Overview of the innovative B2C business models in China · (backed by online B2B platforms) Netease...

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Business Model Innovation (Part 1) Management Theories and Business Models Winnie Lo, Iris Tong E-commerce . Business Models . Innovations January 2020 Overview of the innovative B2C business models in China

Transcript of Overview of the innovative B2C business models in China · (backed by online B2B platforms) Netease...

Business Model Innovation (Part 1)

Management Theories and Business ModelsWinnie Lo, Iris Tong

E-com

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January 2020

Overview of the innovative B2C business models in China

Key takeaways

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A vast number of innovative B2C business models have emerged in China. Key drivers of the innovation include:

• Chinese consumers are empowered by mobile internet. Retailers have a clearer picture of the changing consumer demand by analyzing mobile footprints

• Technological advance leads to digital transformation• Internet giants continuously expand their business ecosystems to engage with consumers and facilitate startups to provide innovative solutions

Zoom in – B2C business innovations emerged at the “consumer”, “product” & “channel” levels

Consumers• Multiple generations have distinctive

consumer preferences and mobile footprints

• Physical distance is no longer a critical barrier for online retailing

Products• Is there consumption upgrade or downgrade

in China? Consumption stratification patterns have developed

• To better fulfill different needs of multipleconsumer groups, more specialized supply chains emerge in China

Channels• Online sellers no longer rely on traditional pure-play

e-commerce model, but seek more channels to increase consumer stickiness and conversion rate

• Certain O2O retailers integrate the merits of online and offline formats to offer innovative fulfillment solutions

What’s next?• Some enterprises/ startups are facing big challenges in running sustainable B2C business• To differentiate from competitors, some B2C operators are exploring B2B business and enhancing their supply chain capabilities.

Source: Fung Business Intelligence

Traditional self-operated e-commence

Traditional e-commercemarketplace

Today: Innovative B2C Models

• Shopping malls• Department stores• Specialty stores• Convenience stores• Mom-and-pop stores

JD.com

Taobao Tmall VIP.com

Past:Traditional B2C Formats

*Various business giants share similar concepts on innovative B2C model. See also Box 1For detail of the discrete O2O models in the past, view also Fung Business Intelligence’s Report in 2016 “Business Innovation in China (Part 1): Embracing New Opportunities by Adopting O2O Strategies & Building Business Ecosystem”Icon source: InternetSource: Fung Business Intelligence

China South City

HLA

Yonghui RT-Mart

Suning Intime

3

Social commerce

Yunji BeidianKoudai Weidian

Mobile commerce

A vast number of innovative B2C business models have emerged in ChinaSome pure-play and brick-and-mortar retailers in China explored O2O (online2offline/ offline2online) models in 2014. However, they recognized that discrete O2O models were unsustainable. More innovative retail models* with integrated O2O operations were gradually launched.

Meituan DianpingEle.me

On-demand/ lifestyle services

platforms

Vivo

Concept stores

Tiktok Kuaishou

Short-videoe-commerce

XiaohongshuMogujie

Content-sharing platforms

SecooMei.com

Luxury products platforms

Pop-up stores

Kaola.com Tmall Global

Cross-border e-commerce

platforms+

Experimental stores

Bianlifeng

Unmanned stores/ kiosks

Web celebritye-commence

Pinduoduo

Group-buyingplatforms

XingshengYouxuan

Communitygroup-buying

platforms

YCloset

Sharing/ rental

platforms

Freshippo

Shopswith in-store

fulfillment center

Xianyu Zhuanzhuan

Second-hande-commerceOnline

Offline

Mom-and-pop stores

(backed by online B2B platforms)

NeteaseYanxuan JD Jingzao

Taobao Xinxuan

Private-labelplatforms

Onlinex

Offline

Box 1. Business giants share similar concepts on innovative B2C model with their own highlights

“New Retail” Initiative, 2016

E-commerce is evolving into “New Retail”, which is an integration of online and offline channels and modern logistics.

~ Jack Ma, Co-founder, Alibaba Group

“Decentralized Smart Retail Solution” Initiative, 2017

Tencent aims to serve as a digital platform connecting brands, physical stores and other service providers and provide consumer-driven retail solutions.

~ Pony Ma, Founder, Tencent

“Smart Retail” Initiative, 2017

By integrating with mobile Internet, traditional offline business can offer retail services for numerous consumers anytime, anywhere.

~ Zhang Jindong, Chairman, Suning

“Boundaryless Retail” Initiative, 2017

In the future, retailers will be able to fulfill any consumers demand anytime, anywhere

~ Richard Liu, CEO, JD.com

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Source: Compiled by Fung Business Intelligence

Innovative B2C model To facilitate

a consumer-oriented retail experience by

integrating online and offline channels with the

support of logistics, technology and data

Key drivers of B2C business innovation

Key drivers of the B2C business innovation:

1. Chinese consumers are empowered by mobile internet. Retailers have a clearer picture of the changing consumer demand by analyzing consumers’ mobile footprints.

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Group buying platforms

Private labels

In the past, retailers didn’t have a clear picture of consumer preferences. Consumer segments were ambiguously grouped by historical data in terms of age, gender, income level, etc.

Value for $$Branded goods

Imported goods

With holistic data analytics of individuals, retailers can now push their marketing feeds to targeted shoppers and groups, based on lifestyle, interest, family status, etc.

Functional goods

TV shopping

Ads

Gaming,entertainment

platforms

Fulfill basic needs

Show uniqueness

Improve quality of life

Recommended by KOL/ KOCEnjoy shopping

excitement/ discount Personalizeditems

Traditional physical stores

Brands’ official online

platforms

Social commerce platforms

Chinese consumers

* Abbreviations: KOL = Key opinion leader; KOC = Key opinion consumerSource: Fung Business Intelligence

E-commerce marketplaces

ThroughKOL/KOC on

livestreaming platforms

Luxury goodsAuthentic goods

Stores backed by

retail technology

Big data analytics Cloud computingBlockchainArtificial Intelligence

Key drivers of the B2C business innovation:

2. Technological advance leads to digital transformation

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D A T A

Source: Fung Business Intelligence

o Increase visibility & traceability

o More accurate market forecast

o Improve efficiency o Enhance consumer experience

o More convenienceo Increase consumer stickiness

o Real-time response

o Quick delivery, accurate, efficient product fulfillment & replenishment

DownstreamUpstream

Manufacturing

Product development and design• Digital Design• 3D printing

Manufacturing• Internet of Things• Augment Reality/

Virtual Reality• Robotics• Automation

Quality Control• Blockchain• Augment

Reality/ Virtual Reality

• Mini-program• Location-based marketing • Social marketing• Customer relationship management• Online feeds to targeted individuals• Augment Reality/ Virtual Reality

Marketing

• Optimized visual merchandising • Smart devices at store level, e.g. magic

mirror, smart shopping guide, etc.• Unmanned payment kiosk• QR code/ Facial recognition payment

Retailing

• Automation • Robotics• Augment Reality/ Virtual Reality• Internet of Things• Unmanned vehicles

Logistics

Mobile technologyAnytime (24 hours x 7 days); Anywhere (shop, restaurant, home, office, on the road, etc.)

• Product research • Order placement • Consumer financing• Product reviews

Consumers

D A

T A

D A

T A

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Key drivers of the B2C business innovation:

3. Internet giants continuously expand their business ecosystems to engage with consumers and facilitate startups to provide innovative solutions

Juhuasuan

Tmall Global

Cainiao NetworkAlibaba Pictures

Fliggy

Koubei

Guangzhou Evergrande FC

Ad China

My Bank Tianhong Asset

Management

Vulnhunt

RRS

Alimama

Alibaba Cloud

Ele.me

Dida Chuxing

Hellobike

Intime

Freshippo

Suning

YCloset

Mei.com

Weibo

Youku

UC Browser

SenseTime

Ant Financial

KXTXBest Express

STO Express

ALOGTudou

HuayiBrothers

CBN

Huayi TencentEntertainment

Technology

SanJiang

Lianhua

EasyhomeBailian

Taobao Xinxuan

Souche

Yiguo.com

Xianyu

Ganjie

Haoshiqi

Xiaohongshu

Wanda Film

China Media Capital

Focus Media

EjoyTechnology

Canxing

iTrigger.cn

Video++

China Unicom

Health2sync

XiaopengMotors

Shiji

Baison

Moredian

Babytree

CloudCare

AuthineNetwork

Kaola.com

ZTO Express

DingTalk

YTO Express

Alibaba Sports

Alipay

Tmall XiaodianTmall

Taobao

AutoNavi Alibaba Health

Seven Ages

CambriconTechnology

DT Dream

Plex-VR

MegviiTechnology

Damai.cn

* Note: This figure includes part of the business units and invested companies of Alibaba Group within ChinaIcon source: InternetSource: Fung Business Intelligence

Qyer.com

Real (or Ruwo)

WPP China

Suning Sports

Sun Art

New Hua Du Supercenter

Tungee

Shuwei

CICC

HTSC

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Key drivers of the B2C business innovation:

3. Internet giants continuously expand their business ecosystems to engage with consumers and facilitate startups to provide innovative solutions (cont’d)

* Note: This figure includes part of the business units and invested companies of Tencent Group within ChinaIcon source: InternetSource: Fung Business Intelligence

ZhihuQQ

Weixin/WeChat

Douyu

iDreamSky

TencentGames

Koudai

JD.com

Pinduoduo Vipshop

Youzan

MissFresh

China South City

HLA

Yonghui

58.comDianping

Meituan1jiajie

LejuTencent Map

56QQRRKD ExpressG7 Networks

Technology

Tenpay

Weixin Pay/WeChat Pay

ZhongAn

WeBank

CICC

Renrendai

KingsoftTencent Cloud

Element AI

TencentVideo

Tencent Pictures

China ReadingLimited

Elong

Mafengwo

HuayiBrothers

Huayi TencentEntertainment

DXY Health

Tongcheng

Weimob

WeDoctor

TencentSports

Tencent Comic

WPP China

Haoyiku

Zhuanzhuan

Renrenche

XiaoxiangShengxian

Better Life

7Fresh

Xiaohongshu

Man Bang

JD LogisticsSunline

QTRADE

Yixin Group

Enflame

Ulucu

Momenta

Keytop

tstudy

Changshan Textile

NextTao

UBTECH

AISEC

Kuaishou

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Key drivers of the B2C business innovation:

3. Internet giants continuously expand their business ecosystems to engage with consumers and facilitate startups to provide innovative solutions (cont’d)

Content sharing

TopbuzzNews2015*

ToutiaoNews2012*

DongchediAutomobile infomation

2017*

BidewuProperty

information 2018*

PipixJokes2018*

HupuSports

information 2019#

DailyhuntNews2016#

News RepublicNews2017^

BABENews2016#

Douyin/ TikTok2016/ 2017*

Xigua2016* Vigo

2017*Flipagram

2017^

Huoshan2016*

DoushanVideo-based

social messaging 2019*

Feishu/ LarkEnterprise messaging

2019*

UlikecamPhoto taking

& editing 2018*

Live.meLive streaming

2017#Helo

Social media 2018*

Social media (Others)

Education OthersGoGoKid2018*

FaceUPhoto taking

& editing 2018^ Baike

Web-basedencyclopedia

2019^

SmartisanSmart devices

2019^

TuchongStock images

2014^ Mokun TechnologyGame2019^

TerarkBig data2019^

LevelupAIAI solutions

2019^

Ocean EngineMarketing services

2019*

aiKID2018*

HaoHao XueXi2018*

Minerva project 2019#

Xiaoyang2018#

VsceneVR

2018^

NameiStock trading

2017*

GeogifAnimation

2019^

NutstoreEnterprise cloud

storage2018*

*Notes:- App icons with outline are targeted at international users, icons with outline are for local users- * Year of establishment; ^Year of acquisition; # Year of investmentIcon source: InternetSource: Fung Business Intelligence

Zoom in –B2C business innovations at the “consumer”, “product” & “channel” levels

Product uniqueness

Zoom in - B2C business innovations at the “consumer” level:

Number of Chinese netizens reached 854 million in June 2019. 99% of them accessed the internet via mobile (847 million)

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Source: China Internet Network Information Center, compiled by Fung Business Intelligence

Instant Message

APPs

Food Delivery

APPs

Mobile Payment

APPs

VideoAPPs*

OnlineShopping

APPs

NewsAPPS

Online Game APPS

Online Music APPs

821 mil#

96.9%^

660 mil#

78.0%^

622 mil#

73.4%^

759 mil#

88.8%^

621 mil#

73.4%^

585 mil#

69.1%^

468 mil#

55.2%^

417 mil#

49.3%^

Convenience & quick delivery

Real-time interaction

Value for money

Smart device users

Info searchAPPs

662 mil#

78.2%^

Notes:# Number of the Chinese netizens using particular services via mobile apps (million, June 2019)^ The penetration rate of using particular services via mobile apps (%, June 2019)* For Video apps, the number of the Chinese netizens and the penetration rate cover all online channels

4.0%

16.9%

24.6%

23.7%

17.3%

6.7%6.9%

AGE GROUP

< 10

10 - 19

20 - 29

30 - 39

40 - 49

50 - 59

> 60

Zoom in - B2C business innovations at the “consumer” level:

Unlike the previous generations, young Chinese netizens are tech-savvy and wealthier, and have become the major consumer group They can fulfill their daily basic needs by simply clicking their mobile apps anytime, anywhere.

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Source: China Internet Network Information Center, QuestMobile, compiled by Fung Business Intelligence

48.6%

26.7%

11.2%

8.4%5.1% AGE GROUP

Below 24

25 - 30

31 -35

36 - 40

Above 41

Among the netizens who frequently used click-and-delivery services, over 3/4 were aged < 30 in December 2018

Major click-and-delivery services in China

In June 2019, nearly half of the Chinese netizens wereaged < 30

Tech-savvyconsumers

Beauty services

Cosmetics services

Facial

Hair servicesMassages

Food delivery

Snacks

Takeaway

Fresh Produce

Home services

Repairing services

Relocation services

Cleaning service

Errand services

Parcel picking/ delivery

Medicine delivery

Personal shopping/ “Daigou”

Travel agent services

5.8%

14.1%

6.5%

5.3%

7.7%

12.6%

20.8%

14.1%

13.0%

INCOME GROUPNo income

1 - 500

501 - 1000

1001 - 1500

1501 - 2000

2001 - 3000

3001 - 5000

5001 - 8000

Over 8000

Zoom in - B2C business innovations at the “consumer” level:

Physical distance is no longer a critical barrier for online retailingHowever, retailers should be aware of the different behaviour of the netizens living in various tiers of cities and belonging to distinct income groups

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9.2%

18.4%

18.8%22.2%

18.7%

12.7%

CITY-T IER

1st-tier

1.5 tier

2nd-tier

3rd-tier

4th-tier

5th-tier or lower

Chinese netizens from various city-tiers in 2019Q1

* Abbreviation: MAU = monthly active usersSource: China Internet Network Information Center, Jiguang, QuestMobile, compiled by Fung Business Intelligence

In lower-tier cities,Buying behavior:• Price sensitive• Value the recommendations from family,

friends and communities• Trust in brands• Prefer touch and feel of products in a

physical store, before check-out online

Top 5 apps in June 2019: (in terms of the strongest annual growth of MAU*)

Pinduoduo(backed by

Tencent)

Tiktok(backed by Bytedance)

Kuaishou(backed by

Tencent)

AutoNavi(backed by

Alibaba)

Weishi(backed by

Tencent)

In June 2019, around 40% of the Chinese netizens earned RMB 2001 – 5000 every month. Over 1/4 earned more than RMB 5000 per month

Willing to pay for quality goods

Lower-tiercities

Zoom in - B2C business innovations at the “consumer” level:

With the aid of mobile technology and data analytics, retailers have a clearer picture of multiple generations in China and plan for corresponding product portfolios and marketing campaigns

Small-town Youngsters Generation Z Young Mothers White-collar Workers

Middle Class Blue-collar Workers Urban Silver-hair Consumers

Small-town Middle-age &Silver-hair Consumers

Who are they?• Age: 20-30• Live in lower-tier cities

Who are they?• Post-95s/ Post-00s• Live in 1st- to 3rd-tier cities

Who are they?• Pregnant mother and/or

mother with kid(s) aged ≤ 12• Live in 1st- to 3rd-tier cities

Who are they?• Age: 25-35• Live in 1st- to 3rd-tier cities• High purchasing power

Who are they?• Age: 35-45• Live in 1st- to 3rd-tier cities• High purchasing power

Who are they?• Age: 25-45• Live in 1st- to 3rd-tier cities

Who are they?• Age: > 50• Live in 1st- to 3rd-tier cities

Who are they?• Age: > 35• Live in lower tier cities

Major behaviour: • Follow urban fashion trends• Seek value-for-money products• More disposable income without

heavy financial pressure on mortgage

• More idle time, prime users of entertaining apps

Major behaviour: • Tech-savvy, prefer online

shopping• Seek personalized/ customized

products• Prefer community sharing, ACG*• Willing to invest in personal

appearance

Major behaviour: • For kid: aware of product safety • For herself: aware of personal

health and appearance• For family: aware of health and

willing to pay for convenience

Major behaviour: • High income, high expenditure,

low saving• Willing to pay for convenience• Seek quality living & trendy

lifestyle

Major behaviour: • Seek personalized products• Enjoy offline shopping

experience• Rational consumption

Major behaviour: • High living cost• Long commuting time and spend

much time on entertaining apps• Risk-averse consumers• Seek value-for-money products

Major behaviour: • Potential online consumer group• Frugal consumers• Tend to shop offline• Frequent users of instant

messaging apps• Easily lured by social media ads

Major behaviour: • Stick to value-for-money products• Risk-averse consumers• Strong trust in the buying reviews

from family and friends• More idle time, frequent users of

entertaining apps15* Abbreviation: ACG = Animation, Comic and Game

Source: Alibaba, Kantar, compiled by Fung Business Intelligence

Zoom in - B2C business innovations at the “product” level:

FAQ: Consumption upgrade or downgrade in China? Different consumer groups have different consumption preferences. New generations are not only fond of foreign brands, but also seek domestic unique brands, e.g. private-label brands or rejuvenated Chinese brands. Some consumers seek value-for-money products, some expect customized goods with speedy delivery, some prefer conspicuous consumption, etc.

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Source: Fung Business Intelligence

Pri

ce p

oin

t

LOW

MEDIUM

HIGH

Typ

es o

f go

od

s

General merchandising

Products for community/ group-buying

Fresh produce Private-label products

Low price products

Second-hand products

Luxury products

Overseas branded products

Mother and baby care products

Zoom in - B2C business innovations at the “product” level:

Answer: Consumption stratification patterns have developedTo better fulfill different needs of various consumer groups, specialized supply chains emerged in China.

17Source: Fung Business Intelligence

Pri

ce p

oin

t

LOW

MEDIUM

HIGH

Typ

es o

f go

od

s

General merchandising

Products for community/ group-buying

Fresh produce Private-label products

Low price products

Second-hand products

Luxury products

Overseas branded products

Mother and baby care products

Spec

ializ

ed

Su

pp

ly C

hai

ns• E-commerce marketplaces

• Sourced from reliable suppliers

• Cross-border e-commerce platforms

• Offer authentic products

• With strong international logistics support

• Vertical e-commerce platforms

• Sourced from suppliers with strong specialties

• Private-label goods platforms

• Offer customized products, good quality/ value for money products

• Luxury products platforms

• A close relationship between luxury brands and sellers/ distributors

• Fresh produce e-commerce platforms

• High visibility in supply chain

• With cold chain logistics facilities and handling

• Second-hand products platforms

• Embedded with sharing economy concept

• With flexible logistics support

• Community/ group-buying apps

• Sourced from cost-minimized suppliers

• Social commerce platforms

• Sourced from cost-minimized suppliers

Via Top KOL/KOC ononline channels20%

Zoom in - B2C business innovations at the “channel” level:

Online sellers no longer rely on traditional pure-play e-commerce model, but seek more channels to increase consumer stickiness and conversion rate

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Social commerce platforms

Read a blog/ view a video online

randomly on an online community

Be attracted by the blog description

Impulse purchase

Share their reviews on

online communities

Conversion rate (%) of different e-commerce channels in China

Traditional e-commerce platforms

Product research & price comparison among various

channels

Shopping cart

checkout

Rate the purchase on the

e-commerce platform

* Abbreviations: KOL = Key opinion leader; KOC = Key opinion consumerSource: iResearch, compiled by Fung Business Intelligence

Consumer needs a particular

product

Traditional e-commerce platforms

0.37%

Supplier

E-Seller uploads product information

KOL/KOC prepares contents (text, pictures, short video,

live streaming etc.)

Social commerce platforms6-10%

Consumer A

Consumer B

Zoom in - B2C business innovations at the “channel” level:

The longer time a netizen spent on particular mobile app, the more likely it is for the app operator to earn from the netizenTime is a scarce resource of Chinese netizens. Internet giants strive for the attention of the netizens via mobile apps

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Source: QuestMobile, compiled by Fung Business Intelligence

42.0%

12.5%10.3%

7.8%

27.5%

% OF HOURS

Tencent's Camp

Bytedance's Camp

Alibaba's Camp

Baidu's Camp

Others

70% of the time that Chinese netizens spent on mobile internet were occupied by major business camps in September 2019

Chinese netizens spent nearly 1/4 day on mobile internet per day on average, according to a survey

Dec 2018

341.2 mins

Mar 2019

349.6 mins

Jun 2019

358.2mins

Sep 2019

359.8mins

Zoom in - B2C business innovations at the “channel” level:

Mini-program is a new weapon of the Tencent’s Camp for capturing more attention from online shoppers

20* The calculation was based on Monthly Active Users (MAU >100 million) of major apps in December 2018Source: QuestMobile, compiled by Fung Business Intelligence

XianyuTaobao

Top 5 Online Shopping APPs (MAU)

580 million 271 million 228 million 78 million 54 million

Top 5 Online Shopping Mini-programs (MAU)

109 million 57 million 41 million 30 million

Tencent’s Camp: MAU of apps = 577 million; MAU of mini-programs = 256 million; Total sum = 833 million (User numbers of app and mini-program of particular company may be overlap)

JD.comPinduoduo

Pinduoduo JD.com VIP.com

VIP.com

Zhuanzhuan

1 2 3 4 5

1 2 3 4 5

Alibaba’s Camp: MAU of apps = 634 million

19 millionJD coupon

Vs.

Low price

Home delivery

Time saving

Long-tail product choices

Zoom in - B2C business innovations at the “channel” level:

Consumers have different expectations when they shop online and offline

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Online

Obtain the goods on-site

Good shopping experience

Product authenticity & reliability

Excellent service

Source: Nielsen, compiled by Fung Business Intelligence

Offline

1

2

3

4

1

2

3

4

22

Zoom in - B2C business innovations at the “channel” level:

Other than exploring new online channels, the Top 2 largestonline retail camps in China ally with offline players to offer O2O shopping experience for Chinese consumers

Icon source: InternetSource: Fung Business Intelligence

New Hua Du Supercenter

Yiguo.com

SanJiang

Lianhua

Easyhome

Intime

Suning

Bailian

Sun Art

Vs.

MissFreshYonghui

Xiaoxiang Shengxian(Under Meituan)

Better Life HLA

7Fresh(Under JD.com)

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Zoom in - B2C business innovations at the “channel” level:

To differentiate from their competitors, O2O retailers not only integrate the merits of online and offline formats, but also offer innovative fulfillment solutions

Traditional offline store

Traditional online store

Social commerce platform/

community group-buying

platform

* Abbreviations: CDC = Central distribution center; RDC = Regional distribution center; FC = Fulfillment centerSource: Fung Business Intelligence

Citydepot

Smart locker

Factory

Citydepot

Smart locker

O2O

CDC/ RDCIn-store

FC

Store-front FC

Factory

Door-to-door delivery(Short distance radius with delivery lead-time pledge)

Citydepot

Self-pick

In-store FC

Store

Store

Store

Shoppers

Shoppers

Shoppers

Shoppers

Parcel pick-up point

Parcel pick-up point

Door-to-door delivery

Door-to-door delivery

Factory

Factory

Factory

Factory

CDC/ RDC

CDC/ RDC

In sum, B2C business innovations emerged at the “consumer”, “product” & “channel” levels

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ProductsConsumers

Channels

ProductsConsumers

Channels

• Consumer data andsegments were not effectively analyzed

• One advertisement “fitted” all

Traditional B2C business

Innovationsin

B2C business

• Consumers are powered by mobile technology and able to shop anytime, anywhere.

• With the aid of data analytics, retailers have a clearer picture of consumer segments with a lower cost

• Consumers, KOL, KOC and retailers connect with each other via many marketing channels

• Supplier-driven• Product expectation:

affordable, functional, durable

• Mass production

• Consumer-driven• Product expectation:

large varieties of goods offered, value for money with excellent consumption experience

• Low brands loyalty is new normal

• Specialized supply chain for mass customization, or even product personalization

• Mainly in offline stores• Low adoption level of retail

technology in store• Lack of after-sale support

• Integrated multi-channels• Store technology available for

data capturing and retail operations

• After-sale services, e.g. quick delivery, goods return, customer services, etc.

* Abbreviations: KOL = Key opinion leader; KOC = Key opinion consumerSource: Fung Business Intelligence

貨 人

貨DATA

What’s next?

* Abbreviations: AI = Artificial Intelligence; CBEC = Cross-border E-commerce; IOT = Internet of Things; KOC = Key Opinion Consumers; KOL = Key Opinion Leaders; O2O = Online2Offline/ Offline2Online; P2P = Peer-to-peer funding; SAAS = Software-as-a-serviceSource: Fung Business Intelligence

Some enterprises/ startups are facing big challenges in running sustainable B2C businessB2C business buzzwords, reflecting the heat level of certain innovative business concepts/ models, kept evolving in China in recent years. Fading of a buzzword usually signals the fall of the business model in China. The lifespan of a B2C business buzzword is affected by technological breakthroughs, consumer behaviour and expectation, regulatory changes and funds.

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2017

Short video platform

Fresh produce

e-commerce

O2O

Web celebrity economy

New Retail

Unmanned stores

Sharing economy

AR/VR

Takeaway delivery platform

Social commerce

Big dataIP marketing

Live streaming commerce

AI

KOL

Second-hand

platform

Consumption upgrade

Fresh produce supermarkets

Mini-program

Private labels

Lifestyle platform

CBEC

Customization

Rejuvenated

Chinese brands

2018

AI

Big data

Mini-program

Rejuvenated Chinese brands

IP m

arke

ting

Live streaming commerce

Fresh produce

e-commerce

O2OConsumption

upgrade

Social commerce

Short video platform

Facial recognition payment

KOL

Fresh produce supermarkets

Private labels

Smart stores

Consumption downgrade

Web celebrity economy

AR/VR

CBEC

Community

group-buying

CustomizationLifestyle platform

Lower-tier market

New Retail

Takeaway delivery platform

Unmanned stores

Second-hand platform

2019

AI

Community group-buying

Social commerce

Low

er-t

ier

mar

ket

Big

dat

a

Short video platform

Mini-program

Rejuvenated Chinese brands

IP marketing

Facial recognition payment

Live streaming commerce

Fresh produce e-commerce

KOC

KOLConsumptionstratification

Smart stores

Membership stores

Night economy

O2O

Private labels

Web celebrity economy

AR/VR

CBEC

Customization

Fresh produce

supermarkets

Lifestyle platform

Takeaway delivery platform

Second-hand platform

Major B2C business buzzwords in China

To differentiate from their competitors, many B2C operators are exploring various methods for enhancing their supply chain capabilities. Some of them engage in upstream B2B business. Some seek assistance from “to B” solution providers.

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Some supply chain experts offer digitized

solutions for enhancing supply chain visibility

Some online B2B platforms emerge with

expertise in design, sourcing and distribution

Some operators provide all-round

marketing services to individual consumers

Certain B2B platforms support online payment system and offer supply

chain finance to business partners

Source: Fung Business Intelligence

Supply chain solutions companies analyze big data of the market and

provide precise forecasts

B2C conglomerates invest in nation-wide

logistics infrastructure

28

ContactManagement Theories and Business Models

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