The World’s Largest Online Economy
China already has the largest online population in the world at 618 million users. Astonishingly, that’s only 46% of their population, so their capacity for growth is enormous.
0
100
200
300
400
500
600
700 618
245
121 101
79 53
20 46
79
10.2
80 39
84 89
Online Population MMs
% of Population online
They’re Becoming More Affluent
The middle classes are expanding beyond the largest cities more rapidly & in greater numbers than any market has ever witnessed. The number of Middle and Affluent Consumer HOUSEHOLDS in China will be the same as the US by 2020.
1
13
34
61
57
36
12
53
69
66
39
23
Household annual disposable income (USD) thousands
Upper affluent >200 Lower affluent $16 - $31.5 Middle Class $9.5 - $16 Emerging Middle $6 - $9.5 Aspirant $4 - $6 Poor <$4
Households Millions Households Millions
Source BGS Consultants
Urban household disposable income 2020
Urban household disposable income 2010
Chinese Online Transactions Online transactions reached $301.9 billion USD in 2013. It is expected to surpass $651 billion USD in 2017.
$75.03
$127.69
$212.08
$301.11
$398.76
$491.54
$585.94
$673.83
75%
70%
66%
42%
32%
23% 19%
15%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0.00
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
$700.00
$800.00
2010 2011 2012 2013 2014e 2015e 2016e 2017e
Transactions USD Billions Growth Rate (%)
Source iResearch, “2013 eCommerce market core value analysis”
Online Retail as a % of Total Retail
The growth of online retail in China is advancing at a more rapid pace than any other country including the USA. In 2014, 9.8% of all retail transactions in China will take place online.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2012 2013 2014e
5.2% 5.8%
6.4% 6.3%
8.0%
9.8%
USA
China
Source: 100EC, “2013 China online retail market insight report”
Number of Chinese Online Shoppers There were over 300 millions online shoppers in China in 2013, which is nearly half of the total internet population. Year-on-year growth was at 48.9% during the same period.
242
302
42.9%
48.9%
39.0%
40.0%
41.0%
42.0%
43.0%
44.0%
45.0%
46.0%
47.0%
48.0%
49.0%
50.0%
0
50
100
150
200
250
300
350
2012 2013
Online Shoppers (Millions) % of Total Internet Users
Source: CNNIC, “China internet development status report”
Ecommerce Enterprises in China
Compared to 2012, the number of Ecommerce enterprises in China increased by 18%. In 2014, we expect there to be almost 35,000 Ecommerce enterprises.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2009 2010 2011 2012 2013 2014e
992
15,800
20,750
24,875
29,303
34,314
E-Commerce enterprises in China
Source: 100EC, “2013 China online retail market insight report”
Overseas Ecommerce Transactions
Overseas Ecommerce transactions reached $12.5 billion USD in 2013. The projected growth rate is over 100% in 2014, reaching $25.3 billion USD by the end of the year.
Source: 100EC, “2013 China online retail market insight report”
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
2009 2010 2011 2012 2013 2014e
$0.8 $2.0
$4.3
$7.9
$12.5
$25.3
China's Overseas e-commerce transactions (USD Billions)
Reasons for Overseas Shopping
The top 3 reasons for China online shoppers to purchase overseas are competitive prices, product quality, and the scarcity of products.
Source: 100EC, “2013 China online retail market insight report”
Product Quality
Product Scarcity
Competitive price
Recommended by friends
More variety
Better service
Security
Better logistics
Easy to "Click & Buy"
Ease of refund / return
Others
21.8%
21.2%
20.3%
8.2%
6.0%
5.7%
5.5%
3.8%
2.9%
2.7%
2.0%
Popular Products for Ecommerce
Due to the concerns in price and quality, fashion, personal care, and baby products are the most in-demand product categories for overseas Ecommerce.
Source: 100EC, “2013 China online retail market insight report”
5.8%
6.0%
7.3%
11.4%
37.8%
Books and Music
IT Products
Household Goods
Virtual Card
Fashion
Top 5 items purchased online by Chinese in China
7.7%
9.4%
12.6%
12.9%
16.0%
Digital Products
IT Products
Baby Products
Personal Care
Fashion
Top 5 items purchased online by Chinese on Overseas
sites
Chinese Shopper Age
The majority of online shoppers in China are aged between 25-30 regardless of whether they shop on China based or overseas Ecommerce sites.
Source: 100EC, “2013 China online retail market insight report”
1.10%
6.80%
10.90%
25.30%
39.70%
15.70%
0.60%
51 and above
41-50
36-40
31-35
25-30
19-24
Under 18
Chinese Shopper Affluence
Overseas shoppers tend to be more affluent than those who limit their Ecommerce to China based sites. Over 80% have a monthly income between $488 - $814 USD.
Source: 100EC, “2013 China online retail market insight report”
2.3%
4.0%
1.4%
15.6%
23.2%
25.3%
9.2%
3.4%
1.3%
2.3%
0.0% 20.0% 40.0%
Above $8,140
$3,256 - $8,140
$1,628 - $3,256
$1,303 - $1,628
$814 - $1,303
$488 - $814
$326 - $488
$163 - $326
Below $163
No Income
Chinese Shopper Location
Most of the online shoppers who purchase overseas are living in Tier 1 cities in China, like Beijing (12.2%), Shanghai (13.2%), Guangzhou (14.1%), etc.
Source: 100EC, “2013 China online retail market insight report”
14.1%
13.2%
12.2%
9.2%
7.2%
5.2%
4.0%
3.7%
Guangdong
Shanghai
Beijing
Jiangsu
Shandong
Zhejiang
Fujiang
Heibei However, recently a new trend has emerged that shows more and more online shoppers are coming from Tier 2 cities or below, accounting for nearly 30% of the total overseas online shoppers population.
Baidu is China’s Equivalent of Google… Baidu is the major search engine in China with over 556 million regular users. That’s the equivalent of all the Google users in Europe and Asia combined.
Population of China: 1.35 billion
Online Population: 618 million
Baidu’s Reach: 556 million
China Search International / NTENT
Overview We are not an agency. We do not charge any management fees.
In fact – the only charge our clients incur is a 2.5% processing fee to cover banking and foreign currency exchange fees.
CSI / NTENT are compensated for our efforts directly by Baidu.
The result is that we’re well-positioned to help clients launch on Baidu in the most cost effective and hassle-free way.
Some of our more well known clients
CSI / NTENT is Baidu’s International Partner. Our clients are predominantly international companies looking to capitalize on opportunities in China.
Our Free Services
CSI / NTENT’s role is to help International companies launch on Baidu.
• Translation of all documents for submission to Baidu
• Facilitation of the account opening process
• Development of custom keyword lists as required
• Translation and volume checking of keywords
• Provision and / or translation of ad copy
• Loading of keywords into the client’s Baidu account ready for launch
• Bid Management API application on the client’s behalf
• Full training on how to manage accounts on Baidu (use of the Baidu console)
• Issuing of invoices in the client’s preferred currency and transferring of funds into the client’s Baidu account
• Full training on how to manage accounts on Baidu (use of the Baidu console)
• Provision of research decks on relevant sectors and updates in the Chinese market
• Pitch Support (provision of keyword proposals, research, and recommendations)
Getting in Touch
Should you have additional questions, please don’t hesitate to get in touch:
Kevin J. Carney
VP, Agency Partnerships & Strategic Accounts
(646) 561-8643
www.baiduint.com
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