Export Now CEO, Frank Lavin and David Roth, CEO of The Store, discuss the competitive analysis, regulatory barriers, intellectual property issues and the strengths of various platforms and channels. Presentation from Retail's Digital Summit 2016.

1. How to Compete and Win in China
E-Commerce
Frank Lavin
Founder and CEO
Export Now
Presented: September 28, 2016 at Retail’s Digital Summit
David Roth
CEO
The Store, WPP

2. David Roth
CEO THE STORE WPP EMEA & ASIA
28 SEPTEMBER 2016
WELCOME
#davidrothlondon

3. FROM
NO CHOICETO
ABUNDANT
CHOICE

4. Premium brands gain market share
Of FMCG brands that increased market penetration, added new buyers,
64 percent sell products at premium or even super premium prices.
Super Premium
(Price Index >150)
Premium
(Price Index 120-150)
Medium
(Price Index 80-120)
Low
(Price Index <80)
Winning brands increased penetration (gained new buyers), losing brands decreased penetration.
Price Index = Brand Average Price/Category Average Price X 100

5. FROM
STATE-OWNED
TO
ENTREPRENEURIAL
DRIVEN

6. www.brandz.com

7. Chinese Brands in BrandZTM
Top 100 Most Valuable Global Brands
1 Brand
2006
US $39.0 Bil.
2.7% of total value
15 Brands
2016
US $402.4 Bil.
12% of total value
+
927%

8. The BrandZ™ China
Top 100 2016 grew 13%
+22% +13%

9. In 2011 the BrandZTM
Top 5 were all SOEs

10. Top 10 Chinese Brands 2016

11. Market-driven brands are
51 percent of Top 100 Value…
Share of China Top 100 value by ownership
State-Owned
Market-Driven

12. FROM
GDPON STEROIDS
TO THE
NEW NORMAL

13. Recent Chinese stock market
swings had little effect on spending
Yes, it has strong impact
Yes, but small impact
No Impact
How did the two stock market drops affect your regular shopping behavior?

14. WESTERN
From
Brands are best
Brand Parity
CHINESEto

15. Chinese brands equal multinational
brands in brand power
Chinese Brands
Multinational Brands

16. Consumers view Chinese
brands as less different
Chinese Brands
Multinational Brands
Consumer view of Chinese and multinational brand characteristics across 16 categories.

17. UBIQUITOUS
From landlines to
24 / 7
CONNECTIVITY

18. Ubiqutous connectivity and still growth to come

19. FIXED
CONECTIONS TO
MOBILE
FIRST
From

20. % share of daily screen time
Mobile is a way of life…56%
share of daily screen time
Mobile
Desktop
TV

21. Mobile is the strategy in China…Digital
ad spending outpaces all other media
% advertising media spending
Digital
TV
Others

22. NO SIBLINGS
TO VIBRANT
SOCIAL NETWORKS
FROM

23. IMPOSSIBLE
E-COMMERCE LOGISTICS TO
WORLD’S
LARGEST
FROM
E-COMMERCE
MARKET

24. VIBRANT
ECHO SYSTEMS
WITH

25. VALUE-CENTRIC
TO MOST
CONSUMERS
FROM LEARNING
TO BE CONSUMERS

26. brand difference strongly influences
willingness to pay a premium
Premium Index: A brand’s ability to charge more than brands in the same category. Average = 100
Different: BrandZ™ measurement of a brand’s ability to be unique and set trends. Average = 100.
Top third are Most Different, bottom third are Least Different.

27. INTERNAL LOOKING
FROM
TO
GLOBAL FOCUS

28. FROM
TO
SINGLES
DAY
GOLDEN WEEKS

30. THE
CHINA
DREAM

31. The Chinese Dream evolves
from political slogan to
personal conviction
To what extent do you think these descriptions of the Chinese Dream represent your opinions?
Chinese Dream strengthens the social cohesion
Chinese Dream is the dream of Chinese people
Chinese Dream and my personal dream are in concordance
Chinese Dream is the dream of the government

32. Advancing the rise of the Chinese
Dream on the world stage

33. Faith in government to fix problems
drives optimism in stock market
Why do you feel optimistic about China’s stock market?
The government is trying to
improve overall economy
The government is issuing new
trading policy
The system of the stock market is
turning transparent and mature
The government will rescue the
stock market performance
Others

34. CHINA
SPEED
STILL CHANGING FAST…

35. www.davidroth.com
@davidrothlondon
david.roth@wpp.com
Resources:
www.davidroth.com/dallas

36. How to Compete and Win
in China E-Commerce
The world’s largest e-commerce market
Frank Lavin, Founder and CEO, Export Now

37. In this session you will learn:
§ The value of the China e-commerce opportunity
§ The different approaches leading brands have taken
in China
§ Key operaDonal consideraDons that are needed to
support a China e-commerce strategy

38. China’s Economy

39. China E-Commerce
Online retail sales in China hit $590 billion in 2015
($350 billion in U.S.), over 20% of total retail sales
Online populaDon and mobile commerce = 2x US
Online adverDsing = $32 billion in 2015
Singles Day 2015 exceeded $14 billion; more than
double Black Friday and Cyber Monday combined

40. InternaMonal Brands in China
§ ~ 12% of revenue and ~26% of profits come from Greater China. Top-selling sports brand in China
§ Nearly 1 million Buicks sold in China in 2015 ( ~80% of global sales)
§ Opened its first store in China in 2010 and now has over 100 stores
§ Starbucks China grew from 1,000 in 2013 to 2,000 in 2015; plans to open 500 new stores per
year over the next five years
§ China hosts 8 of Ikea’s 10 largest stores, and Ikea’s China sales have surpassed USD 1 billion
§ Over 1,200 restaurants in 317 ciDes in China
§ China is the third-largest market behind Germany and the United States
§ China is Apple’s fastest-growing market, surpassing Europe to become Apple’s second-largest
market in 2015

41. China B2C Commerce
SOURCE: iResearch Consulting Group (February 2016); Alibaba (Jan 2016)
Total Online Sales
Marketplaces
Independent
merchant sites

42. InternaMonal Brands on Tmall

43. InternaDonal
Brand
Chinese
Consumer ?
China market
insight
E-store strategy
and operations
Cloud-based
IT Platform
Inbound
Logistics
Brand + Digital
Marketing
Order
Fulfillment
Regulatory
Compliance
Customer
Support
Financial
Settlement
What It Takes to Succeed
China Market
Insight
E-Store Strategy &
OperaDons
Branding + Digital
MarkeDng
IT Enablement
Regulatory
Compliance
Inbound
LogisDcs
Financial
Sedlement
Customer
Support
Order
Fulfillment

44. ü Consumer Analysis
ü Category Overview
ü CompeMMve Analysis
ü Tailored Online Strategy
China Market Insight

45. ü E-Commerce Strategy
ü E-Store Setup + Design
ü Localized Merchandising
ü OperaMons
E-Store Strategy & OperaMons

46. ü Brand Development
ü Omni-Channel Digital Strategy
ü PR/Offline PromoMons
ü Data Analysis + ReporMng
Brand + Digital MarkeMng

47. ü Inbound Shipments to China
ü FTZ Warehousing
ü Product TransportaMon
Inbound LogisMcs

48. ü Import RegulaMons
ü Customs DeclaraMon
ü CIQ + Quality TesMng/InspecMons
ü Label Designs
Regulatory Compliance

49. ü Pick, Pack + Last Mile Delivery
ü Back-End Merchandise
Management
ü Packaging Procurement + Storage
ü Delivery Inserts
ü Carrier Management
Order Fulfillment

50. ü MulM-Channel
ü Pre-Sales
ü Post-Sales
ü Product Returns + Feedback
ü VIP + Customer Loyalty Programs
ü Surge Capacity
Customer Support

51. ü Complete Transparency
ü China Taxes & Fees
ü Localized TransacMons
ü Financial Seblement & ReporMng
Financial Seblement

52. ü TransacMon Processing
ü Front/Back-End IT IntegraMon
ü Access to China Sales & Inventory
ü China-Based IT Support
IT Enablement

53. The Mistake of Nothing
vs.
hdps://starbucks.tmall.com/

54. NFL Case Study

55. About Export Now
Founded in 2010, Export Now is the leading U.S.-based China e-Commerce soluMons
provider, supporDng global brands in China with new market entry, brand strategy,
and digital markeDng.