boc's financial proposal for e-commerce (with pictures and press)
TRANSCRIPT
Building Online Distribution in
China
Pursuing Excellence
Agenda
• About Bank of China………………………………………………………………………………………………….. Page 3
• China Leading the World with Highest Number of Internet User………………………………... Page 4
• Overview of Global E-Commerce Spending……………………………………………………………….. Page 5
• Overview of E-Commerce Market in Asia…………………………………………………………………… Page 6
• Overview of E-Commerce in China - Consumer Behaviors…………………………………………. Page 9
• Overview of E-Commerce in China - Volume & Growth……………………………………………… Page 10
• Overview of Conventional vs E-Commerce Channel……………………………………………..….… Page 11
• BOC your “Total Solutions Provider” Partner in China’s E-Commerce Platforms………… Page 12
• BOC your “Total Solutions Provider” Partner in Conventional Trade Supply Chain…….. Page 13
• Benefits of using BOC’s Cross-Boarder Total Solutions Platform………………………….…….. Page 14
• BOC’s “Total Solutions Provider” Proposition…………………………………………………………….. Page 15
• China’s Bonded Warehouse Supply Chain………………………………………………………………….. Page 16
About Bank of China (BOC)
• Established in 1912, BOC has a history of over 100 years and is China’s most internationalised and diversified Bank.
• Ranked No.4 in Market Capitalisation, No. 7 in Profit, No. 8 in Assets by Forbes.
• In 2014, BOC for the 4th consecutive year being awarded as a ‘Global Systematically Important Bank’, becoming the sole financial institution from emerging economies bearing the title.
• BOC’s New Zealand branch officially open in Auckland on 21st November 2014
• Numerous awards for ‘Best Trade Finance Bank’ and ‘RMB Settlement/Clearing Bank’ in China and internationally.
Awarded Best Trade Finance Bank in China:
Awarded Best RMB Clearing Bank in Asia Pacific and China:
Awarded Strongest Bank in Asia Pacific & Hong Kong 2014/2015 by Balance Sheet:
Page 3
Market Cap c.USD199.1 Billion (Rank #4th)
Total Assets RMB 15.25 Trillion (c.USD2.39 bil)
Total Profit RMB 177.2 Billion (c.USD27.8 bil)
Total branches, subsidiaries and outlets
Over 11,000 branches in China
Credit Ratings A1/A/A (M/S/F)
Total Employees Over 332,000
Global presence More than 700 overseas branches spread across 44 countries
A Truly Global Bank
China Leading the World with highest number of Internet User
Source: CNN
The Chinese e-commerce sector is poised for significant future growth underpinned by the world’s largest online user base and rising internet penetration rates • China has the world's largest internet population with
649 million internet users (i.e. 19% of the World’s population), of which 557 million are mobile internet users, compared to the United States (“US”) which has 277 million internet users
• China’s Internet penetration rate of 47.9% is well below rate experienced in Western economies including the US which has an internet penetration rate of more than 87%
China’s e-commerce market grew 21.3% in 2014, reaching USD 1.93 trillion, and is expected to nearly double to USD 3.79 trillion by 2018 • Online shopping grew 48.7% in 2014 reaching USD 440
million and accounted for 10.7% of total consumer retail sales in China
• Online shopping in China is expected grow significantly as a result of a growing internet population user base, the rapid uptake of mobile shopping, increasing penetration of e-commerce players in China’s lower-tier cities and rural areas as well as the increasing number of debit and credit cards on issue
• Mobile shopping grew 239.3% to USD 145.8 billion in 2014 and is expected to grow approximately 5.0x to USD 710 billion of sales in 2018
Page 4
Overview of Global E-Commerce Spending
• China is the biggest e-Commerce market in the world with USD562.66 billion in sales projected for 2015. • Shopping is the fastest growing online activity in China. • 75% of surveyed Chinese consumers are willing to buy something after receiving a promotional email of some sort • The average internet user in China is 25 years old
Page 5
Overview of E-Commerce Market in Asia
Estimate in USD
Page 6
Overview of E-Commerce Market in Asia
Estimate in USD
Page 7
Overview of E-Commerce Market in Asia
Page 8
Source: ATKearny Research
Overview of E-Commerce in China - Consumer Behaviors
Source: McKinsey & Company
Behaviours and desires of China’s 649 Million Internet users across different city tiers and rural areas
What products have you purchased online in the past 3 months?
Buying food online is becoming more feasible due to quicker delivery time (~40% are using same/next day delivery), and consumer usage of online food shopping is very high in China (>40% in last 3 months) compared to <10% in the US
Page 9
Overview of E-Commerce in China - Volume & Growth
Per Capita Online Spending of China Online Shoppers 2011-2018
China Online Shopping Gross Merchandise Value (“GMV”) 2011 - 2018
In 2014, the GMV of China online shopping market hit 2.8 trillion Yuan or USD439.1 billion, increasing by 47.4%. As released by National Bureau of Statistics of China, the online shopping GMV accounted for 10.6% of the total retail sales in 2014, exceeding 10% for the first time.
In 2014, Chinese Internet users averagely spent 7,716.5 Yuan or USD1,210 on online shopping, increasing by 23.1%, and this spending is expected to approach 10,000 Yuan or USD1,570 in 2015.
Page 10
Source: iResearch
E-Commerce Platform
Manufacturer End Consumer Wholesaler Retailer
Wholesaler Channel
Manufacturer End Consumer Distributor Wholesaler Retailer
Distributor Channel
Manufacturer End Consumer Distributor/Agent
Manufacturer End Consumer E-Commerce
Platform
1 2
1 2
3
Sells
Total Solution Provider
Overview of Conventional vs E-Commerce Channel
11
Total Solution Provider
E-Commerce Platform
Conventional Channel
E-Commerce Channel
BOC your “Total Solutions Provider” Partner in China’s E-Commerce Platforms
Manufacturer
Product Matching Services
(Payment) ($)
E-Commerce Operators in
China
1
2
3
4
5
($)
Shipment of Goods
Agent End Consumer
Overseas China
($)
Bank of China (New Zealand) - Core Services:-
1. To assist in Product & Company Matching to E-Commerce Operators in China
2. To assist Manufacturer to transact their trade via E-Commerce channel
3. Providing Full Transaction Banking Services
4. Lending proposition for both Manufacturers & Agents/Distributor
5. Facilitating potential M&A when opportunities arise
Core Services
Value Added Services
3rd Party Provider
4
M&A
Bank of China’s - Panel 3rd Party Provider:-
1. On-Shore and Off-Shore Custom Clearance Services
2. Import/Export Agents & Registrations related services
3. Warehousing and Bonded Warehousing Facilities
4. Products Sorting, Packaging, Labelling and Logistic related services
(The above are optional services that could be provided by our panel 3rd party provider in assisting your international trade.)
BOC’s Global Customer Database
12
BOC’s “Total Solution Provider” Services
Domestic Financing
Manufacturer
Product Matching services at various stages
(Payment) ($)
1
2
3
4
5
Domestic Financing
($) Shipment of Goods
Distributor/Agent End Consumer
BOC’s Global Customer Database
Bank of China (New Zealand) - Core Services:-
1. Product & Company Matching with Overseas Buyer at various stages
2. To assist Manufacturer to transact their trade throughout the whole trade and supply chain
3. Providing Full Transaction Banking Services
4. Lending proposition for both Exporter i.e. Manufacturers and/or Agents
5. Facilitating potential M&A when opportunities arise
Core Services
M&A
Wholesaler Retailer
BOC’s “Total Solution Provider” Services
BOC your “Total Solutions Provider” Partner in Conventional Trade Supply Chain
($)
13
Commercial / Business
Solutions Short-Term Liquidity Solutions Risk Management Solutions
1. Assisting Exporter / Manufacturer
to promote their company and
products to Online Operators /
Overseas Buyers
2. Obtaining favourable Credit terms
3. Direct funds transfer between
BOC’s network of branches
• Transfer of funds between BOC
globally are direct and fast without
involvement of corresponding
banks
• Avoiding unnecessary commission
deductions imposed by
corresponding banks
4. Intermediary for Exporter/Importer
at over 44 countries and over 700
overseas branches globally
1. Domestic Financing to Exporters or
Manufacturers
• Ability to track all
shipments/payments through the
platform would allow micro
financing subject to satisfactory
records
2. Ability to extend facility to Importer
3. Enabling Exporter to extend
favourable terms to Buyers
4. Accelerating collection of Debtors
5. Shortening Exporter/Importer Cash
Flow Cycle
6. Improving funding gap of both
Exporter/Importer
1. Reducing Buyer / Counterparty
Credit Risk
2. Country Risk
• The potential risk that economic,
political or regulatory restrictions in
the buyer’s country prevents
remittance of payment as required
3. Performance Risk
• The potential for Suppliers unable
to fulfil their contractual obligation
(generally with regards to quality,
quantity and/or timeliness of
delivery
5. Payment Risk
• As a Total Solutions Provider, we
are able to track all aspect of
Payment/Export Documents/Flow
of Goods
6. Managing FX Risk
KEY RISK IN INTERNATIONAL TRADE
1. Lack of Buyer’s information, reputation and their credibility
• International trade opens up a world of potential and
opportunities.
• However, the lack of understanding and information of your
Buyer often the main risk for exporter to consider.
2. Payment Security / Guarantee of receipt of goods
• Given the lack of trust between the Seller and Buyer, there's no
guarantee the Seller / Buyer will receive their payments and
goods respectively in a Pre-Shipment or Post-Shipment
situations.
3. Funding Gap
• Both Seller and/or Buyer will experience funding gap while the
goods are being shipped or air freighted
4. Foreign Exchange
• Both Seller and Buyer are exposed to foreign currency risk
given their preference over certain currency of trade
Business to Business Advantages of BOC’s Cross-Boarder Total Solutions Provider Platform
Benefits of using BOC’s Cross-Boarder Total Solutions Platform
14
Total Solutions Provider to Manufacturer/Customer
who uses BOC E-Commerce Platform
On-Shore and Off-Shore Custom Clearance Services
Bonded Warehousing
Sorting, Packaging , Labelling and Logistic related Services
Import/Export Agents and Registrations related Services
Products & Company Matching Services / M&A
Full Transaction Banking Services
Facilitating Cross Boarder Remittance and Settlement via
a mix of Trade Finance Products
Funding to Exporter/Customer
Bank of China (New Zealand) - Core Products & Services
Bank of China (New Zealand) – Panel 3rd Party Service Provider “Total Solution Provider for your
International Trade”
Core Services
Value Added
Services
• To assist customer by matching their products to E-Commerce Operators and/or to Overseas Buyer.
• Services also extend to helping explore M&A opportunities by our dedicated M&A Desk
BOC’s “Total Solutions Provider” Proposition
• BOC is able to offer a wide range of banking services such as Corporate Account, FX, TT, Internet Banking
• Multi Currency Account i.e. RMB A/C
• Direct Funds transfer for international remittance within BOC Group
• BOC is able to offer a wide range of trade related and cross boarder products.
• Open A/C, DC, LC, SBLC, FG
• Onshore Credit Support for Off-Shore Borrowing i.e. Neibao Waidai
• BOC is able to provide innovative funding structures given our ability to track the entire trade supply chain
• OD, RC, TL, CAPEX, WC and M&A Funding
• Trade Finance Loan
• Help customer dealing with On-shore and Off-shore customs to solve clearance issues
• Make sure goods compliance with NZ and China regulations
• Act as export agent for Kiwi companies
• Provide product registration service to BOC’s clients
• Communicate with Chinese customs
• Assist customer by providing bonded warehousing services
• Assist BOC’s clients with sorting, packaging, labelling and logistic related services
“Stocking Mode”
“On-Order Mode"
NZ China
BOC Panel 3rd Party Service
Provider
BOC Panel 3rd Party Service
Provider
1 On-Order Mode
• Importer does not stock excess good
• Only export based on confirmed
order
• “Make-to-Order” basis
• Usually low moving consumer goods
Stoking Mode
• Importer usually stock excess good
• Often fast moving consumer good
2
(and/or)
1
2
B2B channel
B2C channel
16
China’s Bonded Warehouse Supply Chain
“Total Solution Provider” for your International Trade
Manufacturer
Mode of Entry 3 O2O channel
Event Held at Viaduct Event Centre @ 26th Nov 2015
Event Held at Viaduct Event Centre @ 26th Nov 2015
Thank You
20
0800 69 5566 [email protected]
Bank of China (New Zealand) Limited Level 17, Tower 1, No. 205 Queen Street, Auckland, New Zealand