guide to china digital performance - retail marketing
TRANSCRIPT
Global E-Commerce Leaders Forum February 3, 2015 | NYC
Guide to China Digital Performance Retail Marke+ng
China Search Interna+onal
Population of China: 1.35 billion
Online Population: 618 million
Baidu’s Reach: 556 million
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.
CHINA’S RETAIL SECTOR
Online transacEons reached $301.9 billion USD in 2013. It is expected to surpass $651 billion USD in 2017.
Chinese Online Transac+ons have exploded
$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
TransacEons USD Billions Growth Rate (%)
Source iResearch, “2013 eCommerce market core value analysis”
Overseas e-‐commerce transacEons 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.
Overseas e-‐Commerce Transac+ons are growing at an even faster rate
$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 transacEons
Source: 100EC, “2013 China online retail market insight report”
The middle classes are expanding beyond the largest ciEes 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
All is driven by the Chinese middle class
Source BGS Consultants
Middle and Affluent Consumers (MAC’s)
Year Households 2005 11,000,000 2011 50,000,000
2020 130,000,000* *Approx. the same number as this
classificaEon in the USA
Chinese conEnue saving habits with 22% of monthly household income saved, 8% higher than US and UK consumers
There were over 300 million online shoppers in China in 2013, which is nearly half of the total internet populaEon. Year-‐on-‐year growth was at 48.9% during the same period.
And their movement to online shopping
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”
They use all the same tools as consumers in the west
Source: Nielsen, GlobalWebIndex Wave 6
Search Engines
80% Watched Video
72% Listened to Music
77% Instant Messenger 67%
Uploaded Photos
60%
Activities performed online % Of users
Reviewed a product or brand online 74.58 Used webmail 74.08 Watched a video clip 71.64 Used internet banking 71.29 Purchased a product online 70.79 Used instant messenger 67.2 Uploaded photos online 60.47 Used online office applications 59.62 Post comment on forum / bbs 55.63
Manage your social network profile 54.04
Left a comment on a story on a website 53.39 Used a micro blogging service 52.04
Brought prod/serv through group buying site 49.55
But are even more socially connected
China has the most acEve social media society globally and is more important for brand awareness building than perhaps anywhere else in the world
270 million active users on Weixin
95% of Chinese trust a brand more if on
social media
85% of Chinese online shoppers
share the experience on social media
40% of online shoppers follow brands on social
media
• In 2012, mobile transacEons totaled $7.8 billion USD, represenEng 3.7% of all e-‐commerce transacEons in China.
• However, by 2015 mobile commerce in China is forecasted to more than quintuple, to $41.4 billion USD, represenEng 8 percent of all e-‐commerce transacEons.
• According to data presented by Taobao, the busiest Eme of the day for mobile shopping is 10pm, and purchases made by mobile devices are 67 seconds faster than purchases made on personal computers
Connec+vity across mobile has led to massive mobile shopping growth
CHINA’S ECOMMERCE ON FOREIGN SITES
The top 3 reasons for China online shoppers to purchase overseas are compeEEve prices, product quality and the scarcity of products.
They shop offshore for a number of reasons
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%
Due to the concerns in price and quality, fashion, personal care and baby products are the most in-‐demand product categories for overseas e-‐commerce
and buy different products compared to local transac+ons
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
The majority of online shoppers in China are aged between 25-‐30 regardless of whether they shop on China based or overseas e-‐commerce sites.
80% of them are under 35 yrs of age
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
Most of the online shoppers who purchase overseas are living in Tier 1 ciEes in China, like Beijing (12.2%), Shanghai (13.2%), Guangzhou (14.1%), etc.
Majority are living in Tier 1 ci+es but this will change over the coming period
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 ciEes or below, accounEng for nearly 30% of the total overseas online shoppers populaEon.
SUCCESS
Ingredients for success " Protect your brand and own it
" Trademarks, Chinese language brand & domain " Block compeEEon on search against the above
" Develop awareness
" Display (banner & video) audience buying through RTB
" Build performance " Integrate SEM and Re-‐targeEng (search and audience)
" Unified tracking
Protect your brand and create a Chinese language version
Protect your brand and own it to maximize query coverage
Search Volume
Search Volume
Search Volume
(Monthly) (Monthly) (Monthly)香奈儿 354,000 Chanel 141,000迪奥 216,000 Dior 171,000
卡地亚 207,000 Cartier 72,000路易威登 201,510 LV 516,000 Louis Vuitton 39,000爱马仕 168,000 Hermes 54,000阿玛尼 162,000 Armani 39,000普拉达 87,000 Prada 252,000范思哲 84,000 Versace 48,000
菲拉格慕 63,000 Ferragamo 27,000万宝龙 57,000 Mont Blanc 7,200古驰 42,000 Gucci 132,000芬迪 36,000 Fendi 13,200
蒂芙尼 36,000 Tiffany 168,000登喜路 28,800 Dunhill 36,000
巴黎世家 23,700 Balenciaga 13,500梵克雅宝 23,100 Van Cleef & Arpels 5,700
蔻驰 21,600 Coach 264,000圣罗兰 12,900 YSL 48,000博柏利 12,000 Burberry 180,000 巴宝莉 90,000
杜嘉班纳 11,100 DOLCE&GABBANA 16,500赛琳 5,400 Celine 66,000
Miumiu 54,000Chloe 36,000Loewe 20,400
Chinese Brand Name
English Brand Name
Brandzone drives • 100% share of voice • Exclusive ‘own’ your branded keywords • Creates over 20 points of entry from a single execuEon • Integrates with social media • Available in rich media format • 50-‐90% CTR
Block compe++on against your brand
Search & Retarge+ng
Search Retarge+ng
Remarket customers who are 3X more likely to click on your ad
Retarge+ng
Brings back customers who have lel your site without buying
A combined suite of targe+ng capabili+es across China to • Capture lost customers from the sales funnel • Amplify the result from all paid channels
Client: An established eCommerce player in China providing a wide spectrum of fashion and accessories Objec+ve: Maximize the number of online purchases and ROI Background: Prior to the adopEon of retargeEng across RTB with display adverEsing, the client was primarily engaged in paid search which is believed to be the most effecEve soluEon in driving leads with maximum ROI. With the rise of RTB display in China, the client expanded its budget to include display.
Integrated Approach
Display ad performance when RTB and retargeEng were involved achieved a bener ROI than Search. In fact CPA was reduced by 65% from ¥ 48.7 to ¥17.1 when display had retargeEng enabled through RTB.
About us… Overview • We are a Baidu partner not an agency. That means our
business model does not rely on charging account management fees.
• With offices in Hong Kong, Macau, Singapore, Los Angeles, Sydney and London we’ve guided hundreds of clients through the complex Baidu processes.
• The Baidu InternaEonal team has all previously worked at major brands, publishers and agencies in the USA, UK, Australia and NZ, so we understand your requirements and the importance of managing client’s expectaEons.
• The result is that we’re well placed to help you launch on Baidu in the most cost effecEve and hassle free way.
China Search Interna0onal is the largest Interna0onal Sales arm of Baidu. Our mission is to educate and partner with leading global brands looking to capitalize on opportuni0es in China.
Some of our more well known clients
