nsec symposium (presentation iv 05 e commerce)
TRANSCRIPT
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Exploring an Effective Deploymentof e-Commerce to Promote
Increasing Trade Opportunities
David Chow
Tekhill Holding Limited
May 19, 2011
What We Learned FromAround the World
The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the views orpolicies of the Asian Development Bank (ADB), or its Board of Governors, or the governments they represent. ADB doesnot guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their
use. Terminology used may not necessarily be consistent with ADB official terms.
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e-Commerce in ChinaTruly Fast Growing
e-CommerceIncreased Retail Sales Share
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China: Fragmented MarketGrows Online Shopping
In Comparison: % Adults in EUMaking Online Purchases
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Amazon.coms RevenueAcceleration + Share Gains are
Powerful
TaoBaoAn Impressive Run
190MM activeusersasofCQ1,up80%Y/Yvs.114MMforAmazon.comand90MMforeBay
$58BGrossMerchandiseVolumein2010,up2xY/Y,accountingfor2.6%ofChinaretail
sales
50% oftotalpackagedeliveriesforallbusinessprocurementinChina
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Newegg Formula Maybe Utilized
Acquire Convert Fulfill Retain
Key
Competency Daily Deals
Shell Shockers
Social media
Email
Vendorrelationships
Shoppingexperience
Product selection
UGC
Advancedanalytics foroptimum product,
price, placementExclusive products
Fast shipping
Inventorybalancing
Advancedtechnology tooptimizeinventory
Customersatisfactionculture
Email / LiveChat
Community /Eggxpert
Customers come, buy, stay and tell their friends
Newegg in North America & China
New Jersey Warehouse 10 &
14: Cranbury
Memphis, Tennessee Warehouse 6, 12
TaipeiChina
Global ProductManagementCenter
XianChina Global Support Center OZZO Logistics Center
Southern California Warehouse 1Support Center(Phone, Chat & Email), Whittier
Warehouse 2,7&8: City of Industry US HQ: City of Industry Guangzhou/Beijing/Nanjing/Jinang
OZZO Logistics Center
, Canada Newegg Canada
ChengduChina Global Support Center OZZO Logistics Center
ShanghaiChina Global Research Center
Newegg China OZZO Logistics Center
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Newegg: a Decade of Growth
Note: Net sales shown above include freight revenue and other revenue ($ in millions)
2nd largest online e-commerce platform
Vendor Relationship Critical
Vendor benefitsVendor benefits
Product promotions partner
Access early adopter customers benefit frominfluencer effect
Access customer data
Selection and partnershipsSelection and partnerships
Large SKU selection sourced directly from
vendors Diversified partnerships
Opportunities for continued vendor leverage
Newegg benefitsNewegg benefits
Vendor incentives
Favorable product allocations
Competitive pricing
Vendor relations (select categories)Vendor relations (select categories)
IT products Q410 SKUs 2010 net sales
Hard drives
1,693 SKUs
$302mm
Mobile hardware
3,523 SKUs
$293mm
Memory
3,239 SKUs
$186mm
CPUs171 SKUs
$135mm
CE products
Home video
1,299 SKUs
$68mm
Digital cameras
1,649 SKUs
$65mm
Video game
consoles4,287 SKUs
$36mm
Home audio
1,358 SKUs
$39mm
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Unique Visitors Growth
50%
75%
100%
125%
150%
Sep-
09
Oct-
09
Nov-
09
Dec-
09
Jan-
10
Feb-
10
Mar-
10
Apr-
10
May-
10
Jun-
10
Jul-
10
Aug-
10
Sep-
10
Source: comScore
Unique visitors (Indexed to November 2009)
YoY growth
Unique visitor growth in line with / at top end of peer group
Highest LTM unique visitor growth amongst peers
14.7%5.2
10.0%49.0
0.2%1.9
10.2%4.4
16.7%28.8
4.4%113.6
7.9%5.3
Nov-10 traffic
(mm)
(2.4%)6.7
Best-in-ClassIT Platform
Website order process performance benchmarksNov Dec 2010
SiteTime(sec)
Newegg 8.87 Office Depot 9.81 Overstock 10.37 QVC 13.91 CDW 14.20 Sears 14.42 LL Bean 15.22 Walmart 15.94
Williams-Sonoma
16.58
Office Max 16.81 Amazon 18.26 J.C. Penny 18.36
BenchmarkAverage
18.79
HP 20.53 Target 22.47 Dell 25.70 HSN 29.15
VictoriasSecret
30.76
Staples 36.80
Site Rate (%)
QVC 99.6 CDW 99.5 Newegg 99.4 HSN 99.3 Overstock 99.3 Office Depot 99.1 LL Bean 99.0 Walmart 99.0 Target 99.9 Amazon 99.8 Dell 99.4
Williams-Sonoma
98.3
BenchmarkAverage
98.3
HP 97.9 Office Max 97.7
VictoriasSecret
97.1
Sears 96.9 Staples 96.6 J.C. Penny 94.0
Response Time Rating Success Rate Rating
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Yunnan International
e-Commerce Company
AjointventurecompanyofYunnanProvinceandNeweggsistercompany
OfficialOperationalCenterfor
AsianChinaFreeTradeAreaBusiness
Portal
AsianChinaFreeTradeAreaB2BPlatform
Exploring e-CommerceDeployment
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ADB:
Why e-Commerce Important*
Internetisdramaticallychangingthewaygoodsandservicesareproduced,delivered,soldand
purchased
InternettechnologieshavethepotentialtoempowerSME
Potentialbenefitsofecommercefordevelopingworldareimmense anycompanycanenter
globalmarketswheresizeandlocationbecome
ratherirrelevant
* Asavin Chintakananda, Senior Advisor, Asian Development Bank, Page 6 of Financing E-Commerce While Fighting Poverty Presentation
ADB:Fostering e-Commerce*
Rightconditionsmustexistfor
ecommercetogrowandthrive
Strongpolicyframework
Skilledworkforce
Infrastructureandaccess
Awarenessandtrust
* Asavin Chintakananda, Senior Advisor, Asian Development Bank, Page 9 of Financing E-Commerce While Fighting Poverty Presentation
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Phase 1: B2B Trial in GMS
GMSmayconsidertomakereferenceandutilizeASEANChinaFTAB2BPlatform
TargetinglowerentrycostsandbarriersforASEANenterprises
Accessexcitingyetfragmentedmarkets
B2BforASEANMemberCountriesandChinatopromoteinterregionaltrade
MoresupportcomingtargetingCrossBorderonlinesettlementandePort
CurrentlyrunningatrialwithMalaysia lessonlearned:governmentsupportisverycriticalto
success
Rationale for Trial Accelerateadoptionofecommercetrade
Continuousbuildingofinfrastructure,legalframeworkandincreaseawarenessinetrade
oncostsandbenefits
TargetingtradeopportunitiesbetweenASEANMemberCountriesandChinaasapriorityin
theearlytrial worthconsideration
DomesticB2CandC2Cmarketswhenready
Effectiveutilizationoftransportationinfrastructureupgradedinrecentyears
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Phase 2: B2B2C Through
Established Partners
UtilizeandmakeuseofanestablishedelectronicshoppingmallatNeweggandotherestablished
channelsintheU.S.
Leapfrogbypassinggroundzero
Shortenlearningcurve
Accessvastmiddleclassconsumersegment
AcceleratetradingwithChinathroughNewegg
platforminChina
CurrentlyrunningatrialwithMalaysia
Phase 3: Domestic B2C/C2C
ConsidertoutilizeNeweggandotheravailablePubliceCommercePlatforms
Considernottoreinventcertainbasics
Reducelearningcurve
Lowerstartupandentrycosts
Tailormadetospecificneeds
GovernmentsupportfromeachcountryverycriticalRelevantADBinvolvementandcoordinationvery
important
Comprehensiveplanningbutsmallwinsthroughtrialsutilizinganestablishedchannelisrecommended
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Conclusion: Obstacles Seen
but Huge Potential
Potentialkeytosuccess
Adequateecommerceinfrastructureinplace
Policyandregulatoryframework
Commonplatform:wheelsnotmadehere
B2BbeforeB2Cincertaincountries
Internationalandlocalcollaborators
ADBstrongleadershipinsustainableGMS
ecommerceframeworkdevelopment
ThankYou
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