VELVET GROUP, 2013 ©

Successful businesses need creative strategies

EVOLUTION & UPCOMING TRENDS OF FASHION E-COMMERCE IN CHINA MagentoCom event, November 2013

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VELVET IS A DIGITAL CONSULTING AGENCY

SERVING FASHION, LUXURY AND BEAUTY BRANDS.

W E A R E B O R N L U X U R Y , D I G I T A L , C H I N E S E . . . A N D G L O B A L

VELVET GROUP, 2013 ©

DIGITAL STRATEGY CONSULTING & EXECUTION

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Search Social

POS

Official site

eCRM

Brand content

Mobile

DELIVER EXCEPTIONNAL CUSTOMER EXPERIENCE ���ACROSS BRAND & RETAIL TOUCHPOINTS

Brand awareness, personal connection,! emotion and engagement !

e-Commerce

AVENE YVES SAINT LAURENT

CHRISTIAN LOUBOUTIN L’OREAL GROUP

CLARINS GALERIES LAFAYETTE

KERING GROUP

NOELI GALLERY

BOUCHERON PARIS

V E L V E T Group (HK) Ltd – Confidential 2013 5  

E-COMMERCE CONSULTING

Understand Target

Audience

Market Research & Business Opportunities

Project Design & Planning

Selection of service providers & solutions

Industry Product

Business Proposition

Competition Analysis

Research Findings

Business Requirements

Consumer Journey

Project Roadmap

Business Model

Business Scenarios

IT Warehouse Payment

CRM Delivery Call center

Service Providers Selection

Deliverable

Deliverable

Deliverable Operations

Marketing

V E L V E T Group (HK) Ltd – Confidential 2013 6  

E-COMMERCE CONSULTING

BUSINESS SCENARIOS TO START E-COMMERCE IN CHINA

DEFINE THE PATH TO PROFITABILITY & P&L ESTIMATIONS

OMNI-CHANNEL STRATEGY

AUDIT OF EXISTING E-COMMERCE PLATFORMS

TYPICAL PROJECTS

DESIGN ENTIRE E-COMMERCE PROJECT

VELVET GROUP, 2013 ©

FULL E-COMMERCE SETUP - KEY PERFORMANCE DRIVERS

 Stores  

China  &  France  Strategic    Online  partners  

Tmall,  Bank    e-­‐malls  and  flashsale  sites  

Omni-­‐channel  

Mobile  store  

Front-­‐end  

Back-­‐end  

PRODUCT (fashion & lifestyle)

u Inventory  management  

u Logis9cs  

u Call  center  

u Finance  

u IT  solu9ons  

Online    wholesale  Partners  JD,  Suning,  Amazon  etc  

Traffic  drivers  

u Merchandizing  

Social  Media   u Loyalty  program  

u MarkeEng  

u Services  

Search  

E-­‐mail  marke9ng  

Display  

V E L V E T Group (HK) Ltd – Confidential 2013

CH INA BECAME IN 2013 T H E W O R L D B I G G E S T E - C O M M E R C E M A R K E T

V E L V E T Group (HK) Ltd – Confidential 2013

242 million (2012)

China has the highest number of Online consumers in the world

75 M More than USA

2 x Double size of Japan

6 x Sixth times

the size of UK

7.5 x more than 7 times the size of France

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V E L V E T Group (HK) Ltd – Confidential 2013

+50 M Every year

And it will continue to grow steadily

2012 è 2016

X1.75

242

423.4

mill

ion

2012 2016

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V E L V E T Group (HK) Ltd – Confidential 2013

169 billion

95.8 billion

45 billion 159 billion

Market size

2012

319 billion

X2 93.5 billion

EURO

EURO

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è 2015  

B2C = 45%

B2C = 30%

VELVET GROUP, 2013 ©

CHINA HAS PLENTY OF ROOM FOR GROWTH

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Korea US Europe China Asia India

Internet users as a % of the total population

China

VELVET GROUP, 2013 ©

18%

27%

5% 3%

Apparel, footwear, bags and suitcases

Consumer Electronic, Home appliances

Cosmetics Mother & Baby care

4%

Music, Video & books

FASHION IS THE N°1 CATEGORY

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VELVET GROUP, 2013 ©

APPAREL & ACCESSORIES SALES DURING 11/11

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VELVET GROUP, 2013 ©

DOUBLE 11 TOP 10 BEST SELLERS

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JACK JONES

CAMEL (menswear)

UNIQLO

YINMAN

Apparel takes up 5 positions among top 10 best sellers.

Apparel

Apparel ARTKA

VELVET GROUP, 2013 ©

DOUBLE 11 TOP 10 WOMEN’S APPAREL

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0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

RMB 780,593,247 ≈ EUR 100 million

RMB

COMPET IT IVE ENVIRONMENT & C O N D I T I O N S O F S U C C E S S

VELVET GROUP, 2013 ©

TOP B2C WEBSITES BY MARKET SHARE

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57% Tmall (Alibaba Group)

20% JD

4% Suning

4% QQ Mall

3% Amazon

2% Vancl

1% Dang dang

19 LAUNCHED EARLY NOVEMBER

20 LAUNCHED 1 WEEK AGO

f a s h i o n s h o p p i n g UPCOMING TRENDS

VELVET GROUP, 2013 ©

WEBSITE

Shoppable or not

Order online, collect & return offline

Digital in-stores

STORES

§  Today's customer experience spans across multiple touchpoints § Challenge is to provide an integrated customer experience

MOBILE (smartphones & tablets)

Shoppable or not

79%  of  US  smartphone  owners  use  their  phones  to  

help  with  shopping    

50%  of  retail  sales  is  online  or  “web-­‐  

influenced”  

“OMNI-CHANNEL IS THE NEW NORMAL”

8%  of  total  retail  sales  is  online  

Source: Forrester Research, Web Influenced Retail Sales Forecast, 2013 - USA

VELVET GROUP, 2013 ©

E-SHOPPING IS A MULTI-SCREEN AND MULTI-DEVICE EXPERIENCE

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ATAWAD CONSUMERS

VELVET GROUP, 2013 ©

IT IS CRITICAL TO MAP THE CONSUMER JOURNEY

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WEB

CONTACT CENTER

IN-STORE

CATALOG

MOBILE

EMAIL

SOCIAL

RESEARCH SELECT PURCHASE RECEIVE / USE SERVICE

Browse catalog

Google search

Comparison site

Facebook Fan club

Visit retail store

Kiosk

Product info

Read reviews

Buy online

Chat

Begin catalog order

Pick up at local store

Complain on brand’s Twitter

Issue complaint

Return in-store

Phone order

Email Order confirm w/ Rec

Share experience on Twitter

E2 = EXPERIENCE + E-COMMERCE

VELVET GROUP, 2013 ©

1. MOBILE COMMERCE IS TAKING OFF IN CHINA

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No. of Mobile transactions

Percentage to total No. Transactions

Transaction amount

2011 1,710,000 n/a

2012 9,000,000 8% RMB 1,200,000,000

2013 45,180,000 24% RMB 11.300,000,000

* 2013 Double 11 total number of transactions through Alipay: 188,000,000

•  Single day transactions from Taobao APP exceeded RMB 5.35 billion o  5.6 times over last year’s RMB 960 million o  Number of active users: 127 million o  Number of transactions: 35,900,000

•  Alipay mobile exceeded RMB 11.3 billion (10 times over 2012). o  45 million transactions*

VELVET GROUP, 2013 ©

§  Key functions: •  product browsing/ product

review •  shopping cart •  order tracking •  order management •  user account •  coupon

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Available on iPhone and Android

1. MOBILE COMMERCE IS TAKING OFF IN CHINA

VELVET GROUP, 2013 ©

2. WECHAT COMMERCE DEBUTS

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SCAN-TO-PAY KILLS SHOPPING CART

Scan with WeChat

VELVET GROUP, 2013 © 28

•  Scan to place the item in Tmall shopping cart •  Over 200,000 items have been placed in the shopping cart prior to double 11.

SCAN-TO-PAY KILLS POS

2. WECHAT COMMERCE DEBUTS

VELVET GROUP, 2013 ©

3. EVOLUTION OF CUSTOMER SERVICE

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Receive a phone call from the US within the next 5 seconds. The customer representative is bilingual in English and Chinese and answers customer inquiries with clear explanation

“Click-to-Call” function on the header 1

Provide number to the customer service 2

•  Customers can indicate country, number and the time to call

•  The service is available 24/7

Immediately connected with customer service 3

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CLICK-TO-CALL (BURBERRY)

VELVET GROUP, 2013 ©

3. EVOLUTION OF CUSTOMER SERVICE

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Message board dedicated to customer care

Burberry customer care Weibo account

SOCIAL MEDIA PLATFORMS FOR CUSTOMER SERVICE

VELVET GROUP, 2013 ©

4. PRODUCT PRESENTATION

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VIDEO SHOPPING

VELVET GROUP, 2013 ©

CONTACT US

Velvet Group Limited Greenland Plaza - 1258, Yuyuan Road - 20050 Shanghai – China www.velvetgroup.com | +86 21 61 16 72 32 Patrice NORDEY CEO pnordey@velvetgroup.com