eCommerce on Steroids:

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1 eCommerce on Steroids: An introduction to China’s social eCommerce brands and what we can learn from them. Nicky Szmala & Rachel Guo June 2014 | Beijing

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2 Our agenda Quick snapshot of China’s eCommerce landscape What we can learn from them Intro to social eCommerce-only brands

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3 China’s Giant eCommerce Industry Photo Credit: https://www.flickr.com/photos/23860276@N05/3887510836/

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In 2013 China’s Gross Merchant Value reached USD 1.63 trillion Source: iResearch, Jan. 2014

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1.000.000.000.000 (12 zeros)

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Up 21.3% from 2012 Source: iResearch, Jan. 2014

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269.4 million eCommerce users Source: iResearch, Jan. 2014

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YoY Growth of Mobile eCommerce: 165.4% Source: iResearch, Jan. 2014

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eCommerce in China huge fast growing more and more mobile

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10 China’s eCommerce Ecosystem Photo credit: https://www.flickr.com/photos/15562978@N08/10149082793/

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Taobao Tmall Jingdong Horizontal eCommerce Platforms Electronic Products Gome,Suning Apparel vip.com, Vancl Grocery & Daily Necessity SF-Best, 1haodian Cosmetic Jumei, Lefeng Books Dangdang, Amazon Offline Service Meituan, Nuomi, Dianping Vertical eCommerce Websites eCommerce Brands Xiaomi Smartisan Liebo Crucco Three Squirrels Chu Orange AFU Roseonly Tangcha Diaoye Brisket Duokan Huangtaiji Pancake

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Taobao is replacing Baidu for product search

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eCommerce is tightly integrated into social channel Jingdong-WeChat 1 Dianping-QQ 2 Taobao-Weibo 3 600 Million Users 800 Million Users 500 Million Users Data Source:We are Social, China Digital Landscape 2014

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Shopping festival In 2013, sales volume reached 4.8 billion USD on Taobao Double 11 Festival

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Express delivery infrastructure

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Community based eCommerce stores

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“Internet users in select countries who would buy a brand because of a friend ‘Likes’ or follows it on a social networks” Data Source: IPSOS OXT and Ipsos Global, 2012 CHINA 54% INDIA 44% INDONESIA 39% USA 15% AUSTRALIA 15% SOUTH KOREA 14% JAPAN 6%

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WOM Social Media Data Source: Accenture, Winning the Heart of Chinese Consumers, 2012 77.4% 92.7%

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Emotional Story Niche Target Audience Communication is 100% Social Experience Functional Story Sales Mechanics Partnerships

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Xiaomi | ??

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Lei Jun – The Steve Jobs of China Emotional Story

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Functional Story

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Experience

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Sales Mechanics

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Communication is 100% Social

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Partnerships Partnerships with Chinese telecom operators

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Niche Target Audience Electronic device fans, who are passionate about being involved in product development College students, who are tech savvy but have limited budget for smartphones

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Roseonly

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A gift for the only one in your life Emotional Story

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Functional Story Roses are imported from exclusive gardens high in the mountains of Ecuador Chocolate is imported from Belgium and made by Jean George, a three-star Michelin restaurant in NYC

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Experience Products are delivered in exquisite packages by well dressed male models Guaranteed to be delivered within 24 hours

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Sales Mechanics For the lifetime of each customer account, only a single recipient can be registered

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Communication is 100% Social 109 comments 573 retweets

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Partnerships Trendgroup Media: gains media and celebrity resources Jean George Restaurant : establishes a light-luxury image

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Niche Target Audience Urban, upper middle class males with high demand for luxury experiences and quality products Well educated females with appreciation for exclusive products and high expectation around relationships

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HeyJuice

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Emotional Story

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Functional Story Organic Fruit/Vegetable + Nutrition Recipe

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Experience Just-in-Time Production Kept Fresh On-Time Delivery

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Sales Mechanics Subscription Model

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Communication is 100% Social

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Partnerships Shiyi Pan, as angel investor of HeyJuice, helped recruit celebrities and business elites as early adopters

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Niche Target Audience The young, professional, LOHAS females who have above average income and invest in their well being

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3 Squirrels | ????

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Emotional Story A cartoon story about three squirrels with story lines and merchandise crowdsourced by the brand fan base

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Sourcing of the best nuts and building a distribution system to ensure freshness and high quality Beijing Functional Story Wuhu GZ

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Experience Shell Bag Wet Tissue Clip Customer Feedback Card Card Case

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Sales Mechanics

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Niche Target Audience Young people with tight budgets but willing to pay a little more to enjoy better quality products and services

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What is missing here? Photo Credit: :https://www.flickr.com/photos/10687935@N04/3552576743/

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Instead invest in: KOLs Social Ideas Social Care SEO Product & Customer Experience

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Social works. For product launches. And beyond. What we can learn from eCommerce on Steroids:

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55 Thank you! ??! We’re happy to answer your questions: nicky.szmala@geometry.com

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Image Sources Slide1: http://1.bp.blogspot.com Slide 3:http://www.winnipegfilmgroup.com Slide 9:http://www.liveforthepump.de Slide 12: http://taobao.com Slide 13: WeChat App, QQ App, Weibo web page Slide 14,47:http://www.nipic.com/ Slide 16: http://www.ebrun.com Slide 21,23,24,25,27:Xiaomi official website Slide 22:http://coffeeticks.my Slide26: http://bbs.xiaomi.cn/ Slide 28,36,50:http:www.gettyimages.cn/ Slide 29,30,31,33:http://www.roseonly.com.cn/ Slide 34: Roseonly Weibo and WeChat account Slide 35: http://news.cecb2b.com Slide 37,38,39,40,41,42,44: http://www.heyjuice.cn/ Slide 43: scity.weibo.10086.cn Slide 45,46,49: http://www.3songshu.com/ Slide 51: http://architecturebehindmovies.wordpress.com

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Thanks! We’ll send you the deck! Nicky Szmala nicky.szmala@ogilvy.com Aoiffe Madden aoiffe.madden@ogilvy.com Martyn Rosney martyn.rosney@ogilvy.com

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Thanks! We’ll send you the deck! Jonathan Nguyen jonathan.nguyen@ogilvy.com Hannah Law hannah.law@ogilvy.com Nicky Szmala nicky.szmala@ogilvy.com Thomas Crampton thomas.crampton@ogilvy.com

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Thanks! We’ll send you the deck! Ian Sohn ian.sohn@ogilvy.com