To be successful in the China e-Commerce market western companies must consider the unique requirements for: Product Presentation, Shopping Experience, Merchant Management, Logistics and Infrastructure.

1. Why can’t successful western e-commerce
websites simply replicate their success in
China?
Bill Kohnen Pacific Rim E Commerce Conference
E COMMERCE SUCCESS
IN CHINA

2.  China is the biggest e-Commerce market in the world
 Successful western e-Commerce as well as investors
players desperately want to develop business in
China
 Notable failures because western companies did not
address fundamental differences in expectations by
customers in China
Bill Kohnen Pacific Rim E Commerce Conference
SUMMARY

3. Product Presentation
Shopping Experience
Merchants
Logistics
Infrastructure
Bill Kohnen Pacific Rim E Commerce Conference
AREAS WHERE CHINA AND WESTERN
E-COMMERCE ARE DIFFERENT

4. More vibrant
People important modeling product
Often includes context
See following examples of differences
between Western and Chinese e-Commerce
presentation
Clothing
Computer Accessories
Office Products
Bill Kohnen Pacific Rim E Commerce Conference
PRODUCT PRESENTATION

5. Western China
Bill Kohnen Pacific Rim E Commerce Conference
COMPARISON - CLOTHING

6. Western China
Bill Kohnen Pacific Rim E Commerce Conference
COMPARISON – COMPUTER ACCESSORIES

7. Western China
Bill Kohnen Pacific Rim E Commerce Conference
COMPARISON – OFFICE SUPPLY

8.  Immediately presents interesting content (see following
example)
 Access to new and unique products
 Detailed information of features for comparison
price and features
 Relevant product descriptions
 Total site localization (not just translation)
 Multiple and interesting views of product (5 +)
 Reassurance of trusted Payment process
 Always some presentation of some gender specific
items with more focus on female interest items
(examples: Hello Kitty, stuffed animal, pop culture
phone covers etc..)
Bill Kohnen Pacific Rim E
Commerce Conference
SHOPPING EXPERIENCE

9. Western China
Comparison – Starting Page
Bill Kohnen Pacific Rim E
Commerce Conference

10.  Expectation that the e commerce site manages the merchants
 Authenticity Guaranty
 Fulfillment Quality
 Support
 Quality
 New entrants overwhelmingly underestimate the importance of
managing merchants and therefore do not allocate the right
resources to do this:
 Supplier Management experts
 Quality Control
 Financial Auditors
 Logistics Professionals
Managing Merchant Performance is Vital To Develop Customer Trust
Bill Kohnen Pacific Rim E Commerce Conference
MERCHANTS

11.  Timely order processing
 Return and exchange process
Expectations really not that much different than western but it
has been harder to meet expectations in China as logistics
providers and process are not as developed as in Western
countries.
In China companies can not simply turn over logistics
responsibilities to “Fed Ex” or other third partes and expect
customer expectations to be met.
Bill Kohnen Pacific Rim E Commerce Conference
LOGISTICS

12.  Must have data center inside China Fire Wall
 Western companies need strong partners in China but should
not just hand over operational responsibility
 Requires mutual long term commitment to develop robust
reliable infrastructure
Bill Kohnen Pacific Rim E Commerce Conference
INFRASTRUCTURE