2013/14 fall semester marketing in china presented by: john ho 何炜亮 sam miura 三浦修一
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2013/14 Fall SemesterMarketing in China
Presented by:
John Ho 何炜亮Sam Miura 三浦修一
Background
What’s Tmall ( 天猫 )?• A Chinese B2C online shopping
platform• Operated by Alibaba Group
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Alibaba Group
Type Private
Industry Internet, e-commerce, computer software
Founded in Hangzhou, China (1999)
Area Served
China and overseas
Alibaba Group primarily operates in the PRC, and in
March 2013 it was estimated by The Economist
magazine to have a valuation between $55 billion to
more than $120 billion.
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Affiliated Entities
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In Tmall, you can find…
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Chinese Brands
Global Brands
Luxury Brands
Market Overview
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Online B2C Market in the World
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The growth of E-commerce B2C market
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3 times
Number of people doing online shopping in China (per 10,000), 2012
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Trade volume of e-commerce in China(per RMB 10,000), 2012
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Chinese Market Composition
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Company Overview
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• At present, Tmall is the 8th and the 47th most visited website in China and the world respectively
• Tmall is the biggest B2C online website in the world
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Market share in China
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Business ModelAnalysis
Revenue Sources
Deposit from sellers
Annual service fees
Advertisements
Fines charged from rule-breakers
Outsourcing Expertise
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Strategic investments in other Internet enterprises in China
Xiami MusicSina WeiboAutoNaviQyer.comTianhong Asset Management Co.,Ltd
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Where is Ebay??
Why could Taobao beat eBay in 2005?
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Alipay system
Name registration & Real brand verification
Evaluating system
Chinese demand for “Security”
Tailor-made webpage design for Chinese customers
Alipay
2121
Buyer Seller
Select goods, and buy
Pay
to A
lip
ay
A N
ote
of
ship
men
t
Send the goodsNotice
about the goods arriving
Release the goods’ fees
Why could Taobao beat eBay in 2005?
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Alipay system
Name registration & Real brand verification
Evaluating system
Chinese demand for “Security”
Tailor-made webpage design for Chinese customers
Name registration & Real brand verification
Why could Taobao beat eBay in 2005?
24
Alipay system
Name registration & Real brand verification
Evaluating system
Chinese demand for “Security”
Tailor-made webpage design for Chinese customers
Evaluating System
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Evaluating System
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Why could Taobao beat eBay in 2005?
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Alipay system
Name registration & Real brand verification
Evaluating system
Chinese demand for “Security”
Tailor-made webpage design for Chinese customers
Why could Taobao beat eBay in 2005?
28
Alipay system
Name registration & Real brand verification
Evaluating system
Chinese demand for “Security”
Tailor-made webpage design for Chinese customers
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Tmall’s4P mix of
Marketing Strategy
Product
• Alipay system – usable for almost all
Chinese banks and international credit
cards
• Wide range of goods/services
• Consulting service to sellers
• Comprehensive and reliable system to
resolve arguments and complaints30
Price
• Diversified price levels
• Competitive pricing compared to
physical flagship stores
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Place
Producer Agent
End custome
rs
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• Tmall itself is an agent
• To producer: Low establishing costs
• To customer: Easy comparison of prices
offered by different sellers
Promotion
• Pull Strategy: Double 11
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US $3.1
Billion
US $5.7
Billion
Promotion• Sales PromotionGroup purchase/ limited sales discounts
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Promotion
• Internet promotion
• TV commercials
• Ad boards in metro stations
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Strength1. A large number of member to
enhance brands’ visibility2. The largest B2C websites with
the most diversified kinds of brands
3. Mature and practical features
4. Alibaba Group provides comprehensive service coverage in E-commerce
Weakness1. Single language interface2. Not user-friendly for elders or
people lack of IT competence3. Replicability of it own innovated
system act as sample to other competitors, creating threats for itself
4. Constraints entering global market
Opportunities1. Expanding e-commerce industry2. Popularization of computer3. Quick infrastructure
construction in China, i.e. better transportations, urbanization
4. Inflation and lower purchasing power
5. B2C market is growing remarkably
Threats1. Traditional, middle-aged or
elder Chinese don’t trust the “Internet”
2. Competition leading to loss of profit margin and growth rate
3. Customers do not recognize significant differences between Tmall and its competitors
4. Too large number of shops opening poses challenges on monitor and management
SWOT Analysis
Competitors
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Competitors
Tencent−QQ Wanggou (QQ 网购 )−PaiPai ( 拍拍网 )
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Competitors
JD (formerly named 360buy)
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New Market Plan
What is the biggest challenge to Tmall at the moment?Intense competition in the market – market share has been decreasing in recent two years
Proposed new market plan’s purpose:To observe the market trend and react to the market demand. Differentiate Tmall from other similar competitors. Ultimately strengthens the loyalty of current and new users so as to avoid losing market share.
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New Market Plan
• Delivery ServiceDevelop own courier services
Example: 2013 Nov 11 Tmall – “Shopping Carnival”( 购物狂欢节 )JD – “Not only Cheap but Fast”( 不光低价 快才痛快 )
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New Market Plan
• Delivery ServiceDevelop own courier services
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Long delivery time / DelayUntrue product descriptionFake productCannot return goods/ get refundLose of the goods during deliveryAdditional expensesOthersReasons for buyers’ anger/ dissatisfaction in
their online shopping experience
New Market Plan
• Change in buyers’ demographic and thus the target audience
46Age
New Market Plan
Change in buyers’ demographic and thus the target audience
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Education Level
Grade 9 or below
High school Bachelor Above bachelor
New Market Plan
• Rising popularity of mobile e-commerce
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Q & A
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