1. 2013/14 Fall Semester Marketing in China Presented by: John Ho 何炜亮 Sam Miura 三浦修一

2. Background What’s Tmall ( 天猫 )? A Chinese B2C online shopping platform Alibaba Group Operated by Alibaba Group 2

3. Alibaba Group TypePrivate IndustryInternet, e-commerce, computer software Founded inHangzhou, China (1999) Area ServedChina 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. 3

4. Affiliated Entities 4

5. In Tmall, you can find… 5 Chinese BrandsGlobal BrandsLuxury Brands

6. Market Overview 6

7. Online B2C Market in the World 7

8. The growth of E-commerce B2C market 8 3 times

9. Number of people doing online shopping in China (per 10,000), 2012 9

10. Trade volume of e-commerce in China (per RMB 10,000), 2012 10

11. Chinese Market Composition 11

12. Company Overview 12

13. At present, Tmall is the 8 th and the 47 th most visited website in China and the world respectively Tmall is the biggest B2C online website in the world 13

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15. Market share in China 15

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17. Revenue Sources Deposit from sellers Annual service fees Advertisements Fines charged from rule- breakers Outsourcing Expertise 17

18. Strategic investments in other Internet enterprises in China  Xiami Music  Sina Weibo  AutoNavi  Qyer.com  Tianhong Asset Management Co.,Ltd 18

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20. Why could Taobao beat eBay in 2005? 20 Alipay system Name registration & Real brand verification Evaluating system Chinese demand for “Security” Tailor-made webpage design for Chinese customers

21. Alipay 21 BuyerSeller Select goods, and buy Pay to Alipay A Note of shipment Send the goods Notice about the goods arriving Release the goods’ fees

22. Why could Taobao beat eBay in 2005? 22 Alipay system Name registration & Real brand verification Evaluating system Chinese demand for “Security” Tailor-made webpage design for Chinese customers

23. Name registration & Real brand verification

24. 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

25. Evaluating System 25

26. Evaluating System 26

27. Why could Taobao beat eBay in 2005? 27 Alipay system Name registration & Real brand verification Evaluating system Chinese demand for “Security” Tailor-made webpage design for Chinese customers

28. 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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30. 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 complaints 30

31. Price Diversified price levels Competitive pricing compared to physical flagship stores 31

32. Place ProducerAgent End customers 32 Tmall itself is an agent To producer: Low establishing costs To customer: Easy comparison of prices offered by different sellers

33. Promotion Pull Strategy: Double 11 33

34. 34 US $ 3.1 Billion US $ 3.1 Billion US $ 5.7 Billion US $ 5.7 Billion

35. Promotion Sales Promotion Group purchase/ limited sales discounts 35

36. Promotion Internet promotion TV commercials Ad boards in metro stations 36

37. 37 Strength 1.A large number of member to enhance brands’ visibility 2.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 Strength 1.A large number of member to enhance brands’ visibility 2.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 Weakness 1.Single language interface 2.Not user-friendly for elders or people lack of IT competence 3.Replicability of it own innovated system act as sample to other competitors, creating threats for itself 4.Constraints entering global market Weakness 1.Single language interface 2.Not user-friendly for elders or people lack of IT competence 3.Replicability of it own innovated system act as sample to other competitors, creating threats for itself 4.Constraints entering global market Opportunities 1.Expanding e-commerce industry 2.Popularization of computer 3.Quick infrastructure construction in China, i.e. better transportations, urbanization 4.Inflation and lower purchasing power 5.B2C market is growing remarkably Opportunities 1.Expanding e-commerce industry 2.Popularization of computer 3.Quick infrastructure construction in China, i.e. better transportations, urbanization 4.Inflation and lower purchasing power 5.B2C market is growing remarkably Threats 1.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 Threats 1.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

38. Competitors 38

39. Competitors Tencent −QQ Wanggou (QQ 网购 ) −PaiPai ( 拍拍网 ) 39

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42. Competitors JD (formerly named 360buy) 42

43. 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. 43

44. New Market Plan Delivery Service Develop 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 ) 44

45. New Market Plan Delivery Service Develop own courier services 45 Long delivery time / Delay Untrue product description Fake product Cannot return goods/ get refund Lose of the goods during delivery Additional expenses Others Reasons for buyers’ anger/ dissatisfaction in their online shopping experience

46. New Market Plan Change in buyers’ demographic and thus the target audience 46 Age

47. New Market Plan Change in buyers’ demographic and thus the target audience 47 Education Level Grade 9 or below High school Bachelor Above bachelor

48. New Market Plan Rising popularity of mobile e-commerce 48

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