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TRANSCRIPT
EAST-COMMERCE：
Ways to adapt your business strategies post Covid-19
Marco Gervasi CEO Suite webinarShanghai, 28 May 2020
«Dare and Care»
Some numbers
for the first quarter as a whole, online retail sales slipped by 0.8% year-on-year to around $ 310.8 billion (source National Bureau of
Statistics)
online retail sales of physical goods - such as daily necessities, food and medicine - increased by 5.9% year-on-year, accounting for 23.6% of the total retail market
fresh food’s online sales - including meat, eggs and vegetables – increased 70% year-on-year
online sales of household necessities = kitchenware and fitness equipment - grew by a combined 40% year-on-year in the first quarter
Veggies
The online fruit and vegetable market is expected to grow by 62.9% in 2020 compared to 29.2% in 2019 (source iiMedia Research
March 17)
Livestream to become a driving force in China’s e-commerce sector. More than 4 million online sales promotion shows were livestreamed in the first quarter
Cosmetics
On March 8th, Women's Day, sales of cosmetics on JD.com increased by 97% compared to 2019. The best brands were: SK-II, Lancôme, L'Oréal SA, Olay and Pechoin
Taobao was born during SARS
about 20 years ago SARS hit China by infecting 5,000people and killing 350 (as of July 2003)
on May 10th, 2003 Alibaba launched Taobao which became the largest e-commerce site in the world
it's like saying that a new Amazon might be launched during Covid-19
The 5 trends of Chinese e-commerce during Covid-19
1: bring online what has always been offline
2: change the mix of sales channels
3: product innovation based on new needs
4: redistribute work flexibly
5: amplify logistic support
1 bring online what has always been offline
Shanghai Fashion Week, which took place at the end of March, saw 150 brands streaming on Tmall with over 500 million users
short films, catwalks, exhibitions and panels took place while sales manager interacted with the public and sold products
over 2.5 million people watched the opening ceremony, while 6 million attended the 1st day parade
Women between the age of 26 and 35, living in the first and second tier cities, represented 75% of the audience
The Metropolitan Museum of Art in New York celebrates its 150th anniversary this year. From March 12, the museum is closed until July with estimated losses of around $ 100 million
In March the Met launched its livestreaming service with Pinduoduo (the third Chinese e-commerce platform)
the museum staff is holding a camera to show viewers different exhibition areas
viewers can comment and interact with the staff
there is also an in-app option to purchase gift items
the Beijing Palace Museum, the Shanghai Museum and others have responded with 3D virtual tours
2 change the mix of sales channels
in February, Chinese shoe retailer Red Dragonfly closed nearly all of its 4,000 physical stores due to Covid-19
the company had approximately $ 14.1 million in monthly expenses to face
since February 8 it has trained all its 5000 employees on how to sell products online
«we had to mobilize all staff offline and use our phones to sell. It wasn't an easy thing for a traditional company like ours to do »
on March 8, the brand broadcasted a live streaming session that attracted over 435,300 viewers and helped increase the sales of its flagship stores by 114% compared to the previous year
Cosmo Lady, the largest lingerie company in China, has created a program to increase sales on WeChat by recruiting employees and creating a sales ranking among all employees (including both the president and the CEO)
What did Victoria Secret do instead? On Friday March 27, it announced that most of his 94,000 employees in department stores and shops will be put on furlough
How do we deal with lockdowns, the sale of alcohol and the cancellation of concerts?
Budweiser launched a new consumer experience at home such as weekly livestream DJs and e-gaming events, while digital influencers conduct online sales
for social commerce they have selected consumers and employees who act as brand ambassadors (KOC) and group purchasing coordinators for various residential complexes
During Chinese New Year 2020, about 73% of companies have chosen to close all stores. Consumers have canceled about 94% of food orders. The earnings of the food and beverage sector during the Chinese New Year are equal to 15% of the annual turnover
between 21st -30th January, the restaurant chain Meizhou Dongpo said that it had canceled 11,144 reservations in its more than 100 stores and lost around 2.2 million Euro
Meizhou Dongpo asked his chefs to livestream how to prepare traditional delicacies and direct viewers towards products such as braised pork belly sold on their Tmall flagship store
The numbers
in 2019, livestreaming accounted for nearly 9% of total e-commerce sales in China and approximately 1% of total retail consumer goods sales (source: National Statistics Office of China)
the number of spectators in 2019 was 456 million (source Deloitte)
the livestreaming market is estimated to have been worth about $ 63 billion in 2019
according to Alibaba, Taobao hosts over 4,000 livestream hosts, which generate 150,000 hours of content on a daily basis
Shopshops is a New York-based startup helping Chinese consumers discover new boutiques around the world through livestreaming from stores on Chinese e-commerce platforms
3 product innovation based on new needs
The insurance sector is notoriously conservative, but Ant Financial added free coronavirus-related coverage to its products and increased health insurance revenues by 30% in February
4 redistribute work flexibly
over 40 restaurants, hotels and movie chains shared employees with Hema, (a chain of retail stores owned by Alibaba)
Hema was in urgent need of labor for delivery services due to the sudden increase in online purchases
food delivery companies including Ele, Meituan and 7Fresh of JD.com, followed this example by borrowing manpower from restaurants
5 amplify logistic support
Hema has around 200 stores across the country and during COVID-19 launched a group shopping program for Wuhan, the epicenter of the epidemic
The company delivered goods by bus instead of its usual couriers
«We have simplified our procedures to make everything easier to understand. After 2 hours of education the new hires were ready to work »
To avoid the congestion of shopping centers, Sinopec service stations have dedicated a space in the parking lots to collect the goods bought online in the neighboring shopping centers
In some areas of Beijing, robots delivered food to buildings to avoid contact with the bellboys
"It is what you do with what you have, rather than what you would like to have, that makes the difference among people" (Nelson Mandela)
