exploring e-commerce opportunities in china-ben franzi

Exploring eCommerce opportunities in ChinaEmerging trends and channels China Digital Conference2 June 2016

Ben FranziGeneral ManagereCommerce Platforms & Digital

Page 2

Worldwide B2C eCommerce

$57.7bnLatin America

$482.6bn

North America

$347.4bn

Western Europe

$58.0bnCentral & Eastern

Europe

$33.8bnMiddle East & Africa

$525.2bn

Asia Pacific

This year, worldwide B2C eCommerce sales are set to total $2 trillion USD

Page 3

Populations in Asia to stimulate growth and tradeAs well as a growing middle-class, large and dynamic populations with high internet usage and reliable supply chains are likely to experience rapid eCommerce growth.

China: 1.4 billionIndia: 1.3 billion

Indonesia: 255 million

Australia: 24 million

Philippines: 100 millionJapan: 123 million

Singapore: 5.4 million

Source: InternetLiveStats, InternetWorldStats, Government data (Singapore); all Q1 2015. Wikipedia for population data.

86%

89%

Average global internet average

Japan

28%81%

19%42%

47%China

India44%

Philippines

Singapore

Australia

IndonesiaAsia Pacific online spend:

$525.2bn

National internet usage figures%

Populations

Page 4

Tourism

Government incentives & Customs involvement

eCommerce leadership

Much of China’s eCommerce growth is driven by increased consumer purchasing power and government policy change

China’s booming eCommerce market

Growing middle-class RMB (¥) appreciation

Page 5

By 2030, China’s middle class is projected to equate to 93% of the urban population

Projected China urban households (millions) by income groups

Source: ANZ Research, Business Insider Australia

Chart depicts expected changes to composition of Chinese household wealth from 2015 through to 2030

China’s growing middle class is a key driver of Asian eCommerce

Page 6

Food and wine Clothes & accessories Home

Health & skincare Baby food & products Dairy

Top imports from Australia – Quality, provenance and iconic

Chinese eCommerce preferences play to Australian advantages

Page 7

Despite this growth, there are still many barriers to market entry that need to be recognised so that your business can succeed

• Accessing customers• Legislation• Language & culture• Logistics

Barriers

Overcoming barriers to growth

Page 8Page 8

Key policy changes:

• Types of taxes• Commodities list• Value limits• Tax rates• Clarified tax paying subject

Changes to China’s import tax laws From 8 April 2016, goods purchased through online marketplaces will be treated as imported goods – carrying tariffs, import VAT and consumption tax (in some cases).

Page 9

Sending overseas, simplyIntroducing our new international productsWhat’s new?

• Easy options • Enhanced security• Flexible extras • Less paperwork • Competitive pricing to

popular export destinations – including China (Zone 2)

Find out more at: auspost.com.au/sendoverseas

Page 10

• Postal and commercial solutions• Marketplaces• Sai Cheng China JV• Hong Kong & Asia supply chain

(incl. distribution & warehousing)

• Payment solutions

International - Powered by Australia Post

Our cross-border solutions can open doors to new opportunities in China

Choosing distribution channels to suit you

Page 11

Third-party marketplaces can be an easier way to sell your productsMarketplaces

• One-stop shop – wide product variety• Generates strong consumer confidence

and trust• Broad reach and increased revenue

opportunities (for merchants)

Why marketplaces?

Page 12

How we help businesses sell into China

Tmall (B2C) auspost.tmall.hk

1688 (B2B) auspost.1688.co

m

JD.COM (B2C) auspost.jd.hk

Page 13

A snapshot of brands selling into China via our Australian flagship store on Alibaba’s Tmall marketplace - auspost.tmall.hk

Brands already trading on Tmall

Page 14

Alibaba’s 2015 Singles’ Day sales grew 60% YOY to net USD $14.3 billion (AUD $20 billion)

2015 Alibaba Singles’ Day – in numbers:

China Singles’ Day – Biggest annual online day (5x Black Friday)

Page 15

• Exciting time for Australian businesses

• Huge opportunities• We have the solutions to help

you succeed in China

Summary

Thank you. Questions?For more information: Ben Franziben.franzi@auspost.com.au