bart horsten's presentation from horsten international - etradesummit 2014

China Sidetrack – eTrade Summit October 2nd 2014, Brussels

ChinaTalk / Horsten International 1

How to be prepared for the Chinese

digital revolution as a European SME?

Bart Horsten 2 October 2014

Steenweg op Mol 129

B-2360 Oud-TurnhoutBelgium

Tel: +32 (0)14 720275www.horsten.be

Activities

1. China Consulting: advise in doing business

with China, primarily to Belgian SME’s

2. Trading: sourcing & business development

3. Investments: (minority) shareholder in some

joint ventures, always with one or another ‘China

link’

Sino-European platform



Horsten International NV

• Established in 1996 by Joos Horsten (ex-Janssen Pharma)

• Headquarters in Oud-Turnhout, Belgium

• Two 100% affiliates (in Hong Kong and Xian)

• 9 employees

• Strategic alliances with specialists in different fields and

with business partners

• 100% focus on China

The Chinese World Map



The Chinese have been doing business in

a certain manner for thousands of years.

Don't even start to think for a millisecond

that you're going to change it

2013: a new government



China entering a new era

China is still a country ‘in

development’

Not only the speed of

development is different,

also the way of

development



Position Paper 2014/2015Issued by the European Chamber in China

“The ‘golden age’ for business in China is drawing to a

close. But it may yet be followed by the dawning of a new

era that could be equally rewarding for China and for

foreign investors. However, that positive transition will occur

only if the new leadership remains steadfast and is

courageous in urgently implementing the decisive reforms

outlined during the Third Plenum, without which the

commitment of foreign business to China may start to wane

and, at worst, the economy could be headed for crisis.”

Strategy for China

• Have one! (and probably a

different one from the strategy in other markets!!)

• Take into account China’s new role in the international business playing field

• Choose the right business model (partnerships)



China: the Dreamplace for

E-commerce!

• The “overlap” between the population on social

media and brand consumers is much bigger than in

the west

• Chinese people are massive creators of content,

while most western people are passive spectators

• Chinese people are very open to new technologies

and experiences

Internet Users in China

111137

210

298

384

457

513

564

618 632

50

118

233

308

356

420

500527

0

100

200

300

400

500

600

700

05 06 07 08 09 10 11 12 13 14 (Q2)

Millions

Internet Users

Mobile Internet Users

47% penetration

52.5% shopping online



Reasons for e-Commerce Growth

• Weak retail infrastructure & low availability of certain products outside Tier 1 and 2 cities.

• Low car ownership, congested roads and less than ideal infrastructure. Home delivery is more convenient.

• Online payment systems like Alipay lower the risk of online buying; payment only after satisfactory delivery.

• Discounts: most retailers offer products online at significant discounts.



Alibaba

International B2B

C2C (small businesses)

B2C

(1st & 2nd tier cities)

International B2C

China’s biggest retailers …



Frequency Mobile Shopping

Reasons for M-Commerce Growth

• New means of mobile payment.

• Penetration of smartphones in the

countryside (where few stores are located and

few people own PCs).

• Increase in 3G/4G coverage (40% of mobile

users) & increase in WIFI hotspots.

• O2O tools



Advertising your products in China

• E-commerce platforms in China are the place

where you merge social media, brand

experience, and transactions.

• Chinese platforms are way better than its

western alternatives: Tmall is better than

Amazon, WeChatt (Weixin) is better than

Whatsapp, Weibo is better than Twitter, etc

The Chinese Consumer

• Young: generation of 25 to 44 year olds

• Perception that foreign brands are better than

Chinese brands

• Growing popularity of the western way of life and

consumption patterns

• ‘Showing-off’ mentality

• Very price conscious (bargaining culture), but willing

to pay more for foreign brands

• Low brand loyalty

• Fast changing consumption patterns and behaviour



Online Sales platforms

• Website outside China

• Website in China

• 3rd party platform outside China

• 3rd party platform in China

Online Marketing Basics

• Search Engine Marketing (Baidu)

• Localize product & communication

– A Chinese translation is not enough …

– Work with local teams for content creation

• Integrate website with social media

– Build following on Sina Weibo (Awareness) & WeChat

(CRM, Payment)

• Focus on a niche/market segment



AgendaConclusion The combination of China’s

fast increasing middle class

consumers, the digital

revolution at an enormous

speed and Chinese people’s

openness to new

technologies and foreign

brands leads to great

opportunities for foreign

companies to sell its

products in China, but it is

crucial to be well prepared

and find the right partners.

bart horsten's presentation from horsten international - etradesummit 2014

Business