BRICKS TO CLICKS THERE AND BACK AGAIN Magdalene Kang
BRICKS TO CLICKST H E R E A N D B A C K
A G A I N
Magdalene Kang
How do you shop?
RISE OF E-COMMERCE
Average 3-4% growth
Exponential Growth
中国Number of Online ShoppersAverage Growth Rate = 83.5%
Strong e-Commerce growth
B2C sales in 2011 $961 billion, growth of nearly 20% from 2010
Reasons for the rise in online shopping
Convenience Cheap Comparison Cross-Border
BRICK & MORTAR
D E AT H O F T H E
© Justin Sullivan/Getty Images
Pure clickSource: Google Images
BlogshopsSource: Google Images
Why choose Pure Click?
•Low capital•Easy to launch•Easy to maintain•Global reach
Bricks to Clicks Spectrum
Source: Google Images
Growth of e-tailers
e-Commerce Channel
BRICKS
CLICKS
Brick and Click
Brick & Mortar retailers add e-commerce strategy
Source: Google Images
Adopting a Brick & Click Strategy
Global reach
New customers
Solidify brand
Response to competitors
Channel Conflict
Bricks to Clicks Spectrum
Source: Google Images
BRICKS
CLICKS
Online to Offline
ONLINE TO OFFLINE
M O V I N G F R O M
COUNTER INTUITIVE?
DOES THIS MAKE SENSE?
BETRAYAL OF ECOMMERCE VALUES?
Groupon SingaporeSoure: techinasia.com, e27.sg
Groupon Physical Store
• Better customer service• Better merchant service• Test physical products• Face to face interaction• Branding
tracyeinny physical store
Source: sgentrepreneurs.com.
Best of BlogshopsSource: http://imcms2.mediacorp.sg/CMSFileserver/documents/006/pdf/20090829/2908SHL010.pdf.
KissjaneSource: sgentrepreneurs.com.
Blogshops going offline
• Dream to own a store• Try on clothes• Walk in customers• Space for loyal fanbase
Amazon to open retail store
Source: Google Images
Amazon retail store
• Experience the Kindle• Provide tech support• Sell Amazon publications• Getting taxed anyway• Showrooming
TAOBAO.COM 淘宝O N L I N E T O O F F L I N E
Taobao Mall 淘宝城-上海
Source: http://office.sh.soufun.com/photo/1210234142/907_89096020.htmhttp://newnews.ca/?action-viewnews-itemid-59852
Taobao Mall 淘宝城-北京Source: http://bbs.taobao.com/catalog/thread/508895-252286846.htm
e-Commerce Insider Report, June 2011
Taobao Furniture Mall
• 270 showrooms• Self-service style• Self-service terminals• No promoters• Payment options
• On the spot• Login to Taobao
• 10% of the cost of traditional showrooms
http://www.whatsonningbo.com/tech173.html
Taobao Furniture Mall
• Furniture showroom• Big ticket item• See and touch• Caters to online shoppers• Plans to open in major cities• No plans for other kinds of mall
Source: http://office.sh.soufun.com/
TAOBAO.COMT O T H E M A S S E S
NETIZENSNON NETIZENS
40% netizens
60% still offline
Source: en.wikipedia.org/wiki/Internet_in_China
Source: http://hi.baidu.com/360264986/item/3ab8d01554da30088fbde42f
Online Shoppers
Shop OnlineDon't Shop Online
78%
22%
Source: http://hi.baidu.com/360264986/item/3ab8d01554da30088fbde42f
Reasons for Not Purchasing Online
Not familiarDon't know howNo payment methodUnsafeOthers
TAOBAO PHYSICAL STORES
• Need to reach out to the masses• Address their concerns
• Purchase process• Payment process• Safety concerns
淘宝实体店
淘一站
• Off-the-shelf purchases• Order from a catalog• Seasonal promotions• Order anything on
taobao• Payment services
Source: http://baike.baidu.com/
How to become part of 淘一站
Franchisee Conditions:
1. Have an online taobao store2. At least 4 diamond rating3. At least 98% good reviews4. At least ¥50,000 in monthly revenue5. Proper legal documents6. Provide a minimum deposit
淘一站
• 2008 implementation
• 80 shops in 11 provinces and 40 cities
Source: http://www.0734.com
DEAD!
WHY?
• Customers were all young people• No return or frequent customers• Customers only came for the
novelty factor
REVIVAL OF 淘宝实体店
东山再起
YES! 淘 - 淘宝代购店
• Purchase on behalf of the consumer
• Anything on taobao• Make payments• Accept delivery• Make returns
Source: http://news.ifeng.com/gundong/detail_2011_08/20/8556332_0.shtml
TAOBAO AUTHORIZED DEALER
Takes over entire purchasing process
YES! 淘 - 淘宝代购店
• January 16, 2010• First 150 stores in
Hangzhou• Plans to open 30,000
all over China• Expansion into Tier 2
and Tier 3 cities
Source: http://www.chinainternetwatch.com/548/taobao-expands-into-offlien-retail-business/
TAOBAO AUTHORIZED DEALER
YES! 淘 - 淘宝代购店
Franchisee Conditions:• Commitment of at least 1 year• Basic computer knowledge, typing, experience in
online purchasing preferred• Own a store front of at least 2sqm• ¥750 publicity materials• ¥1200 deposit as guarantee (held in escrow)• Miscellaneous marketing fees
Source: http://www.chinainternetwatch.com/548/taobao-expands-into-offlien-retail-business/
TAOBAO AUTHORIZED DEALER
安银电脑(嘉善,浙江)
VIDEO
Bricks to Clicks Spectrum
Source: Google Images
BRICKS
CLICKS
Online to Offline
WHY MOVE BACKWARDS?
• New walk in customers• Large number of people still offline
NEW MARKETS
WHY MOVE BACKWARDS?
• User experience• Try out products first• Human touch• Branding
SHOWROOMING
WHY MOVE BACKWARDS?
• After sales service• Customer feedback
SERVICE
WHY MOVE BACKWARDS?
• Building trust with the customer• Prove that it is a real business
靠 谱
CONCLUSIONS
BRICKS
CLICKS
Online to Offline
Equilibrium Point