Welcome to the live blog of ChannelAdvisor’s Catalyst Europe 2014. We’ll be live blogging some of our keynote sessions to make sure that Catalyst attendees don’t miss anything. Also, make sure you’re following hashtag #EUCatalyst and @ChannelAdvisor on Twitter for all the latest updates.
Session: State of E-Commerce with Suzanne Miglucci
Speaker: Suzanne Miglucci, Chief Marketing Officer, ChannelAdvisor
Suzanne Miglucci kicks off our keynote sessions with her assessment of the state of e-commerce across the globe. Kicking off her session with an overview of e-commerce, Suzanne shared that e-commerce is growing at 16% in the UK, while brick and mortar stores are growing at under 3%. Drawing from a US perspective, Suzanne has told a shocked audience that not one indoor mall has been built in the US since 2006.
To review the state of e-commerce, Suzanne has taken an look at the marketplace giant Amazon, who has over 237 million active buyers globally, a number that is growing at 19% year on year. Last year they did $74bn in sales, about £44bn. Growing a remarkable 22% annually. On top of this, Amazon was the number 1 mobile site in the UK for 2013. Suzanne then looks at three specific Amazon properties;
1. Third Party Marketplaces
Amazon is 2 times as big as everyone thinks it is, because there is a hidden GMV when you consider its third-party marketplace activity.
2. Amazon Prime
Helps connect all these three topics by giving consumers 1-day delivery options. 10% of Amazon’s users are Prime subscribers, and they spend on average four times as much as the regular Amazon shopper. to get to this audience, retailers should be considering FBA.
3. Fulfilment Network
Amazon hundreds of Fulfilment Centres across the world, with 8 based in the UK. Amazon’s shipping costs are going down, because their fulfilment centres are close to large population centres. So the cost to ship products is decreasing. There’s more shipping innovations made each day – from Amazon lockers in Hammersmith Tube Station to drones.
Suzanne visualises the napkin that Jeff Bezos drew to convince people of the third-party marketplace brings. The belief is that there are 4 unique offerings that 3PMs offer: selection, value, convinience and confidence. By bringing new retailers to the marketplaces, Amazon opens up a wider selection, while the varierty promotes competition. The convinience factor shows that programmes like Amazon Prime deliver directly to the consumers’ door quickly, while confidence is brought through programmes such as Amazon A-z guarantee or eBay’s Money Back Guarantee.
What does this marketplaces phenomenen mean for the global landscape? In the US and UK, marketplaces account for 1/3 of e-commerce spend, while digital marketing drives 2/3 of traffic to retailers’ websites. Look to China and marketplaces account for 90% of e-commerce spend, with Tmall dominating that audience.
Suzanne shared some incredible numbers from China.
- According to Forrester, China is set to be the world’s largest eCommerce market by 2015.
- E-Commerce in the UK is growing at 16%, compare that to 30% growth in China.
- Online shoppers in the region spend $40,000 per second
- Tmall has over 70,000 brands sell across 50,000 stores.
- There’s a day celebrated in China called Singles Day, which is celebarated on the 11th of November. (11/11 all the ones) Last year over 6 billion dollars were spent online on this day. That’s 4 times the size of Cyber Monday.
Suzanne indicated that with China’s jump directly to a predominantly marketplaces landscape, they are in fact leading the e-commerce world, and it may be that the rest of the world begins to look like China in the coming years, with the majority of transactions happening from a marketplace.
So how do retailer’s embark on expansion?
Suzanne said that she knows it can appear daunting, but the opportunity for success is ripe. To help retailers capture international audiences, ChannelAdvisor have created the Agile Cross-Border Trade Framework, to help retailers approach expansion in a step-by-step process.
Traditionally the path to expansion was an expensive and risky model that involved fully translating your website, investing in localisations and then trying to get out there to acquire new customers. This approach meant front-loading the expense to the beginning of your expansion, with an increased risk and no knowledge of whether the appetite and market for your product exists.
With Agile CBT, we invert this cycle. Almost taking a ‘let’s not put all of your eggs in one basket’ approach. Rather than investing upfront at the start- this approach will help you to stagger out the expense between stages. As you do this you can test a market, learn from your experiences and iterate or amend as needed to be successful. Not only does this get you to profitabilty faster but it also reduces the risk. Suzanne urged retailers to take the time to research a market, test and iterate, and continue with success!
Suzanne finished up with an update on ChannelAdvisor’s new Digital Marketing product and urged the audience to take advantage of today’s sessions to learn what they need to accerelate their e-commerce!
Session: The Rise of Alibaba
Speaker: James Hardy
Next up to speak is James Hardy, EU Managing Director for Alibaba. James is on hand to offer advice to retailers looking to expand internationally to China.
James set out to display the Chinese opportunity:
“By 2020, we project that Chinese e-tailing will match the combined size of today’s US, Japanese, UK, German and French markets reaching $420bn – $650bn in sales.” McKinsey Global Institute, March 2013
James identified that brands of different sizes need to take different approaches to expansion:
For larger brands, who already have brand awareness, it’s all about traffic and conversion. These retailers should focus on conversion channels such as search (Baidu/360 paid search, Baidu/360 organic search). Also leverage organic traction: Baidu Q&A, Baidu answers, Baidu wiki, mentions on social channels, blogs, forums. Social influencers have a large part to play as peer-to-peer reviews is prevelant in the market. Influencers are more important than push advertising in China. Mobile is a prominent channel, so a site with responsive site, engagement with existing followers on social platforms, Weibo is key. Larger brands with recognisable names also have the option to set up their own site inside China and/or Tmall.
For smaller brands, James believes its all about building brand awareness through Weibo, which will take up most of the retailer’s budget. Drive this traffic to Weibo, then Tmall.com and a microsite. The advantage of converting sales on Tmall, is that it is set up with the regulations of the Chinese market in mind, and it also is supported by Alipay, which promotes buyer confidence and has a series of protections.
The Chinese market is made up of about 200 tier 3 cities. Biddable media can target by province or by city, and mobile is highly important due to a lower quality infrastructure. Make sure to use responsive design or leverage marketplaces to ensure you capture this audience.
James encourages the audience to take the time to research the Chinese market and to see what strategy is most alligned with their businss. He leaves with these snippets of advice.
Reminder for the Catalyst Europe’s social presence:
• Follow @ChannelAdvisor on Twitter as we’ll be tweeting out updates, reminders about sessions, networking events and more.
• Tag your social posts, Instagram pics with our show hashtag: #EUCatalyst tabs on discussions, networking opportunities and more on the Catalyst app.
• Keep an eye on the ChannelAdvisor blogs where we’ll be live blogging the keynotes and main sessions at Catalyst.