Kaola, With the increasing of revenue, the Chinese’s consumer are more sophisticate and look for good product. Then, a significant number of Chinese’s consumer now order products from foreign brands online, with quick access to information about their suppliers.

 

A CHINESE NEWS SITE CREATES A BIG E‑RETAIL BUSINESS

The online sales portal Kaola.com

NetEase Inc.’sk Koala.com, an online sales portal has become one of the most dynamic websites where Chinese consumers can purchase products from foreign brands. Created in 2014, NetEase, Inc. is one of the leading Internet companies in China. It is a company focused largely on providing online services, sales of e-mail services, advertising services, and applications. NetEase also develops and operates online games. In partnership with Blizzard Entertainment, NetEase also operates some of the international games. The site benefits from the government’s relaxed e-commerce policy to allow consumers to purchase goods for personal use from retailers and brands from other countries.

In 2016, NetEase said its sales of e-mail, e-commerce and other businesses exceeded $ 1.16 billion. Kaola.com CEO Zhang Lei also says that e-commerce represented a big portion of this revenue and that they have increased sales very quickly in recent years.

Since 2016, Kaola.com has presented more than 3,000 brands, with more than 2,000 products from more than 70 countries and regions to Chinese buyers. In addition to Kaola.com, NetEase’s full range of products, including news, e-mail and cloud music platforms, participated in the festival. Meanwhile, its cooperating partners such as Ctrip, China Merchants Bank, ICBC and Smzdm.com have set up various activities to support NetEase’s promotion abroad.

The goals of Kaola.com

China is a country where the retail market is increasingly promising. Then, NetEase has taken advantage of this aspect of the online market to be able to establish itself. Indeed, with nearly 800 million users, NetEase has found a good way to monetize these users.

The main objective of Kaola.com is to sell a large number of high-quality foreign products to nearly 150 million middle class Chinese consumers from an e-commerce site in direct contact with consumers. The government has also relaxed its trade policy regarding online purchases abroad, which further promotes NetEase’s business.

Unlike its competitors Alibaba and JD.com, NetEase focuses more on high-end products. Indeed, Chinese consumers therefore the average age is 30 years are increasingly sophisticated, looking for new products, which will allow them to feel unique. This is very profitable for retailers, as these new “rich” now have greater purchasing power. As a result, competition is very rude and the company that will best serve these consumers over the coming decades will almost become the king of the market.

Kaola’s strategy

While other players mainly sell through markets, Kaola’s strategy is to put a greater emphasis on the sale of large-scale products directly to buyers. This business model allows consumers to buy products at better prices and save time by making their choice. In addition, for about 20 years, NetEase has been running its 163.com news portal. This news portal and other online businesses, provides a convenient and efficient channel for marketing products from overseas to China.

Another strategy of Kaola is to touch the sensitive points of the online market in China, both for consumers and foreign brands. This strategy aims to significantly reduce the delivery time. In the past, Chinese consumers often waited several days (15 to 20 days) before receiving their packages, after having placed their orders with an e-retailer abroad. Now Koala’s expeditions take just few days(1 to 3 days) because they now operate with warehouses in several free trade zones and in different places abroad.

China has created free trade zones in several cities where imported goods can be stored without passing through customs and then sent through an accelerated customs process when ordered by an online buyer. In 2018, Kaola plans to use an automated warehouse covering 250,000 square meters (approximately 2.7 million square feet) to further increase its logistics.

On November 11, NetEase’s Kaola.com spent CNY400 million for launching a super-foreign merchandise festival. Moreover, on the same date, Alibaba also celebrates its shopping celebration to stimulate online shopping. This initiative of NetEase that same day shows its desire to compete with the largest competitor of e-commerce.

The next few decades, Koala.com hopes to bring new and innovative ideas so that Chinese consumers and foreign brands can achieve better result through Kaola.com.

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