Kaola Global Shopping Product Analysis!

This article will analyze how Kaola.com has been leading the cross-border e-commerce field from the following aspects:

1. Industry Analysis
2. Competitive product analysis
3. User Value Analysis
4. Business value analysis
5. Product Iteration Analysis
6. Product structure analysis
7. Operational Analysis
8. Summary and Future Outlook

1. Industry Analysis

Since the beginning of 2020, due to the impact of the epidemic, the overall cross-border e-commerce transactions have been greatly affected in terms of goods and logistics. However, the consumption pattern changes in major markets such as Europe and the United States and a series of favorable cross-border e-commerce policies have also

The implementation of policies for the development of cross-border e-commerce has also promoted the development of China's cross-border e-commerce imports and exports. At present, young consumer groups are rising, and their consumption potential is constantly being tapped and released.

Cross-border e-commerce is an industry that is greatly affected by external factors. Below we use the PEST model to analyze external environmental factors one by one.

1. Political Factors

Cross-border e-commerce accounts for 30% of my country's foreign trade transactions, making it an important form of my country's foreign trade. Since entering the 1.0 stage, my country's cross-border e-commerce has been driven by the participation of large-scale professional platforms, and its policy support for cross-border e-commerce has been continuously increased, and policy dividends have been continuously released.

Since 2005, my country has introduced 53 policies to support cross-border e-commerce, entering a policy dividend period, including: efficiency improvement, process optimization, pilot cities, infrastructure, tax reduction and other measures; especially in the cross-border e-commerce 2.0 development stage, the State Council and multiple ministries and commissions have intensively introduced 35 supporting policies, which have created an orderly and healthy environment for my country's cross-border e-commerce while also driving its sustained and rapid development.

The signing of RCEP, a recent financial topic, will undoubtedly promote the development of cross-border e-commerce.

On November 15, the Regional Comprehensive Economic Partnership Agreement (RCEP) was officially signed. It is understood that RCEP covers a population of more than 3.5 billion, accounting for 47.4% of the world, a GDP of 32.2% of the world, and a total foreign trade of 29.1% of the world. It is the world's most populous and most promising free trade zone negotiation. The goal is to eliminate internal trade barriers, create and improve a free investment environment, and expand trade in services. It will also involve regional cooperation in multiple fields such as intellectual property protection and competition policy. Members include 16 parties, including the 10 ASEAN countries, China, Japan, South Korea, India, Australia and New Zealand.

The signing of RCEP marks the start of the construction of the East Asia Free Trade Area. As policy dividends such as tariff reductions, improved cross-border logistics efficiency, and exchange rate stability are gradually released, related industries such as export cross-border e-commerce are expected to benefit significantly.

2. Economic Factors

Although the IMF (International Monetary Fund) expects that global per capita GDP will decline sharply this year, the global per capita GDP may drop from US$11,560 in 2019 to US$11,000; however, the IMF expects that China's per capita GDP will increase, from just over US$10,000 in 2019 to "close to US$11,000", close to the global per capita GDP. If the per capita GDP really reaches the global level this year, it means that China will enter the ranks of high-middle-income countries and move towards developed countries, which will be a turning point.

From 2015 to 2019, China's per capita disposable income continued to grow, steadily promoting the growth of residents' consumption capacity.

3. Social Factors

In recent years, more and more people have gone abroad to study, work or travel. When these people have used relatively high-quality things abroad for a period of time and hope to continue using these things after returning home, they have to find ways to shop overseas. When they want to buy relatively low-priced goods with guaranteed quality, e-commerce platforms become their choice.

At the same time, after the Chinese dairy product contamination incident was exposed in 2008, the media continued to expose the quality problems of Chinese dairy products. The public's trust in domestic dairy products continued to decline, and the younger generation of parents expressed their willingness to choose foreign dairy products, especially infant formula.

4. Technological Factors

The increasingly improved infrastructure provides a strong driving force for cross-border e-commerce.

• Convenient payment - intelligent verification: Various intelligent payment methods such as NFC payment, fingerprint payment, and face payment have gradually been rolled out and applied, which not only enriches the payment methods, simplifies the payment steps, but also enhances payment security.
• Distribution system - intelligent logistics: Automated and intelligent logistics warehousing systems have begun to be widely used. Warehouse robots and smart shelves can sort goods, further improving distribution efficiency. Increasingly professional SaaS and logistics operating systems cover the entire chain and can achieve efficient data collection and cargo information processing.
• Platform consumption experience - smart terminals: conducting big data calculations on a global scale, the platform displays products from all over the country on the platform and optimizes resource allocation; empowered by new technologies, the platform independently develops AR makeup, product traceability systems and other smart technology terminals to provide users with convenient and comfortable consumption experience.
• Identification of consumer demand - intelligent push: With the assistance of technologies such as big data and artificial intelligence, the platform system can effectively identify user portraits and consumption characteristics, thereby accurately identifying user needs and shopping preferences, and then realize intelligent product push, which to a certain extent helps users quickly find the products they need and stimulate consumption enthusiasm.

5. Summary and Industry Outlook

The country is still continuously releasing policy dividends for cross-border e-commerce. In May 2020, the fifth batch of cross-border e-commerce pilot zones were established, including dozens of areas such as Xiongan New Area and Datong, Shanxi. Cross-border e-commerce pilot zones are gradually filling up the map of China.

At the same time, as the only major country whose GDP has increased instead of decreased during the epidemic, China's national consumption capacity is also rising, and cross-border e-commerce is still an industry with room for exploration; in the first half of 2020, China's imports and exports through the customs cross-border e-commerce management platform increased by 26.2%, and it is estimated that by the end of 2020, the scale of China's cross-border e-commerce transactions will reach 10.3 trillion yuan.

2. Competitive Product Analysis

With the strategic adjustments of Kaola.com and Tmall Global, these two leading players have occupied most of the market, with a slight increase in market share compared to the first quarter of 2020. They have maintained their status as leading players and gradually widened the gap with the players behind them.

Kaola.com and Tmall Global are direct competitors. They are also products of the same company (Alibaba) with different strategies. In addition, their user scales are similar, so we chose these two products for competitive analysis.

1. Kaola Shopping

1) Development History

• On January 9, 2015, NetEase's self-operated cross-border e-commerce platform "Kaola Global Shopping" was launched for public testing;
• On January 29, 2015, Kaola.com started selling Chilean cherries, marking the first cross-border e-commerce fresh produce order.
• On March 12, 2015, Kaola launched its first promotion: a week-long "Diaper Carnival", and broke the record for overseas diaper delivery, which took only about 24 hours.
• On September 6, 2015, Kaola.com 2.0 was launched on the Apple Store, setting a precedent in the industry with its innovative scenario-based experience.
• On December 12, 2015, Kaola.com announced the launch of its first fresh produce business: beef imported from Uruguay, marking the first cross-border e-commerce beef import order shipped via bonded warehousing.
• On March 29, 2016, Kaola.com was officially launched, with a sales target of RMB 10 billion in 2016.
• On November 11, 2017, Kaola’s sales reached four times that of 2016. Kaola.com spent only 28 minutes to achieve the sales volume of the entire day on Double 11 last year, 32 minutes to break the time limit for cross-border delivery, and 78 minutes to achieve twice the sales volume of last year;
• In June 2018, Kaola announced its entry into the comprehensive e-commerce market;
• On September 6, 2019, Alibaba announced a strategic partnership with NetEase. Alibaba Group acquired NetEase's cross-border e-commerce platform Kaola for US$2 billion;
• On August 21, 2020, it officially announced a strategic upgrade, focusing fully on "membership e-commerce".

2) Core Business

B2C self-operated direct purchase and direct sales of overseas products.

3) Business model

Kaola.com adheres to the concept of direct purchase and self-operation. It has branches or offices in the United States, Germany, Italy, Japan, South Korea, Australia, Hong Kong, China, and Taiwan, China. It directly purchases high-quality goods suitable for the Chinese market from the product origin, eliminates counterfeits from the source, ensures the quality of goods, and eliminates many intermediate links. The goods are shipped directly from the origin to the country and stored in bonded warehouses under the supervision of customs and national inspection. In addition, Kaola has launched the Ant Blockchain traceability system to strictly control product quality.

4) Traffic sources

Before NetEase sold Kaola's global shopping business to Alibaba, Kaola's traffic mainly came from NetEase's platform traffic in various fields, including news, music, comics, reading, education, and finance, and it had rich traffic and media resources.

5) Logistics and warehousing

Through the bonded model, we can achieve legality and compliance, reduce costs and achieve fast delivery, so bonded warehouses that can be used for cross-border e-commerce are scarce resources.

LaHaigou has a bonded warehousing area of ​​more than 150,000 square meters in four bonded areas in Hangzhou, Zhengzhou, Ningbo and Chongqing, ranking first in the industry. At the same time, the 250,000 square meters modern and intelligent bonded warehouse in Ningbo has broken ground and will be put into use soon.

At present, Kaola.com has become the company with the largest bonded warehouses among cross-border e-commerce companies; in the future, Kaola.com will gradually open bonded logistics centers in South China, North China and Southwest China.

Overseas, Kaola has initially built an international logistics and warehousing center in the United States, and will open international logistics and warehousing centers in countries and regions such as South Korea, Japan, Australia, and Europe.

Domestic deliveries are prioritized from bonded warehouses near the order address, and can arrive as soon as the next day.

6) Industry advantages

Adhering to the self-operated model to ensure the quality of goods, investing heavily in bonded warehouses to shorten logistics time and facilitating after-sales service are considered to be the core advantages of Kaola Global Shopping.

2. Tmall Global

1) Development History

• In February 2014, Tmall Global was established with the goal of "importing original products from all over the world" and directly supplying domestic consumers with original imported products from overseas.
• In May 2016, Tmall Global launched its direct sales business, realizing a dual model of platform and direct sales;
• In December 2016, Tmall Global won the "Light of Quality" Annual Charming Brand Award from the General Administration of Quality Supervision, Inspection and Quarantine;
• In November 2018, at the first China International Import Expo, Alibaba announced a $200 billion import strategy for the next five years. As the preferred platform for overseas brands to enter China, Tmall Global will continue to accelerate this plan.
• On July 21, 2020, Tmall Global and Hangzhou Comprehensive Bonded Zone officially launched the "Bonded Zone Factory" project, a new national "bonded import + retail processing" large-scale import model;
• On September 1, 2020, Tmall Global announced the upgrade of its overseas warehouse business and officially launched the official cross-border direct mail business "Overseas Direct Purchase".

2) Core Business

B2C overseas merchants settle in Tmall to directly purchase and sell overseas products.

3) Business model

Tmall Global mainly supplies overseas original imported goods directly to domestic consumers. It is also the preferred platform to help overseas brands directly reach Chinese consumers, establish brand awareness and consumer insights. It pays more attention to the direct connection between merchants and users, and creates a new model of direct purchase from overseas warehouses.

4) Traffic sources

Tmall has accumulated a large number of high-value users.

5) Logistics and warehousing

On September 1 this year, Tmall Global announced the upgrade of its overseas warehouse business and officially launched the official cross-border direct mail business "Overseas Direct Purchase"; the confidence of "Overseas Direct Purchase" lies in its global procurement teams, overseas warehouses and brand cooperation.

Based on Cainiao's global warehousing layout and the construction of a global supply chain network, the latest trendy new products and limited edition high-end products released overseas are directly put on the shelves for sale to Chinese consumers through official direct procurement. "Overseas Direct Purchase" also provides a green channel for overseas brands to quickly enter the Chinese market: overseas brands do not need to settle in or open stores, they only need to put the products directly into Tmall International's overseas warehouse to go directly to China. The platform will provide one-stop services for warehousing, front-end operations, sales, logistics and customer service. Thanks to Alibaba's deep cultivation in Cainiao Logistics, Tmall International has considerable guarantees for the delivery and customs clearance speed of non-imported spot goods.

Logistics and distribution:

Bonded model: foreign bulk purchase, warehousing – entry (international logistics - sea transport, air transport) – bonded customs declaration – centralized storage in the bonded area – user order – order sorting, packaging and labeling – bonded customs clearance – Cainiao delivery.

• Advantages: Save logistics time.
• Disadvantages: The model is heavy and has high requirements on platform funds and delivery speed.

Direct mail mode: user places an order – order sorting, packaging and labeling – arrives at the domestic airport (international air transport) – customs storage – express customs clearance – postal customs clearance – domestic logistics distribution.

• Advantages: Lighter mode.
• Disadvantages: Logistics takes a long time.

6) Industry advantages

With a complete range of product categories, as of now, 26,000 overseas brands from 84 countries and regions have settled in, covering more than 5,300 categories, of which more than 80% are entering China for the first time. This ensures that Tmall Global can cover the needs of most consumers.

3. Summary

The main business model of Tmall Global is the entry of merchants. As long as the merchants pass the review, they can sell goods on the Tmall Global platform. The complete categories and brands are the biggest advantage of Tmall Global. At the same time, there is the disadvantage of inconvenient after-sales service. If consumers are not satisfied with the products, they need to send the products back to the foreign merchants. It is very likely that the logistics cost will be higher than the selling price of the goods. The main business model of Koala Global Shopping is platform procurement. Due to the limited manpower of the platform, the categories and brands purchased are definitely not as many as Tmall Global, but the quality of the goods can be guaranteed. In terms of after-sales service, consumers only need to send the goods back to Koala Global Shopping's domestic bonded warehouse, which greatly improves the consumer's after-sales experience. Generally speaking, Kaola.com is better than Tmall Global in terms of shopping and after-sales experience, but slightly inferior in terms of product diversity.

3. User Value Analysis

Kaola.com’s users include domestic consumers, overseas suppliers and the Kaola.com platform.

• Overseas supplier: An overseas registered enterprise that sells cross-border e-commerce retail imported goods from overseas to domestic consumers and is the owner of the goods.
• Kaola Overseas Shopping Platform: It handles industrial and commercial registration within the country, provides web space, virtual business venues, transaction rules, transaction matchmaking, information release and other services to both parties to the transaction (consumers and cross-border e-commerce companies), and establishes an operator of an information network system for both parties to the transaction to independently conduct transaction activities.
• Domestic consumers: domestic purchasers of cross-border e-commerce retail imported goods.

The business logic of Kaola.com is as follows:

1. Domestic consumers

With the rise of a new generation of consumption, those born in the 1990s and 1995s have become the main force of overseas shopping. Against the backdrop of consumption upgrading and the rise of the young middle class, Chinese consumers are generating huge demand potential for global niche reputation and quality consumption.

McKinsey's China Consumer Report shows that China is a major e-commerce consumer country. Consumers pursue high-quality life, exquisite and unique consumption experience. They not only want to "be able to buy", but more importantly, "buy well and buy at a better price". Before the emergence of cross-border e-commerce, ordinary consumers bought overseas goods mainly through three ways: overseas purchasing agents, personal overseas shopping and offline stores.

1) Overseas purchasing

A shopping model in which consumers purchase overseas products directly through individuals or buyers, have the products shipped directly from overseas or brought back to China by hand and then delivered to consumers via domestic logistics.

The biggest pain point of this shopping model is that the quality of goods and procurement channels are difficult to control, and the supply and price of goods are unstable. Middle agents sell inferior goods as good ones, and fake goods are rampant; especially in the market for high-priced goods such as luxury goods and high-end mobile phones, unscrupulous merchants, in order to make huge profits, have led to a large number of fake and inferior goods appearing in the overseas loan market.

Secondly, this method takes a long time to process. It does not involve customs declaration but only random inspection. Although the chance of being selected is relatively small, you will need to pay very high taxes (10%-50%) after being selected, which is also a considerable expense.

2) Personal overseas shopping

Individuals who shop overseas place orders for goods by browsing foreign e-commerce websites (such as Amazon), brand official websites, and other online sales channels, and then send them to forwarding service providers, which then ship them to the domestic market.

The threshold for this shopping model is relatively high. It requires basic foreign language knowledge, dual-currency or even single-currency credit cards (the application for a single-currency credit card is much more difficult than a dual-currency credit card). In some scenarios, it may be necessary to open foreign websites through special methods. The ordering process on the official website is also relatively complicated.

The timeliness and safety of logistics cannot be guaranteed. Generally, overseas shopping products need to be transferred to China via forwarding service providers. There is a high probability that no compensation will be obtained if the goods are lost or damaged by the forwarding company.

After-sales rights protection is difficult. If consumers are not satisfied with the goods after receiving them and want to return them to the supplier, they usually contact them by email, which is not timely. It will also cost a lot to send the goods back. After-sales rights protection through personal overseas shopping often ends in nothing.

3) Offline stores

Overseas brand products can also be purchased in large domestic shopping malls, but the operating and management costs of offline stores are high. High product prices are the biggest pain point for offline stores. In addition, the degree of information disclosure of products in offline stores is limited, which may result in a lot of time wasted because you spend a lot of time going to the store and not being able to buy the expected products.

2. Overseas Suppliers

There are three main ways for overseas suppliers to enter the Chinese market: opening offline stores, being distributors, and selling on domestic e-commerce platforms.

1) Opening a store offline

The traditional retail method can effectively solve the problems of purchasing unsatisfactory products, language barriers and logistics waiting, but it also has many unavoidable disadvantages for merchants:

• High economic costs: store rent, warehouse storage and labor costs;
• High operating costs: National conditions vary from country to country, and overseas suppliers need to conduct specialized operations to attract Chinese consumers;
• High sales price: The cost of the merchant will be added to the selling price, resulting in a high selling price, which may lose market competitiveness.

2) Dealer

This was the way overseas brands entered the Chinese market in the past. For example, Sennheiser's general agent in China is Jinyi. Domestic operations and after-sales are managed by the agent. This method can effectively solve the problem of high costs of opening offline stores, but as the number of dealers increases, more profits will be shared and management will become more difficult.

3) Sales on local e-commerce platforms

The sales method on well-known overseas local e-commerce platforms (such as Amazon) is a low-cost, direct sales method that can effectively solve the problems of offline store opening and dealer sales. However, compared with the above two methods, there are some problems:

• Overseas e-commerce platforms may not be recognized by consumers in China. For example, Amazon announced its withdrawal from the domestic e-commerce market in mainland China in 2019, retaining only part of its business.
• Overseas e-commerce platforms also have the problem of long logistics time, which is no different from the time it takes for personal overseas shopping;
• Foreign e-commerce platforms also bring about after-sales inconveniences and cause damage to brand image.

3. Kaola Shopping Platform

It can be seen from this that the main problems faced by ordinary consumers in purchasing overseas goods are inconvenient purchasing methods, high purchase prices, long logistics time, few product categories, difficult to guarantee product quality, and invisible after-sales rights protection; while overseas suppliers facing high trial-and-error costs in promotion, logistics and management when entering the Chinese market.

Based on the problems faced by consumers and providers, are there better solutions? Koala.com has given its answer.

1) Government support for trial implementation with rich categories

In terms of cross-border e-commerce, the government has launched pilot projects in six cities, including Hangzhou, Ningbo, Zhengzhou and Guangzhou, and opened bonded customs and national inspection green channels for cross-border e-commerce platforms such as Tmall Global and NetEase Kaola, achieving extremely fast customs clearance and inspection and quarantine. Moreover, because they enjoy the "negative list" system of the Hangzhou inspection and quarantine department, except for the prohibited items included in the list, other overseas products can be tried; in other words, the product categories of cross-border e-commerce will be richer in the future.

2) "Self-operated direct purchase", authentic guarantee

Compared with overseas shopping websites, which are full of mixed goods, including purchasing agents, which are often exposed by the media for "selling fakes mixed with real goods" and "exporting and selling domestically"; once consumers buy fakes, the possibility of returning them is almost zero. Kaola.com implements the "self-operated direct procurement" model: Kaola.com's professional procurement team goes deep into the origin of overseas brands to purchase in large quantities; this model keeps the quality of goods firmly under its own control and guarantees 100% authenticity.

3) Bulk purchase, low price guarantee

All of Kaola's products are purchased directly in bulk and stocked in bonded areas in Hangzhou, Ningbo and other places, or overseas warehouses; centralized transportation not only ensures the price advantage of logistics, but also eliminates the intermediate turnover links such as secondary wholesalers and tertiary wholesalers, ensuring that consumers can purchase overseas products at lower prices; at the same time, the e-commerce platform can effectively reduce taxes and fees through its unique customs clearance channels.

4) Layout of bonded areas and logistics support

Traditional overseas shopping usually involves international express delivery by overseas shopping websites, or by forwarding companies that collect the goods and then forward them back to the country. Because of international logistics, the time is basically calculated on a monthly basis. Moreover, in many cases, overseas shopping channels also need to contact forwarding companies themselves. Due to the long international delivery cycle and the uneven quality of logistics and express delivery in each link, risks are inevitable in the process, and there is often no place to complain about loss or damage.

"Overseas shopping is risky and you need to be cautious when shopping" is basically the consensus among ordinary consumers.

In contrast, on Kaola.com, more than 90% of overseas products are shipped from bonded areas, and can arrive in key cities in the Yangtze River Delta region within 1-2 days, and some remote areas and suburban counties in the west can basically arrive within 4-6 days. In addition, there are "direct mail from overseas" products, which are shipped from overseas warehouses in the United States, South Korea, Japan and other places, and transported by NetEase's partner China National Foreign Trade Transportation Corporation, and implement "one order to the end": that is, from the overseas warehouse to the user, the same waybill is used; from the time the warehouse receives the user's order to the time the order is delivered to the user, it is estimated to arrive in 7-15 days, which almost guarantees the speed to the maximum extent.

5) Domestic bonded area returns and after-sales guarantee

It is very difficult to return or exchange goods purchased through traditional overseas shopping, and the problems lie in communication and logistics. When problems arise during the process of overseas shopping or mailing, it is often necessary to make international long-distance calls to communicate with all parties in English, which can easily lead to deviations in the understanding of the goods. In addition, returns and exchanges via international mail are quite inconvenient. Looking back at domestic cross-border e-commerce platforms, most of them have made a commitment to returns and exchanges within 7 days.

Returns and exchanges can be sent directly to domestic bonded areas, which is not only cost-effective but also fast; more importantly, even if there are problems with the products on the Kaola platform, you can protect your rights through complaints, especially for self-operated cross-border e-commerce platforms.

However, it is worth noting that cross-border e-commerce, as a third-party platform, an executive of a vertical e-commerce company once said that some platform e-commerce models that rely on third-party merchants are loose, and retailers can shift the responsibility to upstream merchants based on the contract. The sales platform and source of goods also come from two different parts. Once products like diapers have quality problems due to logistics and warehousing (such as moisture, squeezing, and differences in quality), retailers are essentially not responsible for this, and consumers are ultimately the ones who suffer.

In contrast, the advantage of self-operation is that the cross-border e-commerce platform itself is responsible for the quality of the products. If there is a problem, the platform will compensate the consumers and trace the responsibility of the supplier. This undoubtedly effectively guarantees the interests of consumers.

6) One-stop nanny service, worry-free for merchants

For overseas suppliers, Kaola.com can provide a complete set of nanny-style services, including cross-border logistics warehousing, cross-border payment, supply chain finance, online operations, brand promotion, etc., to solve the obstacles for overseas merchants to enter China and save them from the language, cultural differences, transportation and other problems they face when developing the Chinese market alone. At the same time, Kaola.com's after-sales service can also help overseas suppliers maintain their brand image.

4. Summary

To sum up, whether it is consumers who have requirements for product quality, price, after-sales service, etc., or overseas suppliers entering the Chinese market, Kaola.com, as a high-quality third-party platform, has cleverly solved the pain points of the overseas shopping market. Coupled with Kaola.com's user group management, Kaola.com has become a leading player in the field of cross-border e-commerce.

4. Commercial Value Analysis

Business value is an indicator that measures a company's ability to generate cash flow in the long term. Cash flow refers to the amount of cash inflows and outflows of a company over a certain period of time. The focus here is on the operating income of the core business.

Kaola's core business is: B2C self-operated sales of cross-border products.

We use GMV as a revenue measurement indicator to study the core business revenue of Kaola.com:

GMV = number of users * conversion rate * average order value

The number of users refers to the number of registered users, the conversion rate = number of paying users/number of registered users, and the average order value refers to the average payment amount of all paying users over a period of time.

Any change in the number of users, conversion rate, and average order value will affect the change in GMV, so next we will break down these three indicators and focus on analyzing how Kaola.com generates positive corporate revenue by improving these three indicators.

1. Increase the number of platform users

There has always been a "721 rule" circulating in the Internet industry, which says that whoever obtains the majority of users in the relevant target population will be the boss and will be able to eat the meat.

The accumulation of users is even more important for an e-commerce platform. Back then, NetEase relied on its various clever tricks to become the leader in cross-border e-commerce without spending a lot of money.

1) Breakthrough in social media acquisition: Let users act as marketers

By utilizing the fission mechanism of attracting new users through social media, the saved marketing costs can be returned to users; in the 1.0 version of Kaola Haigou APP, the function of "invite friends and make money immediately" was launched.

Before purchasing, users can share and invite friends, or share products to earn commissions, and directly return cash to users; in the sharing mall, all products have a certain profit ratio. As long as users share with their friends and eventually gain something, they can get profit rewards, which will fully encourage old users to attract new users; after friends accept the invitation and successfully purchase, they can also get new red envelopes. In addition, Kaola.com also supports the sharing of pictures, texts, videos and comments, fully mobilizing the power of user word-of-mouth.

During the purchase, in the early stage, Kaola.com would put out hundreds of popular SKUs and add them to the group-buying mall every day, attracting users to place orders in the form of newcomer groups, 2-person groups, and 3-person groups. The products that were successfully group-buied were about 10% cheaper than usual, and the newcomer groups could get them at 1 yuan a second. Group-buying pictures could be shared to WeChat and QQ with one click, and WeChat could also be logged in quickly. The good user experience could attract many new users.

After purchasing, users can share the purchased products to their Moments and receive up to 30 yuan in rewards per day. If new friends accept the invitation, they can get another 20 yuan. If friends place an order and confirm receipt, they can get another 15 yuan. The progressive rewards encourage users to consciously act as marketers for Kaola and occupy their Moments.

2) The marketing team is capable and capable: maximizing the value of own traffic

NetEase has built a huge and effective marketing ecosystem through its own traffic, and has successfully taken the lead in the field of cross-border e-commerce.

On the one hand, it is tapping the internal potential of its own traffic, building a media marketing matrix including NetEase portal, NetEase news client, NetEase mailbox, NetEase Cloud Music, NetEase Games, etc., and accurately pushing matching product content according to the characteristics of different channels; on NetEase Cloud Music, highly popular Korean cosmetics masks will appear; and on NetEase Games, where male users are concentrated, the popular BEATS headphones will be pushed; the extremely high traffic conversion has brought considerable new customer growth to NetEase Kaola.

Although Koala.com has not yet joined the "Ali Zoo", it can be seen from the fact that Tmall International shared its brand resources with Koala.com during the previous "Double Eleven" event that Alibaba will definitely provide a large traffic entrance for Koala.com in the future.

3) Traffic replacement: universal traffic conversion

Koala.com has consciously reached strategic cooperation with many heavyweight giants such as Didi, Wanda Cinema, China Merchants Bank, Phoenix Miles, Hunan Satellite TV, etc. through various means such as cross-industry cooperation and entertainment marketing, forming a joint force on each marketing hotspot to maximize the value of its own traffic; when the Warcraft movie was released, Koala.com teamed up with Blizzard Games and Wanda Cinema to launch a marketing campaign. With the help of as many as 300 Wanda Cinemas, it brought many high-quality male customers to Koala.com.

In response to the end-of-year shopping boom, Kaola launched a New Year campaign, continuously seizing top media resources: it cooperated with Hunan TV in the 2017 New Year's Eve Gala, sponsored Hunan TV, Jiangsu TV, Anhui TV, and CCTV Network TV in the 2017 Spring Festival Gala, and sponsored Jiangsu TV in the 2017 Lantern Festival Gala. Through 6 galas covering more than 1 billion people across the country, Kaola achieved cross-screen interaction with the new middle class through the innovative communication form of password red envelopes, directly bringing in more than one million new users to place orders.

2. Increase conversion rate

Having users alone is definitely not enough. The real revenue for the platform comes from users who engage in consumption behavior. Now let’s take a look at how Kaola.com improves user conversion rates.

1) Home page

The homepage is the first page that users come into contact with in the true sense, and it is the first step to retain users. The homepage of Koala.com is full of very attractive "gambling, freeloading" activities such as "daily lucky draws" and "get Koala beans". A larger part of the picture is occupied by recent large-scale activities, such as "Double Eleven" and "Double Twelve". As long as the user is a qualified netizen, he will know about the large-scale discount activities, which are extremely attractive to users who have no shopping needs.

Compared with some e-commerce apps that hide categories in an inconspicuous place, Kaola.com is more able to capture the hearts of users who want to buy a certain item but have unclear goals (for example, users who want to buy a pair of Martin boots but don't know much about them); at the same time, it provides a scan and search entry for users with clear goals (for example, users who want to buy a certain brand and a certain model of product).

2) Search page

As a common function for users with shopping needs, the search page is a key point to improve conversion rate.

Search history can help users remember the products they searched for recently, giving them a feeling of revisiting an old place when they return to Kaola.com, effectively narrowing the distance between customers and products. Search discovery is the current popular search keyword, which allows users to see what products other users are purchasing, and can attract some users with a herd mentality to buy related products. At the bottom are commonly used categories, which are the main market in the overseas shopping market and can play a certain guiding role for all types of users.

3) Product details

After users find a candidate product, they enter the product details page, where the words "100% authentic guaranteed" are displayed in a golden ratio position, as well as the source and distribution path of the product, giving users considerable confidence.

Next to the price, there is a higher price that is crossed out, giving users a psychological hint that the current product is a good deal; if users want to know more product details and scroll down, they can see product reviews and ask everyone. It takes a certain amount of time for someone to answer the question after the user asks the question, which can encourage users to return to the product details page to view the answer to the question, increase the number of page visits, and thus increase the conversion rate; then there are product recommendations. If the user is dissatisfied with the current product or wants to compare several products before making a choice, the recommended products can also help increase the conversion rate.

4) Shopping cart

The shopping cart management classifies and organizes the products of different stores, which makes it convenient for users to check out and add discounts to their orders (for example, if there is a discount activity, some products are not participating in the activity for the time being, so just uncheck the box); at the same time, it also displays whether the store is self-operated, aiming to tell users that the quality of the products is guaranteed and to strengthen their purchasing confidence; some products will have the words "free shipping", which satisfies users' love for discounts.

At the bottom there is a "Guess What You Like" feature, which includes similar products or supplementary products to the ones in the shopping cart (for example, if there is a computer in the shopping cart, peripherals will be recommended). These small features are designed to ensure the user's conversion rate and average order value on the shopping cart page as much as possible.

5) Order Settlement

Users who come to this page are often very likely to make a purchase, and there is no need for too much psychological suggestion to ensure that the user's consumption proceeds in a positive direction.

Invoices satisfy the needs of some users who need reimbursement, while coupons, red envelopes, shipping coupons and tax coupons give users the impression that their orders are very cost-effective, while also allowing users to see their expenses at a glance.

6) Payment page

The payment page is simple and crude, with only payment method options and a huge payment confirmation button at the bottom that spans the entire screen. This design effectively reduces the user's choices, guides the user along a positive shopping process, and effectively improves the user's payment success rate.

7) Today's activities

Today's Event is the second menu in the navigation bar, which contains "Everyday low prices, super items, and selected promotional items at limited-time discounts." Events mean discounts, and users usually pay attention to them after opening Kaola.com, especially those who do not have a clear shopping purpose.

The products on this page usually have the daily price crossed out, and the current price is displayed in a highlighted form, giving users the impression that it is a great deal. At the same time, the end time of the event is shown in the upper right corner of the page, making users feel that the promotion is time-sensitive, thereby increasing their impulse to shop.

3. Increase the average order value

There are usually two ways to increase the average order value: increasing the amount of single consumption and increasing the frequency of consumption.

1) Increase the amount of single consumption

The platform operates by offering discounts in various promotional activities to attract users to buy more goods.

Method 1: Full discount activity

When the sales price of the selected products participating in the full-discount activity reaches a certain amount, a discount of no more than the total price of the products will be given.

The promotion method of full-discount and full-reduction is supplemented by a gradient, which can attract consumers to buy larger amounts of goods.

Method 2: Full discount event

Generally speaking, the more items you purchase that participate in the full-discount promotion, the greater the discount on the total price. For example, 10% off for one item, 20% off for two items, and 30% off for three items.

Method 3: Combination Sales

This gameplay is applicable to products where the products selected by consumers have accessories. For example, when consumers buy computers, there will usually be recommended peripherals such as mouse and keyboard on the product details page or shopping cart management page, so as to achieve the purpose of combination sales and thus increase the average order value.

Method 4: Free shipping for orders over N yuan

This gameplay is suitable for consumers who purchase small items. The total order price is often less than 100 yuan, while the shipping fee is often around 10 yuan. Users can participate in the free shipping activity after purchasing several small items.

2) Increase consumption frequency

Black card membership is the main method used by Kaola.com to increase consumer consumption frequency. Here is a brief analysis of how Koala.com attracts consumers to increase their consumption frequency after they activate their black card membership.

Method 1: Low price

100% coverage of self-operated products, discount of at least 4% off, black card price can be used in conjunction with coupons, red envelopes, allowances, consumption credits, etc.

Method 2: Various coupons

Each month, two tax and freight coupons worth 10 yuan are distributed to black card members, each of which is two, to capture the consumers' desire to use discounts as much as possible and to lure black card members to use coupons during consumption.

Method 3: Black card consumption money

A consumption bonus of 100 yuan is distributed to black card members every month, which is available for more than 799 during the membership period. The amount of 100 is already very large, which is very attractive to a considerable number of users.

Method 4: Many discounts

For activities such as daily affordable prices, birthday gift vouchers, etc., the products participating in such activities are often some daily necessities, daily necessities or food, which attract some consumers who may purchase related products on other e-commerce platforms to spend on Koala Haizhuang.

Method 5: Exclusive products

The official original words are "The products that show that the product details page of 'black card exclusive' are all black card exclusive products, and the product inventory is limited, first come first served." This creates a phenomenon of scarcity of such products, allowing black card members to feel the exclusive privileges of black cards, and at the same time attracts some ordinary users to open black card members because they want to purchase this type of product.

Non-member users usually have no dependence on Koala Shopping, which attracts the consumption frequency of these users through activities that do not require pre-payment. The sharing mechanism covering the entire shopping link and the convenience of one-click sharing have brought a large number of new users to NetEase Koala, and it also stimulates old users to increase their purchases on Koala Ocean Shopping due to friend recommendations, which has increased the user repurchase rate.

Data shows that the coupons shared by koala users with friends are as high as 50%, 5-10 times that of other channels. When the shopping circle is superimposed on the circle of friends, new users will have natural trust and favorable feelings for NetEase Koala based on their emotional relationships with friends, which also reduces the cost of exchanging information between users and the platform, greatly increasing the frequency of consumption.

5. Product Iteration Analysis

To understand a person, you must understand his past. Similarly, it is necessary to analyze a product and analyze the iteration records of this product, which can provide some reference experience for our own products; next we analyze how Koala Ocean Shopping entered the market and became the industry leader through the cold start period, development period and maturity period.

The data iterated in the following version is excerpted from Qimai Data and compiled by the author of this article; the platform is iOS, and there may be differences in the time and content of the Android version iteration.

1. Cold start period: market demand verification, basic functions are improved

Before May 25, 2016, the version number will be updated every month from 1.0.0 to 2.6.0 when it was launched; the purpose of this stage is to verify user needs and polish the basic functions of the product.

The functions of the Koala Haigou web version have been gradually migrated to the mobile client, such as one-click collection of products, online customer service and other functions; and unique functions and designs are carried out based on the advantages and environment of the mobile phone, such as the flat design that emerged from 2015 to 2016, giving users a better visual experience; at the same time, the mobile phone is convenient to receive push and link with third-party APPs, and the scan function has been launched to facilitate users to search for products; the arrival reminder greatly facilitates users' shopping experience, and there is no need to check whether the products have arrived from time to time on the webpage like before; WeChat login also facilitates users' registration and login process.

In terms of operation, activities such as "Mobile Exclusive Price" and "Mobile Exclusive Coupons" have been launched to attract users to spend on mobile clients. At the same time, activities such as "Show orders to get coupons" and "Product payments successfully, share friends to receive red envelopes" have been launched to stimulate users to share Koala shopping with friends to achieve the goal of attracting new products.

The product strategy at this stage is to quickly attract a large number of users, successfully enter the overseas shopping market, and lay the foundation for subsequent platform operations.

2. Development period: construction of operational tools, optimization of shopping experience

From June 23, 2016 to May 11, 2018, the version number was updated from 3.0.0 to 3.15.0. There were not many new functions available here, and most updates were bug repairs, performance optimization, and activity content at a special time point, such as the "Double Twelve" activity; at this stage, Koala Ocean Shopping has accumulated a considerable number of users, and what needs to be done is to increase the conversion rate and allow more users to spend on Koala Ocean Shopping.

During the past two years, Koala Haigou has built event operation tools and participated in many activities, including but not limited to "Double Eleven", "Black Friday", "June 18" and other activities. These large-scale discount activities can attract swing users to start spending on Koala Haigou and achieve an increase in conversion rate.

During this period, the membership mechanism has also been upgraded several times. Functions such as "Member Center", "Member Card", and "Member Exclusive Products" have been launched one after another, allowing the shopping and after-sales experience of "black card members" to be gradually optimized, and it also has an increasingly member-friendly sense of honor, which can effectively retain "black card members".

Koala Haigou has also explored community operations and launched the community sector on August 10, 2017, and then gradually added functions such as grass planting community, discovering friends, and asking everyone. It can allow users to see other people's good things on the platform, and if you have any questions, you can also ask relevant user groups on the platform, effectively improving user stickiness.

When you have all the basic functions at this stage, you need to consider how to make users convenient, fast and comfortable to use. The tax details are displayed at the cashier, so that users can have a clear mind about their consumption; at the same time, the display of order delivery information is also optimized, so that users know which day their order will be delivered, so that they can arrange their own plans, optimize the ordering process, launch the prepayment deposit, and add new attention to the store. These small functions upgrades can greatly improve the user's shopping experience.

Not only should users be comfortable to use, but they should also be assured to buy; Koala Haigou has upgraded visual live broadcast, allowing users to see that the Koala Haigou team has repeatedly been in overseas top-notch purchasing locations, going deep into local brand headquarters, factories and offline stores, and broadcasting foreign production and manufacturing processes and brand culture in the entire process. This move allows users to feel at ease and trust the platform.

With its successful operations, continuous optimization of product functions and exploration and innovation of industry gameplay, Koala Haigou has firmly been the leader in the cross-border e-commerce industry.

3. Maturity stage: operation of existing users and business direction expansion

From June 5, 2018 to the present, Koala Ocean Shopping has entered its mature stage.

During this period, the user experience will be optimized. For example, you can directly change the specifications of the product in the shopping cart, support uploading videos in the comment area, and viewing the refund progress in the order, which greatly optimizes the user's shopping and after-sales experience.

After being acquired by Alibaba, Koala Haigou made another attempt in the direction of short videos, launched the functions of Chushu TV and Like communities, and became younger. The purpose is to retain the "post-90s" and "post-95s" who joined the overseas shopping army.

LIKE Community” is positioned as a content community that shares Taobao products. By clicking on the products shared by the community, it jumps to the Taobao product page with one click to divert traffic to the Taobao platform.

"Climbing Tree TV" hopes to build an overseas lifestyle platform, which includes three parts: attention, live broadcast and video. Provide an overseas lifestyle platform through video to show the customs and customs of various places. These are content that young people love very much; at the same time, monetize them through the live broadcast channel's recommendation for product planting.

Koala Haigo has expanded its business model and launched its first global factory store. Koala Haizhuang spends several months or even a year looking for the best factories in the world to provide consumers with the best products; signing contracts with the famous fashion academy POLIMODA and its designers, committed to bringing better designs to consumers; because they go directly to the factory, consumers' feedback can be quickly transmitted to the ears of manufacturers and designers. It can be said that consumers have also participated in the product design, giving consumers the ultimate tailor-made experience.

Finally, the after-sales policy of 30-day ultra-long return and exchange that must be mentioned, which not only reflects the reliability of the quality of the Koala Haigou factory store from the side, but also gives users full consumer confidence. The official website of Koala Haigou explains global factory stores:

Global Factory Store is a business model project launched by Koala Haigou that focuses on direct access to consumers from global high-quality manufacturers. We are committed to bringing consumers the highest quality, best price and best service shopping experience; and the official factory store gift card has collected the world's best quality manufacturing companies. With the help of the company's technology, manufacturing capabilities and the excellent design of koala visual masters, we bring consumers more exquisite combination gifts.

4. Summary

Koala Haigou has been in the leading position in the industry for five years since its launch. It is inseparable from the good experience of the product and the contribution of various activities to the operation.

The update frequency of early Koala Haizhuang was maintained once a month, polishing products in an orderly manner. After a year, it gradually developed the basic functions of domestic e-commerce giants, and at the same time accumulated a large number of users.

We continue to optimize products in the medium term, maintain a good user experience, and strengthen the operation of the membership mechanism and accumulate millions of "black card members".

In the later stage, the main goal was to optimize the membership mechanism, and most of the product iteration was to optimize the details; however, after being acquired by Alibaba, Koala Haizhuang began a new exploration, launching "Tree Climbing TV" to let young users understand the customs and customs of overseas.

It can be said that Koala Ocean Shopping has been exploring, innovating and changing, and this is true in both product design and event operation; but what has always remained unchanged is that Koala Ocean Shopping wants to provide users with a better shopping experience and thus retain users.

6. Product structure analysis

In the iterative analysis, we analyzed the iterative steps of Koala Haigou's product functions. Next, let's take a look at what users' needs meet and how they are distributed throughout the app.

The following picture is the product structure brain diagram of Koala Haigou V4.40.0:

For the convenience of analysis, we re-sorted the product structure of Koala Haizhuang according to the target population, scenarios, needs and functions, and obtained the following table:

1. Before placing an order

We divide the target population into three categories before shopping:

1) Have shopping needs and clear goals: Such users are very clear about the products they want, and there may be a need to compare with the relevant products and understand the actual user experience.

Koala Haigou provides the function of search and scanning for consumers to directly locate the target product. Users may need to compare the target product with similar products or choose accessories. Koala Haigou provides similar recommended functions. Even if users already have a favorite product, they need to have some understanding of the actual experience of the product. Below the product specifications, there are sections that are mentioned by product reviews, questions and buyers, so that users can have a real understanding of the product; some users are anxious to buy a product, which is more sensitive to logistics timeliness, and the product details page also provides a display of delivery time. If there are more needs, Koala Haigou also provides a customer service entrance.

2) There are shopping needs but unclear goals: Such users often have clear needs in their lives, so they have target categories, but they don’t know much about the target categories, and there is a need to understand the product functions and compare the quality of the product; Koala Haigou provides category screening, search and similar product comparison functions to allow users to select products that meet their budget and needs from the list of categories.

Here is an example to explain:

A freshman, Koala, is a southerner. When she was admitted to Harbin, a place with extremely cold outdoors in winter, she did not prepare winter supplies in advance because she didn't know the local winter.

After winter began, Xiao Koala saw that the classmates around her were wearing all kinds of boots. Xiao Koala, as a young man who had high requirements for her appearance, thought that her classmates' Martin boots were very beautiful, so she wanted to buy a pair. Xiao Koala, a loyal user of Koala Shopping, opened Koala Shopping, directly searched for "Martin boots", and then compared the search results, chose a pair of Martin boots you like, and then entered the shopping process.

3) No shopping needs: Such users will pay more attention to the richness of the platform, whether there is something to see or not; to catch untargeted users, content needs to attract them as soon as they enter the platform; therefore, the homepage of Koala Haigou has laid out various browsing areas such as banner carousels, event areas, tree climbing TV, Koala Cool Street, and commodity waterfall flow; strive to arouse user interest as soon as possible and extend users' stay on the platform.

2. Ordering

Users placing an order generally have the need to obtain discount information, modify product specifications, and modify delivery address.

In terms of discount information, Koala Haigou provides coupon collection on the product details page, and the shopping cart page contains relevant product recommendations for orders that are discounted or free shipping for orders to meet the needs of providing users with discounts, and can also increase the average customer price.

For users who want to modify the product specifications and quantity, they can directly edit the quantity or specifications of the product on the shopping cart page, which improves the convenience of users' operations and keeps users in a positive process, which helps increase users' consumption amount.

3. After placing an order

After placing an order, users generally check the order status, product reviews, after-sales service, etc.

In terms of order status, Koala Haigou provides full-process information display of orders to be paid, shipped on behalf of others, received and rated. Users can easily obtain order status in the "My Koala section to alleviate users' waiting anxiety or other doubts, or they can find customer service in "My Koala" for customer service help.

For users who want to share their shopping experience, they can realize their sharing needs through the "Evaluation Gifted" function and get a lottery opportunity; it not only meets the sharing needs of users, but also stimulates users to participate in evaluation and enrich the product review area, bringing more purchasing experience to subsequent users for reference.

4. Summary

Through the above analysis, we can find that Koala Haigou has designed corresponding functions for users with different needs in the product; pay attention to the detailed needs that users may have before, during and after shopping, polishing the product functions very delicately, making the user experience comfortable and humanized, and ensuring the user experience to the greatest extent; at the same time, Koala Haigou maintains a good reputation among the user group, forming a brand effect and attracting more users to use Koala Haigou.

7. Operational Analysis

The so-called "products are responsible for giving birth, and operations are responsible for raising children." This sentence shows that a good product not only requires a good product team, but also a good operation team. This article uses the AARRR model to analyze the operation of Koala Haigou.

1. Acquisition

Koala Haigou initially relied on NetEase’s huge user resources, and obtained huge traffic from channels such as NetEase Games and NetEase Cloud Music, and gained a large number of new users at a lower cost.

for example:

• December 5, 2017: Fantasy Westward Journey players have a chance to get a 15 yuan coupon for Koala Ocean Shopping when participating in the imperial examination;
• October 30, 2018: You can get an annual card membership for 98 yuan for the whole year of Koala Haigou + Netease Yanxuan + Netease Cloud Music + Netease Email.

At the same time, Koala Ocean Shopping has also attracted traffic through traditional media.

for example:

• July 2, 2015: Koala Haigou joins hands with the popular variety show "Very Perfect" to collect goddesses global beauty makeup;
• June 20, 2017: Koala Haigou sponsors the third season of "Flowers and Boys" and becomes a special partner of "Ode to Joy 2";
• January 21, 2019: Koala Haizhuang sponsors the popular variety show "Youth With You".

2. Activation

After having a user base, we must find ways to let users consume on the platform; Koala Haigou has not missed the large-scale discount activities held by other e-commerce platforms every year, and there will also be some unique cross-border e-commerce activities, such as "Black Friday".

• 2015: Double 11 Global Carnival, Double 12 Year-end Ceremony;
• 2016: 1st anniversary celebration, 618 Shopping Festival, Foreign Products Festival, Double 11, Christmas New Year's Eve Season;
• 2017: Global New Year’s Day, Happy Valentine’s Day, 8 Goddess Day, 2nd Anniversary Ceremony, 520 for Love Tao World, 618 Overseas Shopping Ceremony, 816 Feeding Award, Double 11 Super Foreign Goods Festival, Black Five Foreign Goods Festival, Double 12 Year-end Ceremony;
• 2018: 8 Goddess Festival, 3rd Anniversary Ceremony, 618 Shopping Festival, Fan Carnival, 919 Global Gathering Ceremony, Double 11 Global Carnival, Black Five Foreign Goods Festival, Double 12 Super Foreign Goods Festival;
• 2019: 4th anniversary celebration, 520 National Confession Festival, 618 Shopping Festival, Double 11 Global Shopping, Double 12 Super Foreign Goods Festival;
• 2020: 618 Shopping Festival, Double 11 Global Shopping, Double 12 Super Foreign Goods Festival (under preparation).

At the same time, Koala Haigou has also reached strategic cooperation with many brands to allow users to buy on the platform with confidence.

for example:

• March 27, 2015: Koala Haigou reached a cooperation with South Korea's L&P Co., Ltd. Co., Ltd. and obtained the official authorization of South Korea's Kleis Facial Mask;
• July 17, 2015: Koala Haigou signed a cooperation agreement with E-mart, the largest chain supermarket in South Korea, and reached a cooperative relationship with South Korea's Goryeo Yada;
• March 29, 2016: Koala Haigou and Amazon Global Logistics China officially signed a cooperation agreement;
• October 30, 2017: Koala Haigou signed a strategic cooperation agreement with the American brand Garden of Life;
• April 11, 2018: Guigoz, a French century-old scientific research milk powder brand, was officially launched on Koala Haizhuang;

3. Retention

On the premise that the product quality is guaranteed, the membership model is undoubtedly the best way to retain customers; Koala Haigou will give black card members some small gift vouchers every month from the beginning, such as ten yuan tax vouchers and shipping vouchers.

Consumers themselves do not care about 10 and 20 yuan, but people have the mentality of "disgusting losses" and will consume on koala ocean shopping. Over time, they will develop consumption behaviors on koala ocean shopping.

4. Revenue

According to the GMV model, at this stage, the user base and conversion rate have been obtained, and increasing the average customer price can increase revenue.

Koala Haigou frequently holds promotional activities to increase the amount of users' single purchases, and distributes discounts and consumption funds to members to increase the number of users' consumption times. According to the flowers of Liu Peng, CEO of Koala Haigou, it can be seen that most of Koala Haigou's business comes from members; at the same time, the number of members has reached one million, which will also generate an objective revenue.

According to Liu Peng, the number of members of Koala Ocean Shopping has reached one million, with a year-on-year increase of 23%. There are 33 countries with expanded procurement scale, with a purchase volume increasing by 67%. In terms of purchase indicators, compared with non-members, the average annual customer price of the former is 7.3 times that of the latter, the number of monthly visits reaches 2.4 times, and the number of annual orders reaches 4 times.

5. Recommended (Referral)

Social platforms are the most commonly used tools for people, so they are the best user communication platform. Koala Haigou has built a full-link social sharing mechanism with a car from WeChat.

• Before shopping: share and attract new shares every day, earn commissions;
• Shopping: Buying a group and inviting friends to bargain;
• After shopping: share red envelopes after payment is successful;
• Non-shopping: QR codes can be generated after comments for easy sharing.

8. Summary and future prospects

Koala Haigou has been in the industry for five years since its launch, and it is not without reasons. There are mainly the following reasons:

1. Choosing the right direction is the basis

2013 is called the "first year" of cross-border e-commerce. According to incomplete statistics, the relevant policies issued from 2013 to 2015 tripled from 2005 to 2012. The continuous increase in policy support has promoted the accelerated development of cross-border e-commerce. In January 2014, the General Administration of Customs clarified the "legal status" of cross-border e-commerce; previously, the government reduced the cross-border commodity threshold from 500 to 50 to crack down on individual overseas shopping. Cross-border e-commerce came into being.

Compared with the previous small-batch overseas shopping formats, cross-border e-commerce has huge advantages in bargaining rights, quality control, after-sales maintenance, logistics timeliness, etc. It is inevitable to be favored by users. It depends on the user's recognition of the product sooner or later.

2. User experience is the basis

Koala Hai Shopping’s products are mainly self-operated products, which can maximize the user’s shopping experience.

• Large-scale procurement, high bargaining power, can greatly ensure the low price of goods;
• A professional purchasing team purchases from overseas stores to ensure the quality of the products;
• Koala Haizhuang's privilege of building overseas warehouses, bonded warehouses, and rapid customs clearance makes Koala Haizhuang's logistics time-consuming;
• When users need after-sales service, they can send the goods back to the bonded warehouse, which greatly simplifies the after-sales process of overseas products.

The product design of Koala Haigou APP has also greatly optimized the user's experience. Small details such as product recommendations are convenient for user comparison, and shopping carts are directly editing product specifications.

3. Operation is good at promoting development

High-quality operations can maximize the commercial value of products. Koala Ocean Shopping does not miss large-scale promotions from traditional e-commerce every year, such as "Double Eleven" and "June 18", which bring users a familiar feeling; at the same time, there are also overseas promotions, such as "Black Friday", which can attract users to spend on Koala Ocean Shopping.

Koala Haigou has also increased its product visibility by participating in many cooperation with variety shows, such as "very perfect" and "flower boys"; the operation of activities such as daily sharing of new recruits, earning commissions, and inviting friends to bargain can ensure that Koala Haigou remains fresh user input.

4. Continue to innovate and maintain vitality

After five years of development, Koala Haigou has accumulated a large number of young users and million-level members; Koala Haigou has launched video elements that young people like, such as Climbing Tree TV and Like Community, which is quite attractive to young users.

The global factory store is a business model project launched by Koala Haigou, China's leading cross-border retail import platform, which focuses on direct consumers from global high-quality manufacturers; it is committed to bringing consumers the highest quality, best price and best service shopping experience; and the official gift card of the factory store has collected the world's best quality manufacturing companies. With the help of the company's technology, manufacturing capabilities and the excellent design of koala visual masters, it brings consumers more exquisite combination gifts.

5. Future Outlook

"Comprehensively deepening reform and development" will remain the main theme of China's development for a long time in the future. At the same time, the "Regional Comprehensive Economic Partnership Agreement" (RCEP) was signed recently, and China will continue to release policy dividends from the cross-border trade industry.

According to statistics, cross-border e-commerce transaction volume accounts for only 5% of the entire e-commerce industry; it is not difficult to see that cross-border e-commerce is still a promising market, but the industry is already in a mature state, and it is also a fact that there will be no influx of new users.

To this end, Koala Haigou has begun to explore the direction of member e-commerce. The business strategy has gradually changed from first purchasing platform and then consumer choice to what platform consumers need to purchase, and better provide services to users. The purpose is to further screen and retain high-value users, and at the same time maintain differentiated development with cross-border e-commerce platforms in the market. Moreover, after Alibaba took over Koala Haigou, it is more comfortable in supply chain and logistics than before. With sufficient capital chain, Koala Haigou will be more calm in strategy adjustment in the future. Regardless of whether the member e-commerce strategy is suitable, it can be foreseeable that Koala Haigou will play the role of a "trend" in the cross-border e-commerce industry.

The above product analysis comes from the author's understanding of the cross-border e-commerce industry. There must be some inappropriate points. Readers are welcome to correct them.

Author: Pearce

Source: Pearce