Kaola.com Product Analysis Report

At present, young consumer groups are rising, and their consumption potential is constantly being explored and released. In the future, scenario-based cross-border e-commerce consumption that is more in line with the consumption needs and cultural values ​​of young users and integrates social interaction, content marketing, and multi-terminal channels is gradually becoming a new trend.

Compared with traditional e-commerce platforms, NetEase, whose main businesses include portal websites, online games, email, and online music, launched the cross-border e-commerce platform " Kaola Global Shopping " in January 2015. Although it was not the earliest to start, it quickly occupied a huge market share in the yet unclear cross-border e-commerce market. How did it do it? This article will analyze the secret of Kaola's rapid growth based on the current situation and development model of the cross-border e-commerce industry.

1. Industry Analysis

Cross-border e-commerce, abbreviated as cross-border e-commerce, refers to an international business activity in which trading entities belonging to different borders reach transactions, make payments and settlements through e-commerce platforms, and deliver goods and complete transactions through cross-border logistics. As the technological foundation for promoting economic integration and trade globalization, cross-border e-commerce has not only broken down the barriers between countries and made international trade move towards borderless trade, but also has very important strategic significance. Due to cross-border e-commerce

The industry is one that is greatly affected by macro factors, so we use the PEST analysis model to explore the reasons behind it.

1.1 Politics

In 2012, the country opened the first batch of pilot cities for import cross-border e-commerce.

In 2013, policies were introduced to support cross-border e-commerce exports.

From 2014 to 2016, cross-border e-commerce imports began to be legalized, and tax policies were continuously adjusted and improved.

Starting from December 1, 2017, according to the "Notice on Adjusting Import Tariffs on Some Consumer Goods" issued by the State Council, import tariffs on some consumer goods will be reduced at a temporary tax rate, making goods imported through cross-border e-commerce channels safer and more reliable in terms of customs declaration, quality inspection, warehousing, etc.

The post-transitional regulatory policy for cross-border e-commerce retail imports was adopted on January 1, 2018, which clearly stipulates that cross-border e-commerce retail imported goods will be temporarily regulated as personal items, reserving development space for cross-border e-commerce.

On January 1, 2019, the "Electronic Commerce Law of the People's Republic of China" was promulgated, covering many aspects such as e-commerce taxation, business licenses, and transaction regulations, further strengthening the regulation of the cross-border e-commerce market. Against the backdrop of enhanced standardization, the scale of cross-border e-commerce transactions is expected to continue to grow.

In February 2020, the "Several Measures to Promote the Development of Cross-border E-commerce" was introduced to increase support for the cross-border e-commerce industry, and increase support for companies in areas such as imported medical consumables, cross-border e-commerce cargo charter flights, and overseas warehouse construction to meet the needs of epidemic prevention and control, to promote the development of cross-border e-commerce.

In April 2020, the State Council Executive Meeting established 46 new cross-border e-commerce comprehensive pilot zones, adding to the previous 59, a total of 105, to promote the development of cross-border e-commerce.

On June 12, 2020, the State Council issued the "Announcement on the Pilot Program of Cross-border E-commerce Business-to-Business Export Supervision" to promote the deployment of accelerating the development of new business forms of cross-border e-commerce, give full play to the positive role of cross-border e-commerce in stabilizing foreign trade and ensuring employment, and further promote the healthy and rapid development of cross-border e-commerce.

In addition, some cities and regional governments will also provide different levels of funding and subsidies for cross-border e-commerce, such as:

In 2018, Shenzhen launched a cross-border e-commerce subsidy project, providing financial support to cross-border e-commerce companies and supply chain management companies with certain strength to provide comprehensive "overseas warehouse" supporting services for cross-border e-commerce businesses in a B2B manner, as well as to improve the service facilities of overseas operation centers.

In 2020, the Zhejiang Provincial Government issued the "Several Opinions on Resolutely Winning the Battle Against the New Coronavirus Epidemic Prevention and Control and Making All-Out Efforts to Stabilize Enterprises, the Economy and Development", proposing to fully support the stable development of cross-border e-commerce, help cross-border e-commerce companies to open up the supply chain, and make good use of cross-border e-commerce financial support funds.

In March 2020, "Several Policies on Promoting the Development of China (Hohhot) Cross-border E-commerce Business Comprehensive Pilot Zone" further optimized the development environment of cross-border e-commerce and promoted the high-quality development of cross-border e-commerce in Hohhot.

Since 2012, the cross-border e-commerce model has been encouraged by national policies and has great development opportunities. In 2020, due to the continued spread of the overseas epidemic, the country and various provinces and cities successively introduced relevant favorable policies, which further accelerated the penetration of cross-border e-commerce models and industry development.

1.2 Economy

As my country's per capita disposable income increases, residents have more disposable funds and their purchasing power is gradually improving. The younger generation has become the main consumer group. They pursue higher quality goods and their consumption concept of focusing on brands is gradually becoming more prominent. Moreover, as the popularity of excellent foreign products increases in China, the consumer demand for overseas products continues to increase, providing a good user base for cross-border shopping.

1.3 Society

With the increase in residents' income and the development of the online shopping industry, online shopping has become commonplace. According to Aurora Big Data, Chinese households' online shopping expenditures account for 21.9% of their total monthly household expenditures. With the rise of consumption potential among young groups, consumer values ​​and trends such as being keen on new trends, trying new consumption experiences, pursuing circle-based aesthetics, "Amway" and "planting grass" concepts, and quality consumption are gradually becoming popular. These are also the main reasons for young consumer groups to engage in cross-border consumption, helping the cross-border e-commerce industry to flourish.

On the other hand, with the rapid development of economy and society, the number of students studying abroad and outbound tourists has increased year by year, and the popularity of foreign products in China has increased, which has increased consumer demand for overseas products and increased cross-border consumption demand.

On the other hand, the endless stream of problems such as safety issues of domestic maternal and infant products and food, copycat products, counterfeit and shoddy products have reduced the Chinese people's trust in and desire to buy domestic products, and further stimulated the Chinese people's cross-border consumption demand for foreign brand products and high-quality products.

1.4 Technology

As the development of artificial intelligence and big data applications matures, cross-border e-commerce companies continue to strengthen their research and development and application in artificial intelligence and big data. Advanced technologies such as intelligent robot sorting centers, automated intelligent logistics warehouses, smart warehousing, artificial intelligence customer service, and precise consumer insights based on big data will reduce companies' labor service costs and optimize resource allocation; at the same time, smart terminals such as AR try-on and makeup trial will further enhance user consumption experience and continue to help the development of the cross-border e-commerce industry.

With the rapid development of mobile payment and cross-border payment in my country, almost all mobile online shopping payment channels can be covered. More intelligent verification methods such as face payment and fingerprint payment not only enrich payment methods and simplify payment processes, but also improve security and convenience, providing great convenience for cross-border e-commerce payments.

2. Current scale of the industry and future development trends

2.1 Growth in User Scale

Data from iiMedia Research shows that the scale of Chinese overseas shopping users continued to grow from 2015 to 2019. In 2019, the number of Chinese overseas shopping users reached 154 million, a year-on-year growth rate of 52.5%. It is estimated that the number of Chinese overseas shopping users will exceed 200 million in 2020. Although the number of users of overseas shopping is expected to slow down in 2020 due to the epidemic, with the growth of young consumer groups such as those born in the 1990s and 1995s, "quality consumption" has gradually become the mainstream consumption concept. In addition, the increasing frequency of studying abroad and outbound tourism have created a cultural environment for the new generation of overseas shopping. Users' demand for high-quality cross-border e-commerce is gradually increasing, and the user scale will continue to expand.

In addition, as China reduces tariffs on goods from some countries or regions, improves cross-border e-commerce platforms and increases logistics efficiency, many overseas products will gradually become more attractive to users. According to iMedia Research data, in 2018, the proportion of Chinese overseas shopping users who made a purchase once a week was 19.1%, and the proportion of overseas shopping users who made a purchase once a month was 41.0%. Nearly half of users spend more than 1,000 yuan on overseas shopping each month, and the amount is on an upward trend.

2.2 Growth of market size

In 2020, due to the impact of the epidemic, the overall cross-border e-commerce transactions were greatly affected in terms of goods and logistics.

It is estimated that the scale of China's cross-border e-commerce transactions will reach 10.3 trillion yuan by the end of 2020. However, according to data from China Customs' cross-border e-commerce supervision platform, China's imports and exports through the customs cross-border e-commerce management platform increased by 26.2% in the first half of 2020, still maintaining high growth. This shows that cross-border e-commerce platforms are still popular during the epidemic, and the purchasing power and frequency of cross-border e-commerce users continue to grow. Cross-border e-commerce companies have not reduced their efforts to explore major markets such as Europe and the United States.

Due to the impact of the epidemic, the cloud economy promoted by online transactions in all links of the trade chain has become a development trend. Live streaming is becoming more and more popular and may become a marketing hotspot for cross-border e-commerce after the epidemic. China's major cross-border e-commerce platforms are also trying to deploy live streaming and short video promotion, actively making efforts to attract potential users.

Therefore, with the support of domestic policies and the growing user base, coupled with strategies such as self-construction of e-commerce platforms and development of new foreign markets, the scale of China's cross-border e-commerce market will continue to develop in a positive direction.

3. Competitive Product Analysis

Against the backdrop of favorable national policies and social environment, the cross-border e-commerce industry is like a huge cake, attracting many companies looking forward to a piece of the pie. Many cross-border e-commerce platforms have also sprung up and grown, such as NetEase Kaola, Xiaohongshu, Ymatou, Aomaijia, etc.; existing e-commerce platforms have also launched international sections, including Tmall Global, Suning International, JD International (JD Global Shopping), Vipshop International, etc.

According to market share data, Kaola and Tmall Global have obvious advantages in market share and belong to the first echelon; Haitun Global, Suning International and Vipshop International are also major competitors in the industry and belong to the second echelon; other companies such as Ymatou and Aomaijia have a lower market share and belong to the third echelon.

In September 2019, Alibaba Group and NetEase reached a strategic cooperation, and Alibaba Group acquired Kaola.com, a powerful combination of the two cross-border e-commerce industry giants. The following focuses on analyzing the growth paths and business models of the three companies in the first and second echelons of the cross-border e-commerce industry, using this as a starting point to gain an in-depth understanding of the differences between different companies in the industry.

3.1 Kaola Global Shopping

3.1.1 Development process

On January 9, 2015, NetEase’s self-operated cross-border e-commerce platform “Kaola Global Shopping” was launched for public testing. In the same month, it began selling Chilean cherries, achieving the first cross-border e-commerce fresh food order.

On May 20, 2015, Kaola launched the "Love Shopping Carnival", expanding overseas products from maternal and child products to all categories including beauty and personal care, food and health care, and household daily necessities.

On September 6, 2015, the Kaola.com 2.0 version APP was launched on the Apple Store, setting a precedent in the industry with its scenario-based innovative experience.

On March 29, 2016, Kaola.com announced its official launch, with a sales target of RMB 10 billion in 2016.

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".

3.1.2 Properties

Self-operated cross-border retail e-commerce platform

3.1.3 Slogan

Choose the world with black card

3.1.4 Business Model

Since its establishment, Kaola has mainly adopted the B2C self-operated and bonded area models, controlling every link from commodities, pricing, warehousing, logistics to after-sales, especially the centralized procurement capabilities of the upstream supply chain. For high-quality overseas manufacturers, Kaola can provide a complete set of nanny-style services from cross-border logistics warehousing, cross-border payment, supply chain finance, online operations, brand promotion, etc. The self-operated direct purchase + full inspection upon entry into the warehouse + full traceability of logistics model ensures good quality control. The self-operated model means having the right to independently set prices and adjusting pricing strategies according to market environment and competition nodes. On the one hand, it can respect the brand's pricing strategy, and on the other hand, it can take into account Chinese consumers' sensitivity and preferences for prices, thus gaining a large number of platform fans.

3.1.5 Product Categories

Products cover more than 5,000 brands including beauty and cosmetics, personal care and household cleaning, food and beverages, mother and baby, furniture and life, nutrition and health care, apparel and shoes, sports and outdoor, digital, watches and accessories, and light luxury, including more than 1,000 international first-line brands.

3.1.6 Product Source

By establishing a professional procurement team to go deep into the origin of goods to select the world's top quality products, we have established branches and offices in different countries and regions around the world. Our products come from Japan, South Korea, Europe, the United States, Australia, Southeast Asia, etc.

3.1.7 Warehousing and Logistics

Kaola has established 18 overseas warehouses around the world and has an advanced logistics cloud system, establishing a three-level cross-border logistics warehousing layout covering overseas direct mail-overseas collection-domestic bonded import. Domestically, Kaola.com owns the industry's largest domestic bonded warehouse (with a built-up area of ​​more than 300,000 square meters), 15 domestic self-operated bonded warehouses, and adopts "full inspection", including the packaging integrity, expiration date and other dimensions of the goods, to ensure that the goods entering the warehouse meet the requirements and are within the validity period. In addition to domestic bonded warehouses and overseas warehouses, Kaola also cooperates with logistics giants such as Amazon, SF Express, and Cainiao. It has also independently developed the intelligent management system "Xiangyun" and TMS system "Rui Lin", and fully opened them to upstream and downstream partners to ensure supply chain efficiency.

3.1.8 Member Services

Kaola.com has launched the "Black Card Membership" service, priced at RMB 279 per year, which includes a 4% discount for members, exclusive member prices, factory store gift packages, tax coupons, shipping coupons, quick refunds and many other benefits and rights, fully meeting users' multiple consumption needs and enhancing their cross-border consumption experience.

3.1.9 New business trends

Constrained by the problem of declining gross profit margins caused by inventory, Kaola.com has reached a strategic cooperation with Alibaba. At that time, Kaola.com will obtain stronger logistics chain support, and its development strategy will also change from "cross-border e-commerce" to "comprehensive e-commerce" to the current focus on "membership e-commerce". At the same time, Kaola.com will focus on the new consumer group born after 1995, and introduce social marketing models and offline store openings to strengthen brand image building.

3.2 Tmall Global

3.2.1 Development Path

In February 2014, Tmall Global was established. With the goal of "original imports from all over the world", we directly supply domestic consumers with original imported goods from overseas.

In November 2018, at the first China International Import Expo, Alibaba announced its $2,000 import strategy for the next five years.

In September 2019, Tmall Global released the "Three New" strategy for Double 11 2019: exploring new demands for imported consumption by incubating "new categories", introducing "new brands" and launching "new products", and continuously meeting young consumers' pursuit of a diversified imported lifestyle.

In November 2019, Tmall Global continued to accelerate Alibaba’s five-year US$200 billion import strategy, with 123% of the first-year target completed.

On July 23, 2020, Tmall Global announced a brand upgrade, launched a new slogan "My Global Discoveries", and hired celebrities as spokespeople.

3.2.2 Properties

An open third-party trading platform with merchants settled in

3.2.3 Slogan

Tmall Global, my new global discovery!

3.2.4 Business Model

Tmall Global relies on Tmall Mall, and its business model mainly tends to be the M2C model, that is, the investment and settlement model. It attracts globally renowned brands and companies to settle in Tmall Global and open official flagship stores. Cross-border transactions belong to the bonded import overseas direct mail model.

3.2.5 Product categories

Tmall Global's product categories cover beauty and personal care, digital appliances, food and health care, maternal and child products, clothing, shoes and bags, etc., covering almost all categories. In the past four years, Tmall Global has introduced about 25,000 overseas brands from 92 countries and more than 5,100 categories into the Chinese market, of which more than 80% are entering China for the first time.

3.2.6 Product Source

There are three main ways for overseas brands to enter Tmall Global: ① Foreign brands directly enter the Tmall Global platform; ② TP model, i.e. e-commerce agency operation or e-commerce outsourcing model; ③ National and regional pavilions, conducting in-depth cooperation with each settled merchant to ensure exclusive resources.

3.2.7 Warehousing and Logistics

Tmall Global adopts the "bonded import + overseas direct mail" model. Through cooperation with the free trade zones, it has established its own cross-border logistics warehouse in the bonded logistics center. It has currently signed cross-border cooperation agreements in pilot cross-border e-commerce trade bonded zones and industrial parks in Ningbo, Shanghai, Chongqing, Hangzhou, Zhengzhou, Guangzhou, etc., and has fully laid out cross-border channels. Tmall Global has partnered with well-known logistics companies such as DHI, EMS, UPS, and FEDEX to carry out bulk container transportation. The "three-in-one" model effectively integrates the entire process from ordering to payment to delivery, which not only improves logistics efficiency, but also controls logistics costs, while making it convenient for buyers to inquire and protect their rights.

3.2.8 Member Services

Tmall membership store was launched, with an annual card for 108 yuan and a continuous annual package for 99/year. Guests can enjoy benefits such as a 360 yuan red envelope throughout the year, new card opening gifts, membership customization, super value membership prices, free shipping for single items, member feedback day, exclusive consultants, and worry-free after-sales service.

3.2.9 New business trends

In the past two years, Tmall Global’s key battles have mainly included upgrading Tmall Global’s direct sales business, strengthening platform business to achieve a “dual-wheel drive” to empower global brands; strengthening the creation of a new model of direct purchases from overseas warehouses, and building a global supply chain network for more global brands; actively creating content-based marketing, expanding content access channels through live streaming and cooperating with social platforms, and establishing an expert mechanism with institutions to bring more new consumption experiences to users.

3.3 JD International

3.3.1 Development Path

JD International was originally named “JD Global Shopping” and was established in 2015. It mainly engages in cross-border import goods business and is a brand under JD.com.

On July 30, 2018, JD Global Shopping announced that it had signed a strategic cooperation agreement with Japan's Kintetsu Department Store Group. Kintetsu Department Store’s overseas flagship store is officially launched on JD Global Shopping.

On November 19, 2018, JD.com officially upgraded its global shopping brand to “Haidun Global”.

On November 22, 2019, JD.com's large-scale import business underwent a strategic upgrade, integrating its cross-border products and general trade imported goods, and upgrading Haidun Global to JD International.

On March 10, 2020, JD International launched a special support plan "Overseas Merchant Edition" to cope with the impact of the epidemic.

3.3.2 Properties

E-commerce platforms that directly ship products produced or sold overseas

3.3.3 Slogan

Enjoy the best products from around the world at one stop~

3.3.4 Business Model

JD International started out with an overseas purchasing agent model, and then gradually developed its own business, forming a "self-operated + platform" business model to provide one-stop cross-border services, and a "self-operated + merchant settlement" model, focusing on the direct purchase model from the place of origin, strengthening self-operated direct purchases, and highlighting the advantages of direct purchases from the place of origin; through JD Logistics' efficient distribution system and complete professional services, more cooperating merchants and consumers can benefit.

3.3.5 Product categories

JD International currently operates approximately 20,000 brands covering digital home appliances, skin care and beauty, mother and baby toys, food and beverages, fashion and light luxury, gasoline products, cleaning and personal care, daily life, nourishing health care, imported fresh food, etc.

3.3.6 Product Source

We have cooperated with well-known brand companies and large supermarkets in about 70 countries and regions, including Japan, South Korea, Europe, America, Australia, New Zealand, Europe, and Southeast Asia, to recommend local specialty products to users based on the country and region.

3.3.7 Warehousing and logistics

Haidun Global applies JD.com's self-built logistics, supply chain models and standards accumulated over the years to the construction of cross-border logistics. Based on overseas TC warehouses (overseas transshipment centers), self-operated bonded warehouses, domestic logistics networks and distribution systems, it integrates transportation, warehousing, customs clearance and distribution services to form a full-chain service in the field of cross-border logistics.

3.3.8 Member Services

JD PLUS members, 149/year, enjoy 10 times the rebate, 100 yuan/month all-category coupons, 360 yuan/year shipping coupons, PLUS-priced products, 5% off brands, life privileges, free returns and exchanges, PLUS DAY, exclusive customer service, 10% off clothing, health privileges and other benefits.

3.3.9 New business trends

JD International is vigorously developing new markets, improving its marketing ecosystem through new media marketing, social communication and large-scale discount promotions, attracting the attention of the sinking market, and opening JD International offline duty-free shops and experience stores. In response to the background of consumption upgrading, we have also launched a series of authenticity guarantee and service measures to improve consumers' shopping experience.

3.4 Summary

From the above analysis, we can see that the three products were established at a similar time. Although their business models had different focuses at the beginning, Kaola Online Shopping mainly adopts the self-operated model, focusing on cost-effective genuine products; Tmall Global mainly adopts the investment promotion model, focusing on brand product diversification; JD Global mainly adopts overseas purchasing and direct procurement, focusing on convenient and efficient logistics experience; but with the development, their business models have gradually developed towards the "B2C+M2C" hybrid model, and the consumer user groups have also tended to be young consumers. They are all working hard on brand image, user experience, marketing strategy and other aspects.

According to data from iiMedia Research, among the three products, overseas shopping users are most satisfied with Kaola.com, scoring 8.21 points, followed by JD.com International and Tmall International, both scoring above 8 points. Overseas shopping users have the highest trust in the authenticity of Kaola.com, followed by Tmall International and JD.com International.

With the powerful combination of Kaola.com and Alibaba, the market share of both Kaola.com and Tmall Global may continue to increase. Kaola.com is focusing on "membership e-commerce" from "comprehensive e-commerce", and JD International is also exploring new business models and new marketing methods. We expect their respective developments will bring new directions to the industry.

4. User Value Analysis

In the overseas shopping platform market, there are four main participants: suppliers, buyers, distributors, and platforms. The business logic diagram of Kaola Overseas Shopping is as follows:

If cross-border e-commerce platforms want to achieve rapid growth and profitability, they must prepare sufficient and abundant supply, find high-quality suppliers, meet the needs of buyers, and establish an efficient and convenient warehousing and logistics mechanism.

Next, let’s explore the needs of these four parties and how Koala Global Shopping can better meet their needs.

4.1 Overseas Suppliers

With the growth of Chinese national consumption demand and the influence of the reform and opening-up strategy, the Chinese market has become the largest consumer market in the world, attracting countless overseas businesses. There are generally the following ways for overseas products to enter the Chinese market:

4.1.1 Opening offline stores

Overseas brands can sell their products in China through authorization by opening offline stores and counters, such as Starbucks, luxury stores, accessories and clothing. These stores are usually opened in the central bustling streets or large shopping malls of first- and second-tier cities, equipped with dedicated sales teams to meet the consumption needs and shopping experience of domestic buyers.

Overseas brands that want to open stores in China need to go through a series of steps such as registration and application. Store decoration, facilities and sales teams also require certain costs. In addition, since the locations of specialty stores are mainly concentrated in first- and second-tier cities, the coverage of consumer groups is limited, making it difficult to meet the growing consumer demand.

4.1.2 Setting up a general agent in China

Overseas brands can distribute their products by setting up general agents in China. This method is cheaper than opening offline stores in China, but it requires finding qualified and well-known agents, which involves many issues such as product pricing, agency authority, and business model, and it is difficult to fully control quality assurance and after-sales issues.

4.1.3 Through overseas e-commerce platforms

Overseas brands can sell their products to consumers around the world through globally renowned e-commerce platforms such as Amazon, eBay, etc., and can deliver them to domestic buyers through international logistics.

However, overseas e-commerce platforms have limited popularity in China. Language, cultural differences, aesthetic habits, consumption habits, etc. have resulted in a small number of domestic users. Payment methods are also relatively limited, and after-sales rights protection is relatively difficult, which reduces the consumer experience. In addition, international logistics takes a long time, some goods may need to be transshipped, and some logistics cycles can even take months, or goods may be lost or damaged during transportation. These are factors that restrict domestic buyers from using overseas e-commerce.

4.1.4 Opening of official Chinese website

Currently, more and more overseas brands are setting up official websites in China to attract domestic buyers and sell their products, such as H&M China official website, Estee Lauder China official website and other clothing and cosmetics brands.

On the one hand, due to cultural differences, this method makes it difficult for overseas brands' official website style, marketing style, and promotional content to conform to the tastes and aesthetics of Chinese people, and may even cause cultural shock and misunderstandings. On the other hand, opening an official website by yourself requires certain operation and maintenance costs. If you want to fully understand the Chinese market, you also need to build a dedicated team to conduct market research and other operations, so the cost-effectiveness is not very high.

4.2 Domestic Buyers

With the growth of consumer income and improvement of living standards, domestic buyers pay more and more attention to the quality of overseas products. According to data from iiMedia Research, 55.7% of overseas shopping users said that when purchasing overseas products, the most important thing they care about is whether the product is authentic, and 51.9% of users are more concerned about whether the product category is rich. In addition, after-sales service, product quality, price, logistics, etc. are also areas of concern for users.

For domestic overseas shopping users, it is a very uncomfortable experience to buy fakes instead of authentic products. However, what you fear is bound to come true. As domestic consumers have a high demand for overseas beauty and personal care products, and the counterfeiting cost and technical requirements of such products are low, they have high profits, and it is difficult to implement supervision. As a result, fakes are "filling the gap". According to iiMedia Research data, 41.4% of overseas shopping users have the experience of purchasing fakes on overseas shopping platforms, of which 45.5% of the respondents purchased fake toiletries, 39.4% and 37.9% of them were beauty and cosmetics, and nutritional supplements.

In addition, due to its unique logistics system, cross-border consumption has higher requirements for logistics distributors. According to (iiMedia Research) data, the logistics experience satisfaction of China's major cross-border consumption users needs to be improved. Difficult returns and exchanges, long waiting times and high transportation costs have become the main problems faced by China's young cross-border consumers in the first half of 2020.

At present, the main ways for domestic consumers to purchase overseas products are as follows:

4.2.1 Personal purchase abroad

Consumers who are willing to buy can go to local stores to buy overseas products through outbound travel. They can buy the most authentic products at local prices and have a lower probability of buying counterfeit and shoddy products.

However, this method is usually more suitable for some people with better economic conditions or who often need to travel abroad. After all, the time and economic costs of traveling abroad to purchase overseas products are high, and only a certain number of products of different categories can be purchased at a time. In addition, due to cultural differences and language proficiency, it is difficult for buyers to fully understand and select products when purchasing, which greatly reduces the overseas shopping experience.

4.2.2 Find a purchasing agent

As the domestic demand for overseas products continues to increase, domestic consumers can ask acquaintances to go abroad to help purchase and transport the products back to China, or find professional purchasing agents to buy overseas products. Although the quality of products purchased through agents with acquaintances can be guaranteed, the number of such agents is limited. The prices of products purchased through professional agents are generally higher than those purchased through individual overseas purchases, which can guarantee the quality of the products to a certain extent. However, professional agents are unofficial channels after all, and rely on the integrity and consciousness of both parties to the transaction. The phenomenon of buying high-quality imitations or fakes still exists. Once this happens, it is difficult for domestic buyers to protect their rights. With the formal implementation of the E-Commerce Law, it has dealt a heavy blow to small overseas purchasing teams. On the other hand, the actual operator of the purchase of overseas products is the purchasing agent, and domestic buyers cannot personally select or compare products and have almost no shopping experience. As a result, the number of consumers choosing purchasing agents is decreasing.

4.2.3 Through overseas e-commerce or overseas shopping platforms

Domestic buyers can purchase overseas products through overseas e-commerce platforms or overseas shopping platforms. Not only can they choose from a wider range of overseas products, but they can also compare target products on the website, saving manpower and material resources.

However, the style and purchasing process of overseas e-commerce platforms are still quite different from those of domestic e-commerce platforms. Also, due to language, cultural differences, payment methods, logistics speed, after-sales protection and other issues, domestic consumers are not very fond of this method.

However, international logistics takes a long time to transport goods, has longer logistics channels, more logistics links and involves certain risks. Most of the time, the intuitive feeling it gives to consumers is that it is "slow and troublesome", which greatly affects the consumer experience.

4.2.4 Through offline counters and specialty stores

Domestic consumers can also go directly to the offline counters and specialty stores of overseas brands in China to purchase products. Not only can they experience the products in person and select and compare products with the services of professional sales staff, but they can also ensure product quality and after-sales rights protection.

However, overseas brands’ offline stores are usually located in large and medium-sized cities in China, making it difficult to cater to consumers in other cities. In addition, affected by operating costs and tariffs, product prices in offline stores are always higher, and brand offline stores often have incomplete product categories and out-of-stock situations.

Through the above analysis, it can be concluded that the main pain points of domestic users when purchasing overseas products include: authenticity guarantee, product cost-effectiveness, product category, after-sales service, logistics speed and other aspects.

4.3 Platform

From the above analysis, we can find that when it comes to purchasing overseas products, both overseas suppliers and domestic buyers have their own needs, but due to factors such as distance, local policies, and logistics, the current purchasing channels do not meet these needs well. As a cross-border e-commerce platform, how does Kaola.com better meet their needs and attract them to this platform?

4.3.1 Authenticity Guarantee

From the very beginning, Kaola.com has always adhered to the "self-operated direct purchase" model, forming a professional team to directly purchase high-quality products in batches from overseas origins, with the aim of 100% authenticity, and independently controlling every link of the goods from procurement, pricing, warehousing, logistics to after-sales, so as to compress the intermediate links as much as possible, ensuring both the quality of the products and their high cost-effectiveness. According to data from iMedia Research, Kaola.com's product authenticity trust ranks high among overseas shopping users.

4.3.2 High cost performance

Since its inception, Hella Overseas Shopping has aimed to help users "live a better life with less money". It adheres to the concept of direct purchase and boutique operation, establishes branches and offices in different countries and regions around the world, and forms a professional team to go deep into the product origin to select high-quality products from around the world, and directly connect with overseas suppliers. Not only can it achieve lower wholesale prices through the large-scale centralized procurement model, but it can also save the intermediate links and costs such as agents and distributors, and improve the cost-effectiveness of the products to a higher level. According to data surveys, overseas shopping users are most concerned about the cost-effectiveness of overseas products in overseas markets, and the quality of products is also receiving more and more attention. Kaola.com has effectively solved the pain point of overseas shopping users.

4.3.3 Product categories

Between 2015 and 2016, Kaola.com obtained the first official authorization of a domestic e-commerce company mainly from Kraft Heinz, Nestlé Wyeth, Delhaize, one of the largest food companies in Europe, and Xile Group, selling Herobaby brand infant formula, Blackmores and PharmaCare, the first and second largest health care products companies in Australia, Australia's well-known milk powder brand Aubrey, internationally renowned milk powder company Mead Johnson, and one of the three major beauty brands in South Korea, Kolyana. It reached an official authorization cooperation with South Korea's L&P Cosmetics Company and became the first batch of Chinese cross-border e-commerce companies to obtain official authorization for South Korea's Kress mask; it officially signed a direct purchase cooperation agreement with Japan's @cosme. It can be seen that Kaola.com has reached cooperation with overseas manufacturers and brands in the fields of beauty and personal care, maternal and child care, and nutritional health products in the development of overseas product markets.

According to iMedia Research data, beauty products and nutritional supplements are the most popular categories for overseas shoppers, with 35.8% of overseas shoppers preferring to buy beauty products and 31.2% preferring nutritional supplements. Next are toiletries, food and beverages, digital appliances, and clothing and luggage.

These categories are exactly the products that Koala.com has been vigorously purchasing in recent years. Its product categories account for the largest and richest proportion. Koala.com's advantages in quality and diversity in beauty, personal care, nutrition and health products make Koala.com more popular with consumers. As Kaola.com enters the field of "comprehensive e-commerce", its products have covered more than 5,000 brands including beauty and cosmetics, personal care and household cleaning, food and beverages, mother and baby, furniture and life, nutrition and health care, clothing and shoes, sports and outdoor, digital, watches and accessories, and light luxury.

4.3.4 Logistics Speed

NetEase Kaola's daily order delivery timeliness rate is as high as 99.98%, which is higher than the industry average of about 99.95%. The customs clearance timeliness rate is 99.86%, the next-day delivery service fulfillment rate is 99.36%, and the regular delivery punctuality rate of bonded goods exceeds 96.51%. The product mis-delivery rate is 0.0003, which is lower than the 0.5% level of mainstream cross-border e-commerce.

NetEase Kaola has also developed its own intelligent management system "Xiangyun" and TMS system "Rui Lin", and fully opened them to upstream and downstream partners to ensure supply chain efficiency. The average delivery time for general overseas direct mail products is 7 to 14 days. Kaola also cooperates with logistics giants such as Amazon, Sinotrans, SF Express, and Cainiao, and ensures that orders from South Korea and Japan arrive in as fast as 3 days, the United States in as fast as 4 days, Germany in as fast as 5 days, France in as fast as 6 days, and domestically in generally 2 days. The average logistics delivery time is less than 7 days.

4.3.5 After-sales guarantee

Kaola.com has dedicated telephone and online customer service for users to consult product questions at any time. If you are not satisfied with the product you received and want to return it, there is no limit on the number of door-to-door pickups for returns and exchanges, and the product can be sent directly back to the domestic bonded warehouse. With 30-day worry-free returns and fast delivery as its service goal, returns and exchanges solve the problem of post-sales rights protection difficulties for overseas shopping users and effectively protect the legitimate rights and interests of consumers.

In a 2019 survey, Kaola.com ranked first in overall user satisfaction on the platform and was the platform with the highest after-sales service satisfaction.

4.3.6 One-stop babysitting service

For high-quality overseas manufacturers, Koala Haigo can provide a complete set of nanny-style services from cross-border logistics and warehousing, cross-border payment, supply chain finance, online operations, brand promotion, etc., which not only saves costs for overseas manufacturers to enter the Chinese market, but also helps overseas brands overcome the problem of "non-comfortable environment" and better adapt to the Chinese market.

4.4 Summary

Through the above analysis, it can be concluded that Koala Haigou’s business development model and services provided can effectively solve the pain points and needs between overseas suppliers, domestic buyers and delivery parties. The advantages of Koala Haigou in authentic quality, high cost performance, product categories, logistics speed, after-sales guarantee and special services make Koala Haigou the leading cause among many cross-border e-commerce.

5. Commercial Value Analysis

Business value is an indicator to measure a company's ability to generate cash flow for a long time, and the revenue of a company's core business is one of the key factors affecting business value. As an e-commerce platform, Koala Haigou is the core indicator for measuring platform competitiveness (market share).

The calculation formula for GMV is as follows: GMV=number of registered users*conversion rate*customer price

The indicators that affect GMV mainly include the number of registered users, conversion rate, and average customer price. Any increase in these three indicators will have a positive impact on the growth of overall revenue. So next we will focus on analyzing the means by which Koala Ocean Shopping improves these three key indicators.

5.1 Increase the number of registered users

In order to achieve continuous growth in revenue, the most basic guarantee is to continuously register new users. So how does Koala Haizhuang increase the number of users?

5.1.1 Your own traffic conversion

NetEase has businesses such as portals, online games, emails, online education, and online music, and has accumulated a huge user base. Before it was launched, Koala Haigou relied on the huge traffic pool of NetEase News and NetEase Email to divert traffic. Through the traffic conversion of the huge user base in the NetEase series, it laid the foundation for NetEase Koala to develop its user scale, so that NetEase Koala had a certain user base as soon as it was launched in January 2015.

5.1.2 Advertising

In order to quickly increase popularity, Koala Haigou also carried out large-scale advertising in the early stage, mainly including the following:

5.1.2.1 Official media exposed

In October 2015, CCTV launched the "Belt and Road" special report "Community of Shared Destiny", broadcasting the first episode "Parcels in the Distant Land", and in-depth visits to Thailand's latex factories and witnessing the entire production and delivery process of LAYTEX latex pillows purchased by Koala Hai Purchase.

5.1.2.2 Sponsoring popular variety shows

In 2018, Koala Haigou sponsored many popular variety shows, including "Mom Is Superman", "Running Man", "A Life of Longing", "Flowers and Boys", etc. Since the audience of these popular variety shows are mainly young people and the main group of cross-border consumption, the download volume of Koala Haigou APP increased significantly when the variety shows were broadcast.

5.1.2.3 Fully serving advertising

on-line:

Put advertisements on other APPs, such as displaying advertising information on iQiyi pages and videos before playing, and using information flow advertisements for brand promotion.

Cooperate with Douyin APP to hold the Koala Disco Douyin Challenge, and use marketing methods such as user testimony to publish scene-based TVC to increase consumer participation and carry out brand promotion.

Koala Overseas Shopping also launched hot topics on Weibo, joining forces with Weibo big Vs, which triggered heated discussions across the Internet, driving fans to spread through circles, and realizing fission-like communication and attracting new products.

Offline:

In addition to online advertising, Koala Haizhuang is also in cities with a high sales share. Combined with online activities, it will launch digital building screen-splash advertisements, billboard advertisements, and pre-screen advertisements in the cinema, which is beneficial.

Using a three-dimensional and multi-dimensional delivery strategy, the audience can have a certain understanding of the brand value attributes of NetEase Koala in daily information reception channels and become a purchasing user.

5.1.3 Corporate reputation

Since its establishment, Koala Haigou has placed the quality of authentic products at the highest level. With its self-operated direct procurement model and a complete service system, among the cross-border consumer groups, users have the highest trust and satisfaction of authentic products on Koala Haigou platform. Koala Haizhuang has established a good reputation and will help the spread of word-of-mouth fission to reach more new users.

5.1.4 Creating an IP image

Koala Haigou actively creates the "Koala" IP image, and uses marketing popularity and opportunity to increase the exposure of Koala IP image, further strengthens the brand koala IP image, increases the close value of the koala IP image and brand binding, establishes IP awareness, and combines the "reliability" core value of the brand to narrow the distance between the brand and users, acts as a medium for brand voice, and establishes consumers' inner sense of trust in the brand.

5.1.5 Social Sharing Fission

Koala Haigou has long been deploying a new fission mechanism to use social networking to create new social changes. In the 1.0 version of NetEase Koala Haigou APP, the function of "Invite friends and make money immediately". Before purchasing, users can share inviting friends, or share products to earn commissions, and directly give users cash back. In the sharing mall, all products have a certain profit ratio. As long as users share with their friends and ultimately gain, they can get rewards, and comprehensively promote old users to attract new users. After a friend accepts the invitation and successfully purchases, he can also get a new red envelope. 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, NetEase Koala also launched new groups and flash group buying, attracting users to buy orders in the form of new groups and 2-person groups. The successful group buying products are about 10% lower than usual. When group group posting pictures can be shared on WeChat and QQ with one click, and WeChat can also be logged in quickly. A good user experience can attract many new users.

After the purchase is successful, the user can continue to receive red envelopes and send them to friends. Through a variety of gameplay, NetEase Koala allows the behavior of "sharing" to penetrate into the entire user purchase process.

5.1.6 Brand cooperation

Since its establishment, Koala has been cooperating with international brands to expand its channels. Currently, there are more than 5,000 brands with Koala and more than 1,000 first-tier brands. Diversified brands can meet more diverse consumer needs, which will help the platform to increase its registered users.

In September 2019, Koala Haigou reached a strategic cooperation with Alibaba and entered the Alibaba system. It will be linked with Koala Haigou on Taobao live broadcast. To a certain extent, you can also enjoy the dividends of Taobao traffic and absorb new users.

5.2 Improve conversion rate

The conversion rate is the conversion rate when every user generates consumption behavior on the platform. After accumulating a certain amount of user traffic through various methods, the platform should strive to improve the conversion rate and allow users to generate consumption behavior as much as possible in order to create value for the platform.

For e-commerce platforms, there are mainly two types of user types: target-clear users and unclear users. Clarify the user path: Search for products - Enter the product details page - Add to shopping cart - Pay, but not clarify the possible path of users is: Browse products - View details - View products - View details... - Add to favorites - Add to shopping cart and other repeated processes. The two user behavior path scenarios are different, so they need to be considered in combination when designing pages.

In order to improve the conversion rate of users as much as possible, Koala Haigou’s page design mainly has the following highlights:

5.2.1 Home Page

The most prominent feature of the Koala Haigou APP homepage is a variety of promotions, discounts, and prices, and the appearance of the physical products. The bottom navigation specially sets up a functional section for "Today's Events", and the daily discount promotion interaction is clear at a glance. According to iMedia Consulting data, platform promotion activities are the main reason for the increase in purchasing intentions of Chinese cross-border consumer groups. More than half of young people will purchase products due to the platform's promotion activities. The Koala Haizhuang functional module is designed to accurately grasp the mentality of consumers, making users easily attracted by platform promotions as soon as they open the page, which invisibly stimulates users' purchasing needs.

5.2.2 Search Page

For users with clear goals, they will generally enter the search page to enter the target product. To facilitate search, the Koala Haigou search guide page has designed three functions: recent search, search discovery, and common classification. The search discovery is mainly because of the user's recent search popularity, and the recommendation display is customized according to user needs.

If you enter a more general product category in the search box, the search results page of Koala Haigou will display some popular brands and celebrity products; if you enter a specific product name in the search box, the search results page will first display the brand and specific products of the product. The main display of the product appearance, price, black card price, coupon status, popularity and evaluation on the page. The black card price forms a strong contrast with the normal price, releasing affordable information to users; in addition, the coupon status is also highlighted in red fonts, further attracting users to click on the product details page.

In addition, the default recommended search in the search box, popular products, list product recommendations and other designs are also attracting the attention of users with unclear targets and promoting them to enter the product details page.

5.2.3 Product List Page

The product list page is usually subdivided into categories under major categories to show users more diverse product categories. For users who are interested in purchasing a certain type of product, subdividing the product categories will help accurately find target products and select comparisons, and help users advance the purchasing process. The information such as fake one compensation in the middle of the page, interest-free and worry-free of after-sales service are used to enhance user trust. It also recommends it for you based on user search and purchase history to attract users' attention, prompt them to click on the product details page, and promote the purchase conversion process.

5.2.4 Product Details

After the user selects the product of interest and enters the product details page, the trade details page is the user's consumption experience page, which will directly have a direct impact on the user's purchasing behavior. A good page design will help the user make quick decisions and add them to the shopping cart.

In addition to displaying the physical appearance of the product, Koala Haigou's product details page also promotes users to place orders and consume through the following designs:

5.2.4.1 Display consumption protection information

Show genuine product supply guarantee, so that consumers can rest assured; support interest-free services on the entire site, and installment services at will to decompose users' consumption burden; provide worry-free purchase services, including fast refunds, worry-free allergy, worry-free damage, 7-day no-reason returns, etc., to solve after-sales problems, and provide manual customer service to enable users to place orders with confidence.

5.2.4.2 Shaping the product's sense

The product details page displays the characteristics of the product with concise and eye-catching copywriting, sets a list ranking for the product, grasps the users' pursuit of new trends, try new consumption experiences, and pursues circle-based aesthetics, stimulates users' desire to consume and enhance their purchasing intention.

5.2.4.3 Highlight the cost-effective atmosphere

Displays the price of promotional activities, coupon status, gift information, purchase exchange, group purchase discounts, full gifts, discounts, free shipping, etc. of the product, highlighting the cost-effective atmosphere and stimulating consumption.

5.2.4.4 Create an atmosphere of consumer

Display the product evaluation and ranking in the form of pictures and texts, display the number of evaluations and high praise rate. On the one hand, it establishes a sense of trust, and on the other hand, it creates a strong atmosphere of consumerism.

5.2.4.5 Create scarcity of goods

Some products also display real-time countdown, limited sales, and snatched tips, creating a sense of time urgency, creating scarcity of products, and accelerating the user's consumption process.

5.2.4.6 Shopping cart page

When the user arrives at the shopping cart page, in addition to displaying the basic information of the selected products, the shopping cart page is also marked with red to display the current special prices and discount activities of the products, such as "group price xx yuan", "Choose 3 items at 199 yuan", etc., which once again highlight the cost-effective atmosphere and promote users to place orders; at the same time, information such as tax-free products and support for interest-free products can once again decompose users' consumption burden; the red letter of the product quantity shows that the single purchase limit once again creates product scarcity, stimulates users' desire to consume, and settle payment as soon as possible. Finally, the shopping cart page will also recommend similar products for the types of products selected to meet the situation of out-of-stock of target products.

5.3 Increase Average Order Value

Another key indicator to increase GMV is the average customer price. There are two main ways to increase customer price: one is to increase the amount of users' single consumption, and the other is to increase the frequency of users' consumption. When users enter the shopping cart page, Koala Haigou also designed some functions to increase the user's average customer price.

5.3.1 Event Promotion

Show the product's full discount, full discount, and full free shipping activities, such as "10 yuan off for every 2 items", "small gifts for every 158 yuan", "free shipping for every 100 yuan", etc., which allows users to feel the cost-effectiveness and promote users to collect orders.

5.3.2 Price increase and purchase

Display product exchange information and exchange hot-selling products at low prices to stimulate consumers to purchase price increases.

5.3.3 Preferred product recommendations

The shopping cart page displays "Guess you like" below to purchase products, recommend relevant products based on user search browsing history, and increase the average customer price.

5.3.4 Member Discount

Almost all pages use the most eye-catching way to remind members of member discounts in black background and yellow characters. We hope that consumers can open black card members and increase users' consumption frequency through black card privilege services.

5.4 Summary

Koala Haigou has increased the number of registered users on the platform through its own traffic conversion, precise multi-channel advertising, establishing a good corporate reputation, creating an IP image, establishing a social sharing fission mechanism, and strengthening cooperation. It has combined marketing psychology, society to improve conversion rate and customer unit price through page function design and marketing means, and has achieved outstanding results. In 2018, Koala Haigou's APP downloads were the number one in the shopping APP list and the second in the total list. On this basis, it realized traffic monetization and created product commercial value.

6. Product Iteration Analysis

According to Kuchuan.com, as of October 2020, the number of downloads of Koala Haigou in the Android market has exceeded 460 million times. According to the download volume and time relationship curve, it can be inferred that Koala Haigou is currently in the mature stage of product.

In order to deeply analyze the version iteration rhythm of Koala Haigou and explore the product iteration logic, the following is a summary of all the core versions of Koala Haigou from V1.0.0 to V4.38.0 iterations are as follows:

According to the above figure, according to the direction of functional iteration, Koala Ocean Shopping is divided into three stages for analysis:

1) Product launch stage, improve basic functions

Before June 2016, the V1.0.0-V2.6.0 version was the launch stage of Koala Haigou's mobile products. The main goal of this stage is to improve the basic functions of the product, accumulate a certain user base, and gain a foothold in cross-border e-commerce platforms.

On the premise of meeting the essential functions of users' shopping, such as product selection, ordering, payment and other basic functions, Koala Haigou first introduces user traffic to the mobile phone through the functions of online exclusive price, exclusive flash sale, promotional activities, and exclusive coupons. Then, through online video viewing, price increase and purchase, arrival and grabbing, one-click collection, logistics tracking, real-time search, 3Dtouch shopping cart, after-sales elves, and payment methods, it can not only increase trust in the platform and products, but also enhance the shopping experience with a scene-based shopping model to attract more users.

In addition, functions such as posting orders and sharing to get shopping vouchers, sharing to share gift packages for successful payment, sharing to share orders for good product, koala points beans, etc., are also designed, which can not only increase users' shopping frequency, but also promote product promotion and new products.

Through the above functional design, Koala Haigou has added a lot of new downloads every day, and even a daily download volume of one million. In about half a year of its launch, Koala Haigou has downloaded nearly 10 million. The APP ranking has steadily increased, allowing it to gain a foothold and successfully pass the product launch stage.

2) Product growth stage, pull and retain through operation

From June 2016 to May 2018, the version from V3.0.0 to V3.16.0 was the rapid growth period of Koala Haigou. At this stage, expanding the user scale has become the focus of product iteration, which is mainly achieved through the construction of some operational tools.

On the one hand, expanding the scale of users is to attract new users. Koala Haigou achieves social communication to attract new users by launching special topics with one-click sharing, new users receive 1,000 yuan coupons for free, and launching group buying functions.

On the other hand, expanding the scale of users is to increase the transaction volume and order volume of users on the platform to prevent user churn. While continuing to improve users' shopping needs through functions such as adding new chart albums, adding new product Q&A, launching quality assurance and renewal insurance, extended warranty insurance services, adding global navigation, and adding personalized recommendations, users' consumption benefits have also been added. In addition, at this stage, Koala Haigou began to consciously launch member services, member-exclusive products and exclusive rights, and launched a new community module to open the "grass-planting community" as a section for user interaction to improve user activity, as well as loyalty and stickiness to the platform, and realize user retention.

In conjunction with sponsoring high-rated variety shows and e-commerce activities to multi-faceted advertising in cities with high sales share, Koala Haizhuang's popularity has completely begun, and APP downloads once became the number one cross-border e-commerce platform in the industry in 2017, becoming the core player of cross-border e-commerce.

3) Product maturity stage, improve user experience

From June 2018 to the present, Koala Haigou has launched the V4.0.0 major version, and the product has entered a mature stage. After the rapid growth period of products, Kaohaigou has accumulated a considerable user scale. In June 2018, Kaoalagao announced its entry into the comprehensive e-commerce market, and its product categories have been upgraded from cross-border products to selected high-quality products worldwide. In terms of improving users' shopping experience, Koala Haigou continues to launch new shopping carts to find similarities, launch factory stores, maternal and child gift cards, shopping carts to directly change product specifications, add price reduction tips for favorites, new product combination recommendations, and support for white-bar installment of the final payment, etc., to better serve users' shopping process and experience and improve user conversion rate and repurchase rate. At the same time, we also did not forget to continue to attract new new products by inviting new users to obtain red envelopes without thresholds and red envelopes for sharing products.

In addition, Koala Ocean Shopping at this stage also focuses on the following two aspects:

1. Establish and improve the membership system. We have successively launched new member rights and exclusive customer service functions for members. We have also specially set up member exclusive activities such as 721 Koala Black Card Day, 821 Koala Black Card Day, 921 Black Card Day to give member users greater discounts and priority right to purchase, promote member services, so that users can increase their loyalty and stickiness to the platform after becoming a platform member, and also carry out strategic upgrades in August 2020, focusing on the stable layout of "member e-commerce".
2. Rich scene-based shopping. By introducing dynamic live broadcasts and videos, the Like community is established, and its content is younger and trendy, accurately corresponds to the preferences and tastes of the new generation of young consumers, and promotes order consumption.

During this stage, the total download volume of Koala Haigou has reached 460 million, accounting for the highest share of cross-border e-commerce market for three consecutive years, and the market share will exceed half after cooperation with Tmall International.

Overall, Koala Haigou's strategic focus at each stage of the product is clear and steadily implemented. During the product launch stage, it relies on the NetEase platform to obtain basic user traffic, focus on improving the construction of basic functions, highlighting the advantages of its own platform business model to polish the products; in the growth stage, it focuses on brand promotion, cooperate with operations to attract new products and retain new users to expand the scale of users, and lay out the membership system in advance for the next stage; and when entering the product maturity stage, it focuses on improving and promoting the membership system, and also layout community functions and live video functions based on the preferences of consumer users, constantly enriching shopping scenarios, and maintaining user activity and stickiness. This is the overall iteration step of Koala Ocean Shopping.

7. Product structure analysis

In the iterative analysis, we analyzed the iterative steps of Kaola.com's product functions. Next, let's take a look at what user needs these functions meet and how they are distributed throughout the app. Here we mainly analyze the product structure. The following figure is the product structure brain diagram of Koala Haigou V4.37.0:

For the convenience of analysis, by re-examining the product structure of Koala Haizhuang according to users, scenarios, needs and functions, you will get the following table:

Overall analysis:

Because the main target users of cross-border e-commerce platforms are consumers, they focus on meeting consumers' potential needs.

When consumers use Koala Ocean Shopping, there are three scenarios:

• Before shopping, learn about what you care about through the APP;
• The ordering process involves payment and settlement;
• After shopping, you need to check product logistics, after-sales service and feedback.

7.1 Scene 1

What are the needs of consumers before shopping and what functions does Koala Ocean Shopping meet these needs?

As an e-commerce platform, whether to meet the needs of users before placing an order is the key to determining whether users purchase.

For users who have no target products yet and browse randomly in the APP, the key is to attract users' attention and arouse their desire to buy. To this end, Koala Haigou has set up Koala Cool Street, Chushu TV, Like Community, Koala Paradise, and a 0 yuan lottery on the homepage, striving to be attracted as soon as you enter the APP, and click to view and browse to increase the time users stay on the platform. In addition, the conspicuous position on the homepage also displays platform promotion activities such as today's events, value-for-value group buying, hard-core subsidies, rolling event boards, koala beans, cash, daily affordability, etc. Especially the rolling event boards, which directly display the discount strength of the event. The eye-catching font design impacts the user's vision and prompts consumers to have the urge to click.

For users with targeted products, their needs are mainly to be able to quickly know the product and be more concerned about the convenience of finding the product. Therefore, Koala Haigou has designed a search box and a clear and detailed product category catalog on the upper part of the homepage to facilitate users to find target products more quickly. When the user clicks on the target product, he will enter the product details page. The user hopes to have a specific understanding of the product. The page will display the actual product pictures, product introduction, coupons and red envelopes, relevant rights and protection tips, estimated logistics and delivery time, etc., and a koala customer service is also set up to communicate with merchants. The product details page also sets Like (favorites) and records the user's browsing footprints at the same time, which is used by users to save products of interest. In order to facilitate users to select and compare similar products, product lists have been launched, with similar recommended functions. Product evaluation and questioning are to help new users understand the products through feedback from purchased users, and provide users with the most suitable high-quality products as much as possible.

7.2 Scene 2

What are the requirements during the ordering process and how does the platform promote consumers to place orders?

When users have signs of purchasing a certain item, in addition to clicking to buy now, they can save by clicking to add to the shopping cart and then continue to select. On the shopping cart page, the basic information of the product, coupon status, discount status, consumption guarantee information, etc. will be displayed, and the total price and discount status will be automatically displayed for the checked product to facilitate users to determine the final order product or combination.

During the ordering process, in order to fully meet the needs of users without use, a variety of payment methods and installment interest-free services have been set up to eliminate users' doubts and place orders with confidence.

7.3 Scene Three

What are the needs after shopping and how does the platform meet the complete shopping process?

After placing an order, consumers want to know the order status, logistics delivery and delivery of their products, and can check the product status and logistics information through my order to be paid, shipped, and received. If the user needs to return and exchange goods after receiving the product, Koala Haigou will also provide supporting after-sales service. During this period, the customer service center can be used to solve users' consultation and services on the entire process of products, orders, logistics, and after-sales.

For users who want to share their purchasing experience, they can evaluate and share products through the "Evaluation and Gift" function team, and also get the opportunity to draw gifts. This can not only stimulate users to participate in the evaluation, shop again through gift cards, enrich the subsequent experience of purchasing products, but also help increase product popularity and sales.

Summarize:

From the above analysis, we can find that the functional design of Koala Haigou can well meet the needs of users in different scenarios before, during and after shopping. At the same time, the high-frequency functions required by different types of users have a prominent focus and reasonable distribution in product structure, which can be considered a product with relatively excellent design.

8. Operational Analysis

As the saying goes, "A good product cannot be separated from operation." So how did Koala Haigou promote this product so as to make its mark in the blue ocean of cross-border e-commerce? The following is a review of the main operating activities in the current establishment of Koala Haizhuang:

8.1 Increase exposure and sponsorship of high-rated programs

In June 2015, NetEase CEO Ding Lei, Koala Haigou CEO Zhang Lei and executive team were invited to visit South Korea, and CCTV reported the whole process.

In October 2015, CCTV broadcast the "Belt and Road" documentary series "Community of Shared Destiny", which fully presents the entire process of LAYTEX latex pillow, international logistics and domestic bonded area warehousing.

With the program's continuous broadcasting at important broadcast nodes such as "Hourly News", "Lunchtime News", and "News Broadcast", Thailand's LAYTEX latex pillows have quickly become popular. After the show is broadcast, the three LAYTEX latex pillows will usher in a sales peak. At 7 o'clock in the evening, more than 1,000 pieces were sold, and the cumulative sales on that day were over 1.6 million. The huge transaction volume is more or less completed on the Koala Ocean Shopping platform.

During the New Year's Eve in 2017, Koala Haigou has continuously cooperated with Hunan Satellite TV, Jiangsu Satellite TV, Anhui Satellite TV, CCTV Internet TV and other media for New Year's Eve concerts, and through innovative communication forms such as password red envelopes, it has achieved cross-screen interaction with the new middle class, which has directly brought more than one million new users to place orders and consume.

In April 2017, she was one of the main sponsors of the third season of "Flowers and Boys". Eight minutes before the broadcast of the program "Flower 3", Koala Haigou WeChat official account began to push information to millions of fans: the same game as Hua Shao 3 will be launched, and you will get a red envelope of 1,000 yuan if you lose the password, which will suddenly ignite the circle of friends. The boot screen is also simultaneously replaced with "Look at less flowers and grab the same model" to awaken active users. The same special show is not unchanged after it is launched, but is updated continuously based on the differences in each episode and in combination with the theme of NetEase Koala promotion.

In May 2017, Koala Haigou announced that it had reached a cooperation with Oriental TV to become its special partner for the drama "Ode to Joy 2".

In December 2017, sponsored Mango TV "Where Are We Going, Dad 5". Under the Weibo topic of Koala Haigou # Where to Go to China Dad#, there are 63,000 discussions and 54.182 million views.

In March 2018, sponsored the Mango TV homemade variety show "Mom is Superman 3".

In April 2018, Koala Haigo sponsored Zhejiang Satellite TV’s ace variety show “Running Man 2” and Hunan Satellite TV’s slow variety show “Longing for Life 2”. In "Running Man 2", on the one hand, many koala selected goods were inserted in the scene layout of the program, intentionally or unintentionally improving the sense of existence; on the other hand, in the link setting, Koala Haigou integrated itself into the program, not only did the guests broadcast various fancy oral broadcasts during the Q&A session, but even directly built a koala physical store on site to enhance the correlation with the program session. In "The Life of Longing 2", in addition to the strong appearance of various products, Koala Haigo also joined hands with other brands to create a seamless "advertising theater".

During March to April 2018, the sponsorship of three variety shows drove the ranking of Koala Haigou App to soar in Apple Appstore, with the top 1 shopping app rankings and the top 2 in total.

In October 2018, he was one of the partners of Mango TV's "Star Detective 4".

In January 2019, sponsored the iQiyi youth inspirational variety show "Youth With You". By sponsoring "Youth With You", NetEase Koala actively explores innovative models of brand marketing and cross-border cooperation. NetEase Koala and the young boys have successfully absorbed a large number of new fans, and has further narrowed the emotional distance with young consumer groups.

In December 2019, sponsored Happy Twist's first New Year's Eve stage performance in Hangzhou.

8.2 Various forms of promotional activities

2015: The week-long "Diaper Carnival" (it took only about 24 hours to break the record of overseas shopping diaper delivery), the "Double 11" promotion, and the 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, 3.8 Goddess Day, 2nd Anniversary Ceremony, 520-for-I-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: 3.8 Goddess Festival, 3rd Anniversary Celebration, 520 National Confession Festival, 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: New Year’s Day, 3.16th anniversary celebration, 328 Koala birthday benefits, 4.18 welfare festival, 618 Global Mid-Year Shopping Festival, 816 Super Brand Discount Season, Double 11 Carnival, "Black Friday" Shopping Festival, Double 12 Year-end Ceremony, Christmas Gift Festival, Global New Year’s Day.

2020: Blooming 38, Koala Fan Festival, Black Card Welfare Night, Koala Super Brand Day, 415 Vitality Week, 515 Koala Sea Shopping Goods Festival, 515 Koala Black Night, 618 Carnival, 721 Koala Black Card Day, 821 Koala Black Card Day", "99 Weeding Festival, 915 Koala Bag Day, 921 Black Card Member Day, 929 Koala Milk Powder Category Day, Koala Black Card Black Golden Night, 1010 Koala Buy Global, Koala Sea Shopping Protection Category Day.

8.3 Cross-border cooperation

In May 2017, Koala Haigou and Everbright Bank issued cross-border joint credit cards.

In June 2017, Koala Haigou and financial service platform Aiyoumi announced a strategic cooperation to jointly open up the era of Haigou installment.

In January and March 2018, Koala Haigou and CITIC Bank launched a joint credit card.

In November 2018, NetEase Koala and Pizza Hut jointly created a "magic food and makeup store" to jointly build an interesting and fun shopping scene, combining food and beauty, and promoting Black Friday marketing.

In March 2019, Koala and Tencent Video announced a strategic cooperation to jointly launch a joint membership plan. Consumers only need to pay an annual fee of 198 yuan per coupon to enjoy the dual rights of NetEase Koala customized membership and Tencent Video VIP membership; NetEase Game "Shendu Night Walk" and Koala Haigou launched a limited-time Youth League Food Box on sale; Westward Journey to celebrate the anniversary with Koala Haigou, give gifts for four consecutive days, participate in the puzzle interaction, and have the opportunity to win generous prizes.

In May 2019, the Koala Factory Store joined hands with the Summer Palace to launch a limited edition "Yulong Yuzhou" ice dumpling gift box.

In June 2019, Koala Haigou joined hands with Pizza Hut to promote joint members.

In July 2019, Koala Haigou and the game "Onmyoji" released the first customized beauty series. After the series of products were launched, it was widely welcomed by Onmyoji fans, with a 100% praise; NetEase Koala Factory Store and Summer Palace launched the world's first exclusive beauty product - "Yihe Flower Face Skin Care Series"

In August 2019, Koala Haigou and the game "Identity V" jointly launched the game Trend T in limited edition; Koala Global Factory Store and Summer Palace jointly launched the "Moon Full Yihe" Mid-Autumn Mooncake Gift Box.

In December 2019, Koala Haigou and Pizza Hut landed in Hangzhou to open a joint pop-up store.

In April 2020, Koala Ocean Shopping and the Victoria Tourism Bureau of Australia launched an online cloud travel program.

IX. Conclusion

Through the overall analysis of my country's cross-border e-commerce market and koala ocean shopping, the following conclusions can be drawn:

Affected by several major factors such as policy promulgation, economic level improvement, social and cultural transformation, and the progress and development of high-tech, the market size and user scale of my country's cross-border e-commerce industry continue to expand, and maintain a good development momentum in the next few years.

In the cross-border e-commerce industry, Koala Haigou and Tmall International have obvious advantages in market share (both over 20%) and belong to the first echelon; Haidun Global, Suning International and Vipshop International are also major competitors in the industry, belong to the second echelon, but also have a certain influence; other companies such as Yangwo and Aobuyer have a low market share, belong to the third echelon, and have a smaller influence.

In the cross-border e-commerce market, there are four main participants: overseas suppliers, domestic buyers, platforms, and delivery parties. If the platform wants to achieve rapid growth, it must meet the needs of overseas suppliers and domestic buyers at the same time, and at the same time be equipped with a complete logistics and distribution system so as to continuously generate user value.

Koala HaiPu’s current core business is self-operated cross-border retail products. To maintain positive revenue growth based on this business model, first of all, Koala Haizhuang first

Establish a stable basic user base by purchasing cross-border products with high demand and high cost performance, such as maternal and infant products. At the same time, cooperate widely with high-quality suppliers around the world to increase the categories of goods sold to meet more types of consumer needs. Then,

Brand promotion is carried out online and offline in multiple directions, attracting new users, and increasing user conversion rate and customer unit price through promotional activities. Next, by continuously improving the shopping experience and establishing a membership system, users’ repurchase rate and loyalty on the platform will be increased, and user stickiness will be enhanced.

Overall, the development of Koala Haizhuang since its establishment can be divided into three stages, and the sense of rhythm is particularly well grasped. First, improve the basic functions of the platform, highlight the advantages of the platform's business to attract and stabilize users. When the user scale gradually stabilizes, on the one hand, continue to improve the richness and quality of the platform's products, and on the other hand, carry out large-scale counterpart marketing and operation promotion, and lay out the member e-commerce model in advance. As we enter the mature stage of the product, we will mainly promote exclusive member services and discounts, actively explore new business directions, and enhance the commercial value of the product.

Koala Haigou’s target users are young consumer groups. They are passionate about trends, are willing to experience and share new things, and have unique aesthetics and pursuits, so all functional designs are centered around meeting the needs of this consumer entity. There are three main scenarios for consumers to use APP: before, during and after shopping. By sorting out the functions of various versions of Koala Haigou, we can find that the products are keeping pace with the development of society and culture, and the functions are created with the increasing demands of consumers. The essence is to improve users' shopping experience and product usage experience. Maintain product vitality by maintaining high-quality user experience.

Finally, the SWOT model is used to analyze the current advantages and disadvantages of Koala Haizhuang, the opportunities and threats it faces:

Optimization suggestions:

The user-sharing content community still needs to be optimized.

With the contentization of products, content community has gradually become a major trend in the industry. Koala Haigou launched the "Like Community" in April 2020. It is a content community shared by users like Climbing Tree TV. It focuses on grass planting economy and mainly displays the usage effect of users after buying products, attracts other users to place orders and purchases, and sets its entrance in the most eye-catching position in the middle of the homepage, and is intended to promote it.但根據筆者自身的使用體驗，進入“Like社區”頁面后，隨機分享商品內容，偏年輕化，但沒有將其做種類的分類，導致美妝、服飾、家居等產品都有，且內容展示較隨機，冬天還展示夏天物品的內容，用戶靶向性不高，可能導致種草效果不佳。建議優化提升“Like社區”的內容展示規則，便于針對不同用戶進行更精準的種草推薦。

以上，是自己本著熟悉行業的目的做的分析報告，若有分析不到位的地方，歡迎批評指正，感謝。

作者：艾以努

來源：艾以努