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  • E-COMMERCE, what the hell is this on earth? Can you answer it?

    Post by : expatree

“Hey, I heard ecommerce is growing fast in China, people prefer online shopping, right? I have some good products and then invite IT guys to build up an online platform, let’s make ecommerce happened.”  This is a true story that we frequently get such kind of request from foreign entrepreneurs. Before we say “Go” or “No Go”,  it’s better to try thinking what’s the foundation of ecommerce, in another word what we have to keep in mind when we start a new ecommerce business?
Generally speaking, China E-commerce has been developing for 20 years. Nowadays  no matter how big the promotion in marketing activities, in fact it's false surface that covers the truth, marketing should be not everything of ecommerce. Back to 20 years ago, the fundamental setup is considered as a more valuable reference to newbie entrepreneurs. A full picture of ecommerce business consists of technology, merchandising, logistics, marketing, customer service and data analysis. The question comes out, if you are asked to put those in the importance order, which ones are the higher priority?  
One of foreign entrepreneurs gave us her choices, ranking from high to low
“Customer service, Merchandising, Marketing, Logistics, Technology, Data analysis”
Meanwhile we gave our insights, ranking from high to low,
“Technology, Merchandising, Logistics, Marketing, Data analysis, Customer Service”
To our opinion, we grouped “Technology, Merchandising and Logistics” these top 3 as key fundamental factors.  The reason is quite simple. Either online platform or online store setup are relevant to computer technique work, sometimes even referring to infrastructure solution. Merchandising covers product oriented work and logistics service means consumer could enjoy door to door product delivery regardless of location limitation. We firmly believe it’s impossible to run a basic ecommerce business without these 3 factors.  Another group of “Marketing, Data analysis and Customer Service”, we called “value-added” factors. It cannot say this group is not important for ecommerce growing, but these values are only maximized as long as foundation is ready.  
One typical successful story is the history of the growth of Alibaba group. Cloud computing and Alipay Fin-Tech, two technique weapons support thousands of daily online orders. In merchandising aspect Alibaba shows a strong product and price controlling with a direct touch to brand supplier. On the other hand, partnership with local 3rd party company, Alibaba aims at building up a worldwide range of logistics and warehouse networking.  Until now Alibaba has finalized fundamental preparation, he is trying to settle down the layout of in-house marketing platform and follow up databank strategy.  
Since your opinion is on the same page with us, this provokes a new interesting question of “What’s the core functional team or department should be, especially in a new e-commence company?”

As we know technology, merchandising and logistics are 3 fundamental functions. We fully agree that any relevant team plays a majority role as the business is running. Unfortunately in some consulting cases, we always found there is no “core team” member who listed in decision makers. For example, a Japanese company tried to provide e-commerce one stop solution but the strategy is completely relying on customer service department at the beginning stage. Another incredible case tells us the decision making team in a new born  Malaysian company only contains marketing manager and corporate relations manager.  
China advanced in e-commerce development however we don’t recommend  a complete copy of business model. The e-commerce history of each country is developing at different stages.  Also we have to respect local culture influence and pay attention on side effect of globalized marketing strategy. In China everything is changing as time goes by, “marketing-driven” sales strategy would be an old fashion, instead “data-driven” sales strategy becomes a new trending in e-commence future. 

Do you have a clear answer on the meaning of "e-commerce"? Any comments are big welcome.
Date:2017-09-20 18:15:25
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