中國電子商務碎片化報告

1、China Internet SectorUBS Research THESIS MAP a guide to our thinking and whats where in this report HYPERLINK l _bookmark1 OURTHESISINPICTURESMOSTFAVOUREDLEAST FAVOUREDAlibaba, PinduoduoVipshopPIVOTALQUESTIONSQ:Cansociale-commercebecomeadriverforonlineretailsales?Yes. In 2015-17 social e-commerce GM

2、V grew at a 58.4% CAGR in China, faster than overall e- commerce GMV at 26.3%. We estimate online e-commerce GMV growth will slow to a 20.3% CAGR over 2017-22, reaching Rmb15.3trn. We estimate social e-commerce GMV will grow at a 35.2%CAGRoverthesameperiod,reachingRmb2.3trnby2022Eor15%oftheentiree-c

3、ommerce marketup from just 8.5% in 2017. HYPERLINK l _bookmark2 Q: Which online retailers are best positioned in the transition towards social e-commerce? AlibabaandPinduoduoarethebestpositionedonlineretailersinthesociale-commercespace,inour view. We believe they have scale advantages in terms of us

4、ers and merchants/brands, strongpartnerships and ecosystems, and the right business models to acquire consumers and increaseengagement more efficiently. HYPERLINK l _bookmark3 moreWHATSPRICEDIN?Investors believe Alibaba will remain the dominant platform in China e-commerce. But beyond that investors

5、viewsdiverge.TheyareconcernedJDwillnotbeabletopenetratelower-tiercitiesandnew productcategoriesinasignificantwayduetocompetitionfromAlibabaandsmallerplatforms.There is much more controversy around Pinduoduo, as investors are not sure how it will fare as Alibaba focuses its resources to go after Pind

6、uoduos core userbase.UBSVIEWThe e-commerce market in China is fragmenting, which defies the commonly held belief that scale andnetworkingeffectsshoulddrivethebigtogetbiggerine-commerce.Webelievee-commerce isevolvingandincorporatingmoresocialandofflineelements,whichdecreasestandardisation.We expectso

7、ciale-commercetobeakeydriverofoveralle-commercegrowthinChina,especiallyamong newuserswhoareyoungerorolder,fromlower-tiercities,orhavelessspendingpowerthanexisting e-commerceusers.WeexpectAlibabaandPinduoduotobenefitmostfromthistrend.EVIDENCEChinas social e-commerce GMV grew at a 58.4% CAGR over 2015

8、-17, faster than the total e- commerce GMV growth rate of 26.3%. The social e-commerce penetration rate of overall e- commercehasrisenfrom2.0%in2013to8.5%in2017,andFrost&Sullivanforecaststhisnumber to reach .2% n 0. In 1, Aaa ad JDs V re oed frm at 0% ver tprior few years to 86% as new social e-comm

9、erce platforms grew, and we expect the share of the previous big 2 to drop to 77% by 2022.Social e-commerce GMV and user breakdown20162020ECAGR(Rmbbn)S ocial E-com m e rce Conte nt S haringT e am PurchaseUser(mn)KOL (Rmbbn)Key Players: Xiaohongshu, Mogujie, Taobao, RuhnnUser(mn)Key Players: Pinduodu

10、o, Taojiji; Xingsheng Youxuan, Niwonin65.5%65.5%17423GMV (Rmb bn)Key Players: Yunji, BeidianMembership BasedSource: Company data, Qianzhan, iiMedia, UBS estimatesChinaInternetSectorUBSResearchR TESS N PES HYPERLINK l _bookmark0 return -12%12%13%11%14% 15%2,3261,8917%9%1,4915%1,1418212063475162015 20

11、16 2017 2018E 2019E 2020E 2021E2022ESocial ecommerce GMV (Rmb bn)% social ecommerce penetration16%12%8%4%0%We estimate social e-commerce will contribute 15% of total e-commerce in China by 2022. We identity three key business models:Model 1: Users, KOLs and brands are interlinked in a content-sharin

12、g platform.Model 2: Community group purchase platforms use a business to business to consumer (B2B2C) model where the platform controls the supply chain.Model 3: Membership-based platforms use a supplier to business to consumer (S2B2C) model where members also do the selling.Sources for exhibits abo

13、ve: Company data, iResearch, Frost & Sullivan, UBS estimatesChinaInternetSectorUBSResearchPIVOTALQUESTIONS HYPERLINK l _bookmark0 return Q:Cansociale-commercebecomeadriverfor online retailsales?UBS VIEWYes. In 2015-17 social e-commerce GMV grew at a 58.4% CAGR in China, faster than overall e-commerc

14、e GMV at 26.3%. We estimate online e- commerce GMV growth will slow to a 20.3% CAGR over 2017-22, reaching Rmb15.3trn.Weestimatesociale-commerceGMVwillgrowata35.2%CAGR over the same period, reaching Rmb2.3trn by 2022E or 15% of the entire e- commerce marketup from just 8.5% in 2017.While Chinas mobi

15、le internet population is only growing in the mid-single digits,onlineshoppersarestillgrowingintheteensastheyonlyrepresent43% ofChinastotalpopulation.AccordingtoQianzhan,morethan570muserswill beusingsociale-commerceplatformsby2020,upfrom223min2017.EVIDENCEInthesociale-commercespace,weidentifythreety

16、pesofplatforms:content- sharing, group purchase, and membership-based. Many newer e-commerce apps (such as Pinduoduo and Mogujie) incorporate social aspects into the platformfromthebeginning,andestablishede-commerceplayerslikeAlibaba and JD are adding social features to theirapps.We also note that v

17、ideo and live-streaming platforms, such as Douyin and Kuaishou,areventuringintoe-commercebyleveragingtheirlargeuserbases and enabling KOLs to sell goods via theirapps.WHATS PRICED IN?We believe investors are becoming more aware of the potential social e- commerce platforms possess. However, we think

18、 investors have not fully understood the different social e-commerce business models nor priced in all the stock implications.The state of Chinas social e-commerce marketChinas e-commerce market should continue to grow much faster than retailsales.Weestimatea2017-22onlineretailGMVCAGRof20.3%,whilewe

19、 thinkoverallretailsaleswillgrowataCAGRof8.1%overthesameperiod.Inour analysisofUBSEvidenceLabClicksnBrickssurvey HYPERLINK /shared/d2z8WyrCHt (note),wefoundthatonline penetrationinmanycategorieswasslowing,especiallyasChineseconsumersare spendinglessinmanyhighonlinepenetrationcategoriessuchassmartpho

20、nesand homeappliances.However,webelieveonlineretailsalescouldreach28%oftotal retail sales by 2022 (up from 19% in 2018) as spending power rises and consumersincreasetheironlineshoppingfrequencyovertimeinawidervarietyof categories such as fresh food and drygoods.Figure 1: China online shopping GMV (R

21、mb bn) and CAGR20,00016,00019%16%24%22%11,46826%13,41328%15,30530.0%25.0%20.0%12,0008,00014%13%4,6846,0707,7509,58915.0%10.0%4,0003,8075.0%-2015201620170.0%Source: CIC,iResearch,UBSestimatesOnlineshoppingGMV(Rmbbn)% Online PenetrationWe attribute faster online growth to the continued increase in onl

22、ine shoppers and the proliferation of social e-commerce platforms. The number of online mobile shoppers increased 17% YoY in 2018 even though total internet users and mobile internet users grew only 7.3% and 8.5% YoY. With mobile internet population penetration at less than 60%, we believe mobile on

23、line shoppers can continue to grow in the teens even if mobile internet user growth remains in the mid-single digits.Figure 2: Online mobile shopper growth rate30%20%15%16%17%15% 12%10%10%8%9%9%5%6%6%0%6%7%7%Dec.16Jun.17Dec.17Jun.18InternetPop.YoYMobilePop.YoYMobile ShoppersYoYSource: CNNICSocial e-

24、commerce platforms will contribute a greater proportion of Chinas online GMV. We forecast a 35.2% CAGR for social e-commerce GMV over 2017-22, compared to a 20.6% CAGR for total e-commerce GMV over the sameperiod.Frost&Sullivanexpectssociale-commerceGMVtoreach15.2%of e-commerce GMV in China by 2022,

25、 up from 8.5% in 2017. Qianzhan expects social e-commerce platforms users to increase from 223m in 2017 to 573m in 2020.Figure 3: Social e-commerce shopping GMV (Rmb bn) and penetration of total e-commerce3,0002,5002,0001,5005%1,0009%7%51611%82112%1,14113%1,49115%14%2,3261,89116%12%8%4%500347206-201

26、5201620170%2022ESocialecommerceGMV(Rmbbn)% social ecommerce penetrationNote:AbsolutenumbersareUBSestimates;percentagesarefromFrost&Sullivan. Source: Frost & Sullivan, iResearch, UBSestimatesFigure4:Numberofsociale-commerceplatformusers(m)6005734223104223102231529240030020010002015201620172020FSource

27、: QianzhanFragmentation of e-commerce platformsMarket share is starting to fragment, with Alibaba and JD losing share to smaller platforms. China seems to be defying the common assumption in e- commerce that the big get bigger due to scale and network effects. In 2018, bba and Js ombnd market hre fe

28、l from about 90% n the pror few years to 86%, mainly due to faster growth from Pinduoduo, Suning and some smaller platforms. Based on our bottom-up and top-down forecasts, we expect thisphenomenontocontinue.By2022,AlibabaandJDcouldhaveane-commerce GMV share of only 77%, implying a decrease of about

29、10ppt in market share for each platform.E-commerce is becoming less standardised and one-size-fits-all. As we will outlinebelow,manyplatformsareincorporatingmorecontentfromKOLs,brands and merchants, and/or going offline with retailers, delivery networks and community group purchases. These platforms

30、 are also selling more non- standardisedproducts,suchasfreshfood,homegoodsandapparel.Theseshifts in supply and demand could create more differentiation between platforms and potentially more niche platforms.Figure 5: China online retail GMV market share100%75%50%25%Others GOMESuning VIPS PDD JD BABA

31、0%201512%14%12%14%2%15%6%3%9%4%4%4%12%13%14%15%15%14%14%14%77%76%75%71%68%66%64%63%201720182019E2020E2021E2022ESource: Company data, iResearch, Reuters Eikon, UBS estimatesHow many types of social e-commerce platforms are there?We identify three main business models that define how social e- commerc

32、e platforms operate. The first is the content-sharing model, which includes platforms such as Xiaohongshu and Mogujie. In this model, brands, retailers and influencers create and distribute online content that attracts customers and informs them of specific products. Customers form opinions and impr

33、essions,andultimatelymakepurchasingdecisionsastheyconsumecontent, generating a discover / purchase / share loop. The online content deployed has evolved from simple blogs and photographs into dynamic short-form videos and live streams that are more interactive and real-time. While there are manymicr

34、o- influencers, some of the content creators have become much more professional overtime.Thesemajorinfluencers(orKOLs),amasssizeablefollowingsandare trusted by buyers for their taste, opinions, andrecommendations.Figure 6: Ecosystem for content-sharing platformsSource: UBSModel 1: Content sharingCon

35、tent sharing e-commerce platforms will often help connect KOLs to brands or have brands reach out directly to KOLs. Many brands choose to workwithKOLsbecauseaKOLsendorsementcanaddcredibilityanddesirability to a product. Furthermore, a KOL can create additional value by producing user- generatedconte

36、nt(UGC)orprofessionallyuser-generatedcontent(PUGC)thatis moreappealingtotheirfollowers.Bylisteningtotheirfans,KOLscanhelpbrands curate products that are more suitable for the targeted audience and can sell better. KOLs are incentivised to give honest feedback and only sponsorproducts they believe in

37、, as false reviews or advertisements will hurt their trustworthiness and influence.Figure 7: Ecosystem for KOLs working with facilitatorsSource: UBSPlatforms typically monetise through marketing services and commission revenue. Marketing include or search-based often on a as well as offering content

38、 and brand image In commission platforms take a percentage cut (take rate) of the value of goods sold by the orKOL.Commissionisafast-growingrevenueasplatformsarepivotingtheirfocustowardsvideosandThe increasing popularity of content-sharing platforms will contribute to the growth of the internet KOL

39、economy. The internet KOL market (all activities relating to KOL monetisation) grew at a CAGR of 181.5% over 2013-17 and Frost & Sullivan forecasts it to grow at a 41.8% CAGR from 2017 to 2022, reaching Rmb525bn in revenue.Thisspaceconsistsoffourmainrevenuesegments:e-commerce,advertisingand marketin

40、gservices,virtualgiftsfromfollowers,andothers.KOLfacilitatorssuchas Ruhnn, which work with content-driven e-commerce platforms, tend to focus on identifyingandcultivatingKOLsfore-commerceandadsandmarketingservices.InternetKOLe-commercediffersfrompuree-commerceinthatitreferstothesale ofbrand-namedpro

41、ductsthataredevelopedbyorwithinternetKOLs.Figure 8: Market size of Chinas internet KOL economy (Rmb bn)600500525429342429342283253238172196148386492 1021441801717294148335379111201320142015201620172018F2019F2020F2021F2022F0KOLe-commerceAds&MarketingVirtualGiftsOthersNote: Others include paid knowled

42、ge, Q&A, etc. Source: Frost & SullivanAs the internet KOL market continues to expand, KOL facilitators will play a larger role in the ecosystem. We expect 2017-22 CAGRS of: 1) 40.4% in internet KOL e-commerce; and 2) 42.7% in advertising and marketing service revenue.Thisisfasterthanoverallsociale-c

43、ommercegrowth.ManyoftheKOLs on content-sharing platforms sign exclusive contracts with facilitators, as these companies not only develop and promote the KOLs but also manage their store operations and negotiate their brand cooperation. Frost & Sullivan forecasts internet KOL facilitator revenue to g

44、row at a 38.9% CAGR over 2017-22 and hit Rmb201bn.Figure 9: Market size of internet KOL facilitator (Rmb bn)2502011681371681371037139162713150100500201320142015201620172022FSource: Frost & SullivanModel 2: team purchaseThe business model for social e-commerce platforms is team purchase The team mode

45、l can be broken into: 1) such as and Taojiji; and 2) platforms such as Xingshen Youxuan and On team-purchase platforms that cater to groups, buyers can buying or in a team. However, are to join or form teamsofattwobuyerswhensotheycanenjoylowerIfthe to his or her own team, they have the to wait for a

46、 tojointheteamorcaninvitefriendsandfamilymemberstojoinbytheproductonnetworkssuchasWeixin(Wechat)andQQ.E-commerceSocialE-commerceSocialE-commerceGroupPurchaseGroup PurchaseSource: UBSGroup-purchase platforms benefit from their buyers sharing product information with their social circles online. iiMed

47、ia research estimates the number of users that participate in group buy will reach 474m by 2020, fueled by the large existing user base on Weixin (WeChat) and the convenient purchasing journey of group-buying platforms. When a buyer initiates a team purchase with his/her social circle via social net

48、works, the platform is able to acquire organic traffic at a low cost as new users join the shopping team. The platform gains a better understanding of the social graph of its users, which it can use to improve ad targeting or product recommendations. The new users are also more likely to execute an

49、online purchase with a familiar social contact, thereby increasing the conversion rate and future purchasingfrequencies.Small group purchase platforms primarily monetise through online marketing services and commission revenue. marketing services are onainwhichuseanonlinebidding systemtodeterminethe

50、priceandoftheiradswhencertainkeytermscanworkwithplatformsoneventssuchasflash orcouponsforfestivalsthatcandirecttrafficandgeneratedemand. Asonothere-commerceplatforms,commissioncomesfromtakinga of the of good the merchant hasFigure 11: Total users engaged in group buying (m)50047441933241933221197300

51、20010002016201720182019F2020FSource: iiMedia ResearchCommunity group-purchase platforms have been gaining in popularity, as they are easy to access and user friendly. Community group purchase platforms differ from the small-group purchase platforms in that most of the interactions are done through m

52、ini-programs or chatrooms on Weixin (WeChat), instead of dedicated apps. Once a user enters the platforms mini-program, they willbeaskedtoselectacommunityleaderthatisclosesttotheirphysicallocation (usuallyresidential).Afteracommunityleaderischosen,thebuyerwillgettosee whattypeofproductstheleaderoffe

53、rs.Thecommunityleaderwillberesponsible formanagingtheWeixinbuyersgroupandcollatingordersfromgroupmembers. Oncetheorderisplaced,thegoodswillbeshippedtothecommunityleader,and users will pick up the goods from him or her.Most products sold in the Weixin groups are low-price, everyday products, which ha

54、ve high re-purchasing frequency such as fruit, vegetables and tissues. Furthermore, unlike other e-commerce platforms where buyers have an array of brandstochoosefrom,communitygrouppurchaseplatformslimitbuyerschoices, in order to gain scale and lower costs. This also increases a users chance for imp

55、ulse purchases and placing greater trust in the community leaders. Interestingly, many of the community leaders are stay-at-home moms who have turnedintoinfluencersandentrepreneurs.Theyarealsogenerallyperceivedtobe trustworthy by their communities.Figure 12: Number of users that shopped through mini

56、-programs (m)140132631206310080604020020172018Source: iiMedia ResearchCommunity group purchase platforms maximise margin and minimise cost by centralising the supply chain. As these platforms usually work with only a handful of brands for each product category, the platforms have greater negotiating

57、 power when ordering goods from the vendors. In addition, by shippingthebulkorderstoonelocation,theplatformscanminimiselogisticscosts. Thecommunityleadersusuallydonotneedtostorethegoodsforalongperiodas the buyers will want to pick up their usually perishable orders quickly. The platforms will set re

58、venue key performance indicators (KPIs) for the community leaders, and if they miss targets then new community leaders will be appointed. Thisincentivisesthecommunityleaderstobecometoplocalinfluencerbyrunning campaigns to sell goods and by encouraging group members to post user- generated content (U

59、GC) and increase engagement. The community leaders monetise by taking a cut of the GMV they deliver.Figure 13: Community group-purchase platforms use a B2B2C modelSource: UBSSidebar: the power of social tools in driving social e- commerceWeixin mini-programs are also popular with SMBs given the dece

60、ntralised nature of the social networking platform. Instead of joining a traditional e- commercemarketplace,manysmallandmediumbusinesses(SMBs)choosetoset up their own Weixin Official Account or mini-program so they can have more control over traffic and transaction data. By establishing their own Of