Our last visit for the day took us to the headquarter of Netease
where we had an appointment to learn more about it’s cross-border ecommerce business Kaola
, where Chinese customers can buy products directly imported from a foreign country - like a NIVEA cream with German label and packaging.
Netease started out as an email, social messaging and gaming business (I remember my first email address in China was from Netease with the famous 163.net address). A few years ago it became obvious that Chinese consumers began upgrading their lifestyles and started craving more and more overseas brands, because of its quality and authenticity. Founder and CEO Ding Lei didn’t wait long and started competing with the big boys at Alibaba and JD.com. Now his platform is leading (and has been for the last eight quarters) this category with a 27% market share according to the latest iiMedia Research
Kaola as a platform is easy to do business with and they have offices in Frankfurt and Paris for brands to get in touch with them.
We left Hangzhou by plane and arrived late at night in Beijing. The next morning saw us going straight to the biggest ecommerce player the city has to offer: JD.com
with a revenue of 67B USD in 2018
and unlike Alibaba is pursuing a heavy-asset strategy
where it owns and operates large chunks of their logistics networks and warehouses themselves.
We were welcomed by Ella Kidron, senior communication manager at JD.com and her team. By the way, “JD” stands for Jing Dong: Jing as in Beijing and Dong as in Liu Qiangdong, the founder of the company.
His story is a true rags to riches story that began in Beijing’s Northwestern Zhongguancun district with a small stall selling computer spare parts. The HQ we are now visiting has more than 20,000 employees working in it and is truly symbolic for the massive rise ecommerce has seen in China. The ground floor and reception area is where you can witness and inspect all different types of technological innovations around ecommerce, new retail and logistics, including very cool delivery drones that have already been deployed since early 2017
in Zhangwei near Suqian (Liu Qiangdong’s birth place) and other remote areas in China’s vast country side.
JD.com had a tough year in 2018 and the beginning of 2019 but is reorganizing now and is getting ready to prove that it is betting on the right strategy by leveraging its massive logistics empire. Alibaba has a substantial lead but one should never underestimate Mr. Liu’s fighting spirit.
Next up was China’s version of Linkedin: Maimai.
The unicorn company was only founded in 2013 by Fan Lin. In the last two years they have gained more momentum by focussing on localized features like individual and group chat rooms as well as anonymous chat that made it also a lot like Glassdoor. From my own experience watching the Chinese tech blogosphere, most of the juicy stuff that is happening in China’s tech companies was first found on Maimai. The app has now more than 50 Mio registered users and clearly overtaken LinkedIn China as most popular job search and professional networking site.
If you ever have to find talent in China, this platform is your go-to solution and maintaining an updated company profile is a “must”. Also the Maimai example goes to show once again that the big foreign incumbents mostly can’t win if they don’t know how to adapt and localize their winning formula for the China market.
Our three-part report will conclude next time with our take-aways from visits to the remaining four companies: Kuaishou, Horizon Robotics, Bytedance and Xiaomi.