E-Commerce, Industry-Wide NextGen "Infrastructure" Under the Pandemic PDF Free Download
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E-Commerce, Industry-Wide
NextGen "Infrastructure"
Under the Pandemic
The COVID-19 pandemic has accelerated the pace towards fast-growing digital economy, and triggered changes
in online consumption behaviors that are likely to have long-term effects. Studies showed that the e-Commerce
Markets in European and North American countries have grown more than 20% since the pandemic started, and
that number is much higher in developing and least developed countries.
The acceleration of online shopping globally underscores the urgency of ensuring all countries can seize the
opportunities offered by digitalization as the world moves from pandemic response to recovery.
Source: Statista; Google and Deloitte's interviews, research, and analysis
The pandemic catalyzes the change in business behavior and habits. This change will be transmitted from the
consumer side to the supply chain and industrial infrastructure, which will lead to the improvement of the overall
efficiency of the e-Commerce industry. The penetration and growth rate of e-Commerce will be obviously
accelerated, and e-Commerce has become the "new digital infrastructure" of the digital society.
1.E-COMMERCE IS KEY TO ECONOMY
RECOVERY
1.1.THE PANDEMIC ACCELERATED E-COMMERCE BUSINESS GROWTH
Firstly, e-Commerce can coordinate the entire network composing of production, output, industrial chain, and flow
efficiency, manage supply and demand relations. Moreover, it will drive technological development in related
fields, get feedback on the efficiency of the supply chain, and form a flywheel effect in the consumer supply chain.
1.2.E-COMMERCE: BREAKING CONSUMPTION SCENARIOS BOUNDARIES
The pandemic is a perfect and comprehensive test of company’s digital capabilities. During the pandemic,
companies that have successfully managed stable operations are those who have already digitally transformed
themselves in the early stages.
Afterwards, digital operations through e-Commerce platforms will become the norm, and e-Commerce will establish
an ecological model that links consumers, supply chains, and small and medium-sized brands, breaking the
boundaries of traditional consumption scenarios.
E-commerce connects market & consumers
Online consumption is gradually gaining consumer recognition, which provides momentum and preliminary
conditions for e-Commerce platforms to connect producers and consumers. The diversified individual needs of
consumption are transformed into digital models, which can be better applied by the platform through interaction
and connection with other market elements, to better serve consumers.
E-commerce connects supply chains
The industrial Internet era is speeding up, and the supply chain and logistics are in an era of digital intelligence that
is fully mechanized, digitalized, and intelligent. In the future, more physical connections of supply chain will be
realized in e-Commerce platforms. For the supply chain, the data center of the e-Commerce platform is a huge
source of demand models. The flexible transformation and real-time optimization of the supply chain can be
realized through Customer-to-Manufacturer and Business to Manufacturer.
E-commerce connects SMEs and brands
E-commerce platforms can bring predictable scale and multiplier effects to SMEs and brands, especially in terms
of improving efficiency and reducing costs. During the pandemic, resilient companies are those that have already
carried out digital transformation in the early stages. At current stage, to reach customers online for large
companies has become relatively common, and the small and medium-sized enterprises who embark on the digital
transformation journey will enjoy a major marginal increase in the future.
In the future, under the coordination of New Consumer Groups, New Consumption Models, and Omni-channel
Consumption Paths, the core competence of retail business will be the digital supply chain. How to accurately
match customers’ needs requires not only operational experience and thinking, but also the underlying computing
power facilities formed by big data and algorithms to connect the demand with the supply chain.
Over the past few years, many countries have recognized the impact that the Internet and e-Commerce can have
on the way they operate, as the Internet and e-Commerce have shifted economy development from
brick-and-mortar stores to online marketplace. Nearly all countries emphasis the importance of e-Commerce in their
policy statements, and have recognized the catalytic role that government can play in designing national policies,
regulations to protect consumers and sellers, and enhancing the digital infrastructure, e.g., Internet connectivity,
logistics, and online payments.
Policies towards e-Commerce market access differ between countries. Some of the European and mature Asian
nations place great emphasis on enhancing market access for all nationals and they have specific policy goals and
initiatives to promote access.
In Singapore, its initiative for e-Commerce is to strengthen digital infrastructure, particularly in digital connectivity,
data analytics, payment systems, and new business innovation.
In 2020, ESG and IMDA collaborated with Amazon, Lazada Singapore, Qoo10, and Shopee to launch the
E-commerce Booster Package, a program to assist retail businesses impacted by the pandemic to shift to online;
over 2,200 businesses have since joined this program.
Amazon Singapore also helped local retailers to grow their businesses online, empowering retailers to sell their
products on Amazon, reach more customers, and expand their business to new international markets such as the
US, India, and Canada. ESG has further supported these firms through its Market Readiness Assistance (MRA)
scheme that provides market-expansion related services, such as IP protection in North America.
China's e-Commerce industry has grown rapidly over the past twenty years and now leads the world. Now, China is
the world’s largest e-Commerce market with over 50 percent of global online transactions. e-Commerce in China is
dominated by few domestic companies, such as Alibaba’s Taobao and Tmall, JD.com and Pinduoduo.
1.3.NATIONAL STRATEGY ON E-COMMERCE BUSINESS DEVELOPMENT
Market & Consumers
Supply Chain & Logistics Digital Platform & Enablement
As China’s industrial chain is gradually mature, more and more e-Commerce enterprises are well positioned to go
overseas. DTC (direct to consumer) model is a typical way for e-Commerce to go overseas by directing to
consumers through self-built internet online sales platforms.
In recent years, the cross-border e-Commerce business in China has attracted a great deal of attention from
overseas brands and retailers. In terms of policymaking, China truly stands out in the global arena in fostering
cross-border e-Commerce. China has gone through nearly a decade to formulate and adjust its cross-border e-
commerce policies and regulations. It has managed to address many different aspects such as tax, logistics,
electronic information, intellectual property rights, and data protection.
China has fostered an enabling environment for the development of cross-border e-Commerce by implementing
favorable policies. Along with including more goods in its cross-border e-Commerce retail imports list, the country
further expanded the scope of cross-border e-Commerce retail import pilots last year from 37 cities to the whole
Hainan Island and 86 other cities. It also decided to set up 46 new integrated pilot zones for cross-border
e-Commerce and support Chinese enterprises in building overseas warehouses.
China’s cross-border e-Commerce bucked the trend of global foreign trade slowdown caused by the COVID-19
epidemic and witnessed robust growth in 2020, becoming an important force in stabilizing the country’s foreign
trade.
In 2020, the cross-border e-Commerce trade volume reached 1.69 trillion CNY (261.5 billion dollars), a year-on-
year increase of 31.1 percent, while e-Commerce exports were up 40.1 percent, according to China’s General
Administration of Customs (GAC).
DHgate.com, a Chinese business-to-business (B2B) cross-border e-Commerce platform, set a new record in sales
in the Black Friday and Cyber Monday shopping period last year, with the gross merchandise volume of more than
35 percent of the categories doubling over the previous year and over 50 percent categories reaching a new high,
said Wang Shutong, founder of the platform.
On Alibaba.com, China’s leading B2B cross-border e-Commerce platform, with the number of orders doubling, the
transaction volume increased by 101 percent year-on-year in dollar terms in 2020.
In 2020, China piloted a program to boost B2B cross-border e-Commerce export, adding two export supervision
codes “9710” and “9810” for cross-border e-Commerce B2B direct export and cross-border e-Commerce export
overseas warehouses respectively.
Continuous improvement in the cross-border e-Commerce regulatory system has supported the orderly
development of new business forms like cross-border e-Commerce.
In 2021, China’s cross-border e-Commerce will maintain rapid growth, as the pandemic has pushed more
shoppers to make their purchases online, and the next three to five years are still the sector’ golden period of
development.
1.4.CROSS-BORDER E-COMMERCE WILL BE IN HIGH-SPEED DEVELOPMENT
2.REGIONAL E-COMMERCE BUSINESS
DEVELOPMENT AND STRATEGY
Based on e-Commerce retail sales volume and the historical growth rate, we divide the world's countries into four
types, including:
Highly leading China market that accounts for about one-thirds of the global e-Commerce retail share and
maintained rapid growth in the past few years;
Traditional but mature countries represented by Europe, North America, and South Korea, with e-Commerce
business started at very earlier stage, good infrastructure, but growing pace slowed down;
Continents represented by Africa, South America, which are still in the early days of e-Commerce:
The local economy, consumptions, Internet infrastructure and e-Commerce infrastructure are still in cultivation and
construction period. The booming of e-Commerce business development still needs some time. While Singapore
is an exception, consumer levels and infrastructure are leading other countries, but subject to the size of the
population, even though e-Commerce environment is excellent, still the opportunity is very limited.
B2B used to be the main force of China's cross-border e-Commerce. But B2C will become an important force
for the growth of cross-border e-Commerce in the future with 2 main driving forces:
It is estimated that by 2022, the proportion of China's B2C cross-border e-Commerce will further increase by
10%, accounting for 36% of cross-border e-Commerce business volume.
• The development of B2C cross-border e-Commerce platforms at the supply-side side
• The development of cross-border shopping and consumption habits by global consumers at the demand-side
side
China’s cross-border e-Commerce market size and growth rate
2015 2016 2017 2018 2019
0%
5%
10%
15%
20%
25%
30%
16667
1429
1279
1063
GMV(Billion $) Growth Rate
857 16.7%
11.7%
20.3%
24.1%
28.6%
• By 2025, the Internet economy in SEA market will exceed US$300 billion. More specifically, it has reached US
$100 billion dollars by the end of 2019, and the incremental market in the next few years will be much larger than
the current stock market.
• Southeast Asia and China have similar mobile Internet development paths, and the population base is huge.
Among the population of over 400 million are Internet users based on mobile terminals, accounting for 70% of the
total population. In Southeast Asia, over 50% of the population under 30 years old, the young population and fast-
growing economy all contribute to the development of e-Commerce.
• In the field of e-Commerce, the scale of the Southeast Asian e-Commerce market will reach US$172 billion by
2025. From the user side, the penetration rate of e-Commerce in Southeast Asia is 38%, compared with 67.7% of
E-commerce in China, the growth space can be doubled in the next few years.
• The key areas of investment in the Southeast Asian market are still: e-Commerce, online travel, transport and
food, and online media services, around 12 unicorn companies are covering the business domains:
o Bigo (Singapore)
o Bukalapak (Indonesia)
o Gojek (Indonesia)
o Grab (Indonesia)
o Lazada (Singapore)
o Razer (Singapore)
o OVO (Indonesia)
o Sea Group (Singapore)
o Traveloka (Indonesia)
o Tokopedia (Indonesia)
o VNG (Vietnam)
o VNPay (Vietnam)
The emerging potential markets represented by the Middle East, Southeast Asia, Russia, and India, etc., are
currently in a period of rapid e-Commerce development and have strong development potential which deserves
the active attention of cross-border e-Commerce players.
Huge Growth Potential in Southeast Asia Market
According to the report e-Economy SEA 2020 jointly issued by Google and Temasek in 2021:
400 million online consumers accounting for 70%
of the total population in 6 SEA countries
By leveraging China’s e-Commerce experience and rich supply chain resources, Whale Cloud adopts innovative
business models and digital technologies to monetize private traffic and customer base of our business partners,
carry out e-Commerce business with ease.
• Direct contact with consumers
• More focus on targeted audience
• Improving consumer retention rate
• Low cost on getting traffic
Public Traffic:
• Contacting consumers through e-Commerce platforms
• Reaching a wide range of consumers through multiple channels (online and offline)
• Mainly disposable flow, hard to complete retention
• High cost on getting traffic
3.FIGHTING IN NEW BATTLEFIELD:
PRIVATE TRAFFIC E-COMMERCE
With the steady development of e-Commerce in the past decades, the business model is always changing from one
way to another, the traditional PC based e-Commerce is slowly shifting to mobile-based, social e-Commerce, and
the customer journey of e-Commerce has gradually changed from "single channel" to "omni-channel", and online
and offline channels are becoming seamlessly integrated.
The visitors, buyers or monthly active users (MAU) over the e-Commerce platform are vital to the success of
e-Commerce business. But in China, the growth rate of China's consumer market has basically reached the peak
and e-Commerce is undergoing a transition from massive traffic acquisition" to "existing users operation ". The
intensive market competition has forced companies to accelerate the pace to put more efforts on existing users, we
call them as “private traffic”. WeChat ecosystem is the typical reference of private traffic, with more than 1.2 billion
WeChat users, and the challenging e-Commerce platform, Pinduoduo, is one of the successful social e-Commerce
that has monetized the private traffic over WeChat users.
Private traffic can come from users dedicated to a company's app, e.g., mobile business users, bank service users,
or followers of an influencer's personal livestreaming channels, such as Facebook, Twitter or TikTok. Private traffic
is a direct response to the continuous rising costs of reaching fans and followers empowering telecom operators, or
banks, in control of how consumers see their products and service.
The comparison of Private Traffic and Public Traffic pools:
Private Traffic:
4.WHALE CLOUD: BEST & QUALIFIED
PARTNER FOR E-COMMERCE BUSINESS
Whale Cloud has more than 20 years of industry experience in the telecommunications domain, already tightly
coupled with CSP’s digital transformation requirements. More importantly, we have better view of the whole industry
far beyond telecom business. Originating from China market and benefiting from Alibaba Group’s ecosystem, we
have established close partnership with global Internet companies, like JD.com, J&T, Ant Group, Lazada, etc.
Together, we can help our business customers step into e-Commerce business and monetize the private traffic.
Whale Cloud E-commerce Business Capability
The e-Commerce business capabilities from Whale Cloud are divided into four categories:
E-commerce Technology: Cloud Commerce Engine
For companies like supermarket, banks, telecom operators, or financial entities, who have the capability to develop
e-Commerce business with own strength, Whale Cloud can provide e-Commerce platform with state-of-art
technologies and enriched features to support quick time-to-market requirements.
E-Commerce Business Operation
Jointly operating the e-Commerce business with supplementary services from Whale Cloud and telecom operators,
Whale Cloud can bring the China supply chain and operation know-how to CSP and jointly explore the local market.
Meanwhile, Whale Cloud can bring developed logistics, and contract with local enterprises to integrate the available
resources (merchandises, customers, merchants, channels, etc.).
Cloud Commerce Engine
Whale Cloud E-commerce
B2C/B2B2C/O2O commerce engine
Smart Shops
Online marketplace
Wholesale Business Platform
Supply Chain & Eco-partners
Cross-border manufactures
Global suppliers & merchants
Logistics & Intl. shipping partners
Distributors
Operation + Consulting Services
Go-to-market strategy
Social commerce with private traffic
Operation readiness(Organization, payment, logistics)
Operation excellence
Digital innovation
E-commerce Consulting Services
For those companies who want to start the e-Commerce business quickly but need professional advice and
consulting services to ensure everything is on the right track, Whale Cloud can provide professional team with
different level of service to support the operation, The scope of service may include go-to-market strategy,
operation readiness, operation excellence and digital innovations dimensions.
China Supply Chain Services
For e-Commerce service operators, who are already in business operation, but need more products to enrich
SKUs on e-Commerce platform, Whale Cloud has the B2B team to manage diversified customer requirements with
supply chain management (SCM) and manage commodity procurement, drop-shipping, warehousing, and logistic
service with online product selection platform (www.neukoo.com).
Our unique advantage is: accessing to massive China market with tailored customer services.
Based on our years’ industry practices and technical capabilities, Whale Cloud is committed to providing
e-Commerce technology to build online marketplace and platforms to customers. The e-Commerce technology
covers multiple business scenarios such as B2C, S2B2C, O2O, meeting every consumption scenario from
omni-channels. The e-Commerce platform centers on consumer trade process, seamlessly integrates with inventory
management, product management, order management and 3rd party logistics. Incorporated with member
management, loyalty management, and data intelligence capability, Whale Cloud e-Commerce can greatly enhance
company operational efficiency, inventory turnover rate and customer experience.
Whale Cloud leverages data intelligence capabilities from Alibaba Group, with data-driven decision-making
process to improve operational efficiency, mainly include data aggregation, analysis and transaction data
monitoring. The data intelligence connects the whole channels (online and offline) with consolidated data to keep
the marketing and promotion activities all-aligned. With deep analysis of customer data, operational data, it can help
e-Commerce operator rapidly adjust and change operation strategy, while transaction data monitoring can help
discover the hidden value of data to master the business trends and timely respond to changes.
Key features of e-Commerce technology and platform:
• H5 and mobile app-based access
• Intelligence-driven mass personalization
• Data-driven operation assistance and analysis
• KOL/KOC supported content marketing
• Online & offline merged order management
4.1.E-commerce Technology & Platform
The consulting business will address in 4 domains to provide tailored service proposal:
• Go-to-market strategy: Understand the market situation, ecosystem and acquire competitive analysis of indus-
trial players, to streamline applicable resources to be invested for e-Commerce business development, define the
specified business model and company vision.
•Operation readiness: Build up or optimize the key elements of business operation value chain covering e-
Commerce technology, payment, logistic, supply chain, operation team.
•Operation excellence: Practices breakdown on day-to-day operation activities for merchants, merchandises,
marketing & promotion, membership, and customer care services, it also covers the business processes of
end-to-end customer journey, finance flow, goods flow, and customer support flow.
• Digital innovation: Specific for advanced e-Commerce players who have accumulated rich operational data
aiming to develop cross-industry business by creating ecosystem-based cross-industry
applications/business.
• Startup player: The business at startup phase, needs clear business plan and strategy to follow and develop
from scratch.
• Developing player: The business is in operation for certain time, but business growth is slow and cannot
achieve scaled size and reach leading marketing position with differentiated market competency.
• Advanced player: The business is well developed, and operation data is rich enough to support new business
development.
A joint operation team can be established between both parties with respective role and responsibility. Whale
Cloud can provide key roles on the business operations, e.g., marketing & promotion, product management,
logistics services and supply chain management. While our business partner can provide the services like online
and offline customer acquisition, in-app traffic conversion, brand authorization, etc.
The e-Commerce business operation team from Whale Cloud will be mainly responsible for product management,
inventory & logistics management, platform operation, marketing promotion, customer management, and
e-Commerce platform evolution.
Business Operation Consulting Service (BOCS)
The business operation consulting service will provide operation guideline and operation proposal based on the
actual operation status, help e-Commerce service operators at different stages have clear business operation
strategy and executable actions to achieve the defined operation performances. By analyzing the market situation,
competition, target customer group, Whale Cloud can help e-Commerce service operators define business vision,
GTM strategy, operation objectives, organization, business processes, operation readiness, hands-on operation
activities and digital innovation.
With the practical and tailored consulting deliverables, service operators can develop e-Commerce business as
per maturity level and future plans.
4.2.E-COMMERCE BUSINESS OPERATION & CONSULTING
The development of China's e-Commerce is leading the world in terms of online shopping scale, online shopping
penetration, and shopping volume growth. In 2020, China's online retail sales of goods and services exceeded
US$1.8 trillion, and China's online sales as a percentage of total retail sales, from 12.9% in 2015 to 24.9% in 2020,
some of the categories have reached more than 50%.
The cross-border e-Commerce business have undergone more than ten years. Benefiting from the country’s contin-
uous supportive policies in such business model, together with China’s strong supply chain and comprehensive
manufacturing capabilities, many companies have become very experienced at e-Commerce operation capability,
merchandise design and manufacturing, logistics and supply chain capabilities.
As China's foreign trade enters a period of transition from old to new driven by e-Commerce as the core, Chinese
cross-border players are ushering in huge market opportunities. Benefited by state policy, rich capital investment,
global logistics infrastructure and international shipping facilities, China’s cross-border e-Commerce is gaining
more and more momentum and will become new growth path to China foreign trade.
China's strong industrial chain, complete infrastructure, and huge market will make China's "world factory" status
more prominent after the pandemic.
China has two major advantages in terms of manufacturing capacity:
The industrial category is complete, and the products span low-end and mid-to-high end. Despite the increase in
labor costs in recent years, China's manufacturing infrastructure is complete and comprehensive, with advanced
industrial supporting facilities, and its manufacturing capabilities are continuously upgraded.
The China market size is huge. In the past 18 months, there has been an upsurge of foreign M&A in China that has
not been seen in nearly 10 years, it is demonstration that capital investors are optimistic about the China market
potentials.
The value of Whale Cloud Supply Chain Service is: connecting China’s mass product market with the world with our
professional product selection, quality control capabilities. This service can greatly empower those e-Commerce
service providers with rich and continuous merchandise support.
The China Supply Chain Service mainly includes Product Selection, Supply Chain Management, Customer Order
Fulfillment and Customer Support. For more detailed China supply chain service, please refer to www.neukoo.com.
4.3.China Supply Chain Service
• Traditional vendor-buyer model: Whale Cloud can provide partners with e-Commerce technology and operation-
al services but bear little risk for business growth.
• Shared-risk operation model: In this scenario, both parties will share risks and profits from such future-promising
business, by providing operational services, investing operational professionals and marketing resources.
• Aggressive capital operation model: By creating local operation entity with agreed equity and responsibilities,
both parties can inject venture capital to start the business in solid and more sustainable manner.
5.MULTIPLE PARTNERHSHIP AND
BUSINESS MODELS
Whale Cloud and its partners can adopt a variety of business models to cooperate with each other, follow the
collaborative nature of monetizing customer traffic with e-Commerce expertise, technology, and resources,
with principles of shared-risk, long-term partnership and sustainable growth.
The models can be taken include:
It is well recognized there is no one model can be fitting-for-all market. Whale Cloud will always be open minded to
cooperate and find the most suitable strategy to jointly develop the market.
6.SUMMARY
In the future, the proportion of e-Commerce in the entire social retail volume will greatly increase. As e-Commerce
infrastructure, logistics and regulations continue to mature, more and more consumers will favor online shopping,
and at the same time, more and more products will be sold on e-Commerce platforms.
More and more segmented e-Commerce platforms will emerge. With the saturation of the e-Commerce market, you
must find a precise direction to form an advantage to survive in the market and provide supreme customer
experience and operate products with extreme innovation. Private traffic e-Commerce is the new driver for
e-Commerce business, and there will be more such segmented e-Commerce in the future.
With the rise of content marketing, content-based e-Commerce began to be favored. With the continuous
development of content e-Commerce formats, short video commerce and live streaming commerce have become
the mainstream, especially the potential of the live-streaming model cannot be underestimated. The development of
AI, VR, VR and other technologies will drive more and more online sales models that are currently unimaginable.
The nature of online sales will not change, but there is always room for imagination on how to sell your goods in
your unique ways.
