BDA-老虎基金全球典型互联网企业档案研究-EN-2015 08 26

CompanyProfile–FullReport26August,2015ForTigerGlobalManagement©BDA2015Agenda2Flipkart–JDOLA–Kuaidi&DidiLimeroad–MGJ&MLSQuikr&OLX–58&GanjiCommonFloor–SFUNShopClues–

Taobao&TmallHike–

WeChat&MomoGrofers–ShanDianGou&JDDaojiaMoonfrog–

TencentGames&OurpalmMyntra–

VIPSLocalOye–

58DaojiaPolicyBazaar-HZInsMoneyView–FeideeCaraLane–ZbirdVedantu–YY100EducationHolidayIQ–MafengwoandQyerNewsInShorts–ToutiaoSaavn–KuwoandXiamiDelhivery–SFExpressPaytm&Mobikwik–Alipay&WeChatPaymentNestaway–HomelinkZiroomBelezanaweb(Brazil)–JumeiZomato–Dianping&Ele.meZoRooms–HMIN&HTHTLybrate–HaoDF&ChunyuPetlove(Brazil)–BoqiiRoposo–Pinterest(US)RazorPay–Stripe(US)CultureMachine–MakerStudios(US)(Uncomparable)ZoRooms–MeituanHotel(Uncomparable)CultureAlley–VIPABC&51Talk(Uncomparable)Zopper-Wochacha3JDwasfoundedin2004andin2014,itsrevenuereachedUSD19BN;in2013,JDwasclosetobreakevenpointintermsofnetprofitBasicInformationWebsite:www.JD.comEstablished:June18th2004.JDlaunchessalespromotioneveryJune18th(618)tocelebrateitsanniversary.HQinBeijing.ListedDate:May22nd,2014(NASDAQ:JD)Management&Personnel:Founder,Chairman&CEO:Mr.RichardQiangdongLiu(刘强东)whograduatedfromRenminUniversityofChinain1996COOofJDGroup&CEOofJDMall:Mr.Haoyu

Shen(沈皓瑜)whoisformerVPofBaiduandjoinedinJDin2011NumberofEmployees:Over70,000bytheendof2014FinancialDataRevenueTotalGrossMargin(%ofrev.)FulfillmentCost(%ofrev.)OperatingMargin(%ofrev.)NetMargin(%ofrev.)Source:Companyinformation,BDAinterviews1+91%Totalrevenue191173Services&othersDirect-sales6%94%3%97%3%97%1%99%0%100%BusinessModelJDacquiresproductsfromsuppliersandsellsthemdirectlytocustomersonline.JDstartedoffasthelargestvertical3Cwebsite,butexpandedintogeneralmerchandisein2011.JDearnedanaverageproductgrossmarginof~9%in2014andalsoobtainsadsspendingfrombrandsuppliers.OnlineDirect-sales2012201320103rd-partymerchantscouldselltheirproductsonJD

andJDchargesacommissionof2%~8%.

JDalsoprovidesvalueaddedservicessuchasadvertising,warehousing,logisticsdelivery,dataanalysis.Ingeneral,theseservicesfeesarealreadyincludedincommission.JDalsochargesaplatformfeeofRMB6,000/yearforamerchant.OnlineMarketplaceJDFinance:Paymentbyinstallmentforcustomer(annualinterestrate:~6%).C2CBusiness:SimilartoTaobaomarketplace,whichisnamedPaipai,theformerTencent’se-commerceplatform.JDchargesmerchantsmembershipfeesandadsfees.O2O:JDprovidesdeliveryservicesforofflinestoresincludingrestaurants,supermarkets,pharmacy,etc.Nowtheserviceisfreeformerchantsandcustomers.OtherBusinesses201420112012201320102014In1Q14,

JDgrantedsharetoCEOMr.RichardwhichmateriallyincreasedG&AexpensesUnit:USDBN2011Fordirect-sales,productmarginis~9%.Forservicesandothers,grossmarginis~60%-4.8%201220132010201420114In2014,JD’stotalGMVreachedUSD42BN,mainlydrivenbyincreaseofcustomers;in1Q15,fulfilledordersplacedthroughmobileaccountedfor42%Source:Companyinformation,BDAinterviews+100%2014201320122011JD’sAnnualGMV

(Unit:USDBN)+98%2014201320122011=X+11%2014201320122011X2011-9%201420132012AmountPerOrder(Unit:USD)76%1Q1418%82%15%4Q1385%MobilePC1Q1542%58%4Q1436%64%3Q1430%70%2Q1424%ActiveCustomerAccounts(Unit:MN)OrdersPerActiveAccount(Unit:#)BreakdownofFulfilledOrders

byPCandMobile20142013+119%20122011NumberofFulfilledOrders(Unit:MN)JD’sOperatingData~6020132014+242%20112012NumberofSKUs

(Unit:MN)5In2014,direct-salestookup61%oftotalGMV;intermsofproductcategories,3Candhomeapplianceaccountedfor54%Source:Companyinformation,BDAinterviews201191%2014Direct-sales39%Market-place61%201325%75%201223%77%BreakdownofGMVbyDirect-salesandMarketplaceUnit:#+39%Numberofsuppliersfordirect-sales6,0007,2004,6002,700+197%Numberofmerchantsformarketplace201460,000201323,50013,30020112,300201220%80%GeneralmerchandiseandothersElectronicsandhomeappliances201446%2012201335%54%36%64%65%2011BreakdownofGMVbyProductCategories39%15%1%5%InfantandbabycareHomeappliance6%Cosmetics3%19%3CproductApparel&accessories20146%OthersFoodsanddrinks7%BooksandmagazinesFurniture&decoration6%12%N/A15%9%10%N/A20%ProductMarginofDirect-salesN/AUnit:#6In2014,China’se-commerceGMVisUSD454BN,andJDaccountedfor9%;Intermsofe-commercebuyers’number,itspenetrationreached29%Source:iResearch,Companyinformation201447%201346%201242%38%2011InternetPopulationPenetrationasoftotalpopulation201451%201337%201228%201122%E-commercebuyersPenetrationasofinternetpopulation201429%201321%201218%201111%JD’se-commercebuyersPenetrationasofChina’se-commercebuyersChina’sInternetPopulation(Unit:MN)China’sE-commerceBuyers(Unit:MN)JD’sE-commerceBuyers(Unit:MN)China’sE-commerceGMV

(Unit:USDBN)81%TaobaoandTmall9%10%OthersJDSuning49%JDOthers2%Jumei3%Yixun3%AmazonDangdangYihaodian4%VipshopGomeJD’sMarketShareInTermsofDirect-sales+53%2014201320122011JD’sMarketSharein2014

(asofChina’se-commerceGMV)7Lowerprices,fasterdeliveryandproductqualityguaranteedarethethreeimportantchoosingfactorswhencustomershoppingonline;JDperformsbetterinthesecondandthirdfactorsSource:Companyinformation,BDAinterviewsandanalysisQ:ThereasonswhyyouchooseJD.(Multiple;N=474)LowerPrices86%54%1%ProductQualityGuaranteedFasterDelivery79%59%26%RichSelectionConvenientPaymentReturnPolicy&OthersQ:PleasecompareJDwithTaobao.(N=474)KeySuccessFactorsAlthoughJD’sproductpricesarerelativelyhigherthanTaobao’s,itsfasterdeliveryandqualityguaranteedarebetterthanthelatter,whichisitscompetitiveedgeinChina’se-commercemarketJDlaunchedthe211program(i.e.ordersreceivedbefore11amwillbedeliveredonthesamedayandordersreceivedby11pmwillbedeliveredby3pmthefollowingday).In2014,over70%ofordersweredeliveredinthisway.ConsumersconsiderJD’sdeliveryspeedisthefastestamongallplayersThoughJD’spricesarehigherthanTaobao,itspricesarelowerthanofflinechannels.Consideringtheaspectofproductquality,customersconsiderJD’spricesarerelativelyattractiveKillerFeaturesofJDTherearesomeshoddyproductsonTaobaomarketplace.Asadirect-salesplatform,JD’scouldguaranteetheauthenticityofthegoodsandprovidebetterreturnpolicythanTaobaoTaobaoandTmallhavemoreSKUsthanJD

doseTaobaoandTmall’sAlipayisthemostpopulare-commercepaymentmethodinChinaJD’sreturnpolicyisbetterthanTaobao,becausethelatterhasabundantsmallsellersandtheyhavedifferentreturnpoliciesofthemselvesAgenda8Flipkart–JDOLA–Kuaidi&DidiLimeroad–MGJ&MLSQuikr&OLX–58&GanjiCommonFloor–SFUNShopClues–

Taobao&TmallHike–

WeChat&MomoGrofers–ShanDianGou&JDDaojiaMoonfrog–

TencentGames&OurpalmMyntra–

VIPSLocalOye–

58DaojiaPolicyBazaar-HZInsMoneyView–FeideeCaraLane–ZbirdVedantu–YY100EducationHolidayIQ–MafengwoandQyerNewsInShorts–ToutiaoSaavn–KuwoandXiamiDelhivery–SFExpressPaytm&Mobikwik–Alipay&WeChatPaymentNestaway–HomelinkZiroomBelezanaweb(Brazil)–JumeiZomato–Dianping&Ele.meZoRooms–HMIN&HTHTLybrate–HaoDF&ChunyuPetlove(Brazil)–BoqiiRoposo–Pinterest(US)RazorPay–Stripe(US)CultureMachine–MakerStudios(US)(Uncomparable)ZoRooms–MeituanHotel(Uncomparable)CultureAlley–VIPABC&51Talk(Uncomparable)Zopper-Wochacha9Kuaidiwasfoundedin2012andhasover2,000employeesnow;inNovember2014,KuaiDi’smonthlyrevenueisaroundUSD2.3MNmainlydrivenbyprovidingitsprivatecarservicesSource:CompanyInformation,BDAAnalysisWebsite:Established:inMay2012Location:HQinHangzhouManagement&Personnel:CEOofKuaidi:Mr.ChuanweiLv(吕传伟)

whowasformerlyworkingatatechnologycompanyinSiliconValleyCOOofKuaidi:Mr.DongZhao(赵冬)whograduatedfromZhejiangUniversityin2001Numberofemployees:Over2,000BusinessModelKeyFinancialIndicatorsRevenueBasicInformationTaxiBookingPrivateCarBusinessModelDescriptionMonetizationKuaidiplaystheroleofataxibookingrequestdistributorTaxidriverselectsbookingandprovidesservicetopassengerTaxibillcouldbesettledviaKuaidiapporcashKuaidiONEcooperateswithlocalcarrentalcompanies,professionaldriversandprivatevehicleownertoprovideprivatecarbookingservicesVeryLimited

Revenuegeneratedonlyfromin-appads,creditmall&marketingcampaigns~20%commissionchargedbasedonthedriver’sGMVNov14Oct14Sep14Aug14*RevenueismainlydrivenbyKuaidiONEprivatecarservicesKuaidiMonthlyIncome(USDMN)SubsidyKuaidiONEPrivateCarMonthlySubsidies(USDMN)KuaidiTaxiBokingMonthlySubsidies(USDMN)Jul146.72.3Jun148.12.9May146.80.4Oct148.73.9Sep146.0Aug146.0Nov140.90.9Oct140.50.3Sep140.20.2Aug140.10.1ToPassengerToDriverNetBurnAug14Sep14Oct14USD-6MNUSD-5MNUSD-8MN=Income–Subsidy(Passenger&Driver)Fortaxibookingservices,Kuaidihasacquiredmonthlyregisteredpassengerof37.7MNanddriverof1.2MN;forprivatecarservices,ithasreachedaveragedailypassengerof13,007anddriverof1,96310TaxiBookingPrivateCarUserNov14Oct14Sep14Aug14Jul14Jun14May14Apr14Mar14Feb14Jan14TotalRegisteredDriver/Passenger(MN)PassengerDriverOrderAug14Jul14Jun14May14Apr14Mar14Feb14Jan14Nov14Oct14Sep14AverageDailyNumberofPlacedOrders(MN)UserJun14May14Apr14Mar14Feb14Jan14Nov141,963Oct14Sep14Aug14Jul14AverageDailyActiveDriver/PassengerOrder3.9Nov1424.7Sep148.8Oct14Aug142.0Jul141.3Jun140.9May141.1Apr140.5Mar140.3Feb140.6Jan140.7AverageDailyNumberofPlacedOrders(K)Source:CompanyInformation,BDAAnalysisPassengerDriverAverageDailyOrderperActiveDriver/PassengerMar14Feb14Jan14Nov14Oct14Sep14Aug14Jul14Jun14May14Apr14PassengerDriverPassengerDriverAverageDailyOrderperActiveDriver/PassengerOct14Aug14Nov14Jul14Sep14Jun14May14Apr14Mar14Feb14Jan14Byendof2014,thefulfillmentrateoftaxibookingforKuaidiishigherthantheoneofprivatecarduetovehicle/driversupplyshortage,duetodriverpickingorderswhichfitsintothesubsidyschemethebestandordercancellation11TaxiBookingPrivateCarFulfillmentNov14Oct14Sep14Aug14Jul14Jun14May14Apr14Mar14Feb14Jan14AverageDailyFulfilledNumberofOrders

(MN)DailyRideFulfillmentRate(%)=#FulfilledOrder/#PlacedOrder1

Nov1463%Oct1460%Sep1455%Aug1452%Jul1453%Jun1459%May1460%Apr1465%Mar1446%Feb1428%Jan1443%DailyRideFulfillmentRate(%)=#FulfilledOrder/#PlacedOrder2

47%Feb1451%Jan1442%Nov1445%Oct1442%Sep1448%Aug1448%Jul1446%Jun1440%May1443%Apr1449%Mar14Source:CompanyInformation,BDAAnalysisFulfillmentAverageDailyFulfilledNumberofOrders

Nov14Sep14Oct14Aug14Jul14Jun14May14Apr14Mar14Feb14Jan14ReasonsofFulfillmentFailure1Lackofvehiclecapacitytomeetpassenger’sbookingrequeste.g.highdemandduringpeakhours,lowsupplyduringmidnight2Driverspickorderswhichbenefitthemselvesthemost;withindifferentsubsidyscheme,giventheknowndrop-offpoint,shortdistanceridemightnotbepreferredbydrivers3Unsuccessfullyorderingduetocancellation;passengermightcancelbookingsduetovariousreasons,e.g.longwaitingtime,wronginformation,alternativecommutemethodNote1:PlacedOrderreferstoanytaxibookingrequestonceplaced,regardlessofitsresponse/cancellationstatusNote2:PlacedOrderreferstoanyprivatecarbookingrequestonceplaced,regardlessofitsresponse/cancellationstatus12DiDiwasfoundedin2012andcurrentlyithasover2,000employees;DidisharessimilarbusinessmodelasKuaididoesSource:CompanyInformation,BDAAnalysisWebsite:www.Established:inJune2012Location:HQinBeijingManagement&Personnel:Founder&CEOofDidi:Mr.WeiCheng(程维)whowasformerlyworkingatAlibabaCOO&CEOofDidi:Ms.QingLiu(柳青),daughterofMr.ChuanzhiLiu(柳传志),andshewasformerlyworkingatGoldmanSacks,graduatingfromHarvardUniversityNumberofemployees:Over2,000SupportFromInvestorBasicInformationDidiandKuaidishareverysimilarbusinessmodelandprovidenearlythesamekindridebookingservices(Taxingbooking&PrivateCar);howeverDidiobtainsmoresupportfromTencentthanKuaididoesfromAlibabaTrafficIn1H2014,Alipaycontributed~8%oftotalordersTechnicalFinancialAlibabaoffersKuaidisometechnicalguidanceoccasionallyAlibabaspentUSD70MNonsubsidyforKuaididriversandpassengersTencentWechatcontributed15-20%oftotalordersplacedonDidi30-40Tencent

engineersspent3monthshelpingDidiimprovetheproductTencentspentoverUSD150MNonsubsidyforDididriversandpassengersUserOct14Sep14Aug14Jul14Jun14May14Apr14Mar14Feb14Jan14TotalRegisteredDriver/Passenger(MN)PassengerDriverOrderOct14Sep14Aug14Jul14Jun14May14Apr14Mar14Feb14Jan14AverageDailyNumberofPlacedOrders(MN)DailyRideFulfillmentRate(%)Sep1459%55%Aug1450%Oct1466%May14Apr1453%Jun14Jul1454%58%Mar1476%63%Feb1445%Jan14TaxiBookingKuaidiandDidisharessimilarproductfeatures;someproducthighlightsincludeenablingpaymentsettlement,3rdpartyplatformbooking,sharingcouponandloyaltyprograms13Kuaidi&DidiMajorFeaturesComparisonSource:CompanyInformation,BDAAnalysisFunctionFunctionDescriptionKuaidiDidiCallforTaxiImmediatelyRequesttaxiserviceimmediatelybasedondesiredpick-upanddrop-offpointTaxiReservationReservetaxiserviceataspecifiedpick-uptimeEstimatedFareNotificationWithpick-upanddrop-offpointinformation,systemwillautomaticallycalculatethefareforprivatecarbooking,andaskuseriftheywouldtryprivatecarserviceIn-appPrivateCarBookingUsercanswitchbetweenTaxiBookingandPrivateCarBookingmodeintheAPPAutomaticLocationSystemwilllocatewheretheuserisanduseitasthedefaultpick-uppointTipBoxDuringpeakhours,usercanofferdrivertipsatafixedamounttoincreasetheincentiveforthedrivertoresponsetotheuser’sorderRMB5RMB3or5VoiceInputInsteadoftypingpick-upanddrop-offpoint,usercanusevoiceinputtopublishtheirrequest3rdPartyPlatformBookingUsersareallowedtobookrideonthirdpartyauthorizedplatforms;thiswillalsodriveadditionaltraffictotheridebookingtoolitselfAmap,BaiduMap,AlipayBaidu,WeChatAutomaticallySubsidy

Systemwillchoosetopayextrabonustothedriveroncertaintaxibookingorderbasedontheuser’stier,waitingtimeandotherfactors,tofulfillbookingrequestPaymentSettlementUsercanusethein-apppaymentfunctiontosettlethetaxifarewiththedriverCash,WeChatPay,AlipayCash,WeChatPay,AlipayRateDriverUsercanratethetaxidriver’sserviceandconditionofthevehicleaftereveryrideGet&UseCouponDuringpromotionperiod,usercaninstantlyusetaxicoupontopaypartialtaxifare,collect&distributecouponrightaftertherideSharetoSNSPlatformUsercansharetherideinformationanddistributecoupononSNSplatformMomentsWeiboWeChat,QQLoyaltyProgramUsercanearnpointsthrougheachride,andgainuppertierthroughaccumulatingpoints5tiers4tiersCreditMallPointscouldbeusedtowardsredeemingphysicalandvirtualgiftatthecreditmallForbothKuaidiandDidi,driver’sretentionratesarehigherthanpassenger’sretentionrates;Kuaidi’sretentionrateoftaxipassengersisslightlylowerthanDidiandtheretentionrateoftaxidriversisneckandneckwithDidi14TaxiBookingRetentionRate1-monthSource:CompanyInformation,BDAAnalysisTaxiBookingRetentionRate99%27%37%15%04/201401/201410/201307/201304/201301/201310/201407/201453%14%3-month6-monthPassengerDriver1-month84%30%67%21%07/201404/201401/201410/201307/201310/201404/201301/201350%17%3-month6-monthPassengerDriverThetopconsiderationsforconsumersinevaluatingridebookingtoolincludeitsuseeasiness,availability&varietyofvehicles,priceandcustomerservices15Top10KSFsforRideBookingBusiness*Theresultisconcludedfromasurveywithsamplesizeof713participantsCompetitiveLandscapeTaxiBookingPrivateCarDidi43%Kuaidi57%Other2%YidaoUber11%DiDi&KuaidiONE78%Source:Eguan,BDAAnalysisMarketSizeintermsofOrderVolumein1Q15MarketSizeintermsofActiveUserVolumein4Q14*UberdoesnotparticipateinTaxiBookingGiventheChineseridebookingmarketishighlycompetitiveandcurrentlymajorplayersarestillsubsidizingtheclientsataveryhighamount,thefollowingresultissummarizedfromamultiple-choicesurveyServiceQualitySuccessRateofRequestTimeofArrivalPriceEasytoUseUserAwarenessEasyPaymentQualityofCustomerServiceSuperiorModelsattheSamePriceExplanationIncludingcleannessoftheservicevehicle,attitudeofdriverandetc.IfthebookingrequestcouldbefulfilledtimelyCriteriaResult*IftheAPP’sinterfaceisuserfriendlyorworkswellatmosttimeIfdisputecasebeefficientlysolvedraisedbycustomersIfpremiumvehiclemodelsareavailableatafairpriceIfpaymentcouldbesettledwiththedrivereasilyIftheuserbooked/reservedvehiclecouldarriveonpromisedtimeAgenda16Flipkart–JDOLA–Kuaidi&DidiLimeroad–MGJ&MLSQuikr&OLX–58&GanjiCommonFloor–SFUNShopClues–

Taobao&TmallHike–

WeChat&MomoGrofers–ShanDianGou&JDDaojiaMoonfrog–

TencentGames&OurpalmMyntra–

VIPSLocalOye–

58DaojiaPolicyBazaar-HZInsMoneyView–FeideeCaraLane–ZbirdVedantu–YY100EducationHolidayIQ–MafengwoandQyerNewsInShorts–ToutiaoSaavn–KuwoandXiamiDelhivery–SFExpressPaytm&Mobikwik–Alipay&WeChatPaymentNestaway–HomelinkZiroomBelezanaweb(Brazil)–JumeiZomato–Dianping&Ele.meZoRooms–HMIN&HTHTLybrate–HaoDF&ChunyuPetlove(Brazil)–BoqiiRoposo–Pinterest(US)RazorPay–Stripe(US)CultureMachine–MakerStudios(US)(Uncomparable)ZoRooms–MeituanHotel(Uncomparable)CultureAlley–VIPABC&51Talk(Uncomparable)Zopper-Wochacha17MGJandMLSwereoriginallyapparelshoppingguidewebsitesforTaobaoandTmall;theychangedtheirbusinessmodelsbytheendof2013whentheylaunchedtheirowne-commercemarketplacesSource:Companyinformation,BDAanalysisWebsite:Established:FoundedinFebruary2011asanapparelshoppingguidewebsiteforTaobao&TmallDatee-commerceplatformlaunched:November2013ProductCategories:Apparel&accessories,CosmeticsLocation:HQinBeijingManagement&Personnel:Founder&CEO:Mr.Yirong

Xu(徐易容)workedforIBMinSiliconValleyforthreeyearsbeforerelocatingtoIBMChinain2003Numberofemployees:Over1,000MLSWebsite:Established:FoundedinMarch2010asanapparelshoppingguidewebsiteforTaobao&TmallDatee-commerceplatformlaunched:October2013ProductCategories:Apparel&accessories,CosmeticsLocation:HQinHangzhouManagement&Personnel:Founder&CEO:Mr.QiChen(陈琪)joinedTaobaoandworkedthereforoverfiveyearsaftergraduatingfromZhejiangUniversityNumberofemployees:~1,000MGJDescriptionMGJMLSCPCAdvertisingChargesmerchantsifusersclickonproductpicturesCPSAdvertisingTheplatformpurchasestrafficfromoutsidewebsitesandchargesmerchantsacommissionwhenordersaresubmittedMerchantsoperatestoresonthee-commerceplatformandarechargedacommissionbasedontransactionvalueOfficiallya5%takerate;~2%takerateactuallychargedin2014,duetodiscountsOfficiallya5%takerate;~2%takerateactuallychargedin2014,duetodiscountsCPCAdvertisingMerchantsbidforplacement;CPCpricevariesCPSAdvertisingMerchantsbidforacommissionrateCPCAdvertisingMerchantsbidforplacementandarechargedatleastUSD0.05perclickCPSAdvertisingMerchantsbidforacommissionrateCommissionAdvertising2014Revenue1122332014Revenue112821USDMNUSDMNMonetizationMethodsNote:1.MGJandMLSarecurrentlyburningmoney.In2014,MGJearnedanetmarginof-240%MGJandMLS’sGMVswereUSD408and527MNrespectivelyin2014;asashareofthewholewomen’sapparele-commercesector,theywerestillverysmall,lessthan1%18MGJUnit:USDMNMLSUnit:USDMN1Q154Q143Q142Q141Q141Q154Q143Q142Q141Q1420144082014527GMVSource:Companyinformation,BDAanalysis=OthersMGJ0%MLS1%VIPS3%JDTaobao&TmallMGJandMLS’MarketSharesinTermsofWomen'sApparelin2014=2014201420142014XXGMV

(USDMN)GMV

(USDMN)NumberofOrders

(USDMN)AmountPerOrder

(USD)NumberofOrders

(MN)AmountPerOrder

(USD)MarketShareMLShasmoremerchantsthanMGJdoes;comparedwiththeirmaincompetitors,MGJ&MLSlagintermsoftheirspendingperbuyerandtheiroverallnumberofannualbuyers19NumberofAnnualBuyersOnMainPlatforms,2014JDVIPSJumeiMLSMGJUnit:MNSpendingperBuyer,2014JDVIPSJumeiMLSMGJUnit:USDNumberofOrdersperBuyer,2014JDVIPSJumeiMLSMGJUnit:#Source:Companyinformation,BDAanalysisNumberofMerchantsOnMainPlatforms,201412,05068,1092,400Jumei1JD(PoP)VIPS2MGJ5,010MLS7,110Unit:#Notes:1.Referstothetotalnumberofsuppliersandthirdpartymerchants2.Thenumberofbrandpartners20MGJandMLSchargethebelow-averageRevenue/GMVamongtheirpeersSource:Companyinformation,BDAanalysisAdRevenueMarketplaceCommissionMLS7.6%5.5%2.1%MGJ5.0%3.0%2.0%Revenue/GMVofMGJandMLS,2014MerchantsgenerallypayhighermarketingexpensesonMLSbecauseMLSallocateslessfreetraffictomerchantsthanMGJdoes.BothMGJandMLSofferadiscountontheircommissionfees.Theofficialcommissionrateis5%ofGMV.Note:1.Weusethecommissionrateforwomen’sapparelonTmall,whichis5%,andtheaveragemarketingrevenueofallcategoriesineachplatform.10.3%VIPS(PoP)25-30%Jumei(PoP)16.5%Tmall18.8%MLS7.6%JD(PoP)6.1%MGJ5.0%Taobao0.9%ComparisonofRevenue/GMV,2014Accurateproductrecommendations,guidanceonfashiontrends,andsharingwithotherusersarekeyvaluepropositionsofMGJandMLS,differentiatingthemfromTaobao21ValuePropositions:ComparedtoTaobaoSource:BDAinterviewsandanalysisStrongestperformanceAccurateProductRecommendationsbyEditor’sManuallyPickingGuidanceonFashionTrendsSharingwithOtherUsersonAPP’sForum/CommunityMGJMLSTaobaoWeakestPerformanceThrougheditor’spicking,MGJandMLScanshowlatestapparelontheirwebsitesorapps,followingfashiontrends.Taobaohasalsostartedtotrytoemployalargenumberofthird-partyshoppingguideappstoautomaticallyselecteliteproducts,nevertheless,thiswayisnotaseffectiveasMGJandMLSdoInsteadofdirectlyusingsearchfunctions,customersarelikelytousethevariousrecommendationRecommendationfeaturingproductsselectedbyeditorsmanuallyareactuallymoreattractivetheTaobao’sgeneratedfromalgorithmiccomputingsearchresultsBuyerscansharetheirexperiencesandcommentsonMGJandMLS’sappsorWeChatmoments,byuploadingtheirpicturesandsendingthelinks.ThiscouldincreaseMGJandMLS’svisits.However,WeChatprohibitslinkssharingofTaobao.KillerFeaturesofMGJ&MLSThemainreasonswhyMGJ’scurrentcustomersuseitarethatit’seasierforthemtofindtheirdesiredproductsortheylikereadingthecommentsfromotherusers22ShoppingBehaviorofMGJ’sCustomersHardtosay,dependsonproductcategory4%Bothequally52%InormallysearchdirectlyonTaobaoandTmall12%IalwaysbrowseMGJfirst

andthenbuy

onTaobao

ortheplatformitself32%Source:BDAsurveyandanalysisReasonsforBrowsingMGJFirstQ:WhatisthemostimportantreasonwhyyoubrowseMGJfirst?(Singlechoice,N=131)It’seasiertofindtheproductsIdesire3%Betterbrowsingandshoppingatmosphere4%Productpricesaremorereasonable4%Thepurchasingprocessismoreconvenient9%Theapp’sdesignismoreuser-friendly13%Productqualityishigher27%Ilikereadingotherpeople’scomments40%Q:Whichdoyouusuallyusefirstwhenshopping:MGJorTaobao/Tmall?(Singlechoice,N=412)23Moreover,havingevolvedfromashoppingguidewebsite,MGJ’sproductsaremorefashionableQ:WhydoyouprefershoppingonMGJforapparel,shoesandbags?Highqualitycustomerservice11%Activesharingatmosphere12%Seasonalfashionguide18%Favorableprices27%Clearcategoriesandapowerfulsearchfunction36%Highproductquality43%Fashionabledesigns75%N=154Q:HowwouldyoudescribeyourmainbehavioronMGJandTaobao?N=24748%29%22%1%Q:WhydoyouprefershoppingonTaobaoforapparel,shoesandbags?N=75High-qualityafter-salesservice15%Easypaymentprocess21%Fashionabledesign21%Highproductquality24%Myfavoritestoresareonthisplatform27%Favorableprices39%Wideselection61%Topurchaseaspecifictarget32%Shoppingforappealingproductswithoutaspecifictarget44%Window-shopping11%Tolearnwhat’spopular,notshopping14%MGJTaobaoSource:Companyinformation,BDAanalysis24ActivecustomersonMGJaregraduallyswitchingmoreandmoreoftheirpurchasingtothisplatformandawayfromTao