Gazette nr1

The YueHan

Gazette Shanghai 2015

The Business Model for the 21 st Century

Issue #1

F U LL

LMEN

TI

A LES A S *

FIL

*

ND

N A SIA A New Concept

BabyBjรถrn in China

Selling to China

Johan & Johan

A trusted company since 50 years

Dr Bernd-Uwe Stucken

Page 6

Page 18

Page 10

Established in 2010

www.yuehantrading.com

Foreword

Y ou are now holding the first issue of The YueHan Gazette in your hands. Next issue will arrive January 2016. This is our way of presenting our company and ourselves. Our ambition is to offer interesting reading and give you a deeper understanding of our business, the way we do it, who is behind and what it is that drives us.

We have engaged a top photographer, a professional journalist and a five star art director to help us making this high quality magazine.

Interviews with employees, partners, clients and other interesting people – all with some kind of experience from business in Asia – adds up to the big picture. We hope you find the reading inspiring and even helpful for your business in this part of the world.

Another year has passed and it has for sure been an exciting year for our clients, customers and us. In this the first issue of The Gazette we will tell you about some of the highlights of 2014 and the plans for 2015. One major event is of course the 5th anniversary on 1st of February.

We will also explain what we mean when we say “Sales & Fulfillment is our middle name” and what are the business areas “Enabler and Operator”.

Welcome to the first issue of the Gazette.

Johan & Johan

Shanghai, January 2015 (Words with * are explained in Dictionary page 27)

Contributors :

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Editor in chief: Johan Wikander (johan.wikander@yuehantrading. com), Project coordinator: Johanna De Vera.

Photographers: Nicky Almasy, Hyuen Tran, Johan Wikander.

Writer: Monica Liau. Art director: Gustav Hultman The Gazette is neither a public nor a commercial magazine and it is not for sale. All rights belong to YueHan (Shanghai) Trading Co Ltd, PRC. Content or pictures may be not copied without permission from YueHan.

The Yuehan Gazette

Content

Highlights From 2014 4 Be Localized 5 New Company In Vietnam 5 The New Model, meet Johan & Johan

6-7 and 27

Sales & Fulfillment 8 Shanghai Guide 9 Selling To China

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Meet The Staff

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Why Controlling?

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Breath Fresh Air

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Tasty Recepies

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Meet Weiwei, our Online Manager

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Tmall

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Two For a Tango

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BabyBjörn

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Why product testing?

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Meet Irene and Ewenique from Australia

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Developing talents

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Multi Channel Logistics

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S/C Operations Manager

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Global Patents in China

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The Enabler Service

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Online Markets in Asia

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Information Flow

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Our Story, meet Aurore and Selina

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Plans for 2015

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Gazette is a loanword from the French language. The word is a 16thcentury permutation of the Italian gazeta, which is the name of a Venetian coin. Gazeta became an epithet for “newspaper” during the early and middle 16th century, since the first Venetian newspaper cost one gazeta.

2015

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Highlights from 2014 T hree new Operator* clients

started, One Green Elephant/ fashion from Germany, Segre/ breathing masks from Sweden and Ewenique/baby garments from Australia.

In September a flagship store on Tmall was opened for BabyBjörn. Thanks to the good brand awareness also in China it quickly kicked-off. The schedule, three months for the start-up project, was held almost on the day.

Existing clients had an impressive sales growth resulting in almost a doubling of the business volume for YueHan. Several additional services were added to the business scope related both to sales, marketing activities and fulfillment. One example is the in-house photo studio were additional product pictures are taken for clients’ online stores. Another example is product and sales training at stores.

Our online team is now offering a more complete service in the setup and operational management of a store on Tmall.

We have further defined our business scope. “We help overseas companies and brand owners to operate and sell their products in China, Hong Kong and Vietnam”.

Our focus areas are baby- and children’s products, fashion and accessories and health- and personal safety products.

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A couple of trips to exciting Ho Chi Minh City convinced us to start up a sister company in Vietnam. Office is already in place, employees are signed up and documents to establish the company are submitted. We will copy/paste the existing business model and processes – localized when necessary.

The organization grew with new smart colleagues; Mandy our Vietnam coordinator, Bruce our IT and ERP* expert, Irene sales and marketing for client Ewenique and Anna sales and marketing for client Segre. Huyen joined us in Vietnam.

One of our more important internal achievements is that we have reduced manual work and got our ERP* system Ufida to serve us even better, not only in the daily operation but also for the statististics, follow up’s and invoicing.

The yearly golf-putting competition was held in the office with Johan Aledal as the winner.

A tough but fair match…

A highlight from a manager and owner perspective is that the team is developing in a good direction and are doing such a fine job. Well-done colleagues!

In November we launched a new website. Stay tuned at www.yuehantrading.com

We feel encouraged by the outcome of 2014 to move on to 2015!

The Yuehan Gazette

TO BE LOCALIZED T he world wants to come

to Asia to do business and in recent years not only sourcing but selling products is on top of the agendas. There are many who make a real success and do good business – but there are also those who fail. Starting business far away from HQ is a big challenge.

Our #1 advice and strong recommendation is to be locally present.

- YCDBIAWLP ;

Beside that, the speed of development is many times higher than in the Western world. The markets in Asia have changed already before you returned back home after an Asian business trip If you do not set up your own legal entity, being successful is much about finding the right partner. Read the article by Dr. Bernd Uwe Stucken on page 10.

The key is a localized team

YCDBIAWLP – You Can’t Do Business In Asia Without Local Presence…

working with local set-up, knowing the rules of business and having the ability to “read between the lines”. Local athori-

It’s obvious that Asian markets are far away but it’s not only about the distance. Language, culture, consumer behaviour, laws, how to negotiate, the respect of contracts, how to recruit staff, tax rules, customs regulations, product marking – the list is long and could fill this magazine.

ties are not always keeping up with the fast development on the market, rules and policies are differently interpreted and can change overnight.

“The mix of foreign and local staff makes all the difference”

For sure when selling consumer products in Asia you have to adjust to local consumer law and habits, product testing and -marking, local agreements and price lists. Customer service, a part of your sales force. must speak the local language and understand the

consumers and their demands.

Therefore you need:

“A local inventory, a local team of employees, local infrastructure – to have a chance of being successful and profitable.”

Opening in H C M C The plan is to be up and running with the new company Johan & Johan (Vietnam) Ltd. during Q2 2015. The office is located in Maritime Bank Tower, Nguyen Cong Street, District 1 downtown Ho Chi Minh City (HCMC).

It will be a copy 1-to-1 of the existing business set-up in China and we will offer the Sales & Fulfillment also in Vietnam – the fastest growing market in Asia after China. Shanghai is still HQ using the same processes and IT system on all markets.

CONTACT : mandy.nguyen@yuehantrading.com (Shanghai office) huyen.tran@johanjohan.com (Ho Chi Minh Office)

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A NEW DIST R IBU T ION M O D E L - I nt e r v i e w w ith J ohan an d J ohan ;

“We have developed a new distribution model – an alternative way to enter the markets in Asia. It replaces the traditional distributor model, which we find is out of date, especially for quality products and brands with high integrity.

Johan & Johan are the founders and owners of YueHan. A good match of competences within web and IT, online and offline selling and logistics made it possible to create this new way for overseas brands to sell in China, Hong Kong and Vietnam.

“It’s been fun, a lot of work, a few set backs and surprises but together with our team of skilled people it has been possible”.

When Johan Wikander and Johan Aledal met in Shanghai in 2009, they found they had more than a surname in common. Sitting in the same room at the Swedish Trade Council, the two quickly discovered their backgrounds were a perfect match for working together and they started to talk about the need for foreign companies to be local when doing business with China. They decided to set up a new trading company.

Aledal started long time ago within IT, web and E-commerce and has developed solid online experience. Wikander, with decades of consumer products logistics for the retail industry and directly to consumers, shipping and purchasing expertise under his belt.

Instead of hiring consulting companies to get them off the ground, the two decided to learn how to establish a company and the foundations of business operation in China: everything from the Chinese customs system to online regulations. The detail-oriented duo wanted to do more than

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just float on the surface, instead participating in every step of the way, which is why companies today trust them with their business.

By February 2010, the two established YueHan and now make their way helping foreign brands and companies to come and sell their products on the Chinese market.

What kind of clients do you work with?

Aledal: We focus on consumer products, especially the baby and kids segment, health and safety, fashion and accessories. All clients are foreign companies/brands and presently they come from Sweden, Finland, Germany, Italy and Australia. Important for us is the likelihood of a selling success on the markets here rather than the country of origin of client and we have to believe in the products in order to take on new clients.

If you don’t have a good product that adds values to consumers, you really have a tough way to go.

Besides the quality of the products

we strive to work with brands that have a story to tell, an interesting history.

Wikander: You need to be local and have a “platform” to operate from. We believe that the traditional distributor model – especially for our target group of clients/products – is out of date. Brand owners are not in control of their brand.

Therefore we have developed a new model where brand owner and YueHan work close together. Crucial for this kind of collaboration – or should I say partnership – is that we have aligned agendas, have trust and are willing to share information for the sake of improving sales and customer satisfaction. If we feel prospects do not show an attitude of going “all in”, then we hesitate.

So you are fostering brands committing to the long term?

Aledal: Yes! We want them to be involved and we want a close collaboration. We want them to come here and work with us to plan for coming seasons and new products.

We don’t want them to just say “here’s the price list, tell us what you want”. That’s not our client.

Wikander: One of the exciting parts of our work is to base operations on standard methods still being able to customize when it’s necessary. Our ambition is to create a set up where clients feel “we have our own office in Shanghai”. Asian markets develop in such a high speed and the ability to adapt together to new prerequisites is a key factor.

ONE - STOP - SHOP w w w.y u e h a n t r a d i n g . c o m The Yuehan Gazette

There are distributors all over the world. How come you find this model out of date?

Aledal: The complexity and challenges on the markets here are immense – from fake products and parallel import to fishy sales channels and sometimes immature business manors. The brand owners we talk to are caring about their brand and brand integrity. They pay attention to the complete brand appearance from the packaging to customer service, sales channels etc. There is a clear miss-match situation.

“ We d on’t d o every th ing ou rse lves but we take res ponsibility for a ll processes”

Wikander: Most of our clients are international and are selling on several markets and they do not want that sales prices vary too much. The consumers - especially when you look at E-commerce - are comparing prices both domestic and on online stores in other countries.

Aledal: Our model is especially attractive to companies and brand owners that already have some China experience and have strugggled with traditional distributors and felt the lack of control.

Wikander: It’s always naive to say that you are “unique” but let’s say that our New Model is different from what the market offers and that we are early out with our way of doing this.

You are selling or presenting a new concept, not known, to your business contacts. Do you find trouble in convincing prospects to use your model?

Wikander: Yes we do. As you say – it’s always a barrier to new ways of doing business. It does take a bit longer and some pedagogic explanations.

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The upside is that most of our prospects understand and then feel comfortable and realize the advantages.

Aledal: Now, after a couple of years, when we have cases to present and statistics concerning improved sales and profitability the convincing process is shorter. After all - we know

that the bottom line is better for the brand owners with our model.

Wikander: With Aledal’s and my background we understand the way our clients think and what they are looking for when selecting a partner in China. Our clients know their products and their brand better than anyone and we know the local

market and how to operate – the sales and fulfillment.

/ The interview continues on page 27.

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Sales and Fullfillment * W e have realized that the most crucial

factor for successful international business is the choice of partner. It is a big commitment and risk for overseas companies to act on a market far away from home, protecting brand values, adjusting to the local market and staying in control.

The heart of YueHan’s business idea is to secure this gap and be a one-stop-shop, described below, taking care of clients’ complete interest in China, Hong Kong and Vietnam.

visiting customers. The strategy for sales and marketing activities are set together with brand owners. Social media is an important component in this work. The online team is managing the complete operation and maintenance of the online stores.

The Customer Service team is important for the E-commerce sales process. Customers want to chat and be sure of what they are buying.

Support

The dialog with brand owners is frequent and close. We share information on sales, inventory and make suggestions for

Preparations

Before starting up or when new products are to be launched we need information and samples to prepare for import and sales. We need to follow local regulation in terms of consumer law and product marking. Sometimes special certificates are required combined with product testing.

Commercial matters such as sales prices, assortment and sales channels need to be decided. On top of that trademarks and local domains need to be taken care of.

Inbound

replenishment or other activities. We help to calculate the ideal stock level.

We share experiences and customer feedback and of course we are assisting with all our China knowledge.

Outbound

Both E-commerce and retail orders are handled via IT interfaces. The ERP* system transmits data directly to warehouse. Orders up to 3pm are sent out same day. The transportation network covers all of China.

Financial & Controlling

All transactions are booked into inventory and YueHan issues invoices and

Brand owner ship the goods to nearest

the separate local VAT invoice*. Different

port and YueHan takes over upon arrival.

payment methods are handled including

Customs- and CIQ* formalities are han-

tax matters. The last transaction of the

dled. We also receive goods from domestic

supply chain is the payment to the

suppliers. At warehouse products are

overseas brand owner.

scanned, inspected and put away, per

Both supply chain and finance are using

SKU*, on picking locations. Often different

the same ERP* system, 100% integration.

value adding services are required.

Controlling is done on a daily, weekly and

Sales

monthly level. Read more on page 12.

YueHan engages a specialized team for online sales. For offline sales normally there is one dedicated person responsible for the sales and marketing of each brand.

We visit and participate in fairs, have

* CORNERSTONES OF

OUR DAILY BUSINESS !

meetings in our showroom and

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The Yuehan Gazette

Shang h a i

E n j oy t hi s g uide to the P ea rl o f th e Orie nt The Shanghai F&B scene is changing faster than you can say the word. New and exiting venues are opened all the time but there are also oldies that are very good. Here are some of our favourites.

Go to website SmartShanghai. com for more info and click on Taxi-printout and you will get the address in Chinese.

Eating Pirata, Tapas Kitchen Bar on Xinle Rd. 136. T: 5404 2327 Mercato, One of the best in town. Italian with a fantastic view on the Bund, 166 Guandong Rd. 6/F. T: 6321 9922 Sichuan Citizen, Sichuan food and don’t miss Basil Drop, 30 Donghu Rd. T: 5404 1235 Liquid Laundry, Gastro-pub with own brewery, Huiahai Rd. 1028 2/F. T: 6445 9589 Hakkasan, Top Chinese food on the Bund, 18 Zhongshan Rd. 5/F. T: 6321 5888 Furgeson Lane, a variety of good cafés and restaurants. Also perfect for brunch.

Din Tai Fung, best service and quality in town and the best dumplings ever. Several locations.

La Stazione, newly opened with Italian kitchen. 98 Yanping Rd. T: 5175 9818 Goga, best crossover food at 1 Yueyang Rd. T: 6431 9700 Caliburgee, best burger I have eaten says Olof Olsson - a true burger fan 1818 Nanjing Xi Rd. T: 5239 7728.

The Commune Social, tapas from heaven. Close to our office at 511 Jiangning Rd. T: 6047 7638 Lost Heaven, Nice atmosphere and delicious Yunnan food. 38 Gaoyou Rd. T: 6433 5126

Drinking Le Baron, Cool club on 20 Donghu Rd 7/F.

2015

Speak Low, a hidden place with good drinks. 579 Fuxin Rd. Union Trading Company, Coctails, coctails, coctails. 64 Fenyang Rd. Constellation, dark and cosy, 86 Xinle Rd. El Coctel, dark and intimate lounge, 47 Yongfu Rd. 2/F. On 3/F you will find The Apartment with a nice rooftop patio.

Vue Bar has maybe the nicest view in the city? Hyatt on the Bund. 199 Huangpo Rd. 33/F. Bar Rouge, one of longest lasting venues with an epic view on the Bund. 18 Zhongshan Yi Rd. 7/F

SHANGHAIKARTA

Shopping The fantastic mix of small local shops and the big malls make the shopping scene fascinating.

IAPM. New shopping mall on Huaihai Lu/Shaanxi Rd. Copy Market. Crazy market in 4 floors on Nanjing Lu/Chengdu Rd. Start with offering 1/3 of price.

“Antique” Market. Outdoor market with really nice items. Dongtai Lu/ Liuhe Rd. Will close in summer 2015 Fabric Market. Tailors making your special piece of garment. 2-4 days delivery. 399 LujiaBang Rd.

Our hotel Thanks to many bookings every year we can offer a good price at Hotel CACHET Boutique Shanghai, 931 Nanjing West Rd. Contact Aurore.Demurger@yuehantrading.com for reservation.

Our driver We can offer you a good driving driver and a car with safety belts for day trips, pick ups at airport or for whatever you might need a car.

The driver speaks a limited English and is a very reliable person. Contact us for booking.

Things to do If you spend a weekend in exciting Shanghai a visit to the Bund is a must. There are plenty of nice bars - many of them rooftop - and restaurants and the view is breath taking.

There is an amazing circus and acrobatic theatre “ERA – Intersection of Time”. Performances every evening at 7:30 at Shanghai Circus World, 2266 Gong He Xin Rd 20 minutes by taxi north of city centre. Book your tickets in advance at (21) 6630 0000, www.era-shanghai.com Close to the Bund, on 60 Fuzou Rd is the amazing House of Blues and Jazz. Don’t miss this club with atmosphere from early 20-ties. Have a beer or Gin Tonic and listen to the music…

Best tip for a day of is to spend it walking around in the former French Concessions. Small shops, a daily life on the street with kids doing their homework, families having lunch, people playing mahjong all in a wonderful mix.

Shanghai has a living art scene with good museums. Not far from the Bund is Moganshan Rd. with several good venues. Its worthwhile to spend some time there in this creative area under constant development.

If the weather is clear pay a visit to top floor of “Bottle opener” the Shanghai World Financial Centre or Hyatt Hotel Bar. On Sinan Rd 44 there is an Antique Shop & Café. You can buy the furniture you sit in and if the weather is fine you must have your coffee or breakfast in the small and quite very nice garden.

Urban Planning Exhibition Hall at Peoples Square. One of Shanghai most visited museums, an amazing scale model of the entire Shanghai city.

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Selling to China - the legal framework for structuring distribution channels There are many routes that foreign companies can take to sell their goods to Chinese businesses and consumers.

EXPORTING Foreign companies can export products directly to buyers in China. Chinese companies that wish to import must obtain the necessary foreign trade licenses. If they do not hold a license or don’t want to deal with the red tape linked to imports, they can hire a Chinese-registered foreign trade company to complete the necessary import formalities.

AGENTS/DISTRIBUTORS Another way to penetrate the China market is to use agents and distributors in China to import and distribute products. Some do not hold an import and export license, typically if the import requires a specific license, for example the import of cosmetics, foods, or pharmaceutical products. In that case, they usually engage an importer with the necessary licenses.

The use of agents and distributors is a relatively easy way to enter the market, but such trade intermediaries are often difficult to control and direct. It is particularly

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difficult to get market and customer information since many are multi-brand, multi-sector traders. As a result of dealing with this situation for a while, some principals attempt to acquire all or a major part of the business of the Chinese agent or distributor to gain better control over the distribution channel.

REPRESENTATIVE OFFICE Sometimes setting up a representative office can be a useful tool to coordinate marketing activities without establishing a major presence in China. But note that a representative office may not engage in direct business activities; it is restricted to performing liaison activities, information gathering, and market research.

Establishing a representative office can also have negative tax effects as China’s tax authorities would usually regard it as a “permanent establishment” for tax purposes and tax it on the operational cost basis.

TRADING COMPANIES Another method used by foreign companies is to form foreigninvested commercial enterprises (FICEs). A foreign investor can establish an FICE, in the form of a wholly foreign-owned enterprise

(WFOE), to engage in wholesale and retail distribution of goods.

The business scope of a FICE could read as follows: “Wholesale and retail of [specific goods], commission agency (auction excluded), import and export of the aforementioned commodities, after-sales services and related ancillary services, repair and maintenance services related to the aforementioned commodities”.

There are of course certain restrictions and for the establishment of a retail structure specific preconditions need to be fulfilled.

FRANCHISING Franchise agreements are another option for distributing goods. In China, franchising is governed by specific regulations, which include mandatory provisions to protect the franchisees. A franchise contract must be filed with MOFCOM and there is also a long list of detailed “information disclosure” requirements. In practice, therefore, many foreign companies try to avoid establishing franchising structures and instead develop more traditional distribution structures.

DIRECT SELLING Direct selling is defined under Chinese law as a “method of distribution whereby a direct salesperson recruited by a direct sales enterprise promotes its product, outside any fixed place of business,

directly to an ultimate consumer.”

Direct selling is heavily regulated in China as historically direct customer contacts have often been used for building pyramid systems. Direct sales channels are closely monitored and need specific licenses, which are difficult to obtain.

ELECTRONIC COMMERCE Online shopping is widespread in China and Chinese consumers have started to buy products abroad. A very hot product is infant formula since Chinese parents often don’t trust food safety in China. Selling via a foreign website is an easy approach and some Chinese service providers have started to offer logistics and payment services for Chinese consumers who want to buy overseas. Sellers should be aware though that this model may not be sustainable as foreign websites can be blocked at any time by the Chinese authorities. A safer approach would be to acquire a Chinese IP-address. This, however, requires the establishment of an FICE in China or at least the involvement of a local distributor.

There are also local online market platforms that hold the necessary licenses and have attracted a large number of sellers. In the past the these providers have usually required the sellers to set up a presence in China but things are changing.

Dr. Bernd-Uwe Stucken Partner for Pinsent Masons LLP

The Yuehan Gazette

Our philosphy and the people behind 1

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T he company’s soul and spirit

1. Anna Skott

6. Joanna Huang

11. Selina Hui

2. Aurore Demurger

7. Johan Aledal

12. Sharon Zhu

3. Bruce He

8. Johan Wikander

13. Weiwei Ma

4. Evelyn Ma

9. Katarina Boberg

14. Winnie Wang

is simplicity, openness, collaboration and professionalism.

By combining people with different skills, playing the same song together - like an orchestra - our clients should find our company the best choice for a long-term partnership. We encourage teamwork and colleagues to take responsibility.

We have a cost efficient and entrepreneurial climate in the company and welcome street-smart thinking. Having fun at work and feel happy and comfortable as employee are important ingredi-

5. Irene Yip

10. Mandy Nguyen

15. Winnie Xu

ents of our philosophy‌

2015

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Why we prioritize controlling - Retail is detail

“Retail is Detail” is a well-known fact. It’s a long way from your suppliers or warehouse to the final customer on the Asian markets – and there are a lot of costs driving steps on this way. Brand owners are afraid of loosing control obviously over the brand but also other commercial matters.

Inventory management - Where the profit is hiding “What is worse? Having too much inventory or too little”.

How can you evaluate the impact of customers not getting their orders on time? Is the brand loyalty high enough?

Without a close follow up of sales and inventory you can face risks from increased costs to loosing unsatisfied customers. Aurore is our Business Controller and her role is to support clients with relevant, frequent and fresh statistics. She provides easy-to-read reports highlighting slow movers and the good selling ones. Profitability is strongly connected to how good you are in handling your inventory and logistics.

Ask us about the “Air-Bridge” and stock replenishment. The prerequisite of good inventory management is good control of data, when you get it and its validity. We can help you there.

A lot of effort is put into creating statistics and reports

How to follow sales and inventory? How to make precalculations? What should be recommended sales prices? When should we replenish with new or more products? Is there a need for price reductions or other market activities? Weekly and monthly we present data and follow ups in an easy-to-read format.

Combine statistics and commercial feeling

Together with client

We follow sales and compare with last year and to budget. We check the sales compared to the stock level. We can see what products will have shortage and when and we can see what products inventory will last for ever. We give you this information and use a KPI* called Stock-Life time, which is the heart of our replenishment discussions, says Aurore Demurger.

Every month clients receive a report package with data for decision-making.

We are not very fond of just nice to know – even if we can give you that as well.

YueHan’s income is based on sales, when products are sold. We are “in the same boat” and will push, discuss, assist to reach best possible sales. It’s in both parties’ interest. We are not robots and do not act only on statistics. It’s the dialog together with clients that can result in good management.

Business intelligence YueHan will during 2015 upgrade its reporting capacity with a Business Intelligence system. “It’s essential that we as a fulfillment company can provide clients with proactive information related to our joint sales and inventory work in China” says Partner Johan Aledal.

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The Yuehan Gazette

B r e at h i n g M a s k s C l e a n i n g t h e a i r y o u b r e at h e Meet Anna Skott

Focus at YueHan is on quality and having a professional attitude towards both customers and employees. Johan & Johan bring the Swedish leadership style to China, including caring about employees, open mind-set and a flat non-hierarchy organization.

- Sales and marketing for client, Segre

Please describe what you do?

Who are you?

I am Swedish Pharmacist with background in health & science.

I live in Shanghai since 3 years together with my family.

When we arrived to China we were living in Beijing, where the air pollution was terrible, hence the air pollution quickly become our biggest concern.

pollution protection was “right in the spot for me”. Keeping peoples health in focus by rising awareness of using a proper mask on polluted days felt meaningful to me. Also at the same time being able to offer a trustworthy alternative as the Swedish produced SEGRE’s masks now is available in China was also important.

How did you end up at YueHan? Given the opportunity to work with the breathing masks for air

“It’s an additional service” - Says Torbjörn Bodin GM Radisson BLU, Beijing Please tell us a bit about Radisson Blu Beijing’s history.

Radisson Blu Hotel, Beijing opened in 1993, under the brand SAS International Hotels. Now with new owners since 2007, the brand of the hotel is Radisson Blu. When the hotel opened there were almost 50 Europeans working in the hotel, but since the local work force have been more educated in the hospitality sector we rely on the young generation of skilled local staff.

Who is your typical hotel guest?

From the beginning our typical guest was a Scandinavian businessman. Now, most companies in China, have changed to local management so less Scandinavian businesspeople are travel ling here. Nowadays, 2015

Our main concept is to sell the masks to companies that provide breathing masks to their employees and their families in order to ensure that they have the proper mask for protections against air pollution. Many of the masks I see people wear when they travel back and forth to

work are simple fabric pieces that do not fit tight to the face, which makes them useless.

Tell us more about the hotel campaign?

Hotels want to make sure their guest have easy access to proper masks and want to make sure their guests feel safe while traveling to big cities in China, despite the smog.

“Some companies have already included this kind of action of handling air pollution in their corporate social responsibilities (CSR)”

our typical guest is a Chinese business traveller, many of them coming to attend an exhibition next door. Besides this we have Chinese and foreign leisure guests, travelling in groups or individually and several international airline crews.

Why have Radisson Blu Beijing started to sell breathing masks?

Within our company we have a program with the name Responsible Business. Wherever we operate, we are working close with the local community to be a good partner and employer taking care of the environment and operating in a sustainable way. ”To provide SEGRE facemasks is an initiative that we believe ties in naturally in our Responsible Business initiative.”

By informing our guest of the health risks when the air quality is bad and at the same time provide a solution for them is a way to show that we genuinely care.

Until now, how has this new initiative been received by the hotel guests?

It takes a lot of information to get people to understand the health risks with the polluted air.

we think that they should act for their own good. Together with SEGRE masks we will make sure that our guests know how they should take care of themselves when going out in Beijing.

When guests are going out without any protection and the air quality index is over 250 - I know that there is a large room for improvement of the information.

I don’t think that they smoke in their car or in other way expose others to passive smoking, but going out in Beijing when the air is thick from pollution is like smoking a pack of cigarettes. We have started and we will continue to inform the guests and how

Can you see any other health products hotels will offer in the future?

Many of the guests in hotels and restaurants are being more and more health conscious – mainly with what they eat and drink. On our breakfast buffet, we have several alternatives for many staples, such as milk and other dairy products made from soya beans. We have gluten free bread and of course vegetarian alternatives in our restaurants.

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R ecepi es from C hin a , Ho ng Kon g, Vi e tn a m a nd Swe d e n ;

Kung Pao Chicken

Chicken Wings

Phô

Meat Balls

Boneless chicken breast, 400g Cucumber, 100g Roasted unsalted peanuts, 100g Shallot, 1 tbl Cornstarch, 1 tbl Dry red pepper, 1 tsp Chile pepper, 1 tsp Sugar, 1t sp Chinese cooking wine, 1 tsp Light soy sauce, 2 tsp Vinegar, 1tsp

Boneless Chicken Wings, 10-12pcs Dried Mushrooms, 4-5pcs Onions, 1/2 Ginger, 4 slices Spring Onion, a few stems cut into 5cm long Water, 1/2 cup Marinate/Sauce: Oyster Sauce, 2 tsp Light Soy Sauce, 2 tsp Xiao Xing Wine, 1 tsp Salt, 1/4 tsp Sesame Oil, 1 tsp Corn Starch Flour, 1 tsp White Pepper (optional) a pinch

2 onions, halved 4” nub of ginger, halved lengthwise 5-6 pounds of good beef bones 1 pound of beef meat - cut into large slices, 6 quarts of water. 1 package of Pho Spices [1 cinnamon stick, 1 tbl coriander seeds, 1 tbl fennel seeds, 5 whole star anise, 1 cardamom pod, 6 whole cloves in mesh bag],1 tblspoon salt, 1/4 cup fish sauce, 1oz of regular sugar 2 pounds rice noodles (dried or fresh)

2 tablespoons olive oil, divided 1 onion, diced 1 pound ground beef 1 pound ground pork 1/2 cup Panko (breadcrumbs) 2 large egg yolks 1/4 teaspoon ground allspice 1/4 teaspoon ground nutmeg Salt and black pepper, to taste 1/4 cup unsalted butter 1/3 cup all-purpose flour 4 cups beef broth 3/4 cup sour cream Salt and black pepper, to taste 2 tablespoons chopped fresh parsley leaves.

1. Cut the chicken into bite size pieces.

In a bowl, add 2 tsp of light soy sauce, A pinch of salt, 1tsp of cooking wine then the cornstarch and mix.

2. Cut the cucumber and the shallots into bite size pieces.1 tsp crushed dry seedless red pepper.

3. In another bowl mix everything else, except the peanuts.

4. Place half a cup of oil in a hot wok, add dry red pepper and chile pepper, saute them for a second, and add the shallot.

5. Add the chicken and 1 tsp Chinese cooking wine, stir-fry the chicken until it’s browned.

6. Add the remaining ingredients and cucumber to the wok and heat until simmering, stir-fry this until it starts to reduce, and add the peanuts and serve.

14

1. Clean the chicken wings and cut them in half sideways. Marinate in a zip bag for 2h.

2. Soak the dried mushroom in water for 2h or until soft, clean and squeeze the water out from the mushroom, quarter it. Quarter the onion.

3. Fry the onion until half done, remove from pan.

4. Fry the chicken wings until brown and crispy.

5. Add ginger and spring onion, fry for 2 min on high fire.

6. Add half done onion, mushrooms and chicken wings, stir-fry for 2 min.

7. Add the marinate left in the zip bag and water, cook until most of the sauce is absorbed, stir frequently to avoid sticking.

Cooked beef from the broth thinly sliced 1/2 pound sirloin sliced thinly. A big handful of each: mint, cilantro, basil, 2 limes, cut into wedges, 2-3 chili peppers, 2 big handfuls of fresh bean sprouts, Hoisin sauce and Sriracha hot sauce.

1. Place ginger and onions on baking sheet and brush just with a bit of cooking oil. Broil high until ginger and onions begin to char. Turn over and continue 10-15 min.

2. Fill large pot with cool water. Boil vigorously, add the bones for 10 min. Drain, rinse the bones. Refill pot with bones and 6 qts of cool water. Bring to boil and simmer. Remove any scum on the top.

3. Add ginger, onion, spice packet, beef, sugar, fish sauce, salt and simmer uncovered 1,5h. Remove the meat. Continue simmering for 1,5h.

4. Slice the meat as thin as possible. Bring your broth back to a boil. Fill each bowl with rice noodles, broth shredded cooked beef and raw meat slices.

1. Heat 1 tablespoon olive oil. Add onion, and cook, stirring frequently, about 2-3 min.

2. Combine ground beef, ground pork, Panko, egg yolks, allspice, nutmeg and cooked onion; season with salt and pepper, to taste. Using clean hands roll the mixture into 1,5-inch meatballs.

3. Add 1 tablespoon olive oil to the skillet. Add meatballs, in batches, and cook about 4-5 min.

4. To make the gravy, melt butter and whisk in flour until lightly browned, about 1 min. 5. Whisk in beef broth and cook, until slightly thickened, about 1-2 min. Stir in sour cream; season with salt and pepper, to taste. Stir in meatballs and cook, stirring about 8-10 min

The Yuehan Gazette

When the clock struck midnight

on 11/11 last year, Weiwei Ma and her team watched a flurry of activities begin across the online stores.

The well-prepared online shoppers had, prior to midnight, filled their shopping-carts and suddenly clicked the “purchase” button. Designated as “Single’s Day” November 11th has become the largest shopping day in the world, Chinese buyers egged on by a plenitude of discounts. In 2014, Alibaba’s sites Tmall and Taobao alone sold for USD9.2 billion in those 24 h.

“We were all on the battlefield that day,” laughs Weiwei, a native of Lijiang, Yunnan Province. “Many of the customers were waiting for midnight to shop - and then BANG! the orders were pouring in…”

Weiwei and her team worked in shifts around the clock to offer immediate customer service; answering questions, managing requests and dealing with those exhibiting “hasty buyer’s remorse”.

It is one of the most exciting times of the year for the team, requiring months of preparation to help brands set up their stores and decide on details like discounts, which lines to promote and which products are needed to have on stock at the warehouses.

During the rest of the year Weiwei, spends her time helping clients develop and run their online stores, setting up Chinese websites and managing online marketing budg-

CHINA E-COMMERCE OUTLOOK

By Koba Yuichiro, GIGA marketing

China is the biggest internet coun-

try in the world with 650 million internet users. Although penetration rate has not reached 50% of the population, penetration among younger generation in big cities, where most of the international brands are targeting, is very high.

ets. Currently, Tmall is YueHan’s preferred E-commerce sales channel, generating more than 50 % of the Chinese B2C sales.

Weiwei also helps clients navigate differentiating E-commerce platforms, especially since mobile platforms like WeChat are driving mobile purchases to a significant degree.

“The advantages of mobile apps and WeChat are changing consumer behaviour, which means we have to change the way we do marketing,” says Weiwei. “They do more shopping in general and the timing of when they buy changes.

She’s finding that desktop and mobile marketing budgets are becoming more and more separated, as are the strategies she uses to make sure YueHan clients are reaching their target market.

Social media pages and attractive content are vital for generating fans and followers, and content needs to be updated constantly.

Meet Weiwei Ma - Onl in e m a n ag e r “ I t ’s a part of ou r daily work

Despite rigorous demands required of her job, Weiwei relishes these changes for making her job exciting and varied. “Plus, I actually feel like my work life is much easier now,” she laughs again. “I have an app on my mobile that monitors my online stores 24 hours, which means I can be doing my job, even when I’m not in the office.”

#2 JD.COM IS CATCHING UP

More than half of 650 million internet users in China shop online and Taobao/Tmall is their first choice of where to buy. Taobao/ Tmall has more than 50% market share in online shopping in China.

Their famous Double 11 (November 11th) sale alone sold 9.2 billion USD in just one day. Because of its high market share, Taobao/Tmall is the first choice when international brands open online store in China.

Taobao Express is the Taobao/ Tmall equivalent of Google AdWords and

the main traffic acquisition tool you work with. Taobao Express is especially important when your sales volume is still small since sale volume is a big factor for organic search result ranking.

One of the biggest changes we saw in 2014 was the shift to mobile devices. In many Taobao/Tmall stores, more than half of access came from mobile devices and their conversion rates tended to be higher than PC. Although Taobao/Tmall mobile APP generates mobile pages automati-

to pr ese n t mark e t in g ideas”

As many other online marketplaces JD.com started with home electronics but a few years ago they transferred to a multi brand & multi category mall including shop-in-shop infrastructure. JD.com is with its 20% market share catching up the giant Tmall (50%). One of the major advantages with JD is their connection with mobile messaging platform WeChat and its 600 million potential customers. More and more brands are today considering parallel stores on Tmall and JD.com cally, page layouts and elements are different. Since more and more users will be using mobile devices for shopping this year. It will be very important to optimize store page content for mobile devices.

WeChat, the most popular mobile social media in China opened an online shopping plat form, WeChat Store, last year with their own payment system. It’s getting more popular among young WeChat users and becoming a new force in mobile E-commerce market.

2015 will be the year of mobile E-commerce, think mobile first!

“All B2C orders before 3pm

The return rate is lower

“It takes normally 3 months

“By the end of 2015 we plan

are sent the same day.”

in China than in Europe”

to open a store on Tmall”

to have 5-6 stores on Tmall”

Winnie Xu, Supply Chain

Aurore Demurger, Controller

Weiwei Ma, Online manager

Johan Aledal, Optimist

2015

15

This is TMALL

How we set-up a Tmall store :

9 out of 10 orders pass our customer service

1. Store application process submitting trademark, legal, import and product documents.

The #1 online marketplace in China.

Tmall is Asia’s leading retail business-toconsumer platform owned by Internet giant Alibaba that also is controlling Taobao (C2C*) and Alibaba (B2B).

Tmall provides the infrastructure Operating a Tmall store is similar to operating your own B2C website. Except to some few store design limitations and some logistics rules such as 72h shipping and 7 days return requirements, the commercial and operational

3. Store design in Photoshop. set-up are very much up to the merchant to decide. Tmall provides the infrastructure to host a storefront and the attractive access to millions of potential customers. Stores on Tmall requires a Chinese legal entity, local warehouse and a customer service to serve all incoming questions Monday to Sunday usually from 9AM-11PM. Tmall is hosting stores for +70 000 domestic and international brands and Tmall (and Taobao) has become the natural destination for both product search and shopping. Statistics shows that Chinese Internet us-

Tmall vs Tmall Global Tmall Global is a rather new concept enabling brands without Chinese legal entity nor local Chinese inventory selling to Chinese consumers. Some of the requirements for merchants are to provide a China-based return arrangement and a Chinese-language based customer service.

ers prefer to do product search

“YueHan believes Tmall Global can be an option for brands that want to “test China” during a limited time period, but to be profitable we believe the local Tmall solution is the most sustainable set-up, says Partner

from 9am to 11pm. All

on Tmall/Taobao rather than

Johan Aledal”.

year excluding Chinese

search engines like Baidu and

FACTS ABOUT THE CUSTOMER SERVICE TEAM • Open 7 days a week

New Year.

ously a positive factor for Tmall’s traffic and Tmall is today pro-

• 9 out of 10 orders

viding a full range of marketing tools, similar to Google AdWords and keyword

• Is a part of the sales

marketing, for merchant to

team and staff have

improve their search listing and

sales bonus.

Many international brands are

is done together with

today choosing Tmall as their

the client.

Chinese online flagship store location while their brand.cn-website in some cases

400+ customers a days

are more focusing on communi-

chatting with us.

cating about brand, history and

• Working with Tmall, JD.com and WeChat

5. Warehouse, ERP and distribution preparations.

6. Marketing and store launch preparation and planning.

7. Product training for customer service.

8. Launch!

Friends of us run this superb Italian restaurant on 98 Yanping Lu

traffic.

• The product training

• In average we have

4. Implementation of store and product pages.

Google. This behaviour is obvi-

• 2 shifts. pass the C/S team.

16

2. Selection of store template and discuss design requirements with client.

product detail information.

Tell them you are a friend of YueHan and you will get an extra treat...

Tel: 5175 9818 The Yuehan Gazette

It takes two for a tango The foundation of good business always depends on with

whom you do it with as much as how you do it.

In business there are a lot of practicalities like agreements, communication, information and SOP’s etc. but it is also very much about trust, confidence, openness and a give and take attitude. Sharing the same agenda, clients should feel well taken care of, good service and value for their money.

Our “New Model” is built on that philosophy.

Our basic criteria when we enter into a business relation for the Operator are:

• • • • •

2015

A good brand with quality products. Preferably with a story to tell.

The products should have potential to add something to the market.

An ambition of stable and long-term collaboration based on a healthy business mind-set.

An outspoken interest and willingness to add resources into the project.

A solid understanding of the need of information and communication from both sides.

17

Sales, IT, supply chain and controlling – the operations team all sit together

Björn Engström: BABYBJÖRN BOTH OFFLINE AND ONLINE IN CHINA

The BabyBjörn has been a trusted brand for parents all over the world for over 50 years. When we were looking for a new solution for sales of our products in the Chinese market it was important for us to find a dynamic partner that not only could support both online and offline sales channels, but also that would allow us to be directly involved in key business decisions and maintain our strong brand integrity.

The YueHan Trading full-service platform has proved to be what we were looking for and we are now pleased to have worked together with the YueHan-team since 2012.

It has allowed us to quickly establish a market presence and to build our own team dedicated to the sales and marketing of BabyBjörn’s products.

We have entered both physical as

well as online sales channels in a short time.

In 2014 we launched our own BabyBjörn store on Tmall in close cooperation with the YueHan-team.

“…..allow us to be directly involved in key business decisions and maintain our strong brand integrity”.

With their support, entrepreneurial can-do-spirit, and high level of service we have been able to fully focus on our consumers and customers in China and developing our business in a rapidly changing market.

In picture: Björn and Erik Engström

Why product testing prior to import?

By Paolo Iavagnilio, Eurofins Shanghai The fact that a product has an outstanding safety performance (physical, chemical) in the Country of origin, doesn’t mean that it can certainly meet the conformity to the Chinese standard on textile goods ( GB 18401) or other product group standards.

This standard is a mix of three com18

ponents: EN standards (Europe), ASTM standards (North America) and some specific deviation introduced on purpose, to qualify it in distinguishing way.

In order to reduce the risk to see their goods blocked at the Chinese Customs, because not compliant (would it be because of safety

properties or even just for a label incongruity), the Manufacturers tend to get access to a pre-test activity, in order to verify, on a single sample, the suitability of the whole batch, before its departure for the destination market.

This kind of verification not only provides a verdict (fail/pass), but also helps to define which changes can meet the full compliance to the mandatory requirements; it is typically cheap and avoids any extra costs connected to the management of not conforming goods.

The Yuehan Gazette

Meet Irene Yip - Sales and marketing for client, Ewenique

As Sales Manager for Ewenique, Irene Yip use both her extensive background from launching companies around Asia and from her experience as a mother for Eweniques strategy in China.

Ewenique is an Australian baby brand, a family owned operation selling 100% Merino wool products.

“People are not familiar with merino wool and think it’s supposed to be itchy and hard to look after,” says Irene. “The first thing we have done is spend a lot of resources paving the road into the market. We have set up a WeChat account, a new Chinese website etc.”

“One of the safest products in the world for little children with sensitive skin.”

A lot of marketing focuses on building positive brand imagery and helping people connect Ewenique to themselves.

Irene is in charge of guiding this family company into the China market – overseeing everything from inventory control to marketing campaigns when launching the product market.

“People like to relate to the product, so we’re helping Ewenique really understand the local mind-set,” In addition to building brand awareness, Irene is also

Developing talents a key to success for doing business in China

By Tero Kosonen, CEO of MPS China Talent retention is one of the big-

Top management together with hu-

gest challenges that businesses

man resource department just need

face in China’s fast-developing and

to understand to offer tailored solu-

dynamic market. Companies are

tions instead of the easier, one-size-

spending plenty of time and money

fits-all courses.

on employee training but much of

A clear career plan with sufficient in-

this is done in dull sessions of listen-

vestment in individual development

ing to expert lectures, taking notes

will motivate employees and help

and then forgetting about what was

companies to retain the best people.

learned as soon as busy schedules

Only by developing a committed and

and daily tasks take over.

skillful local team, a foreign company

A far more efficient way is to iden-

is in a position to succeed in China in

tify the high potential talents within

the long term.

the organisation, and provide them individual coaching and mentoring programs to develop their leadership

100% Wool made in Australia

creating Ia training manual for the shops that might carry Ewenique products in the future.

“We’ll do in-shop training for all sales staff so they’ll really know our product; why it’s better than others and why what you’re paying is worth the price,” says Irene.

“As a mom, I know you always need to ask your friends for advice and the most powerful testimonials for a brand spread through word of mouth. What I say and believe in actually affects people in their patterns and shopping, so I hope to use my own influence to help Ewenique – a brand I really believe in.”

WE ARE LOOKING FOR MORE TALENTS Our team is constantly growing and we therefore kindly ask you to contact us if you have an interest in being a part of doing what we describe in this magazine.

Our philosophy and strategy is that our talents should grow with the business and therefore we need to secure the inflow of new talents. Do you have experience in retail- or Ecommerce business, supply chain, sales of consumer proucts or you are just a very suitable person for us?

Please feel welcome to contact us…

skills.

In today’s increasingly competitive business environment, leadership is truly needed at all levels of the organization. Investing in people will yield the best results.

2015

Interested to join the team?

Contact Johan & Johan on hr@yuehantrading.com 19

MULTI CHANNEL WAREHOUSE

WELCOME TO TOMORROW LAND...

An on-going logistics project

Warehousing and logistics operations are very manual in China today.

The demand from the market though is getting tougher and tougher with a constant cost pressure. A new era is beginning for warehouse operation with better E-commerce service, shorter lead times and more flexibility.

Together with logistics provider and partner Fiege we have started to take the concept of retail and E-commerce warehouse logistics to a new level.

We are now together with CEO of FIEGE in China, Mr Hannes Streck, and his team creating the best multi channel operation China. No more no less…

HANNES STRECK, CEO OF FIEGE FAR EAST What is your personal and business background?

I studied International Management in Paris, Oxford and Berlin and joined Fiege after a short excursion into Strategy Consulting. Back in 2005, during a hiking trip to Tibet, I set the fundament for my passion for Asia and China in particular. Since March 2012 I am based in Shanghai.

Tell us a little about your company and their activities in China.

FIEGE Far East is operating in China since 1981. We provide freight forwarding and logistics services.

As the pioneer of contract logistics, FIEGE establishes holistic supply chain solutions, customised to specific market needs of our customers.

The logistics performance of many companies in China is suboptimal so we aim to be a strategic partner to optimise processes and improve our 20

customers’ competitiveness. Flexibility, costs and time-to-market are the crucial leverages. Our goal is to be a leading logistics provider for both offline and online logistics services.

As a subsidiary of the family-owned Fiege Group, we fuel our expansion in China with technology and know-how transfer from our central engineering team and experience – specially in online logistics – mainly in Europe.

“The demand in China for genuine, quality products from reliable brands will further soar. We witness a constantly growing sophistication of shopping behaviour and brand awareness. This offers a globally unmatched opportunity for Western brands to develop their sales in China, especially via E-commerce to an online community of meanwhile more than 600 million internet users” says Hannes Streck and YueHan cannot agree more.

YueHan and Fiege are together setting up a state-of-the-art operation including both the retail and Ecommerce operation from the same inventory. This project is planned to be introduced during 1st half year 2015.

With 60-70% of online sales order placed via mobile platforms the expectations from consumers is fast deliveries. Modern and efficient logistics operation requires smart processes and an operation supported by an advanced WMS* and suitable equipment to meet customers’ expectations. Our project includes all this and we are cutting time and cost this way.

One challenge is to combine the technique for serving both retail and E-commerce from the same inventory. Another challenge is how to speed up the information flow including feedback to consumers.

“We anticipate that we soon will be shipping also during weekends” With help from FIEGE HQ expertise we pick the best practise and combine it with our own E-commerce and logistics knowledge and adjust to Chinese environment.

“Warehousing is a critical element of any retailer’s supply chain strategy. Specifically, today’s cost efficient business strategies highlight the importance of warehouse efficiency for manufacturers. Furthermore, as consumers demand greater product availability and short delivery times, businesses must make their supply chains more responsive while limiting new capital outlays.

It is task of balancing costs, reach and responsiveness.

I enjoy the project a lot and it’s great fun to start with an empty paper and create the future. The result will have a big impact both for us and our clients” says Johan W..

Below picture is from Fiege’s operation in Moenchengladbach, Germany.

What’s Fiege’s role in this project?

The multi-channel approach plays a major role in this context. In the partnership with YueHan Trading, we provide together a holistic, yet localized service portfolio from A to Z for foreign companies who wants to sell in China. Whilst YueHan is focusing on the sales and other fulfillment matters, we add our know-how in operational execution of customs clearance, logistics management and warehousing. That brings us in the position that we can jointly offer our clients to enter the Chinese market fast, with flexibility at a reasonable cost.

The Yuehan Gazette

MEET WINNIE XU - SUPPLY CHAIN OPERATIONS MANAGER

As Supply Chain Operations Manager, Winnie Xu deals with customs matters, imports and exports – not a small task when clients are working with China for the first time or even when they’ve been in China for years. With more than a decade of logistics experience under her belt, Winnie is the go-to woman when dealing with port officials, and there is always a customs or CIQ (China Inspection & Quarantine) matter she is working to resolve.

“Basically my job is to help our clients to get goods in and out and to figure out issues and offer them the best solution,” says Winnie. “From my experience there is a big need of guidance for our clients about Chinese imports and exports, and the laws can seem very complex sometimes.”

“I work with the clients to make sure they understand all of these issues, so their products can come in as smoothly as possible,” says Winnie. “I really enjoy this job because it’s like a fascinating puzzle, and finding swift, speedy solutions is satisfying.”

Winnie also arrange value-added services when needed, prepare inbound and outbound order forms, purchase and sales order, as well as retail and E-commerce scheduling and shipping solutions.

“I was at a big global company before, but I took this job with YueHan because the two Johan’s showed a lot of ambition, ability and professional expertise,” she says. YueHan is much more like a local company with foreign characteristics – so we can use our Chinese perspective to solve the problems, but also offer the best of Western management…”

Ask us about the AirBridge

EUROFINS - new partner for testing and support

The Eurofins Group provides testing, certification, and consulting on the quality and safety of products to manufacturers, distributors and retailers.

Their expertise encompasses a multitude of national and international specifications and regulations. They apply the highest technical standard to ensure impartial testing and independent judgement. In addition, Eurofins is also able to facilitate and guide us to demonstrate compliance with legal requirements.

Eurofins covers all the product groups of our needs – like toys and other baby products, children’s products, clothes and accessories and the breathing masks. We are happy to start collaborating for tests and consulting so we can be quicker and more precise in our comprehensive work with product validation.

With over 16,000 staff in more than 200 laboratories across 36 countries, we are well served for testing and Eurofins in China are accredited by several authorities to perform testing in China. Read more on page 18.

2015

21

FROM MADE IN CHINA T O C R E AT E D I N CHINA Global patent filings extended a run of strong annual increases in 2013, underpinned by double-digit growth in China where about a third of the world’s 2.6 million patent applications were filed, followed by US and Japan.

Trademark applications rose to nearly 5 million, also driven by strong demand in China. Across the world, IP filing activity saw growth of 9% for patents, 6.4% for trademarks. Reflecting growth rates of gross domestic product in many regions, IP filing increases are robust in China and the US, while declining in Europe and Japan.

“Global intellectual property filing trends mirror the broader economic picture” (WIPO Director General Francis Gurry) Patents In total, innovators filed some 2.57 million (+9%) patent applications worldwide in 2013. China, 32.1% of world total, and the US, 22.3%, received more than half of global filings, while the European Patent Office saw its share of the world total fall to 5.8%.

The top three patent offices in 2013 were China, with 825.136 filings, followed by the US (571.612) and Japan (328.436). The gap between China and the other offices has widened considerably since 2011, when China’s State Intellectual Property Office became the world’s top office in terms of patent filings received. Among the large middle-income countries, India (-2.1%) and South Africa (-2%) saw declines in filings while Brazil (+1.5%) and Malaysia (+3.8) recorded growth in filings.

Trademarks Since 1995, trademark applications have more than doubled. Also, for the first time, the total number of classes specified in applications surpassed 7 million. China (1.88 million class counts) saw, by far, the highest trademarking activity, followed by the US and EU. Trademark filing activity in China has grown from nearly twice that of the US in 2004 to around four times in 2013.

Over the last decade, trademarks relating to the service class that is associated with advertising, business management and administration, have continued to be the most sought after. They are followed by those related to the goods class that covers clothing and the one relating to scientific, photographic, measuring instruments, recording equipment, computers and software.

Source (shortened version): Geneva, December 16, 2014, PR/2014/771 www.wipo.int World Intellectual Property Indicators

Soon the world is going to start copy Chinese products and not vice versa.

22

The Yuehan Gazette

A PRODUCTION OFFICE? THE ENABLER Mentioned before - you need to be local. The Enabler service is a complete office solution for companies who wants to be locally present but have no entity in China. Get all the support you need and focus on your own business.

The office is full of skillful people within different areas and this together with the infrastructure for HR matters, postal and parcel service, meeting room, IT, payment of salaries and taxes etc. – which makes the Enabler package an efficient, low risk and low cost solution.

When visitors arrive we offer pick up at the airport, a driver with car for factory visits, discount on a hotel nearby the office, translation services, help with visa matters etc.

One-person-clients benefit from having “colleagues” in the office available for a small advice, a lunch or just a chat.

Present clients use this service for a production office for sourcing and local production or a sales representative office and customer support.

THE WEEKLY FIKA* Fika is a Swedish word or expression for a small coffee break preferably together with colleagues and a cake. Every Friday the whole office gathers together for an appreciated fika before the weekend starts.

BUSINESS AREAS Our two business areas are - the Enabler and the Sales and Fulfillment service under the name of the Operator.

Enabler client Suzan Ljungemo, Marketing manager at Swedish BergkvistInsjön says: “We chose YueHan as their office provides my colleagues a nice open space and inspiring and creative environment with the integration of the different companies and branches. Their executives have a long experience from China and the everyday service and support provided to us is excellent.”

2015

23

O nline market S in C hina and V ietnam are exploding - C h i n a O n l i n e R e ta i l M a r k e t G r o w s 3 T i m e s F a s t e r T h a n R e ta i l M a r k e t

China’s online retail market keeps growing with an increase of 25% Yto-Y*, estimated by Bain & Company.

And, the growth rate of China online B2C retail market is 3 times higher than overall China retail market.

By 2018, half of the revenue of China online retail market is expected to come from tier-3 & lower cities.

• There were total 680 million internet users in China, per end of June 2014 • 10.000 packages from Taobao being shipped to Taiwan every day • 60-80% of all orders are placed on mobile devices.

• China online sales of mother and baby products will reach 300 billion RMB in 2018.

24

• Sales during 11/11 from 00:00 – 00:20 exceeded USD 1 billion, whole day USD 9 billion.

China is since a couple of years the biggest E-commerce nation in the world. Other countries in South-East Asia have in general, in comparison with traditional retail, also developed a successful E- commerce sector.

Vietnam in particular who joined the WTO* rather late in 2007 has attracted a number of overseas venture capitalist focusing on E-commerce including giant Rocket Internet with its flagship market place Lazada.vn.

Many new brands and online players are today entering and collecting knowledge by setting up an online store on these emerging markets.

CHINA

Internet penetration 680 million % of population 48%

2014 B2C online sales (USD)

275 billion

A big difference between Asian markets and other parts of the world is that it’s a few huge players that dominate the market rather than companies’ single brand online stores.

The top two marketplaces in China covers more than 80% of the market.

This results in e.g. complete other marketing strategies and -methods.

VIETNAM

SWEDEN

41 million 44%

8,9 million 93%

2,2 billion

5,2 billion

Source: ChinaInternetWatch.com (dec 2014) and http://www.internetlivestats.com com/, Dezan Shira & Associates, Swedish Digital Commerce (e-barometern), http://www. statista.com

The Yuehan Gazette

FIVE QUESTIONS TO JOHAN & JOHAN ON IT Q: Who are the stakeholders of data/-information?

A: Oh, there are many. Our own operation, the warehouse, clients, customers, finance, customs broker, tax bureau, market places and online stores.

Q: Tell us about your information strategy?

A: Transparency with clients is essential. We also want to reduce manual input and the use of Excel and connect both backward and forward along the supply chain. Keywords are openness, sharing and speed. A key success factor for us.

Info rm ation f low

Q: Why Ufida as ERP? A: It is one of the bigger systems in China and it offers direct integration between the finance module and Tax Bureau and between supply chain and finance. Inventory is under perfect control.

Q: Challenges?

A: Yes… :) Q: High ambitions – when will you have connected all stakeholders and fulfilled the strategy?

A: We have a step-by-step approach and may not ever be finished. We are already quite far but give us a year or two – then we will be very far.

- Co n n ec ting stake h old e rs

ERP system Ufida / Qlik Sense

Warehouse WMS

Podio

Integration

Due to China tax office regultions only a limited number of ERP* systems are allowed to be used for tax declaration purpose, Ufida, in Chinese “yonyou”, is one of them.

The warehouse management system (WMS) in use is based on modular structure and covers the full spectrum of modern WMS setups. It can be used across various industries and is designed both for simple and more demanding requirements.

The WMS receives, from ERP, several times daily sales order information for picking, packing and distribution. The efficiency of all processes is based on WMS* intelligence. During 2015 we will start paperless operation in Shanghai warehouse using RF* devices.

The inventory in WMS *is daily aligned with ERP* inventory.

YueHan has been using the online platform Podio since 2012 for collaborations, sharing content and to manage projects. You can isolate your work in “workspaces” and YueHan runs a number of internal ones such as our CRM* and Intranet. We also invite our clients’ contact persons to client unique workspaces for various project set-ups and for running operation. This kind of tool fits perfect with our IT-ambition with data transparency and sharing.

To be efficient, IT systems must be connected to each other between all stakeholders like clients, supply chain, finance, customers, online stores, warehouse, tax bureau, CRM* etc. – all use and need basically the same data. Step by step we integrate these systems to reduce mistakes, save time, work and speed up processes.

This is a focus area for us during 2015.

Ufida is YueHan’s “heart” where all supply chain and financial transactions are managed and where each client has it’s own isolated space.

To easier extract and analyze data from Ufida, YueHan will during 2015 implement and connect a Business Intelligence system called Qlik Sense with Ufida. This will speed up our already comprehensive client reporting and maybe also help us to produce a bit more sexy statistics.

CLIENT QUOTE: “It is always nice to come to YueHan knowing that going to our Shanghai Office is like coming home.

The warm atmosphere, the great mix of people, the “Fika*” on Fridays and the pulse in the area gives me a nice energy boost. We are representing several Swedish sawmills and for our lumber export to China it is important to have a good base for our Chinese colleagues. YueHan is that good base. Me and my other Swedish colleagues drop in whenever we are in Shanghai and use a desk for a week or two. The possibility to sit next to my Chinese colleagues is worth a lot for our work and business.”

Lars Ljungkvist, Bergkvist-Växsjö AB 2015

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HOW IT ALL BEGAN AND WHY WE NOW NEED MORE JOANNAS, SELINAS, W I N N I E S , B R U C E S A N D E V E LY N S …

Johan & Johan met in Shanghai and realized the potential in the combination of their skills. During the establishment of the company, it was obvious that there was a need for a new model of doing business with China – an update of the distributor model.

rations were not working out in the way brand owners wanted.

We found a basic and common problem for these foreign companies.

Brand owners do not want to lose control of their brand and the traditional distributor or agent solution was out-dated.

We noticed that the world is coming to China, to sell their products on the booming market. The economies in the Western world are slow and the business seeks new markets.

We also noticed that several collabo-

We also understood that the online business in China only had started and that the map of E-commerce is very different from markets in US or Europe.

MEET AURORE DEMURGER - BUSINESS CONTROLLER

Every Friday at 4pm, the entire YueHan office stops what they’re doing and gathers for fika – a Swedish tradition that roughly translates to “coffee break.” It’s a good time when everyone has the chance to put down their

MEET SELINA HUI - WORKING AT CUSTOMER SERVICE To answer people’s questions all day, one must have a deep well of patience, extensive product knowledge and the ability to gently push shoppers towards a decision.

This is the domain of Selina Hui, one of the persons that potential customers contact when they’re 26

work and spend a little time to share sweets, hot drinks and conversations with the friends in the office.

As the Business Controller, she works very closely with finance and supply chain teams, as well as many clients, to make sure there is good visibility in all of their trade processes. One of her main goals is to help clients with extensive reports on sales and inventory. With two warehouses in Beijing and Shanghai, Aurore and the rest of the team have to follow inventory for retail customers and online stores closely trying to figure out what to buy.

“Chinese consumers are notorious for their need to know every detail about a product before they buy it and their demand for guidance” This comes from an increasing demand, and offer, of products on the market, plus a general concern for safety and price sensitivity – customers must see the value in what they’re purchasing.

Selina spends her shifts in constant dialog with customers answering their questions, discussing everything from price points to whether or not a particular piece of clothing feels “thick and fluffy.”

YueHan was set up February 2010 to become a better and modern bridge between foreign brand owners and the market in China.

Brick for brick the solution for the 21st century has been built and we can offer this bridge. It is a combination of a new business model, street-smart solutions, a lot of work to understand the business rules and teamwork of good employees.

Thanks to a continuous growth we need our talents to take on more and more responsibility and we also add so they can assure a proper controlling. Needless to say, she has many balls in the air.

Aurore, originally from Burgundy, France, is officially a China veteran. Touching down in China in 2002 as a student, she quickly fell in love with the country and has been here ever since.

“My job is about more than just bookkeeping and numbers, it’s about really utilizing the information you get from the system and translate that into useful business data.”

new services to the “smorgasbord”.

As our staff is offered new opportunities we have a need of an inflow of new talents.

We love to recruit internally from the existing team and to put it very simple: We need more skilful people who are willing to work hard, take responsibility and are self going and proactive persons.

Read the articles and interviews here made with our staff. Get inspired and if you want to grow with us - please drop a mail.

“The controlling part of the job means I extract the sales, the inventory and the costs, Every month I can explain exactly how the sales is developing in detailed format – from online and B2B figures to how much is spent on marketing etc. It’s interesting to pull out all of these figures, and really important for the YueHan business model and ambition to serve clients.

“Customers are constantly comparing one item to another, one brand to another, and they are never sure which is best for them,” says Selina with a laugh.

Selina has comprehensive experience with customer service, previously acting as a representative for major make up brands, which also required detailed customer service to match customers to products. She switched to YueHan after she got married because she felt she could relate more to the products she was selling, and the clients she was representing.

make it into the Chinese online market. I see myself as a spokesperson and a guide to help both clients and consumers.

“Without the Customer Service, these brands wouldn’t be able to The Yuehan Gazette

IN T ERVI EW J OHA N & JO H A N - Co n tin ued Continuation from page 7; Aledal: We do not do everything ourselves even if we prefer to be a “do-it-in-house-company” to secure quality and control. Still the strategy is to be a one-stop-shop for our clients meaning we take responsibility for all processes regardless if done by a partner or us. A fun part of doing our kind of business in China is the speed of development and the “just do it-mentality”. Consumers have a very strong position with their buying power resulting in an atmosphere where both our clients and we have to be on the toes everyday.

Our business model is normally based on the sales so YueHan gets paid when products are sold. This is attractive to clients and creates a “sitting in the same boat” situation.

large extent in the hands of the employees. We are still a young company (five years) and every day we try hard to encourage the staff to take responsibility, learn more and understand the core values of our company and the clients. So one outspoken strategy is to further develop our colleagues, support internal recruitment and build selfconfidence.

Tell us a little about your business strategy and philosophy

Wikander: We are working in a very international and sometimes “special” environment so another important strategy is to transfer knowledge and experiences about the business here back to clients.

Doing business on the other side of the world but still being in commercial control requires good tools for communicating. We believe our reporting about sales, inventory and customer feedback is essential for the success.

Aledal: We want to deliver best possible service and that is to a

Aledal: We are driven by the sales and share the same agenda which

makes communication smooth and a natural part of daily work. The heart of the business is our mutual understanding and the strive to improve products and other commercial matters. We believe that the details are the key and almost nothing is too small to discuss or make better.

Wikander: When the business model is created on a foundation that is transparent, understandable and of benefit for both YueHan and its clients, we are sure that we all make good business.

What’s the 5-year plan of the company?

Wikander: Step by step we are integrating the information flow between all stakeholders. Maybe maybe during 2nd half of 2015 we have an “App” for mobile devices where clients can find yesterday’s sales, how many orders were sent out, the conversion rate on Tmall.

With the ongoing warehouse project we will also be ahead of competition in terms of efficiency and service. We are soon going to send out E-commerce orders 7 days a week.

Most likely we developed a “hub in Asia concept” so we can be serving several markets from one place.

Aledal: We want to grow and believe that the economies of scale are a good opportunity for us.

We plan to expand to other markets in Asia. Vietnam is the 3rd market for us and in five years I hope we are in Indonesia, Philippines, Korea, Japan and… Starting business in Vietnam will show if the scalability of YueHan is as good as we think.

I also think we have further developed our E-commerce team to offer even more additional services. In five years we will do everything inhouse.

Both with a humble smile: We want to be a 100 million turn over company before 10th anniversary.

DICTIONARY; ERP; Enterprise Resource Planning.

SKU; Stock Keeping Unit.

WMS; Warehouse Management System KPI; Key Performance Indicator.

Fapiao; Local Chinese VAT invoice.

CIQ; China Inspection & Quarantine Service.

WTO; World Trade Organization.

CRM; Customer Realtion Management.

RF; Radio Frequency.

C2C; Customer to Customer.

Enabler; Business Area within YueHan, an office and administration platform.

Operator; Business Area within YueHan for the sales & fulfillment.

2015

27

1/ INFORMATION FLOW

E O UT U S

JA N U

*

We continuously improve and extend our reporting package

IN

AR

N E X T IS

Plans for 2015

for sales and inventory analysis as well as cost follow up. We have an ambition to further develop these reports, both for internal use but maybe more important, for our clients. A new Business Intelligence software will be introduced to help us to combine data from several sources and thereby be able to offer a smarter and better information flow. Step-by-step we invite our clients to our online workspaces.

2/ VIETNAM

Y 2016

During Q2 the company in HCMC will be established with staff, office, warehouse etc. The plan is to copy and paste what we do in China – in a localized way. We are quite sure that the online business will dominate.

3/ ONLINE- AND SALES TEAM We will increase our offer with new tasks such as setting up a photo studio. We will also open our first store on JD.com – the 2nd largest marketplace in China.

4/ SIMPLIFY TO FURTHER SPEED UP Processes and SOP’s are constantly evaluated and changed.

One secret behind efficiency is the continuous improvements we do in the daily work and how we communicate with stakeholders.

Further simplification is a main topic during 2015. The speed and quality of the processes between customers -> marketplaces -> operation -> warehouse -> finance -> customers -> clients is a key matter.

We are also working on a mobile app for clients to get even faster flow of information.

5/ MULTI CHANNEL OPERATION During 1st half of 2015 a new warehouse will be used as main hub for Shanghai distribution. We will take 10 steps ahead into efficient logistics using state of the art processes and equipment. Paperless picking is one example.

2015

The Yuehan Gazette