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The JOHAN & JOHAN

Gazette Shanghai 2017

Issue #3

MARKETS - Experiences from Vietnam after first yaer TECH - Sales and fulfillment daily updates

BUSINESS - Sales managers at J&J reflects

TMALL - 10.000 sales orders on 11/11

MOBILE - Communication, will emails be old school?

Established in 2010

The Business Model for the 21 st Century

PLEASURE - Swedish Fika

TO READ - Fo ur b rands presents their story

johanjohan.com


FOREWORD

Expanded edition - our biggest issue yet! It is with pleasure we write the foreword to this, our third issue of the Gazette. The Gazette has survived and has been appreciated by readers. The positive feedback has inspired us to improve and make every new issue a bit better. And yes – this edition is bigger than ever before… One year has passed since the last Gazette and we have a lot to tell - but we are more interested in looking forward than looking back. In the interview with Johan and Johan, on pages 8 and 9, you will find our thinking behind the plans for this year, including further investments and collaborations. Very exciting is that we open a new office in Hong Kong in the second quarter of 2017. The aim is to do the same as we do in Shanghai and Ho Chi Minh City, i.e. establish a lean organization for sales and marketing. Many of our brands are interested in sales also in Hong Kong. Further, we want to be more present in Europe to be closer to clients and prospects. Which has led us to formulate plans for establishing a bridgehead there. A trend in China and ASEAN countries is the growth of the middle class which is expected to continue for many years. These consumers are looking for well designed, affordable and safe, Western quality products preferably ecological - exactly what our partner brands are offering. Scandinavian design is “in”. Another trend is, of course, the growth of eCommerce, which is bigger here than in any other region in the world. More than 50% of our product sales is now online B2C The Chinese government declared in their latest five year plan that the focus is “quality of life” for families. J&J’s brands and product groups - Baby & Kids, Health & Sports and Apparel & Accessories – are spot on, so we have good faith in strong growth in the coming years.

Best regards, Johan Wikander and Johan Aledal Shanghai, January 2017

J oha n Aleda l

Jo ha n Wikand e r

Editor in chief; Johan Wikander (johan.wikander@johanjohan.com), Publisher; Johan Aledal (johan.aledal@johanjohan.com), Project manager and Creative Director; Nicklas Hultman, Photographers; Nicky Almasy, Nicklas Hultman, Sandra Björnfot and Johan Wikander. 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 not be copied without permission from YueHan.

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CO NTENT

HIGLIGHTS FROM 2016

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FAMILY IN FOCUS

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NEW CREATIVE DIRECTOR

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THE STAFF

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INTERVIEW WITH JOHAN AND JOHAN

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CLIENT P.A.P

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FIKA – GLOBAL TREND

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TRENDS IN RETAIL

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CLIENT BERGKVIST INSJÖN

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OUR TWO SALES MANAGERS 14-15 CLIENT BREAD & BOXERS

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NEW ORGANIZATION

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BOOM FOR SALES OF BABY PRODUCTS

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CLEINT AXKID

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VIETNAM 22-23 THE FUTURE SHOPPING HAS ARRIVED

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11/11 2016 ON TMALL

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WILL EMAIL DIE?

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AMAZON OMNICHANNEL

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NEWS IN BRIEF

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PLANS FOR 2017

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Gazette is a loanword from the French language. The word is a 16th-century 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.

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HIGHLIGHTS FROM 2 0 1 6 •

N  ew flagship stores on Tmall successfully opened

J OHAN & JOHAN product sales almost double in size

• S ignificant increase in prospects and collaborations • T he sales of BabyBjörn started in Vietnam both online and offline • New online B2B service introduced •

B  usiness intelligence system and mobile app for clients with daily sales and inventory data goes live

• E nhanced organizational capability with new team members prepares us for continued growth • New brand name JOHAN & JOHAN introduced • C  lient satisfaction survey showed clients want more face-to-face meetings with us at HQ spurring us to make plans for Europe

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CHINA’ S L AT EST F I V E-Y E A R P L AN P UT S FAM ILIES I N FOCU S Keywords to watch for: safety, quality, health, and environmental sustainability In August 2016, the National People’s Congress approved a new five-year plan—a blueprint outlining key social and economic developmental initiatives that China has committed to every five years since 1957. China’s 13th Five-Year Plan has several key goals: to move away from heavy industry and construction, to develop a modern information-intensive infrastructure, to bridge welfare gaps between rural and urban areas, to develop green energy technology, and to better distribute the fruits of economic growth. China plans to shift from a production-led economy to one that is more consumption oriented. The overall objective of the 13th Five-Year Plan is to build a moderately prosperous society before 2020 and the living conditions for families is very much in focus. Health, education, sustainability, quality and safety are all important keywords in bringing about a consumption-led economy.

“Quality of life for families, especially now that the one-child policy has been abandoned, is the priority. Recent food scandals should not be repeated and the awareness of parents is high” The government has pinpointed that big efforts have to be made to secure safe, high quality products within the areas of education, food, toys, infants and children’s clothing and products, as well as the car industry. The five-year plan proposes an Action Plan that will improve the health of China’s people which entails universal access to fundamental healthcare and services, promoting national fitness, and increasing - by one year – the average life expectancy.

The Plan also lays down that by the year 2020 the urbanization rate will reach 60% in terms of regular residents. Increased urbanization will bring about further changes in socio-economic development, and likewise promote consumption and investment. It is hence the largest potential driver of domestic demand and development. The Plan highlights environmental quality as a core issue, and vows to enhance protection of the ecological environment and improve the efficiency of resource exploitation. The 13th Five-Year Plan proposes many methods to curb air pollution and to reduce China's consumption of water and energy consumption, and carbon dioxide emissions. This will enhance efficient utilization of energy resources and the quality of the ecological environment as a whole, and achieve atmospheric haze control by 2020.

"The ultimate goal is to achieve more than 292 days of good air quality throughout the year." It is also worth noting that that the Five-Year Plan incorporates a stringent PM2.5 air quality index, demonstrating government confidence in its ability to combat environmental pollution. It is clear that there is a growing interest from the growing middle and upper-middle classes to have access to high quality, sustainable, safe, healthy products. These products do not have to have a famous luxury logo. Affordable premium products are in demand.

SWE D I SH DESI G N A passion for florals We are happy to introduce our new Creative Director, Nicklas Hultman to our team. Nicklas has a background from working with top clients in some of Sweden’s biggest agencies. He loves logos and graphic profiles - which comes very handy when we are working with clients that want their brand established on J&J’s markets. Nicklas is also a talented photographer. When he is not in the office you will find him working on his various art projects. You can see his stunning flower project in Gothenburg (Botanical Garden) and Beijing (ArtGardenFestival).

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INTRODUCING THE GAZETTE NEWSLETTER AND THE LIBRARY From Q1, the Gazette Newsletter will be distributed to subscribers and within J&J’s network. The world is changing so fast so we need to make more frequent updates. The newsletter will obviously contain news but also links to interesting articles, client case studies, etc. It will be also be available online at johanjohan.com/gazette In line with our ambition to be informative and to provide information to our network about the latest from the region and business environment where J&J is active - we will have a “Library” on our website. There will be links to the latest research surveys, reports, articles, findings, studies, thoughts, forecasts. You will find interesting reading and a source of selected information on johanjohan.com/gazette

BETTY SIU; INTERN TO BECOME OUR CONTENT AND MARKETING SPECIALIST Betty’s heritage lies in southern China, Guangdong province and Hong Kong. Her parents moved to Sweden in 1978 and settled down in Eskilstuna where she was born. Betty is fluent in Swedish, English, Cantonese and Mandarin. She is midway through her education at Fudan University in Shanghai, one of China’s top schools, where she is majoring in advertising at the School of Journalism. When Betty is not studying, she works for J&J. The goal is she will do so until graduation and after…. During her internship, she will learn everything about our business to be a future resource for the company. The combo of being fluent in English, Chinese and Swedish, a good education and interning with us is perfect, and we are happy to welcome Betty on board.

YANG YANG OUR COVER STAR Our photographer Nicky Almasy had a behind-the-scenes day at the Caree Kids’ photography Studio.
“Yang Yang likes being photographed,” her mum says. “She’s a natural. Everyone kept telling me how pretty she is, so coming here seemed the obvious thing to do. She loves dressing up in cute dresses and gowns. She feels like a little princess. And she is.” “This is mostly about her having fun,” her mum continues. “Whether she’ll continue or not in the future depends on her studies”.

A T IP FO R S HANGHAI V I S I TO R S C U T T IN G E D GE A RT S CE N E If you are in Shanghai between November and March, we strongly recommend a visit to The Shanghai Biennale at the Power Station Of Art. This year it was, once again, very impressive. Shanghai is a commercial and cultural hub. All corners of the world meet here. Business are ongoing 24/7 and art from (almost) all countries are on display here. Every year there are several big art happenings that occupy the many art venues in Shanghai - The Shanghai Biennale, Shanghai Art Fair, West Bund Art + Design Fair, Film Festivals… and much more. We like to see as much art as we can – it is nice to step out of your comfort zone and widen your perspective.

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TH E PEOPL E BE H IN D TH E SC ENE

Emily Chen

Phil Wu

Maggie Luo

Supply Chain Operator Assistant

Retail Sales Manager

Customer Service Operator

Coco Zhu

Ating Zhou

Crystal Duan

Sandra Bjรถrnfot

Rosa Jiang

Juan Xu

Office Assistant

Social Media Operator

Online Operation Specialist

Intern, Market Research

Customer Service Operator

Store Promotor

Bruce He

Johan Aledal

Mimmi Engstrรถm

Amy Zhou

Sharon Zhu

Huyen Tran

IT Manager

Partner

Intern, Market Research

Web Design Assistant

Web Design Manager

Sales & Marketing Director (Vietnam)

Selina Hui

Hui Cao

Andreas Andersson

Betty Siu

Johan Wikander

Chilli Zhou

Customer Service Operator

Finance Manager

Fulfillment Manager

Intern, Online Content

Partner

Brand Manager

Sherry Xie

Nicklas Hultman

Tra Nguyen

Winnie Xu

Lap Duong

Nate Hao

Online Sales Manager

Creative Director

Market Development Manager (Vietnam)

Supply Chain Operator Manager

Marketing Manager (Vietnam)

Accountant

2016

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J OHAN & JOH A N : AN INSPIRED IDEA By Shannon Ellis

It all started with a fortuitous meeting at the Swedish Trade Council in Shanghai in 2009 when two Johans – and future business partners - realized they had a lot more in common than the same first name. After swapping stories from their time in China, they stumbled upon a crucial aha-moment. “We had it in the back of our minds - an inspired early idea - to combine our complementary expertise in frontend sales and backend fulfilment to help companies come to China to do business,” said Johan W, founding partner at JOHAN & JOHAN. “A brand has to have a base here to be truly successful. And we could see clearly that the traditional distributor model is out of date and no longer cuts it for brands when they have something unique to offer.” From the outset, J&J was established to meet the needs of premium brand owners on the Asian markets. They do this in two key ways. First, J&J acts as a gatekeeper for the brand. They protect its image and the brand DNA, with a keen understanding of the brand’s global strategy. Unlike traditional distributors, J&J is deeply committed to transparency and cooperation with the brand owner. Real time data is shared so clients retain a vital link to the market and stay on top of trends. Secondly, J&J is a platform that opens doors. Brand’s need an ally on the ground to access and, ultimately, maximize the dizzying array of online and offline sales channels in the market. With an experienced team of local staff with deep market insights and relationships, brand owners can be confident that their products will reach target consumers in the right sales environment at the right price.

2016: THE YEAR AN INSPIRED IDEA TAKES FLIGHT Flash forward to 2016, and the two Johans have plenty to be pleased about. Their early inspiration followed by several years of hard work has begun to bear fruit. They have a business model that works and a portfolio of brands that Chinese consumers love. Revenues in 2016 increased by 55% from the year prior. After diligently laying the groundwork, they are on track to reach their target of 100 million yuan (€13m) in revenues by 2018. The theme of the past year has been expansion and rapid growth. Both Johans smile and look confident saying “…we feel we have the ability and strength now to move to the next level. Let us give you a few examples:”

1. Riding the mobile and eCommerce boom J&J take an Omnichannel approach that combines traditional retail and eCommerce. A surge of growth has come from smartphone users buying online for the first time. In China, there are 800 million people that have internet access via their phone. Mobile commerce is creating another wave of exciting growth across online platforms. It takes more than just saying “Open Sesame” to worlds largest eMarket place. Alibaba is a powerful platform for online sales but getting access to the various online marketplaces is not always possible for outsiders with little knowledge of how the system works. “Tmall, in practice, has closed the application process for new brands,” said Johan A, cofounding partner at J&J, who makes regular trips to Alibaba HQ in Hangzhou. “We are able to convince them to accept our brands on Tmall. If the products fall in line with priorities of China’s 13th Five Year Plan, such as baby and kids, personal health and safety, sustainable products, etcetera, then we can make

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a stronger case. Additionally, we have a track record on Tmall for delivering strong revenues with brands we represent - which is also very important.” Leveraging the power of WeChat, the world’s leading messaging app Nothing demonstrates the force of ‘China speed’ - and the need to be located in the market - as much as the rise of WeChat in commerce. WeChat has gone from zero to 800 million users in four years. Not content to be a messaging app, WeChat has conquered e-payments (leaving ApplePay and others behind) and is moving aggressively into mobile shopping. For selected clients, Aledal and the team are working on a WeChat store and on other mobile platforms.

3. N  ew faces mean a stronger organization J&J’s organizational structure has been bolstered with four newly hired department heads taking charge of Online Sales and Retail Sales, Fulfillment and Finance. Last year’s expansion would not have been possible without the support of the four senior managers that joined us last year. They have created improvements in internal operations across the company, opened up new online and offline channels, significantly boosting sales. These new members hail from multinational firms such as Inditex, Toys R Us, E-Land and Accenture.

4. The Enabler service expands

China is a great opportunity, but there are many promising markets across the region. J&J is building a ‘spoke and hub’ model with Shanghai positioned as the headquarters for an operation that has offices throughout Asia.

Beyond directly assisting brands to sell in the China market, J&J also offer another service: The Enabler. For brands or companies that are looking to have an on-the-ground presence, The Enabler provides a co-working space that is much more than a desk. Brands can hire and monitor employees and access services such as warehousing or take advantage of J&J’s network of logistics, legal and service professionals.

Good Morning Vietnam… Last year, J&J established the Vietnam office, with BabyBjörn as first brand planning to introduce more brands in their portfolio to this exciting market. They have a lean sales and marketing team on the ground in Ho Chi Minh City supported by the Shanghai office.

For many companies, taking advantage of The Enabler is the perfect step for entering J&J’s markets. During 2017 the offer also includes help with product quality inspections and –assurance, delivery control, order monitoring etc. just like an extended arm to the buyers in Europe.

“We wanted to test if our concept is scalable, to copy and paste what we do in a street smart way using limited resources,” said Johan W. “We are using the same enterprise resource planning (ERP) system, the same logistics partner, and so on. Our success in Vietnam encourages us to continue. We know that we have this ability.”

“The feeling of solid ground under our feets, the professional team and a stabile operation surely inspires us to release the handbrake as we say in Sweden” says the optimistic and positive Johans…

2. A  sia-enabled: Vietnam now open for business

The Johans are now moving on to their next Asian market setting up a branch in Hong Kong. Same business model, same processes, same set up etc. “We know the concept is scalable now” says Johan W. J&J on Instagram johanandjohan

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p.a.p made in sweden Eight years ago in Sweden, Anna and Ulf Pyk bought a new MacBook Pro. This laid the foundation for the brand P.A.P Made in Sweden. The founders Anna and Ulf Pyk had difficulty finding a stylish laptop cover for their newly bought treasure, so they decided to make their own. Earlier that year, Ulf Pyk who is the designer at P.A.P Made in Sweden, made a book cover in leather and he used buttons and leather lace to achieve the prominent details. "We are doing the same style," said Anna and Ulf Pyk. After the laptop cover was sewn by a friend in Småland, the founders received many compliments on the unique laptop cover. It was at this point that Anna Pyk decided to bring the product to the market and see if others would have an eye for this leather accessory. Within a year, most Apple Premium Resellers as well s Sweden’s largest department store, NK, had the P.A.P laptop covers on their shelves. P.A.P can also be found in leading fashion stores in Sweden such as Grandpa and interior design boutiques. Following this early success, P.A.P Made in Sweden has added iPhone Covers, iPad Covers, wallets and bags to their collection. The brand today has over 50 different products in various colours. The product line Stationeries, is an important part of the company’s product range

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and a new line will be released for Spring 2017, in connection with Paperworld, an international trade fair for stationary, office supplies and writing instruments in Frankfurt. Besides stylish leather accessories, P.A.P is on the way to enter new markets with products such as cutlery, cups, doilies, coasters and napkin rings. Yet, this is just the first part…

P.A.P Made in Sweden stands for Premium Accessories by Pyk.

Quality materials in focus. All leathers are vegetable tanned, mainly in Italy. The leathers are imported from Switzerland as well as from the Tärnsjö Tannery, Italy. Besides leather, wool is another popular material in Europe. Much of the wool P.A.P uses is organic, originating from Italy.

Timeless Design

P.A.P products are intended for long-term use, you can use them today, as well as in 20 years. Due to the quality and timeless design, P.A.P Made in Sweden sets itself apart from the “throw-away mentality”. The P.A.P laptop case is a style icon for every generation.

Clear Design Language

When you see a P.A.P Made in Sweden product, there should be no doubt about the brand name (as long as you know what P.A.P is so to say). Adding the stylish bags and pouches together with its clear design language in the form of buttons, triangle and sometimes with lace, makes P.A.P truly unique.

Multifunction

Many products are designed to be multifunctional. For instance, the laptop covers 13" and 15" can also be used as a nifty folder to store your important documents. Another one is Majvallen iPad Mini Envelope which could be the perfect small clutch for a night out, or it can be used as an organizer for chargers and external hard drives. Our Haga Purse would be perfect for headphones or your make-up. One is only limited by one’s imagination.

Last but not least - Made in Sweden

This point lies closest to our hearts, it is amazing to be able to use our knowledge and Swedish craft history as a base to build our own production in Sweden and at the same time have full control over the whole production process. There are six people working with P.A.P today and two small factories in Småland who make most of the bags and a couple of wallet for us. P.A.P Made in Sweden has today its market in large parts of the world such as UK, USA, Canada, Australia, Korea and Europe. Thanks to Johan & Johan, P.A.P has now reached the Chinese market! P.A.P is sold in more than 300 stores at global stage and the goal for 2017 is to increase the number to 500. In order to achieve this goal, P.A.P Made in Sweden will during the year focus on making the brand more well known through different trade shows in Frankfurt, New York, Paris, Japan and Korea. A marketing campaign will also take place in line with the introduction of new products and packaging, and a change in our web-design.

Sweden is still our largest market, but we have high hopes for Asia.

It feels good that the establishment of P.A.P has got the time needed and that we progressively have grown into our roles in the brand as well as learning how to seek improvements. It may seem easy to just sit down and draw a marketing plan but having many components that should match the reality, is something that is not too straightforward. With the positive attitude we have today, P.AP Made in Sweden feel strong to continue our big adventure! By Ulf Pyk www.papsweden.se www.pellealvegetale.it

JOHAN & JOHAN GAZET TE


"FIKA " - The global concept

F I K A SWE D E N

- in Shanghai

Friday fika at the Johan & Johan office Fika [fee:kah] is considered a social institution in Sweden, it means having a break, most often a coffee break, with one's colleagues, friends, date or family. The word fika can be used as both verb and a noun. You can fika at work by taking a "coffee break", fika with someone like a "coffee date", or just drink a cup of coffee, tea or other non-alcoholic beverage. As such, the word has quite ambiguous connotations, but almost always includes something to eat, such as biscuits, cakes and even sweets, accompanied with a drink. This practice of taking a break, often with a cinnamon roll or some biscuits, cookies, or a fruit on the side, is central to Swedish life. Although the word may in itself imply "taking a break from work", this is often emphasized using the word fikapaus ("fika pause") or fikarast ("fika break"), with kaffepaus and kafferast, respectively, as near synonyms. Fika may also mean having coffee or other beverages at a café or konditori (a "patisserie-based coffeehouse"). Traditionally, fika requires sweet, baked goods, especially cinnamon rolls.

f ik a - Around the world

There is a new Queen in town and she is called Valentina. She grew up in China but lived in Sweden for many years, now she is back in Shanghai to share the Fika tradition to everyone. And she does it splendidly! Tell us about why you started FiKA SWEDEN. The thought of launching FiKA actually started when I studied in Shanghai. After living here for a while, I missed a regular Swedish fika, but there was nowhere to find it. Afterwards, I went back home to Sweden and studied professional baking and pastry-making, and with a goal to bring Swedish coffee culture to Shanghai. My sisters and I opened FiKA SWEDEN in Shanghai. How do you manage to get the “Swedish taste” in all your pastries? It has surely been a challenge to capture the authentic taste of Sweden. After a long time sourcing and tasting an ocean of different ingredients, we are finally satisfied with the flavours. We mainly use imported materials from around the world in order to guarantee the quality of our products. Another reason why FiKA SWEDEN is able to maintain the Swedish taste is because the co-owner is an educated pastry chef and baker in Sweden, therefore the product assortment can be ordered. What do Chinese costumers think of Fika? So far, Chinese customers have shown a lot of interest in the culture of FiKA. But what’s truly amazing is that there’s so many Chinese customers that have heard about FiKA – far more than expected. The majority of whom have travelled to Sweden and since coffee culture is huge in Sweden, you can’t miss the word “FiKA”. Our special pastries are also really appreciated, many say they haven’t seen or tried them before such as our Swedish Prinsesstårta, Budapesttårta and the chocolate ball (Chokladboll).

Fika Swedish Kitchen - Sidney, Australia is founded by the three friends and foodies Linda, Diana and Sophie. All three have lived in Sydney for six years. After constantly talking about the delicious food and the beautiful things they missed about Sweden, they decided it was time to combine the best things about Swedish culture with modern Aussie café culture.

FIKA - New York, USA In September of 2006, FIKA opened its doors to its very first location at Central Park South, on Manhattan's 58th street. The place was an instant success, we are not surprised. You can now FIKA at 17 places in New York.

fikaswedishkitchen.com.au

fikanyc.com

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FIKA Sweden - Shanghai, China If you visit us in Shanghai you should make some time to go to FiKA at 82 Shaanxi Nan Lu. It will probably be the best fika moment on your trip.

fikaswe.com

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G LOBAL T R ENDS I N R ETAI L

EIGHT INSIGHTS TO UNDERSTAND THE NEXT RETAIL REVOLUTION FROM PWC . It’s nothing short of a revolution, and the stakes have never been higher for retailers and consumer goods companies. From the unmistakable desire to be a member of a specialized retail community to buying more on their mobile phones, from becoming more reliant on social media to demanding a more service-focused and knowledgeable store employee, global consumers are pushing the boundaries of what shopping means.

1. To understand future global shopping behaviour, look at China. Historical data shows that what China was doing several years ago, today’s consumers across the globe are doing. 2. We may live in the age of value—but price is still king. Years of slow global economic growth have resulted in a value dynamic and affordability is important in every income bracket, in virtually every country, across every age group. 3. Store traffic doesn’t matter
as much as overall customer conversion across channels. Customers are voting with their feet as they shop more online, and for multi-channel retailers that means the need for an increasingly focused, curated and engaging brick-and-mortar store experience that creates maximum conversion—no matter what channel ultimately records the purchase. 4. Retail talent matters. Ever-more sophisticated customers want employees who can enhance the brick- and-mortar store experience: associates with the product knowledge, technology know- how and skills. 5. Mobile devices have turned the corner as purchasing tools. Mobile commerce is now on the march toward becoming the online shopping tool of choice. 6. Today’s consumers look to community. A deeper connection with retailers via customer “communities” is apparent as consumers pick up on the perks of membership. 7. Social media is the “great influencer.” Customers are relying on social media—in addition to their family’s opinions, advertising messages, and media coverage—to make product decisions and gauge brand authenticity. 8. There is room for retailers to grab the “leading innovator” mantle. While consumers see plenty that is innovative about their favourite retailer, very few retailers qualify as “leading innovators” in shoppers’ minds. Source: www.pwc.com

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bergkvist

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insjön ab

A family-owned sawmill that provides China with children’s furniture made from raw material found in the deep forests of Dalecarlia in Sweden. By Per-Ragnar Bergkvist 4:th generation and Vice President of Bergkvist-Insjön AB

History

I´m stepping inside the elevator and just before the door closes I see the sign “Welcome to JOHAN & JOHAN, 21st floor, Jiangning Rd., Shanghai”. During the few seconds it takes us to get to the 21st floor, I drift into a daydream and with a feeling of experiencing a special moment with memories that now are a part of the Bergkvist history. Unfortunately, I never got to meet my great grandfather but I’ve been told that he was a man who liked adventures and was always looking to find new and unexplored paths on his hunting and fishing trips in the Swedish forest, as well as in the sawmill business he started in 1926. I doubt that he could imagine a member of the fourth generation of the Bergkvist family in the year 2016 would take an elevator to the 21st floor, to Bergkvist-Anson’s own Shanghaioffice. To imagine that the business in China would be almost one-third of the mill in Insjön's entire production, and to be run by three powerful and super skilled ladies from Shanghai, would most likely have been impossible for him to do.

A small bump from the elevator doors opening quickly snaps me out of my reverie and I step into JOHAN & JOHAN’s office to meet our three employees, Wendy, Gillian and Lucy. I feel very proud to be a part of the fantastic journey the Company has taken and is doing in Asia, especially in China.

2016

What drives our business?

A raw material of slowly grown spruce from Dalecarlia, Sweden, that meets the requirements of customers from Japan & China in terms of quality, size, moisture content and most important of all, delivery time. It is important to understand that the average forest-owner makes one or perhaps two “clean cuts” in a forest’s lifecycle. They expect a top price for these high-quality logs planted by their grandparents 80 to 100 years ago. The challenge but also the thing that drives our business - that we so successfully done in China - is to find customers who appreciate our quality, who are willing to pay for it and increase the yield or outcome in their factory, somewhere else in the world. Due to a perfect process from us in the Sawmill in Insjön, all production is custom-made for customers in terms of measurement, quality and delivery time. What helps us drive the business is our Shanghai office. Every time I enter the office I have the same feeling, a feeling and a desire to do hard work. You can really feel it in the air, the atmosphere created at the office with different companies working in the same location on the 21st floor with different products, must be unique and will bring out creativity in the people working there. You literally feel that you are a part of something in the world that matters.

“Because what China and Shanghai has taught us, is that anything is possible” The most fascinating aspect from all of this, is how fast our own staff and customers embrace and learn our business, products and market movements. The journey that we have made in China over the past 6 years would have taken 20 years or more in Europe in terms of developing products & improving business.

Asia 67% of total production

In the early 1990s, we first understood that there was a demand in Japan for our products based upon the raw material we use. Stepping into the demanding Japanese market was a challenge so big for us that we had to change the total structure of the company. To be able to perform in a market like that you have to invest in machinery and staff education. Since 1992, the Asian market has always played a big part for us. ...

Read full story here: johanjohan.com/gazette

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LOCAL SA L ES P R OFES S I ONA L S , YO UR K EY TO LO CAL CU STO M E RS Sherry Xie (Online Manager) and Phil Wu (Retail Sales Manager) explain

China’s massive market opportunity is not so easily tapped. It takes local savvy for international brands to navigate the maze of eCommerce platforms and link them to an effective retail strategy. This year, J&J hired Sherry Xie, as B2C Online Manager, and Phil Wu, as B2B Retail Manager, two professionals with over a decade experience that are bringing fresh perspectives and deep China ties to the business.

Nothing beats local knowledge Both Sherry and Phil bring rich experience from companies such as Toys R and Guess Kids to their work for high-quality brands from northern Europe (known in Chinese as 北欧 Beiou often used to refer to highquality, simple design). But what they both say they love at J&J is the daily challenges of meeting the needs of various brands. It requires them to devise creative strategies customized for each brand and to network effectively to expand channels. For Phil, a recent partnership with a Hong Kong-owned chain in Shanghai opened new doors to Hong Kong. “If I had to approach them in Hong Kong without an introduction from Shanghai, it would be tough going,” says Phil. “Ongoing relationship-building is central to implementing a successful sales strategy.” But it also helps that there is a growing desire in China for well-designed, sustainable and affordable products that come from northern European countries. “When I approach a new offline client, they may not know J&J but if they hear we sell products from ‘Beiou’, they always want to learn more,” says Phil. “I joined J&J because I was attracted by their philosophy to bring more sustainable, premium brands to China - not more luxury goods - but high-quality brands that consumers can afford,” says Sherry. “It is great to give Chinese consumers more choice, so

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they can find what they want for their children and families.”

Closing the gap between Europe and China It requires close communication with brand owners to stay on top of their needs and importantly, to keep them abreast of fastchanging Chinese and Asian consumers. “Through weekly meetings, we provide feedback to brand owners. Often, China is a new market for them, so we are dedicated to providing visibility on what is happening here,” says Phil. This collaboration involves more than planning and follow-up, it provides transparency in sales reporting, inventory, returns and customer feedback. This level of granular data narrows the distance between the brand HQ in Europe and consumers in Asia.

Online storefronts, many roads to one destination: your brand For foreign brands new to China, being represented on Alibaba’s Tmall is priority number one. Alibaba’s business-to-consumer platform has high-end players from Maserati, to Nike, to BabyBjörn and is favourite shopping destination for China’s discerning consumers. Brands that are successful in their brand-owned websites in other markets, choose to be on Tmall in China.

When Sherry joined J&J, she saw that the potential to unleash the full power of Tmall by putting brands in more Alibaba storefronts such as Tmall Supermarket – which attracts users on a much more frequent basis. By bringing brands to more online storefronts, brands have seen their traffic and revenues rise at a minimal cost.

But it’s a two-way street: the importance of mutuality Tmall may be a winner in China’s eCommerce race, but the Alibaba juggernaut is always looking to expand their reach and looks to foreign brands for help. Brands can reap the benefits if they know how to meet Alibaba’s ambitious targets and priorities. “Tmall needs to know the brand has influence offline and that that brand will invest to attract new customers from offline to online,” says Sherry. “I help brand owners design a blueprint that Tmall likes, ensuring Tmall supports more storefronts and promotions leading to more traffic and sales.” The Baby and Kids segment is one of skyrocketing growth in China, and foreign products are particularly welcomed by Alibaba. Knowing that Swedish brand BabyBjörn would be attending Kind + Jugend in Cologne Germany, the world's leading trade fair for baby and toddler gear, Sherry encouraged BabyBjorn to invite Tmall category representatives (known as Xiao Er) to attend for the first time.

JOHAN & JOHAN GAZET TE


Phil Wu

Sherry Xie

Retail Sales Manager

Online Sales Manager

dictionary: Operator / ope • ra • tor /: 1. Actually doing something. 2. One of J&J’s business areas. 3. For companies who want to sell their products in China. 4. Offline retail and online marketplaces. 5. The brand owner is in control of the brand. 6. Now also in possible in Vietnam and Hong Kong. 6. One stop shop Sales and Fulfillment. Enabler / en • ab • ler /: 1. Making something possible. 2. An easy way to do business in China. 2. For companies without a legal entity in China. 3. Office solution all inclusive. 4. Employment and HR. 5. All the legal hassle included. 6. No investment. 7. Low cost and no risk 8. Fika every Friday is included. “In Cologne, Tmall got to know BabyBjörn well. When Singles Day rolled around in China, Tmall provided extra support such as special promotions that gave the brand store more exposure and traffic,” says Sherry. “It is very effective to help brands exchange resources. Tmall is looking for more exposure to offline resources. Inreturn, Tmall can provide online resources in-kind,” she adds.

Making global pricing a reality In China, imported goods often face steep duties. This means foreign products are either sold at a higher price in China than elsewhere, or the brand’s margins are squeezed by distributors who set low prices. These low prices are often unsustainable. In an attempt to grab market share quickly, distributors fail the brand in the long run. But today’s Chinese consumers are avid travellers, keen to discover new brands when they go abroad. When they return, they hunt for deals online. It is no longer

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viable for prices to vary wildly, to be much higher in China – or in retail. But how can brands keep prices consistent and still make healthy margins? This is where Sherry and Phil work closely together. They recognize the need for a seamless brand experience - not only between countries - but also across offline and online as well. They work together to ensure that eCommerce pricing promotions such as China’s Singles Day (11.11) are coordinated with retail as well. Moreover, as Retail Manager, Phil has many strategies for keeping the high costs of bricks-and-mortar retail to a minimum. He seeks out partners that have their own marketing and a loyal customer base to leverage their efforts such as premium multi-brand stores with social media followers. This cuts down on overhead, helping brands can keep their China prices consistent with other markets. Always top of mind is protecting the brand’s interests over the long term.

Sales / sa • les /: 1. Activity to transfer ownership of a product from one party to another. 2. Normally money is also transferred – but in the other direction. 3. Selling of products is done in China, Hong Kong and Vietnam. 4. Marketing 5. Customer Service. 6. Sales information and Statistics. 7. Sales resources. Fulfillment / ful • fill • ment /: 1. Several support functions for selling and delivering products. 2. Product marking and quality standards. 3. Customs clearance. 4. Inventory with all its logistics. 5. Order management 6. Need of ERP system and WMS system. 7. Storage per SKU 8. Pick and pack of products. 9. Domestic distribution. 10. Possible returns. 11. Invoicing and payments.


bread & boxers Swedish fashionbrand at chosen retailers

Bread & Boxers started as an extension of the mini bar, a lifesaver for light travellers, or if you will, room service at its best. Their first collection of underwear, including boxers, panties and socks, were at first only available in hotel rooms. But soon hotel guests came back with inquires on where to buy their new favourite underwear a bit closer to home. Since 2011, an extended collection of everyday basics can be found in selected stores throughout Europe, USA and Asia. Bread & Boxers want simpler, better alternatives for everyday basics. Being serious about the everyday routine, they think getting great underwear should be as simple as picking up the morning bread. Founders Alexander Palmgren and Henrik Lindahl truly believe that the things we wear every day matter more than the things we wear only once in a while.

patterns and bright colours. The products are unembellished; perfect for those who prefer to leave logos out of their look. “We like to keep a low profile and let other do the noise,” says Creative Director Henrik Lindahl. Embracing the simplicity of everyday life the packaging is inspired by the essentials that can be found in the local grocery store. Simple as that. Since 2014 Henrik Lundqvist, dynamic goalie for the New York Rangers hockey team and perennial man of style, is part of the trio behind Bread & Boxers. Hailed by Vanity Fair magazine as one of the top 5 best-dressed men and as one of the most stylish athletes by GQ magazine, Lundqvist is frequently praised for his exceptional taste in clothing, and embraces the brand’s aesthetic of classic, clean lines and Swedish styling. Lundqvist works together with founders Alexander Palmgren and Henrik Lindahl to develop the collections as well as the company itself. He also appears as the face of the brand in visual imagery and on selected packaging for the series of “Lundqvist’s Favourites.”

Bread & Boxers was created with simplicity, comfort and functionality in mind. All pieces are designed in Sweden and crafted from the best cotton fabrics for a soft touch and a great fit. Bread & Boxers aim to be experts on basics and don't do seasonal collections. Instead they put all their efforts developing and improving the timeless key styles. The brand avoids trends,

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“I’m excited to be on the creative side of fashion, where ideas and personal style come to life,” says Lundqvist. "I always wanted to be involved in building a brand, but the right opportunity hadn’t presented itself until Alexander contacted me. The line is beautiful and comfortable – essential, really -- which is what attracted me to Bread & Boxers in the first place. I wore the products and loved them. It’s

that simple. The company is now going into an even more to expansive phase and I’m thrilled to see how the products will be received in new markets such as China and Japan.” Lundqvist and CEO Alexander Palmgren are friends from Gothenburg, the second largest city in Sweden, where they grew up. Each summer, Lundqvist returns to Gothenburg for a post-season retreat; it was also the location for a recent Bread & Boxers photo shoot that shows Mr. Lundqvist in Gothenburg harbour area. “Knowing Hank for many years, I’ve been fascinated by his ability to move between different worlds, yet stay true to his values and heritage,” says Palmgren. “He’s a successful athlete, living a high life in New York, yet he still appreciates the small but pleasurable things in life. Hank represents the essence of Bread & Boxers.” Creative Director Henrik Lindahl adds, ”Lundqvist always has a positive aura that makes people feel good. Of course, his sense for fashion makes him extra relevant, but to me, his way of enjoying life is even more inspiring.” “Henrik Lundqvist’s involvement in the brand is a natural, synergistic partnership, given his Swedish heritage and incredible style,” says CEO Alexander Palmgren. “His iconic status on and off the ice will have great impact on the future of Bread & Boxers.”

JOHAN & JOHAN GAZET TE


we are all one team We do take organizational matters seriously…

Very few things in business – or maybe life – are the result of one person. J&J has from its first day consisted of a team – Johan A and Johan W – both convinced that without each other the company would not be where it is today. So – teamwork – is an important part of J&J’s DNA. Step by step, developing team spirit and a way of working together, the company is now proud of the collaborative attitude among colleagues. From a team of two people, the company grew to become a bigger team of 10 people. In 2016, we became four teams of 22 colleagues. Stronger and better than ever. It takes a while for an organization to adapt to new ways of working. Team members must learn to know each other and get to know the strategies and goals of their team. But the big trick is to combine the teams into one unit – the company - one big team striving for the same goals. Thanks to the new team leaders, the teams are more focused on their tasks but guided by the overall goals of the company. The power and energy of an organization is when the combination of individuals – each with their own experience and personal skills – come together as teams and at the end of the day as one company.

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INTRODUCING THE NEW TEAM LEADERS: Phil Wu – Retail Sales manager: Phil has worked in the apparel industry in both China and Korea. Previously, he was a brand manager in a large Korean international clothing company. Phil has the necessary insight and strategic sense to launch a diverse range of brands successfully. Andreas Andersson – Fulfillment manager: Previously, Andreas worked for Accenture and Swisslog. His areas of expertise includes supply chain, warehouse management systems, warehouse automation, intralogistics and system integration. Step by step Andreas – as the master engineer of processes – is simplifying the daily work for everybody and making flow charts almost fun…

Hui Cao – Financial manager: Hui has more than 10 years of experience in finance and controlling, especially for the retail industry (Inditex and Decathlon, etc.). She acquired an MBA in Europe that enabled her to communicate crossculturally and react to agile business quickly. She exemplifies moral integrity, responsibility, and is highly capabile of change management. Her commercial acumen makes her especially qualified for the role. Sherry Xie – Online Sales manager: Before Sherry joined J&J, she worked for Toys R Us as an eCommerce marketing manager. Sherry has more than ten years' working experience, of which three were in in a leadership role. Her good understanding of the China eCommerce market and contacts within the online space is of greatest value.

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boom for sales of baby products By Wu Yiyao in Shanghai, Shanghai Daily (edited version)

"I don't really care about the price. Quality and safety are the determining factors when I purchase products for my daughter..."

- Feng Lijing, a 32-year-old mother in Shanghai.

Demand for safe child-care products will continue to grow in China as safety awareness among young parents increases, said a report recently released in Shanghai. Total retail sales of accessories for feeding such as nursing bottles and spoons made of safe materials in China may expand to more than 5 billion Yuan ($800 million) this year, while vehicleuse child safety seats and baby monitors may see renewed demand, said the report published by GfK (Gesellschaft fĂźr Konsumforschung), a global market monitoring and research services provider. The report, which tracked consumer choices across China, found that the compound annual growth rate of products for feeding newborns and toddlers reached 24 % in the past three years, and said it will continue to rise steadily. Monthly spending on newborns and toddlers under the age of 3 including their feeding, clothing and toys across China reached some

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500 Yuan, and is on track to grow further. Average prices for such products for young children have also picked up, the report said.

the age of 4 must be seated in a safety seat when traveling by car, said Jin Lan, director of the East Region at GfK China.

"I don't really care about the price. Quality and safety are the determining factors when I purchase products for my daughter," said Feng Lijing, a 32-year-old mother in Shanghai. Her monthly spending on the 2-year-old is about 4,000 Yuan, more than half of her monthly income, she said.

The GfK report said Chinese parents favor European brands and specialty stores when choosing products for young children and mostly end up buying high-end brands.

Safety concerns should also accelerate sales of child seats in vehicles and baby monitors, which were introduced in China years ago. In Europe and the US, about 90 % of the families with young children may purchase and use child seats in their cars, while in China the figure is much lower. Policymakers have been stressing the importance of using these products, and in Shanghai, a local regulation has urged that children under

JOHAN & JOHAN GAZET TE


china’s environment Getting greener by regulation The Chinese government is taking many actions to curb emissions and improve the environment. One action has been to shut down small factories lacking clean emissions technology. Another action is making our complete office building a smoke free zone from 1st of March. Most recently, the government has focused on cardboard production facilities, and closed down a great number of locations. While this is in the best interest of the environment, it has severely constrained the supply of cardboard in the Chinese market and caused a very noticeable price increase. Our costs for cardboard boxes has increased dramatically this year. In accordance with our philosophy and collaborative spirit, J&J will absorb this cost. The positive outcome is we are able to use boxes that reduce the environmental footprint of client operations in China. That’s good news for all of us.

TALKING BUSINESS IN CHINA AT A SWEDISH CHAMBER NEAR YOU

“The Sweden-China Trade Council and the Chambers of Commerce are very suitable partners for us for networking, finding possible business opportunities and connecting to companies interested in commercial collaborations between Europe and Asia,” says Johan Wikander adding that, “we feel it's win-win to establish a liaison between us, since we can help their members with small and big matters.” J&J looks for partners that have a healthy balance between support and commercial thinking. In 2016, J&J held seminars in Malmö with the chamber of commerce for southern Sweden, in Stockholm with the Sweden-China Trade Council and Stockholm chamber, and in Hong Kong with the Swedish chamber in Hong Kong. The audiences all share in common an enthusiasm to better understand the challenges and opportunities of doing business in or with Asian countries. “The seminars are in line with our strategy to share our experience and be transparent,” says Johan Aledal. The plan is to find two other chambers to visit in 2017.

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axkid Maybe the safest car seats in the world?

Axkid is a young, modern company with substantial experience in developing and manufacturing car seats. Axkid's car seats are developed in accordance with the Scandinavian philosophy; ”Rear-facing seats are the safest” because of their ability to save children’s lives in car accidents. The benefits of rear-facing car seats are well documented and the industry shares the opinion that children should travel in a rear-facing position for as long as possible. Axkid continuously works to encourage the use of rear-facing seats and rearward facing car seats is very rapidly growing in sales in many countries all over the world. - Our vision is to create the safest car seats on the global market. As the cars of today become ever safer, there are also increasing demands for continuous development of child car seats. This is where our passion lies. We want to be the first-choice supplier of child car seats, in Sweden, Europe and the world. This will be managed through our solid background from many years’ experience of rearward-facing travel within child car seats. We want to create "safety and comfort in everyday life" for all families, tells the CEO of Axkid - Daniel Johansson. Axkid has a product line that covers the need of 0-36kg, from the first infant carrier to the final booster cushion with their primary product Minikid. And Axkid are proud that parents around the world are pleased with their products, and they work constantly for the fact that safety must be a given. “We have chosen to collaborate with Johan & Johan because they are working with a number of strong Swedish brands and we strongly believe that they could help us build our brand in China and take it to the next level. They are professional and have the knowledge that we previously lacked in our investment in China. We are very excited about this new collaboration and look brightly at the future,” Axkid’s CEO Daniel Johansson said.

Training with the Johan&Johan team

Extract from the information film from Axkid about the danger with frontview-facing seat, and possitive sides with rareward-facing seat.

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JOHAN & JOHAN GAZET TE


J& J IN T H E EU : FO OTPR IN T C LO SE TO CL I EN TS Never before has the landscape shifted and developed so fast for global retail. Competition is severe and the need to be updated and on top of developments is a key factor for J&J and its clients. We have decided to be more present in Europe - right now the majority of J&J’s clients are from northern Europe – close to clients and prospects. We think it’s good and of mutual interest for us and our clients that we can meet more often for follow up, development, share information and further improve.

1 0.000 O R D ER S ON 11/11 After Nov. 11, Single’s Day in China the biggest sale of the year, the media reported on the huge order volumes placed on the marketplace Tmall. At J&J we were well prepared, but the outcome was slightly more than double what was forecasted. Nonetheless, we are happy to report that the machine worked like a Swiss watch. Both before and after 11/11, the J&J office and warehouse were working around the clock. Almost all staff participated to ensure that the 10,000 orders we handled were delivered on time. “It was the best test possible for our processes and systems. For 2017, we decided to start full EDI integration between J&J, Tmall and the warehouse to be prepared for the next 11/11 with even bigger numbers” says Johan Aledal. See separate article on page 25.

COCO –TH E O IL IN THE M AC H IN ERY Coco Zhu, from Wuxi in China, joined J&J as office assistant in late autumn of 2016. Coco is a ray of sunshine at J&J, assisting everyone in the office to be better able to do their jobs. “I am in charge of everything,” says Coco answer when you ask her what she does at J&J. She does not know how right she is… taking care of all the things that makes the office work. The fact that Coco speaks absolutely perfect Swedish, after studies at the university of Lund, Sweden, makes her able to greet many of the guests to the office with a “Välkommen, kan jag hjälpa Dig…”.

T H E NE W S H OW RO O M There are so many nice and beautiful products in J&J’s portfolio that it was a pity not to have them on display. Daily visitors to the office enjoy taking a look and employees grow closer relation to the products. Potential customers can see the complete product range and, more and more, they are interested in our “multi-brand” offer. Welcome to have a look and be inspired!

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J&J V I E T N AM : AT F I V E M O N T H S OF AGE

RETAIL SNAPSHOT

Sales and Marketing director Huyen Tran tells us about the development.

Ho Chi Minh City, Vietnam

How long have you been in Vietnam? JOHAN & JOHAN has been in Vietnam since 2015, but officially launched its first brand, BabyBjörn, in the Vietnam market spring and summer 2016. How many people are there in the operation team in Vietnam? We work very close with the Shanghai Operational team, but here on the ground, we have three dedicated people to manage operations. What has been the response to your services in Vietnam? Currently, we are delivering the product as a distributor of BabyBjörn, so we look for retailers that are a good fit for BabyBjörn. This means retailers focused on quality and premium brands, and convey the image of caring about the products that they carry for babies and mothers.

What is the biggest challenge you face right now in your work in Vietnam? The biggest challenge is that people don’t know that BabyBjörn is available in Vietnam. They don’t know about that, and so getting out to the market and letting people know that our product is available in Vietnam. That is the biggest challenge. What is your outlook for the baby and kids sector in Vietnam? Vietnam has very high birth rate, income per capita is increasing and the middle class is growing, so there is overall growth in the Vietnam market. With that, we see that people are more interested in premium products, especially, when it comes to children, it’s important that they use products that are safe and healthy for their children. I believe with a little bit of patience, and making more efforts in marketing and education about BabyBjörn, there remains high potential for the brand in Vietnam.

How has the reception of BabyBjörn been in Vietnam? We are, today, in four different places. We have a Facebook presence, which is a very big thing in Vietnam, and then we are also in the Takashimaya mall, on taembe.com and Lazada. Overall, the reception has been good, especially among the community that know the brand. For example Takashimaya, the people who know the brand come to the baby section and go directly to the product display because they know it.

Spanish Inditex store Zara recently opened their first store in Ho Chi Minh City (HCMC) and Swedish H&M group have announced that they will establish stores in 2017 there as well. Generally, Vietnam has experienced stable economic development since the beginning of the year 2016. Despite difficulties in agricultural production and falling industrial growth, GDP for the whole year is forecasted to grow at 6%, according to the latest projections by the World Bank. Basic inflation was well maintained under 2%. As of August 2016, total FDI into Vietnam reached US$14.37 billion (up 7.7% y-o-y). In Q3 2016, one new shopping mall and a refurbished one were operational, adding over 110,000 sq.m. of retail space to the market. Currently, there are 133 retail outlets in the city with total retail space of over 1.2 million sq.m. District 1 continued to have the highest volume of retail space in the city, accounting for over 18% of total supply. The aforementioned new completion was fully occupied.

Huyen Tran Sales & Marketing Director

Recent high profile investments from retailing giants into the non-CBD (Central Business Districts) areas, establishing large retail outlets and offering aggressive rents has paid off with occupancy rate reaching 94%, higher than the CBD’s, which reached 92%. Outlook nearly 30,000sq.m. of new supply is expected to be completed in the last quarter of 2016. While demand for CBD retail space is expected to remain high, limited land for development means that significant future projects will mainly be located in the non-CBD areas.

Source: Cushman & Wakefield www.cushmanwakefield.com

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TH E NEXT AS I A N TI G E R Vietnam’s success merits – a closer look

Which Asian country has roared ahead over the past quarter-century, with millions of its people escaping poverty? Vietnam, with a population of more than 90m, has notched up the world’s second-fastest growth rate per person since 1990, behind only China. If it can maintain a 7% pace over the next decade, it will follow the same trajectory as erstwhile Asian tigers such as South Korea and Taiwan. Quite an achievement for a country that in the 1980s was emerging from decades of war and was as poor as Ethiopia. Unlike either China or India, Vietnam lacks the advantages of being a continent-sized economy, so the lessons of its rise are more applicable to other developing countries, especially those nearby. Most obviously, openness to the global economy pays off. Vietnam dramatically simplified its trade rules in the 1990s. Trade now accounts for roughly 150% of GDP, more than any other country at its income level.. Foreign firms have flocked to Vietnam and make about two-thirds of Vietnamese exports. Allied to openness is flexibility. The government has encouraged competition among its 63 provinces. Ho Chi Minh City has forged ahead with industrial parks, Danang has gone high-tech and the north is scooping up manufacturers as they exit China. The result is a diversified economy able to withstand shocks, including a property bust in 2011. At the same time Vietnam, like China, has been clear-minded about the direction it must take. Perhaps most important has been a focus on education. Vietnamese 15-year-olds do as well in maths and sciences as their German peers. Vietnam spends more on schools than most countries at a similar level of development, and focuses on the basics: boosting enrolment and training teachers.

Vietnam is a model for countries trying to get a foot on the development ladder. With luck, it will also become a model for those trying to climb it up. Vietnam is a middle-income country facing a steep ascent to the highincome ranks. The Trans-Pacific Partnership, a 12-nation trade pact meant to be a boost, may well be blocked by America’s inward turn. State-owned enterprises (SOEs) are bloated. Competing provinces, long a benefit, are a liability when they duplicate infrastructure. Vietnam has struggled to build a domestic supply chain. Moving up in value will be hard when China’s grip on high-end output is tightening. The repressive, one-party system of government is brittle. But Vietnam’s past quarter-century means that it has a decent chance of prevailing. It is at last starting on SOE reform. It is negotiating trade deals in Asia and with Europe. And it is drafting plans to increase its domestic share of manufacturing without scaring off foreigners.

Source: www.economist.com

2016


TH E FU T U R E OF SHO PPI NG H AS ARRIV ED By Gerd Bovensiepen, Benedikt Schmaus, Birger Maekelburger / Strategy&

Retailers around the world are starting to transform their relationships with their customers by offering an Omnichannel shopping experience. With the Omnichannel approach, consumers can make their purchases via their choice of sales settings: They can channel-hop among online and physical stores, smartphones, tablets, social media, call centers, and email, for example. This gives consumers more ways to shop and interact with a retailer, more information about products or categories of products that interest them, and greater product availability. Ideally, retailers are rewarded with more lucrative relationships with their customers and a deeper understanding of customer behavior and preferences — along with the chance to target product recommendations and discount or promotional campaigns directly at individual consumer needs. To evaluate the ways that Omnichannel shopping is beginning to redraw the retail landscape, Strategy& conducted an analysis of Omnichannel’s market penetration and potential in 19 countries or regions. With the data we obtained from industry sources, we constructed the Global Omnichannel Retail Index, which assesses Omnichannel readiness in nine retail segments within each of the 19 countries or regions. The index sets a rating for each country on a scale of 1 to 100 based on four metrics: consumer behavior, degree of digitization, Omnichannel potential, and infrastructure. Some of the index’s conclusions are unexpected; for example, China is number one in both the Omnichannel grocery segment and the Omnichannel apparel and footwear segment. Other results are more intuitive: It is no great surprise that the top three Omnichannel countries — the U.S., the U.K., and Australia — are eCommerce powerhouses. However, we believe that all of the index’s findings will be extremely useful to retailers in determining future strategic approaches, regardless of whether their Omnichannel participation status can be described as leading the pack, falling behind, not yet ready, or about to dive in.

PwC’s 2015 survey of shoppers in 19 countries revealed that consumers want what they want when they shop. Those needs include attractive prices, convenience, great customer service and quick - if not immediate - gratification. Before the emergence of eCommerce and especially before mobile commerce, consumers rarely got the full package in one shopping experience; however, the growth of eCommerce has precipitated a transformation that goes well beyond Web purchases. In many of the largest sales categories, retailing is in the throes of morphing from a single-channel, exclusively online or offline activity into a more multifaceted Omnichannel landscape that gives consumers many more options for shopping. In this new environment, consumers can channel-hop among online and physical stores, smartphones, tablets, and social media, to name a few of the growing array of possibilities. Omnichannel retailing allows them to select the channel that is most convenient for making purchases, reading product reviews, comparing features and prices, and getting customer support. For example, an individual can shop online for a television with the features she is looking for at the price she wants to pay, read reviews from other consumers who have already purchased the model, then reserve the item to buy later. Subsequently, she can go to the store to see the TV firsthand, purchase it with a mobile app on her smartphone, and have it delivered to her home within hours.

Complete report: www.strategyand.pwc.com

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2 0 17 – Ye a r of the ro o s ter

People born in a year of the Rooster are very observant. Hardworking, resourceful, courageous and talented, Roosters are very confident about themselves. Roosters are always active, amusing and popular among the crowd. Roosters are talkative, outspoken, frank, open, honest, and loyal individuals. They like to be the center of attention and always appear attractive and beautiful. Roosters are happiest when they are surrounded by others, whether at a party or just a social gathering. They enjoy the spotlight and will exhibit their charm at any occasion. Roosters expect others to listen to them while they speak, and can become agitated if others don't. Vain and boastful, Roosters like to brag about themselves and their accomplishments. Their continually seeking the unwavering attention of others annoys people around them at times. Lucky numbers: 5, 7 and 8 Lucky colours: Gold, brown and yellow. Lucky flowers: Gladiola and Cockscomb Lucky directions: South and southeast Lucky lunar months: 2nd, 5th and 11th Best suited careers: Sales person, restaurant owner, athlete, teacher, waiter, journalist and surgeon.

JOHAN & JOHAN GAZET TE


11/11 ON T M ALL The world’s biggest online shopping event

By the close of trade, the site had seen sales worth USD 17.8 billion, a 60% increase from last year. The reaction to China’s Singles Day shopping bonanza reflects the drama and excitement of China’s capitalist holiday.

LOGISTI C S The backbone of a successful shopping experience Warehouse logistics is an efficient machine - picking and packing thousands of orders every month. More than 100.000 pcs were distributed to online and offline customers, all over China, in 2016. To be able to improve efficiency and cope the quantities of 2017 a lot of development has been done. The big project to do now is the EDI integration between J&J order management system and warehouse. Modern retail is more about the buying experience than ever before. Quick deliveries, correct products in good shape nicely packed, easy payments etc. are all hygiene factors. It is the whole that creates the buying experience deciding if the customer is happy and will return for further purchases. Therefore we spend a lot of energy in constant improvements in our logistics. We test new methods all the time to fine tune everything from product presentation, customer service to logistics and last mile delivery.

”I wanted two different coats, but they both sold out in the first three minutes of the sale!” complained one young woman ”I spent 2,000RMB last night” said another. ”Now I’m going to have to eat dirt if I’m hungry because I’m broke!” Power of Chinese consumption Singles Day has grown tremendously since Alibaba began promoting it as a shopping day in 2009, and now includes many retailers such as rivals JD.com that stage sales promotions. This year, Alibaba said there would be more than 80,000 brands from 25 countries selling goods on its platforms. In the lead up to the event, the firm hosted a four-hour TV variety show featuring Chinese celebrities and Western entertainers such as British actor Daniel Craig of James Bond fame. Alibaba chief Executive Daniel Zhang had said in a statement that the event would mean ”the whole world will witness the power of Chinese consumption”. He promised consumers ”a new surprise every hour” over the 24-hour marathon, especially mobile users. The firm said more than 27 million purchases came via mobile devices in the first hour. Although its competitors offered attractive discounts Chinabased analyst at market research firm Euro-monitor International said that consumers’ attention was still focused on Alibaba’s online marketplace Tmall.com. ”It’s not only due to the wide choices and competitive prices, but also the heavy marketing campaigns especially the successful gala evening which invited lots of famous entertainment stars,” she said. ”China is a big market with close to one billion smart connected device users - it is a good news for both Alibaba and their competitors,” Kitty Fok, China manager for market research firm IDC said.

Source: www.bbc.com

N EW MO B I L E AP P FO R C L I ENT S Sales data updated daily “Retail is detail” is a well-known phrase. Few businesses need information as fast as those in the retail industry. There are many unpredictable factors that can have a big influence on sales and retailers – regardless they are online or offline – need to act swiftly. The winners are the ones with fresh data that enables control and decision making. The J&J clients now have a mobile app with sales and inventory data updated with transaction data for the day prior. Yesterday’s sales and the current month’s sales are accumulated and presented together with a comparison to last year (up to the same day) and current budget. The sales are also compared with total inventory.

2016

“At the end of the day, the critical difference between you and your competitors is not always about a better product or service offering but about customer experience and convenience.”

25


H E RE' S H OW MI L L E N N I A L' S A R E IM PACTING T HE FUT U R E OF CO M M U N I CATI O N - Chat apps are altering consumer behaviour Email was once at the forefront of convenience. Used as a way to quickly send messages and share files from anywhere in the world, it was — and, for many, still is — a primary tool to communicate with friends, family, and colleagues. However, over the past several years Chat apps, SMS, and social messaging platforms has largely displaced this more traditional form of online messaging. In 2016, instant messaging and texting increased to 35% of global communication. Meanwhile, email accounted for 22% of communication in 2016, which is down by 29% from 2014. And as these communication channels enhance their capabilities and add more functionality, the threat to email's sustainability will increase. But is email the next legacy technology to fall prey to obsolescence? The short answer is no. However, it's worth looking more closely at shifting user behaviour when it comes to online communication — whether it's at home, on-the-go, or in the workplace.

Why Email Won't Die Despite current trends, email maintains an entrenched position as a trusted form of communication among consumers. Because of this, email will persist as a legacy mode of communication, both within the workplace and for private correspondence. In fact, we project that it'll be at least five years before most of the younger generation of users join the workforce and further diminish email's relevance in the workplace. Consumer behaviour is often slow to change, and email is still the most used communication tool for older generations. This preference is often passed down to members of younger generations. In the short term, email usage is even expected to increase. However, this is largely because of the global adoption of smartphones, which has boosted the access users have to their email accounts.

Hand-Held Communication The saturation of premium smartphones in many mature markets, and the existence of mobile-first economies such as China, means that mobile devices are everywhere. This gives users immediate and consistent access to other people and businesses with the touch of a button through means like social media, chat apps, and email. Moreover, combined, the top four chat apps boast more than 3 billion monthly active users globally, surpassing the top four social networks. Chat apps are altering consumer behaviour. The wide adoption of chat apps and texting is remodelling the way people communicate online, including via email

1,790

1,000 1,000

1,000 846 600 345

225

200

Chat apps are replacing email as the preferred mode of business-to-consumer interaction. More and more millennial's — those between 18 and 34 years old — are finding that chat apps are a more reliable and convenient way to reach brands and service providers, according to an Ovum survey of millennial’s. Chat apps are convenient. Chat apps support quick and easy-to-access communication, and enable businesses and users to communicate with those who may not have an email address.

400

317

Chat Apps: 3 billion MAU

Social Networks: 2.7 billion MAU

Email Clients: 1.6 billion MAU

Note: Monthly Active User (MAU) based on most recent accessible data Source: www.businessinsider.com

AM AZON D EBU T S B E I J I N G S H OW R OOM Omnichannel has started for real. Amazon continues to focus efforts on expanding its Chinese market. Autumn 2016, the online retail behemoth opened a showroom in Beijing’s popular shopping destination Sanlitun Square. Reportedly designed to look like a giant Amazon shipping container, consumers can browse, test and consult experts on a wide and varied selection. Customers can also buy from Amazon’s Chinese site by scanning a product’s barcode with their mobile devices. This past summer, Amazon launched a Chineselanguage version of its Japanese site and offered reduced shipping rates to mainland China. The goal is to cash in on the 2.34 trillion yen ($22.5 billion) Chinese consumers are projected to spend on Japanese eCommerce products in 2019, according to Japan’s Ministry of Economy, Trade and Industry.

26

The showroom reportedly features an area dedicated to Amazon’s Prime service, which debuted in China in late October this year. Chinese Prime customers enjoy free shipping on orders for products overseas with a minimum purchase of $29.50. Goods that are sold in China will be shipped for free to Chinese Prime customers - paying $57 for their membership. Though Alibaba is still the Chinese staple for eCommerce — just look at this year’s Singles’ Day statistics — Amazon is the preferred marketplace for Chinese e-tailers when they want to sell their goods internationally. Amazon beats out Alibaba’s international marketplace, AliExpress, 62% to 40%.

Source: www.pymnts.com

JOHAN & JOHAN GAZET TE


N E WS I N B RI E F

Swedish Design And Innovation Week was filled with activities from Swedish brands in the Life Hub Plaza. The J&J team was there with all of their Swedish brands.

Childrens Book Fair was another successful fair with thousands of visitors. Our brands: Naty, BabyBjörn and Axkid was present and gained a lot of attention and interest.

We were happy to welcome the Consul General of Sweden, Ms. Lisette Lindahl, to visit our office. Among many of the things we discussed, we chatted about the upcoming “Swedish Dads” project. We are looking forward to this exiting collaboration.

Our first Client Survey was performed late December. We did this online and 29% (from 12 companies) answered with valuable input. We hope to have an even higher response rate next year! The aim was to collect feedback to further improve our services and offerings.

At the Annual Christmas party almost 50 colleagues attended. The “Toast Skagen” was the winner on the buffet and at the lottery - Jenny from BabyBjörn was the winner. She won the first prize Apple Watch. I am happy to report she was super happy :)

For the 5th year in a row, we welcome interns from the Swedish Export Academy to J&J for an opportunity to practice and gain hands-on experience. This year's interns are Mimmi Engström (left) and Sandra Björnfot (right).

IS THI S O UR N EW O F F I C E IN H O NG KONG?

2016

In December last year, we scanned the office market in Hong Kong. We visited several alternatives and found one on Lyndhurst Terrace that we liked. We have decided to locate ourselves in Central on HK Island – close to the train to airport and subway. Negotiations have started and we hope to move in on 1st of April 2017. The goal is to offer Sales & Fulfillment in Hong Kong – just as we do in China or Vietnam. The local staff will manage the sales and marketing activities, sales orders, support, etc. We use the same logistic partner – Geodis – as elsewhere and offer the same services for pick and pack B2B and B2C. We also have space to offer The Enabler Service.

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PL A NS FOR 2 0 17 1/ Extended Enabler concept

We have found that many companies, buying from this region, are interested in support for sourcing of products, quality inspections and –assurance, supplier development, transport coordination and consolidation, CSR (Corporate Social Responsibility) inspections etc. All of them tasks of a traditional “production office”. Our extended Enabler service will start during the first half year of 2017.

2/ Full EDI integration with tmall and warehouse

We have started the project to have full EDI integration both with Tmall and our warehouse. It will speed up all processes and we can make out bounds even faster and it will reduce manual work. We plan to be ready before summer.

3/ Open our 100th store

Our Retail Sales manager and his team have been very successful in finding retail partners. From August to November we opened almost one new store every week. Our goal is to open store number 100 sometime before the end of 2017. We have already started to sell in locations outside Shanghai like Hangzhou, Qingdao, Wuxi and more cities are to follow.

4/ Establish a European hub

The transactions and the business happens in China, Hong Kong and Vietnam. Brand owners have their HQ’s in Europe. We would like to visit them more often and be closer for business development. We will establish a European hub to step-by-step be more available in Europe

5/ Sneak peak at new markets

We have surveyed Indonesia and Taiwan as possible next markets to establish our business. We are planning to follow up with visits to learn more and to study the opportunities.

6/ Open Hong Kong office

We will inaugurate our new office on Hong Kong Island on 1st of May 2017. We look forward to discuss opportunities in this market with all our existing clients and prospects. We already have contact with stores in Hong Kong - mother or sister companies to existing customers in Shanghai – showing an interest in the products.

7/ New capacities needed

We will need additional competencies based on the development of clients and the business. We foresee a web developer, quality inspectors and CSR expertise, marketing professionals, brand managers (KAM). Please drop us an email…

8/ Widen our online services into B2B

We extend our B2C online services in China to also serve Western B2B brands. We will support these new customers with social media, B2B eCommerce and search engine marketing – in order to generate more sales opportunities!

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The Gazette Issue #3  

The Gazette Issue #3  

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