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The JOHAN & JOHAN

Gazette Shanghai 2016

CSR - Gina Tricot takes responsibility

Issue #2

TMALL - The 3rd shop opened

TRAVEL - Johan and Johan’s hidden gems

BUSINESS - Cross border eCommerce

MOBILE - Brand new app for clients plus maternity app marketing

MARKETS - China, Hong Kong, Vietnam and Indonesia

Established in 2010

The Business Model for the 21 st Century

TO READ - Marco Gervasi’s book East Commerce

www.johanjohan.com


Fo r ewo r d

J o h a n Wikander

Johan Aledal

A good thing about going public and writing about things you plan to do is that you, not to loose face, actually have to do them. 2015 has been a year of action and when reading this - the 2nd issue you will learn about some of the achievements. We are proud to present to you this new issue of the Gazette, which we hope can offer something interesting and informative that will contribute to your business in Asia or is just some nice reading. A big and important step for Johan & Johan is of course our new establishment in Vietnam. After a year of bureaucracy and waiting we now have the investment certificate to operate in Vietnam and the fun part can begin. Office, staff and clients are now starting up and when you read this we will have made our first deliveries. We have added several new Value Added Services to our business and it’s a pleasure to present them to you here in this issue, this includes a photo studio, in house online marketing, artwork capacity and a mobile app for sales data. In this issue we also share some of our hidden gems around the world - bars, restaurants and hotels we have visited which we found worth noting. We hope you enjoy reading this, the second edition of The Gazette. Johan and Johan January 2016

Editor in chief; Johan Wikander (johan.wikander@johanjohan.com). Publisher; Johan Aledal (johan.aledal@johanjohan.com) Project assistant; Anders Eriksson. Photographers; Nicky Almasy, Rikard Wikander, Johan Wikander. Art director; Gustav Hultman.

C ontributors :

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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.

JOHAN & JOHAN Gazette


Co n t en t

HIGHLIGHTS FROM 2015

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NEW IDENTITY

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CHINA OUTLOOK

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INTERVIEW WITH JOHAN AND JOHAN

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EXPLANATIONS AND ABBREVATIONS

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HOW TO PROTECT A TRADEMARK IN CHINA

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PRODUCT FUCUS

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ECO BY NATY

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CROSS-BORDER ECOMMERCE

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THE PEOPLE BEHIND THE SCENES

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SIX MEGATRANDS DRIVE CHINA

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ONLINE PAYMENTS IN VIETNAM

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20 YEARS IN VIETNAM

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J&J’S HIDDEN GEMS

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HCMC – VIETNAM

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HONG KONG

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THE CHINESE ECOMMERCE MODEL

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CHINA’S ECOMMERCE GROWTH

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THE FULFILLMENT HANDBOOK

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MOBILE SALES DATA

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CSR AT GINA TRICOT

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POLARN O. PYRET

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MATERNITY APP

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ONLINE MARKETING

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INDONESIA

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FULFILLMENT TEAM

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NICKY ALMASY

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THE PHOTO STUDIO

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PLANS FOR 2016

28 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.

2016

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Nine hi g h l i g h ts f ro m 2 0 1 5 1. Our third flagship store on Tmall opened – this time for the Swedish brand Polarn O. Pyret. It opened according to the project plan just before 11/11 – Single’s Day in China. Single’s day was in general a huge success for us with almost 1.500 sales orders. 2. We are proud to have Clam onboard Johan & Johan to lead our online digital marketing division which is a newly established unit in the company. Clam brings with him solid experience in the marketing of baby products including carriers, bouncers and diapers. 3. The 21st floor was not longer big enough to house our growing team and clients - so a new office was opened also on 17th floor. The Enabler concept keeps growing. 4. Mandy Nguyen who has worked a year at the Shanghai office was sent to Ho Chi Minh to start up both administration and operation there. Huyen Tran is our new Sales & Marketing Director for Vietnam joined. 5. A photo studio for product pictures was opened during the autumn and came very handy for Polarn O. Pyrets introduction in China. 6. Aurore Demurger was appointed team leader for the fulfillment team and Anders Hjelm joined as project manager. 7. Anders Eriksson, art director from Sweden, joined as our creative director and marketing manager. We now have the capacity to develop printed matters, web banners and more for our clients. 8. Our 1st mobile campaign was launched together with Bonzun. Their App has 900.000 downloads. 9. This year we have three interns from Exportakademin in Sweden - Klara, Kristina and Linda.

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JOHAN & JOHAN Gazette


New identit y Our services are now gathered under one common brand for all markets

Two out of three emails we get starts either “Hej Johan & Johan” or “Hi J&J”. When we meet people at events we hear “Oh… so you are Johan & Johan”. When operating now on three markets in Asia we need a brand name that is suitable everywhere also bearing in mind our marketing activities in Europe. The same name in China, Hong Kong and Vietnam also reflects that we do exactly the same thing in the same way everywhere

“We didn’t have to think twice since the brand name was given to us by our network” Our new brand name is Johan & Johan. We believe it should be easy to remember…

Rising Chinese

consumers

McKinsey report on China outlook By Erik Roth, Jeongmin Seong, and Jonathan Woetzel, McKinsey Quarterly, Oct 2015 The events of 2015 have shown that China is passing through a challenging transition: the labour-force expansion and surging investment that propelled three decades of growth are now weakening. This is a natural stage in the country’s economic development. Yet it raises questions such as how drastically the expansion of GDP will slow down and whether the country can tap new sources of growth. New research by the McKinsey Global Institute suggests that to realize consensus growth forecasts, 5.5 to 6.5 % a year, during the coming decade, China must generate two to three percentage points of annual GDP growth through innovation, broadly defined. China will have evolved from an “innovation sponge,” absorbing and adapting existing technology and knowledge from around the world, into a global innovation leader. Our analysis

2016

suggests that this transformation is possible, though far from inevitable. To date, when we have evaluated how well Chinese companies commercialize new ideas and use them to raise market share and profits and to compete around the world, the picture has been decidedly mixed. China has become a strong innovator in areas such as consumer electronics and construction equipment. Yet in others, creating new drugs or designing automobile engines, for example, the country still isn’t globally competitive. That’s true even though every year it spends more than $200 billion on research (second only to the United States), turns out close to 30,000 PhDs in science and engineering, and leads the world in patent applications.

that by 2025, such new innovation opportunities could contribute $1.0 trillion to $2.2 trillion a year to the Chinese economy. To achieve this goal, China must continue to transform the manufacturing sector, particularly through digitization, and the service sector, through rising connectivity and Internet enablement. Additional productivity gains would come from progress in science- and engineering-based innovation and improvements in the operations of companies as they adopt modern business methods. Chinese companies that rely on customer-focused and efficiency-driven innovation perform relatively well.

“When we look ahead, though, we see broad swaths of opportunity”

When we look ahead, though, we see broad swaths of opportunity. Our analysis suggests

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The

s to ry c o n t i n u e s

“Brand ow n ers wa n t co n t ro l a n d i n f lu en c e and are k een o n sa l es data a n d stat i st i c s”

Interview with Johan and Johan;

Another year has passed by for Johan & Johan which nowadays also is the new brand name for our group company, read more about that on page 5. Has 2015 been going according to plan? Is Vietnam operational yet? Do Johan and Johan still believe their business model is a more modern way of retail distribution? These were some of the topics in the previous issue of the Gazette which we now intend to dig into.

You are claiming that your business model is a new modern option to the traditional distribution set-up, has 2015 changed your way of looking on your offer? A: Our belief has only grown stronger. The retail market is getting more and more global and the competition is severe. Global brands with high integrity have a need of control both from a branding and commercial point of view; Johan & Johan can guarantee this kind of control. W: We are meeting small brands with limited resources that frequent are travelling around the world to coach their local partners with store visual merchandising etc. We are also talking to medium sized brands that are gradually closing down distributors and setting up their own legal entities around the world. No doubt that the old distributor model is out-dated - brand-owners need and require control and transparency and these components are in our DNA. A: The brand-owners are very keen on sales data and statistics – especially when it comes to eCommerce. We can provide such data and KPI’s on both detailed and aggregated level. This is one of the advantages with our business model. So the distributor model is no longer sustainable and your model works for all brands? W: Johan & Johan is from a legal point of view preforming its business as a traditional distributor, we buy, import and sell products on our local market(s). But instead of closing the transaction at delivery of a container we prefer 6

to go hand in hand with the brand-owner until the products are sold to the local retailer and/ or end-customer. We are usually talking about “doing China/Vietnam/Hong Kong together” and if the brand-owner has resources, our model is in many cases more attractive. No business model suits everybody and we noticed that one common reason for why we terminated some few cooperation’s is the lack of brand-owners’ interest in doing it together. We want and need the brand-owner’s expertise in their own products, pricing and branding. A: Each brand engagement for us is of course a bit unique. The bigger the brand is, the more control of sales and marketing they want. Smaller brands have obviously less resources and experience of the Asian markets where Johan & Johan usually are asked to take more responsibly to increase the sales. You promised to start your operation in Vietnam in 2015, is the plan intact? A: Johan & Johan (Vietnam) Co. Ltd. has today an office on 180 Nguyen Cong Tru Street in Ho Chi Minh City and we are operational with local staff. As in most “Asian projects”, we did suffer from a delay and our establishment period took 12 months instead of planned 6 months. However, we look on this with optimism and we feel our offer to help overseas brands to sell in this region, usually with a challenging business climate, has a great need and we can justify ourselves. We are happy to take some hits and learn the new market the hard way, since we

know this has a great value for our existing and future clients. W: Looking on Vietnam in particular there is no doubt about the future potential. One of the fastest growing economies in Asia with a large population demanding more and better products and brands. For every visit we do to Ho Chi Minh City we can see new shopping malls, car showrooms, coffee shops and fancy restaurants. We love the feeling to “be there and to be ready” for the soon upcoming retail kick-off. Why the urge to expand in Asia-Pacific, isn’t China big enough? A: That’s a frequent question from our families :-) China is big but the neighbouring markets are way too interesting to ignore and one of our USP’s will be that we can support brands on multiple markets. W: eCommerce is becoming a popular way to launch and introduce a new brand in order to obtain rapid market feedback. The leading online retailers and marketplaces are today expanding in the ASEAN countries and therefore it feels natural that we follow this trend and offer a multiple market access. The ASEAN community will gradually lower import duties and ease the trade within AsiaPacific, which will be a great benefit for our Asian footprint.

JOHAN & JOHAN Gazette

JO H AN & JO H AN


A: The Chinese market is absolutely big enough for us but since our strategy is to focus on a limited number of strong brands and we assume some of them will follow to other markets with us – it’s a way of growing the business with each brand. So your business model is proven to be attractive, your expansion is somewhat going according to plan, what will happen during 2016? W: Continue to work with the details in our Sales and Fulfillment package; we are on the right track! We are doing some major logistic changes in terms of warehousing that will make us even more competitive on all our three markets. We are planning to staff up our Hong Kong company that will be positive also for sales in southern China and our clients.

team at Polarn O. Pyret in Stockholm we got orders the first day. Step by step customers find the way to the store and sales increase every week. W: The brand is totally new to the China market and every week we try to understand what the customers want and how they appreciate the brand. A new brand does not automatically get any sales on Tmall among 75.000 other brands so it’s hard work and monitoring every order. A: We are normally too humble to brag about ourselves but we can’t avoid passing on below mail that we got from Anna Sandberg at PO.P; “Hello everyone! We also want to send an official THANK YOU to all who have been involved in the PO.P Tmall project.

A: We have today a mature online team with a complete set of in-house services like customer service 7 days a week, a photo studio and online marketing. This is something we will continue to work with and further develop. One focus area for 2016 is to strengthen our offline retail sales team with new recruitments. Activities that our clients will notice in our sales reports!

We think the collaboration has worked over our expectations.

There are rumours that the opening of the 3rd flagship store on Tmall went well?

Good job for making it happened!

A: It did. We opened on schedule and thanks to good marketing planning together with the

You are all very professional and easy to work with and you have shared your knowledge with us in the best way possible. Communication wise it has been a pleasure working with you. Thank you also for taking such good care of us during our visit to Shanghai. Let us now look forward and see how we can optimize our PO.P journey in China”.

Expl anations: 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. Wholesale and retail. 5. The brand owner is in control of the brand. 6. Now also in possible in Vietnam and Hong Kong. 7. One stop shop Sales and Fulfillment. Enabler / en - ab - ler /: 1. Making something possible. 2. An easy way to do business in China. 3. For companies without a legal entity in China. 4. Office solution allinclusive. 5. Employment and HR. 6. All the legal hassle included. 7. No investment. 8. Low cost and no risk 9. Fika every Friday is included. 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.

Abbrevations in Gazette: POS – Point of Sale ATM- Automatic Teller machine PRC – Publics Republic of China ERP – IT system for Supply Chain and Finance SKU – Stock Keeping Unit CSR – Corporate Social Responsibility HCMC – Ho Chi Minh City ROI – Return On Investment HR – Human Resources J&J – Johan&Johan CET – Central European Time KPI – Key Performance Indicator 2016

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How to protect a trademark in China What the future holds for the domestic market

Like in most countries, according to the Trademark Law of China, foreign applicants are to register trademarks in China solely via agents firm. Before filing a trademark application, it is recommended that some level of searching be conducted to determine if any similar trademark have been filed in China. Also you can try search by yourself at www.tmsearch. cn or use www.chinatrademark. net providing a free trademark search service. The time span from filing to obtaining a trademark will normally take approximately 12-16 months. To protect your trademark in China in an economical way, registering it with the China Trademark Office (CTMO) should be taken into consideration. Under China’s laws and regulations on the basis of unfair competition, without a registration, enforcement is still technically possible, but generally protection under such laws is much less predictable and normally more expensive. FIRST TO FILE PRINCIPLE China adopts “first-to-file” principle for obtaining trademark rights. This means that generally the person who files their trademark application first can register the trademark. It is therefore highly advisable to file applications for trademarks as early as possible, and preferably well before you enter the Chinese market. CHINESE CHARACTER TRADE MARKS Chinese consumers prefer the Chinese versions of the brand, because Chinese is their mother tongue. So if you don’t have a Chinese name for your English mark, you are strongly advised to create one and register it. If not, the local market will voluntarily create one for you (which you might not like) and the third party might register it..

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GUIDANCE TO REGISTER THE TRADEMARK 1) There are two ways to file the application: filing an application directly with the China Trademark Office or alternatively by extending an existing application or registration to China under the Madrid Protocol. 2) If you choose to file the application directly, you must file through a local Chinese trademark agency 3) It is generally preferable in China to file for the version of a mark as it is used and to cover as wide a range of goods and/or services as you reasonably can. 4) Before filing your trademark, trademark searches are advised to conduct to check whether anyone else has already filed for a similar or identical mark, which might block your planned application. 5) Once approved, the application will be published in the CTMO Gazette. During the following three months after the publication, any party may file an opposition against your mark, challenging the application on the grounds of prior marks, distinctiveness or other grounds set out in the Trademark Law. A registration certificate will be issued if no opposition is filed within this three-month period. 6) The validity period of a registered Chinese trademark is 10 years and can be renewed every 10 years.

“It is highly advisable to file applications for trade marks as early as possible, and preferably well before you enter the Chinese market” 7) Normally, it takes 18 months to obtain a trademark registration in China, with protection generally effective on the date of registration.

TO PREVENT SOMEONE ELSE REGISTERING A TRADEMARK SIMILAR OR IDENTICAL? The best way to prevent this type of “counterfeiting” is registering your marks early. But if someone already files your trademark, an opposition can be submitted once it is published in the Trademark Gazette. An opposition will normally take 18 months. The loser in an opposition can file an appeal to the TRAB which will normally take a further 18 months to issue a decision.

Image from Aftonbladet.se

WHAT IF SOMEONE ELSE HAS ALREADY REGISTERED MY TRADEMARK IN CHINA? Trademarks registered by others can be cancelled through the filing of petitions with the TRAB. It is normally advisable to support such cancellation actions through extensive evidence of the fame and use of your mark, both in China and globally. But if someone has registered your mark and has not used it for three years, it is possible to petition the CTMO to cancel the registration on the grounds of non-use for three years. Source: CTPLO – China Trademark & Patent Law Office Ltd. www.ctplo. com and www.chinatrademark.net/ china-trademark-registration.asp

JOHAN & JOHAN Gazette


Produc t fo c u s Our three areas

DEMANDED PRODUCTS IN ASIA We are saying “No” more often than “Yes” to companies asking us for a presentation or quotation and there are several reasons for that. What products you are allowed to import and sell in both China and Vietnam are stated in the business license and it is much more specific and detailed than what westerners are used to. Of course the scope can be adjusted but it is a process each time including the unavoidable administration. Beside the legal and administrative side of the matter we are careful in selecting before taking on a new brand. Our strategy is clear and strict – a few but strong brands within a few strong areas of products – where there is a demand. You do not sell just because the products are imported.

Eco

by

Our brands have in common that the products are of high quality, safe to use and are affordably priced. The brands and the products must add something to the markets and preferably have a story to tell.

and it’s build into the brand. We also sell more and more ecological products – which of course is the future. The baby and kids segment can be extended to include maternity products and other parenting products.

We have identified three current areas where we like to be strong and believe can reach significant sales volumes. Maybe educational products could be interesting - as an extension to baby and kids – in the future.

“Our strategy is clear and strict – we want a few but strong brands within a few strong areas of products…”

BABY AND KIDS Parents want the best for their children and Asian parents are no exception. Due to several “scandals” in recent years they pay more attention to the origin, the quality and the safety of the products. All our brands have quality and security in their DNA

APPAREL AND ACCESSORIES In the summer of 2015 we launched the accessories brand P.A.P. and it was a real hit. P.A.P is an affordable brand of top of the line products. The fact that the tanning is made environmental friendly and the products are hand made in Sweden contributes to the strength of the brand. P.A.P. is in a good position in Asia as it

complements the growing adoption of smart phones and tablets of which need a cover :-)

“… and by doing that we do it really well...” PERSONAL HEALH AND SAFETY It is obvious that air pollution is a problem all over Asia. The production of energy is not very green and the traffic has gotten out of hand, the commonly used scooters are pollution bombs. So far we have taken on only one product – a very good breathing mask. We sell online to end-users and to companies to sell or give away. A few hotels are selling the masks to arriving tourists and other travellers.

“…must turn breathing masks into a life style product...”

N at y

Eco diapers and wipes are coming to Asia

ENVIRONMENTAL AWARENESS More than 20 years ago, Marlene Sandberg found herself thinking about eco diapers, and doing so on a regular basis. She was the mother of two boys, a corporate lawyer, and had a burgeoning sense of environmental awareness. It was during this period that Marlene came across a newspaper article reporting on the damaging effect that disposable diapers had on the Swedish environment. On average, every Swedish baby was responsible for a half-ton of dirty diapers every year. So the diapers kept piling up, due in part to the material in traditional disposable diapers being predominately oilderived plastic. 2016

Marlene recalls that period as being a time of environmental awakening, but also of uncertainty in how to make a difference with two young sons and a demanding career. “Like many people of my generation I was becoming much more environmentally aware”, says Marlene. “At the same time, I had a busy life and I did not see that washing diapers would fit into that schedule.” Marlene knew there would be challenges along the way to an environmentally friendly diaper. Though Instead of backing down from those challenges, she embraced them, saying:

“I don’t believe in compromises or shortcuts. If you want an eco-friendly diaper to be successful, it must perform at least as well as, or better than, the best traditional diaper.” After five years of hard work, research and development, Marlene formed ECO by Naty and launched an environmentally friendly disposable diaper made out of biodegradable material onto the market. This has during the years been followed by the launch of a line of baby care products (ranging from skincare to wipes), organic clothing and upcoming inventions of hightech, eco friendly baby gadgets. ECO by Naty is now available all over the globe and still expands

continuously, all while investing as much resources as possible in developing new, innovative biomaterials. The brand recently earned the OK Bio based certification by the reputable independent organization Vincotte and won the “Best Eco Nappy” category in Junior Design Awards 2015.

Thanks to Marlene’s hard work and philosophy, ECO by Naty is now the number one green diaper alternative on the market. “ I started my company with the determination to make a high-performance diaper that was friendlier on nature and healthier for your child. And that is what ECO by Naty is today, says Marlene Sandberg”. 9


C h i na s

cross-border ecommerce

By-passing a thourough import system By Dr. Bernt-Uwe Stucken, partner at Pinsent Mason in Shanghai

Is cross-border a sustainable solution and is it also good for the consumers? BY-PASSING THE SYSTEM In the past, import of products into China must go through the normal importation procedures. Since 2013, China started to promote the crossborder eCommerce business, and selected some pilot cities (such as Shanghai, Guangzhou, Hangzhou, Ningbo, etc.) to implement a new way of importation. In July 2014, the PRC General Administration of Customs issued the Announcement No. 56 with respect to the regulation of goods and commodities imported and exported through the cross-border eCommerce. Under the new rules, “goods” and “commodities” are treated differently. Goods imported by the business entity to be resold to the other business entity (i.e. B2B) will be treated as traditional importation. However, “commodities” ordered by the end users directly on the cross-border eCommerce platform from the business (i.e. B2C) and delivered to the end users via mail or express will not be subject to the requirements under the traditional importation, provided that the commodities are for self-use and within the reasonable quantities. Bonded import model and direct purchase import model are two cross-border eCommerce models recognized by the Chinese government. • Under bonded import, products arrive in bulk at the city and have to obtain a China Inspection and Quarantine (“CIQ”) certificate on arrival. They are stored in a ware-

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house in the city’s Free Trade Zone until ordered by a customer, and delivered by domestic carrier.

• The company must have sole and exclusive right to open the store from the trademark owner; and

• Under direct purchase, goods are only received in the city after they have been ordered, and they do not need CIQ certification. However, the seller’s website must be registered and recognized by the Chinese customs authority, and the goods to be sold must be registered with the relevant authorities in China.

• The company must have one goods return location in China.

In this pilot, only ‘daily commodity’ products can use the direct purchase model, including food, clothes, computers, phones, etc. If a business entity wants to sell the products from overseas directly to Chinese individuals via the direct purchase model, it must set up an online store on a cross-border eCommerce platform registered and recognized by the Chinese Customs. However, hurdles still remain for foreign business entities. T-mall Global is one of the largest cross-border eCommerce platforms registered and recognized by the Hangzhou Customs. However, T-mall Global does not accept voluntary application for setting up a store on its platform, and they will invite good brand on case-by-case basis. They have several requirements for a company to open a brand flagship store in T-mall Global, including:

SUSTAINABLE? ECommerce is a topic with high priority on the Chinese government’s policy agenda. China’s eCommerce revolution is just beginning and the government is expected to continue to implement policies to promote its development. Despite the promising future of this popular business model, policy consistency is another issue challenged by quite a few suppliers. The different tax and inspection standards applied for traditional trade and cross-border eCommerce causes business to wonder whether the favourable policy in cross-border trade can be sustainable.

Pinsent Masons, as a leading international law firm providing legal service in China for decades, has gained experience on how the eCommerce business model operates in practice. We are here and ready to support you reach Chinese consumers successfully. Dr. Bernd-Uwe Stucken, Lawyer and Partner for Pinsent Masons LLP

• The registered trademark of the brand must have been registered for more than one year, and the products under such brands must have sales in retailing channel;

JOHAN & JOHAN Gazette


The people b eh i n d t h e sc en es

Jessica Wang

Aurore Demurger

Bruce He

Evelyn Ma

Huyen Tran (VN)

Mandy Nguyen (VN)

Your picture can be here next year - contact us now

Johan Aledal

Want to join a successful team? hr@johanjohan.com

Clam Zhao

Johan Wikander

Selina Hui

Weiwei Ma

Anders Hjelm

Winnie Xu

Sharon Zhu

We are always looking for more talents

Crystal Duan

2016

Joanna Huang

Anders Eriksson

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Six megatr en d s d r i ve C h i n a to day 1. URBANIZING A BILLION PEOPLE This is the largest migration in human history, with 300 million moving to cities already and 350 million more on the way. China has 160 cities with populations of more than one million and 14 with more than five million. Increasingly, these cities are becoming linked, creating urban areas with 30 million people or more—the size of many European countries. 2. HUGE MANUFACTORING SCALE The manufacturing base has increased more than 18-fold in the past 30 years and is worth USD 2,2 trillion annually in value added.China’s traditionally low labour costs are rising, and there is aggressive movement from low-tech assembly to high-tech manufacturing, as well as from the more expensive coastal areas into cheaper central and western China. In addition, Chinese companies’ strategy of building big and selling cheap may not be enough to win in Western markets against companies with both established market share and brand equity. 3. RISING CHINESE CONSUMERS Now, the engine is the Asia–Pacific region, which will account for two-thirds of the world’s middle class by 2030. In China an additional 200 million people will enter the middle class by 2016, joining 300 million who have done so in the past 30 years. As urbanization accelerates, consumer spending is becoming more like that of the West’s middle class. 4. MONEY – AND LOTS OF IT The country has more than USD 15 Trillion in bank deposits, growing by USD 2 Trillions a year. China is the single largest foreign purchaser of US government debt. And its yearly trade surplus with the United States has grown from $10 million in 1985 to more than $300 billion in 2012. 5. THE BRAINPOWER BEHEMOTH Spending on education has doubled, and the number of college graduates has increased more than 7-fold since 1998. There is an explosion in research-anddevelopment investment: in 2009, China accounted for 12.8 percent of the world’s R&D spending which is well ahead of most European countries. 6. THE CHINESE INTERNET Although China has more users than any other country 600+ million) penetration is comparatively low – but it’s exploding.

Source: McKinsey, April 2014, Jeffrey Towson and Jonathan Woetzel

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JOHAN & JOHAN Gazette


O n l i n e pay m e n t V i e t na m

of eCommerce in

What the future holds for the domestic market Article for the Gazette by Trung Anh Nguyen and Phuong Do, IDG Vietnam. The fast growing rate of Internet users is one of the most notable aspects of Vietnam economy with up to 40 per cent of its people using Internet. According to statistics from the industry and trade ministry’s eCommerce and Information Technology Agency, Internet and mobile play an important role in consumers’ trading with nearly 60% of online users conducting online purchases. 80% of businesses will order or receive orders through eCommerce applications on the Internet or on mobile platforms. Over the last five years, the strong growth of eCommerce has stimulated the e-payment services sector. In 2010, there were 84,500 e-wallet accounts opened with 17 banks providing services and 119 merchants accepting online payment. Since then, the online payment network has been developing with POS network growing faster than ATM due to high cost of investment and operation of ATM machines. The payment market in Vietnam is still in early stage and very fragmented with only 11 companies being granted the trial license, but the number of competitors is much larger. The e-payment market in Vietnam currently focuses on different areas like banking transfer (OnePay, SmartLink, VNBC), eCommerce (Soha, Nganluong, Baokim), whole seller and retail, etc. Though banked sector was large and grew rapidly, cash payment was still the main payment vehicle with cash on delivery (COD) method accounting for 64% of eCommerce transactions since the benefits of e-payment are not clear yet. Also the complex of 3D security incorporated into credit cards and the fact that customers can return products upon delivery have persuaded them to stick to their traditional payment method – COD. 2016

The online payment platforms in Vietnam have not kept up with the development of eCommerce, which could be attributed to consumers’ unfamiliarity with epayment, inherent risks associated with online financial services providers and led to the dominance of COD method. As for the online vehicles, debit transaction still accounts for a large proportion of e-payment with banks trying to grow credit cards number to increase payment through their system. Underdeveloped credit rating system slows down the development of credit card and the domination of debit account puts the security on hand of consumers, which further limit the use of online payment tools. Banks have put substantial efforts to upgrade banking technology in order to manage online transactions and have become the leader in successfully applying non-cash payment. However non-cash payments were still the exception rather than the rule. The legal system, and the habits of authorities, companies and the general public perpetuated the use of cash. The government has encouraged the use of electronic payment systems and to eliminate cash payment by building an online payment platform for eCommerce from 2016 to 2020. The government also encourages the development of eCommerce across borders along with export and import activities, taking up 15 per cent of B2C eCommerce sales by 2020 which would foster e-payment to reduce transaction cost. This is a shortened version – read the complete article at: www.johanjohan.com

BREAKING NEWS: Shanghai, Jiangsu and Zhejiang Provinces will offer a 144 hours visa-free entry for international transit passengers. (Jan 29, 2016)

The Chinese Ministry of Public Security approved recently a new policy that will increase international tourism and business cooperation with foreign Countries in the area of Yangtze River Delta. Starting from January 30th 2016, citizens of 51 nations will get a 144 hours (6 days) visa-free entry if transiting through Shanghai’s Pudong Airport, Shanghai’s Hongqiao Airport, Hangzhou’s Xiaoshan Airport and Nanjing’s Lukou Airport, provided they hold valid passport, ticket to leave to a third Country within 144 hours and necessary visa for this country (if required). Read the more at www.johanjohan.com

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Ugly? Yes. But it cleans the air you breathe.. It’s time for Segre now.

CSR - Corporate Social Responsibilty More and more efforts are put into a serious and real work with improving the working conditions at factories in Asia. Still there is a lot to do and it all starts with the management, the buyers and their understanding and commitment to set a sustainable CSR policy. Swedish Gina Tricot is one good example of taking this important matter serious. Read more about their CSR- work on page 22.

Order at www.segre.cn FOLLOW ON INSTAGRAM; SEGRE.INTERNATIONAL ORDER AT: WWW.SEGRE.CN

1.500 ORDERS IN ONE DAY 11/11 Singles day 2015 Singles day 2015 was a huge success with almost 1.500 sales orders in one day. The system – including IT, customer service, ERP with order management, the warehouse pick & pack etc. and distribution – worked without any hick up’s. “It was a very good test of our processes and set up – the ability to handle bigger volumes” says Johan Aledal 12/12 was a good day as well and reached a third of the bigger 11/11. 2016 we aim to double the sales from 2015 Johan Aledal ads with a smile. Starting at midnight 10-11/11 the customer service worked 24 hours to be there for the customers. More than 70% or the orders were received in the first 30 minutes. The last order was picked and shipped on 12 November.

P.A.P Made in Sweden Premium hand made felt and leather accessories with an eco friendly tanning method. Now selling in China and Hong Kong via JOHAN & JOHAN. www.papsweden.com Follow on Instagram; pap_asia

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JOHAN & JOHAN Gazette


20 Y e a r s

in

V i e t na m

By Krister Kling General Consul of Sweden’s in HCMC

“Mr Krister Kling is the Consul General of Sweden in Ho Chi Minh City since 2005 and is also the Director General of a Guston Molinel SA producing professional garments and high end leisure clothing. Among the customers of GM there are several well-known brands from Europe and Australia. Mr Kling has – with his comprehensive experience of Vietnam – been a good advisor during the establishment of JOHAN & JOHAN”. Many sunrises and many sunsets has been accumulated during the awakening of the Blue Dragon, which can be described as a small economic miracle that’s was developed under the red umbrella of political affiliation. I still remember the first steps taken on Saigon streets and I have followed how its people have adjusted themselves to the consumer society and developing country at a pace that is fantastic. 20 years ago one was surrounded by girls on bicycles dressed in white Ao Dai, today the same girls drive a scooter and dressed in jeans. There was no high rises, there was limited taxi’s, cycles was the mean of transportation and one could always get a good Vietnamese Pho for a dollar.

2016

As related to the manufacturing segment of business I have seen factories develop from North to South in a speed that makes one think about the dedication and creativity this people have. As in every developing country certain businesses always comes first, assemble industry, such as textile, shoes, white goods etc. Vietnam was no exception, due to the availability of workforce, in the next step Vietnam has developed supplies that in the early days was brought in, but quickly many young entrepreneurs found a way of setting up shop. The leadership of Vietnam also quickly understood the necessity of infra structure so that over the years the whole country could benefit from the boom. Today one can easily say that Vietnam is a country were business flourish across all the fields and will probably continue to do so years to come. What does the future have? We know what we have today, a stable economy, and continuous development, stable political situation and still a young available workforce, but is it enough, my personal feeling is, that this is not enough, some questions has been raised, why does tourists only come one time and not like in Thailand over and over again, why cant we find locally educated middle management, why do we still have to relay on imported management,

is the school system not up to it, why does Vietnam always look at Singapore as the target of success. Very interesting questions for the next coming years, were would the Blue Dragon go? To sum it all up one can say the following, Vietnam has another eight maximum ten years in the developing phase if competitiveness will be there, salary levels are on the rise and soon other regional countries will come back in the market on a competitive level. The government needs to let go of the old criteria, cut away red tape issues, push for democratic reform and make sure that investors stay or come forward on the basis of sound economic development and return on investment. But never the less, the past twenty years living in the land of the Blue Dragon I have no regrets, the country, it’s people and living in such an environment has been an experience I would not like to be without, the positive sides outpace the negative on the whole scale of being here for twenty odd years. Krister Kling

“…living in the land of the Blue Dragon… …it’s people and living in such an environment has been an experience”

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When in France B&B in Espinasse Vozelle Aux Jardins des Thévenets An old barn transformed into the most wonderful small place to stay. Breakfast and dinner with the owners and other guests in the garden. www.jardins-des-thevenets.com

When in Switzerland Brasserie in Geneva Café du Centre, Place du Molard 5 Moules, huitres, fruits de mer. The oldest and best brasserie in Geneva. Established 1933 and it is truly a heaven both for the eye and the palate. www.cafeducentre.ch

When in Italy Restaurant in Milano Navigli Trattoria Ponte Rosso, Ripa di Porte Ticinese 23 The menu follow the local season of ingredients. A dinner here is a momorable moment and you will return. www.trattoriaponterosso.it

When in Sweden Hot dogs in Borås Särlakoket, Göteborgsvägen 10 When only the best is good enough. Typical Swedish hot dog street restaurant for sausage, mashed potatoes, shrimp sallad, roasted onion, ketchup, mustard and more…

When in Germany Bar and Restaurant in Berlin Strandbad Mitte, Kleine Hamburger Str. 16 Right in the heart of Mitte quarters in Berlin. The service is just amazing. Good food in a nice environment. We also tried the breakfast and it was spot-on. www.strandbad-mitte.de

When in Hong Kong Restaurant on Hong Kong Island Little Bao, 66 Staunton Street, Central Cross-over food presented as pieces of art. The taste is great and staff knows to take care of the guests. The burgers – all with a twist – are a must. www.little-bao.com

When in Denmark Restaurang in Odense Gröntorvet from 1724, SortebrödreTorv 9 HC Andersen hometown. Have “Smörrebröd” the traditional Danish sandwish and “en lille en”.. www.restaurantgrontorvet.dk

When in Skåne Inn in Skanör Skanörs Gästgiveri, Mellangatan 13 In beautiful Skanör the best place to eat or stay is here. We ended up having a Mårten Gås dinner (traditional goose) a dark november evening. www.skanorsgastis.com

When in Austria Scnitzel Restaurant in Vienna Figlmüller, Wollzeile 5 The home of the schnitzel for more than 100 years. www.figlmuller.at.

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JOHAN & JOHAN Gazette


HC MC - V i e t na m

F i r s t d ay i n t h e n e w o f f i c e

Johan & Johan (Vietnam) Co. Ltd. TNR Tower, Room 42, 9th Fl. 180-192 Nguyen Cong Tru St. Nguyen Thai Binh Ward Dist. 1 Ho Chi Minh City Vietnam

Why start in Vietnam? The market is already big enough for Johan & Johan and the demand is expected to develop quickly in the coming years for higher quality products. With a very high birth rate, and a population of more than 95,000,0000, baby, kids, and mother products is a promising segment which we will start with. Secondly we want to confirm that our business model is scalable and that a new market can start quickly, at low cost and risk by leveraging the HQ competences and infrastructure. We want to know this before setting the long-term strategy in Asia. Our aim is to follow the same business model in Vietnam as we have executed in China – with some local adjustments. So far with 3-4 months of experience - our thesis about the scalability of our business model seems to be right. It is of course interesting for our prospects and existing clients to choose/ have a partner that can serve several markets in the region. On top of this we love the country – its people and the food:-)

Huyen

Mandy

Any lessons learned? Definitely and confirmations of many of our initial thoughts. The need of a good lawyer for the establishment and consumer law, need of local expertise in import procedures and do not underestimate the time bureaucracy takes in this part of the world. Creating a network takes time so before starting up the business we need to make multiple visits. But maybe the most important – start the business with local staff with experience and at least one person should have worked at least 6 months at HQ in Shanghai. Who are the clients? We think that Vietnam will be interesting for several of our existing clients and that they can enter a new market very easily and fast. We have the pleasure to start with two very strong baby brands that both are perfect for us.

“It’s copy paste of the China set-up localized when necessary” We are lucky: We have a dream team in Mandy and Huyen and we know they will do a great job. They are both well educated, have solid experience from Johan & Johan’s business and a valuable network in Vietnam. Beside them we also have a Vietnamese good friend – with long experience working and living in Europe - as our legal representative and acting chair. So solid local competence is already in place. Next step? We have finished the post-registration and are now looking into the details of logistics like product testing and marking for customs. The first merchandise will arrive in Q2. We plan to do the first real “outbound” within. We are now talking to both online and offline retailers and making a selection of 4-6 partners. 2016

O u r favo u r i t e P h ô r estau ra n t N h u L a n , Ha m N g h i , D i st r i c t 1

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Hong Kong -

Ta k e t h e S ta r F e r r y to our new office in Hong Kong

our third market

WHY HONG KONG? The company is registered in Hong Kong and has the necessary licenses for import and sales. We are now looking for a sales person – reporting to our new Commercial director in Shanghai – to be responsible of sales in Hong Kong and South China. In 2016 we foresee some of our clients will grow in the offline retail and that is not possible if we can’t make personal visits regularly. If you want to sell to retailers in Paris you don’t have your sales force in Stockholm… We also believe that some of our existing brands have potential to sell in Hong Kong. A good sign is that we are contacted by retailers in Hong Kong who are interested in carrying our brands which could potentially start to sell in March. The Hong Kong company will be operating under the brand Johan&Johan together with the sister companies in Vietnam and China and again we do everything copy paste with localization if necessary.

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JOHAN & JOHAN Gazette


This years interns This is now the 4th year we take on interns from Exportakademin in Sweden. We find it a duty for companies to invite students to get experience and practice. It’s also a good source for future recruitments…

We are now on 21st and 17th floor NEW TEST STANDARDS IN CHINA FROM 1/7 2016 GB31701-2015: New Chinese national standard for infant and children textile products China has in its efforts to further strengthen the safety requirements on textile products for infants and children issued the new standard GB 31701-2015 which will replace the current GB18401-2010- standard. GB 31701-2015, or ‘Safety Technical Code for infant and children textile products’ as it is also called, has a more technical focus and further enhances the safety requirements on textile products for infants and children. As opposed to the current one, GB31701-2015 includes requirements on chemical safety, mechanical safety, textile accessories and flame-retardants.

This year we have the pleasure of having Klara and Kristina with us for 5 months. They do a fantastic job and contribute to our Sales & Fulfillment. Klara and Kristina have each one the responsibility for a defined project. Klara is working with the sales of brand P.A.P, leather accessories, and Kristina focus on the breathing masks SEGRE. In the middle of the intern period Linda, who is a classmate of Klara and Kristina, joined us. Her task is to arrange 3 seminars in Sweden in May 2016 where Johan and Johan will present both the Enabler- and Operator services.

We are looking for more talents hr@johanjohan.com

M a r l e n e Sa n d b e rg

The implementation date is set to June 1st 2016 with a 2-year transition period. Thus, products manufactured before implementation and fulfill certain standards are allowed to be sold on the Chinese market. From June 1st 2018 all concerned products must comply with GB31701-2015.

JOHAN & JOHAN will organize three seminars on the topic “How to do business in China, Hong Kong and Vietnam” in May 2016. Interested or do you know some who might be – drop us a mail on info@johanjohan.com

2016

“It’s a complete waste of time doing something mediocre”

- Marlene Sandberg

Read on a wall at client Naty’s HQ , Stockholm

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The Chinese eCommerce model is spreading globally By Marco Gervasi for the Gazette Marco Gervasi is within J&J’s network of experts and our discussions are fruitful and interesting. He is a big source of inspiration to us.

economy.” This is exactly what China did. But the Chinese e-commerce model is not only entering emerging markets, it is also setting foot in the developed world. A clear example is what is happening with WhatsApp acquired by Facebook to create a more similar model to WeChat. Another example is what Twitter did by adding images to its application in the same way done by Weibo, the popular Chinese microblogging platform. Finally, the acquisition of Alibaba’s e-commerce site US 11 Main could be the “Trojan horse” to bring East-Commerce in the United States.

During ‘Start-up Asia Jakarta”, an event where the best technology start-ups in Southeast Asia present their products to the public, I interviewed a young entrepreneur called William Tanuwijaya. William comes from a small town in Sumatra and is the founder of Tokopedia, Indonesia’s largest e-commerce platform. To build his platform, William was not inspired by eBay, nor by Amazon, but by Taobao, a Chinese marketplace created by Alibaba and designed to solve the same problems that the Indonesia’s e-commerce faced. In fact, because of its thousands of islands, recreating an Amazon type model - where a company buys, stocks and resells goods directly to the public - would require the construction of warehouses in all major cities: an unthinkable task. Taobao instead is a technology platform simply connecting consumers with producers. It is much easier to set up and cheaper to scale. On October 2014 SoftBank, one of Asia’s biggest technology companies and a key investor in Alibaba - and Sequoia Capital have invested USD 100 million in the company setting a record in the history of Indonesian start-ups and proving that Taobao model is a winner. William and Tokopedia are part of one of Asia’s most promising e-commerce markets. But Indonesia is not the only country where the Chinese e-commerce model has been successful. There is also India, where since 2010 e-commerce has been growing by more than 100 percent year over year. According to Gartner, the Indian e-commerce market will reach more than 6 billion USD in revenues in 2015. The three largest Indian players are Flipkart, valued over 10 billion USD, Amazon, and Snapdeal, also known as the Alibaba of India and valued over 5 billion USD. Among the three, Snapdeal, invested among the others by Softbank and Alibaba, is probably the one that is growing the fastest. It is therefore becoming increasingly clear that the Chinese e-commerce model is spreading outside its borders. This is why I believe we are facing the birth of a new phenomenon that I called East-Commerce. East-Commerce is not just confined to Asia, it is spreading to other emerging countries. For example, the Nigerian e-commerce site Konga. com, originally conceived as an Amazon-like model, launched its marketplace platform at 20

The book is available at AMAZON.COM the beginning of 2014 with the goal of becoming the Alibaba of Africa. In 2015 Baidu acquired the Brazilian group buying website Peixe Urbano and applied there its Chinese online to offline model. Peixe Urbano market share grew from 30% to 60%.

“For the first time a new Internet model, which has not been developed in the United States” What we are seeing happening is that two different Internet models seem to be emerging for two different market conditions.

For the first time a new Internet model, which has not been developed in the United States, is about to compete at the same level and, in certain cases, to be even better than the American one. It is now clear that very soon we will increasingly interact with Chinese e-commerce both nationally and globally. More and more Chinese e-commerce platforms are in fact opening offices around the world and their task will not only be to recruit brands and products to be sold in China, but also help their companies conquer new markets. This article is excerpted from “East-Commerce, A Journey Through China E-commerce and the Internet of Things” by Marco Gervasi (www.east-commerce.com). The book will be published by Wiley & Sons on April 2016 and the ebook is already available on Amazon. To learn more about how technology is changing our lives and the global business models you can follow Marco Gervasi on his blog www.marcogervasi.wordpress.com.

“We can now distinguish between developed countries and developing countries models,” said Porter Erisman, the former VP for Alibaba now helping e-commerce companies building marketplaces. Porter’s conclusion is based on his on-the-ground experience with Taobao. “People know that the U.S. has developed the most mature and effective e-commerce model. It is a bit like buying a car. Everyone knows that Germany has produced some of the most advanced cars in the world,” said Porter. But here is the catch: “The established model used in developed markets like the U.S., Europe, and Japan, does not Iwork well in developing markets because it has been built relying on different infrastructures and market features. Therefore you need to develop a model that better suits the different market conditions of a developing JOHAN & JOHAN Gazette


China’s eCommerce market likely to exceed that of Europe and the US combined within three years Value of e-commerse transactions in the USA and China 2009-2015 USD billion 600

China 500

400

USA

China’s annual online-retail sales passed those of the United States in 2013. By 2018, they are estimated to reach about $610 billion—passing Europe and the United States combined. Yet though the market is vast, succeeding in China is far from easy. While select leading Western companies have captured some of the country’s explosive ecommerce growth, many make basic mistakes, from equating China’s e-commerce leaders with US companies (“Alibaba is China’s Amazon!”) to assuming selling and distribution practices from home markets are transferable. The reality is that China is simply different. As a point of comparison for consumer and retail companies, we regard the combination of the size of the prize and the degree of change needed to succeed as roughly analogous to what consumer-packaged-goods companies experienced in the late 1980s when Walmart changed the consumer game.

300

200

100

0 2009

2010

2011

2012

2013

2014

2015

Fulfillment

Source: Cindy Chiu, Todd Guild, and Gordon Orr, Aug 2015 /www.mckinsey. com/ insights/consumer_and_retail/five_keys_to_connecting_with_chinas_ wired_consumers

handbook

and a good news

Good financial results – bottom line - comes from avoiding delays and mistakes. The nature of the collaboration between JOHAN & JOHAN and the clients is transaction intense and details of the processes are important. The Fulfillment Handbook helps clients and JOHAN & JOHAN to achieve not only good sales but also good financial results. It is a part of the start up project to go through the Fulfillment handbook with the clients. It is a guidebook how to do all the details such as documents, packing, marking, IT collaboration etc. It is actually a book about the basics that we know from experience are not always fully in place. If both client and JOHAN & JOHAN follow the guidelines of the handbook we will save a lot of unnecessary costs and important time.

2016

Bonded and Non-bonded in one warehouse *) From April we will be able to store and handle products both as non-bonded and as bonded in the same warehouse. One side of an aisle is bonded and the other is non-bonded. This means we can now use the advantages of bonded warehouse in a much faster and cheaper way. Our Fulfillment team is happy to tell you more… *) In a bonded warehouse the goods are not yet cleared through customs and can be transferred for clearance to any country of destination.

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Mobile

sales information ALMOST REAL TIME DATA

A new value added service Johan & Johan’s monthly report package on sales and inventory information is extensive and an important tool for both our own and for clients work. But it is historical data and to be able to speed up action taking we have created a mobile app where all sales transactions until yesterday evening are included. With the app, our clients can – while brushing their teeth in the morning – check their sales from yesterday in number of pcs and revenue. We split B2B and B2C and display some essential eCommerce KPI’s.

A walk in the park

Sales is presented as monthly as accumulative and compared to both budget and last year. This will be launched at the latest in Q2 2016.

Chat during lunch break W: What happened? It’s soon X-mas. Where did 2015 disappear? A: I don’t know… To me it feels like it was summer holidays a few weeks ago. W: Is that a good or bad sign? A: Well it’s been a year with a lot of work. I feel the need of a bigger organization now is urgent. W: I agree – it’s good to have a flat organization but we have passed the level when that is no longer possible. We need more middle management. A: Thank God we have started the recruitment of a Team Leader for the Sales. And that Aurore could take responsibility for the Fulfillment team. W: Yes, but to balance the cost of new staff with the growth and income is maybe one of the toughest things being an entrepreneur? To afford and the need is not exactly in synchronized… A: As usual we have to listen our gut feeling… (a smile) W: We have both new Enabler and Operator clients starting soon. A: You are right. Now I am hungry. W: Looking forward to lunch now. Yummy dumplings. 1pm we have a meeting with Bonzun for ad’s on their maternity app. Nice to meet Bonnie again. Do you know when Mandy is coming to Shanghai? A: It’s going to be fantastic to reach out to 900.000 users of the app – all interested in baby products. Here we are. Did you say dumplings…? I will show you some ideas of the PPT presentation for tomorrow’s monthly meeting with BabyBjörn while we eat. Mandy is coming on Thursday.

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JOHAN & JOHAN Gazette


Responsibility today and tomorrow Interview with Anna-Karin Wårfors Hea d o f C S R at G i n a Tr i cot

Gina Tricot – a successful Swedish fashion company – is using the Enabler service at Johan & Johan for their production office in Shanghai.

both media and consumer groups, require us to strengthen local presence – but finding the right staff can be tricky. From our perspective, the CSR field should be interesting for any young person wanting to enter into an exiting line of work!”

Q: In short, what is CSR? A: “The shared responsibility of governments and companies to contribute to the development of human rights has been gaining momentum since Special Representative John Ruggie first presented a framework to the United Nations’ Human Rights Council in June 2008. In this, the corporate responsibility is identified as respecting human rights, avoiding infringement on the rights of others as well as addressing adverse impacts of operations.” Q: What does that mean to a company like Gina Tricot? A: “To us, corporate social responsibility is mainly about taking responsibility for our business, for example by protecting the human rights of those involved in our production. These rights are based on international labour standards. In order to approach this systematically, we are members of the Business Social Compliance Initiative, an organisation with more than 1 600 member companies. Our shared Code of Conduct and harmonised compliance process provides a united framework, meaning that both we and our suppliers can build cooperation on issues that can often seen ambiguous.”

Q: What’s the worst thing about your job? A: “Obviously the potential risks. When the Rana Plaza factory complex in Bangladesh collapsed in April 2013, leaving more than 1 100 workers dead, it was a reminder that labour rights really need to be protected. But the industry responded, and there are now more than 190 brands working together in the Accord on Fire and Building Safety in Bangladesh, inspecting factories and taking action to make factories safer.” Q: What’s the best thing about your job? A: “That it is evident that cooperation is really working. BSCI and the Accord are two examples, but we also see that our long-standing suppliers have formed strong alliances with us also through the CSR process. Sure, the world isn’t exactly as we want it to be, and we can never say everything is perfect just because there is a Code of Conduct. But together, we are improving!”

Q: What are the greatest challenges?

Q: How do you see CSR in China?

A: “The supply chain in the fashion industry is highly complex and there is no strong tradition of transparency in the industry. For the compliance system to work, we need to know where all products are produced. When orders are subcontracted without us knowing, the system fails. Also, the higher demands we place on ourselves, as well as increased attention from

A: Global textile production is a highly competitive arena, and buyers are becoming more flexible and fastmoving. Strong focus on CSR is therefore a competitive advantage for Chinese suppliers, not only to gain new customers but also to continue the often strong and long-standing relations they have with European brands.

DEFINITION OF CORPORATE SOCIAL RESPONSIBILITY (CSR): Corporate social responsibility, often abbreviated “CSR,” is a corporation’s initiatives to assess and take responsibility for the company’s effects on environmental and social wellbeing. The term generally applies to efforts that go beyond what may be required by regulators or environmental protection groups. Read more: www.businessnewsdaily.com/4679-corporate-socialresponsibility.html

2016

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Striped sinc e 4 0 y ea rs

1976

Swedish quality baby & children’s brand Polarn O. Pyret Interview with E-commerce Project Manager Anna Sandberg at “Pole Arn Oh Peer Et”

How do you translate Polarn & Pyret into English? Polarn O. Pyret… “Pole Arn Oh Peer Et” means “Buddy and the Little One” since we have clothes for both the newest of babies and playful kids at school. But, to make it easy, you can call us “PO.P” for short!

Striped clothes – tell us the story? The stripes have a long history and the imitations are endless – but a striped top will always be associated with Polarn O. Pyret in Sweden. The designers behind this successful collection were Katarina af Klintberg and Gunilla Axén. They wanted to make life easier for families since, at the time, women started to work in a higher extent and the fathers had to take more responsibility at home. With the stripy collection you could easily mix and match tops and bottoms, the colours could be used by both girls and boys and you could wash it all together. Easy. What are the important cornerstones of the brand? The same core values lives on from the time when the first stripe was born. Polarn O. Pyret still makes unisex prints and do not separate between girls and boys. The quality is never to

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be questioned. We make clothes that can be used by generations to come, which is also a very important benefit when it comes to our sustainability work. But perhaps our most important corner stone is that we produce clothes that are functional and easy for kids to play in. Clothes that let children be children. Why go to China? Our goal is to offer our clothes worldwide. Today we are represented on many markets such as UK, US and in most of Europe. China is a fast growing market that is very interesting to us. We decided to go online on T-mall in cooperation with Johan & Johan, since we see high potential with the cooperation and the ability to reach our target group.

Will you be able to teach Chinese parents to put on rubber boots on their children? Does it rain in China? Our philosophy is that you should be able to play outside, regardless the weather. We shouldn’t let everyday things like rain stop us from doing what we want, no matter where we are. The same goes for all our outerwear. Also, dry and warm children are happy children and we are convinced that also the Chinese consumer want smiling faces on their little ones! Will the white stripes stay white even after washing? Our stripe never fades. Thanks to never, ever, compromising on quality, the clothes will stay the same wash after wash. You will be surprised how many times you will be able to hand it down from brother to sister or even neighbour. That’s also what makes us sustainable.

JOHAN & JOHAN Gazette


Maternity h ea lt h a p p s u p po rt i n g Chinese preg n a n c i es Bonzun wins prestigious prices

From January 2016 Bonzun and JOHAN & JOHAN are collaborating in marketing activities at hospitals and on the app. In January 2015 one of Sweden’s top entrepreneurs, Bonnie Roupé, tapped-in to China’s need for more support for families during pregnancy, through the launch of Bonzun – www.bonzun.com Bonzun is an app with a clear message to help deliver knowledge and peace of mind to pregnant women by giving them on-the-go access to safe health information. It has the world’s first test tracker, covering 30 blood tests and maternal check-ups in China. The service was started after its founder and CEO, Bonnie, experienced some complications during her own pregnancy. After experiencing the uncertainty about her symptoms and the difficulty in finding research about her condition, she was inspired to try to change things for other women. The need for the app was particularly validated in China when she discovered the supporting facts that 39% of pregnancies in China experience complications and 82% of wealthy Chinese don’t have a family doctor. Not to mention the fact that many migrant Chinese women may go through their whole pregnancy without seeing a doctor.

worldwide, for the app’s functionality and social responsibility including one from the Shanghai Civil Affairs Bureau for best social responsibility start-up 2014. Bonzun is initially free to download but to get full access to all its services, this requires users to pay for a subscription service. Other future revenue drivers will include sponsored content, further premium functions and in-app purchases of private medical professionals time as well as life insurances for Chinese families. Bonzun was also nominated Chinas top Mobile & Internet start-up in Beijing, which is a unique thing since it’s a Swedish company. The app - available in both Android and iOS currently has 900,000 users. Bonnie predicts that by 2017 Bonzun will have 20 million users all over the globe. She believes that this is positive news for continuing to support the Chinese health service in the future as the bigger the service gets, the more it will be able to do. They’re currently not only working on a new improved version of the app but also looking to go worldwide, starting with launching into the UK market by end of December 2015. The Chinese name for Bonzun is 科学妈 (Kexuema).

Despite Bonzun’s limited marketing budget, within 6 months of launch it has had 420.000 downloads and had won multiple awards

Online

marketing

How to be seen online in China? Since a few months an in-house service There are 700,000,000 netizens in China and the potential to sell your products on the Chinese eCommerce market is huge. However, how will they find your store and your products? Where and how are they searching? How to coordinate offline activities with your online store? It is the daily work of our online marketing team to deal with these questions in order to maximize sales.

Polarn O. Pyret is the first advertiser to support Bonzun and reach out to the nearly million Chinese women who use the service.

A common question is where to spend the online marketing budget? Chinese netizens tend to go directly to the online marketplace for product search. Tmall.com and JD.com, the two biggest marketplaces, have their own search engine with marketing tools for keywords, banners etc. Traditional search engine marketing on Baidu.com has a better ROI for services and B2B.

2016

25


A sias

next trillion dollar business

The Indonesian economy has the capacity for robust long-term economic growth. Indonesia is on track to become Asia’s next trillion-dollar economy in two years, according to IHS, joining the ranks of China, Japan, India, Australia and South Korea. “The Indonesian economy has the capacity for robust long-term economic growth of around 5.4 percent per year over the 2016 to 2020 time horizon,” said Rajiv Biswas, chief economist, Asia-Pacific at IHS. Thereafter, GDP is projected to double again by 2023 to an estimated $2.1 trillion – surpassing Australia, which is currently a $1.52 trillion economy. Indonesia’s economy has proved resilient despite commodity price headwinds and monetary policy tightening thanks to steady domestic consumption, supported by the country’s rapidly expanding middle class. The economy expanded 5 percent in 2015, with growth projected to accelerate in 2016, driven by a recovery in exports helped by the lower exchange rate and pickup in govern-

ment investment, according to the OECD. Shifting dynamics Indonesia’s economic ascent over the next decade has significant geopolitical implications, said Biswas. The country will have a far greater voice in international political and economic institutions as a result of its increased economic might, including in the G-20, IMF, World Bank and United Nations, he said. “The rise of Indonesian GDP will also create rapidly growing bilateral trade and investment opportunities in a wide range of market segments across many industries, including resources, manufacturing and services,” he said Indonesia’s GDP per capita is forecast to rise to $8,700 by 2025 from $3,400 - becoming one of the largest emerging consumer markets in the world.

Aurore Demurger

Hurdles to overcome Despite Indonesia’s favourable economic performance over the last decade it still needs to tackle major economic development challenges, including improving its business climate and creating employment opportunities for the large number of workers entering its job market each year. “Indonesia’s youthful demographic structure means that around 2.4 million people will join the population of working age every year over the next decade, requiring sustained rapid jobs growth to fulfil the expectations of young job seekers and to avoid any potential risks of social discontent or unrest,” said Biswas. The government also needs to work on diversifying the economy away from a heavy reliance on commodities exports. Source: Shortened version of CNBC Asia Economy 16 Apr 2015 by Ansuya Harjani, Writer, CNBC Asia

When in Indonesia Café Batavia a fantastic Bar, Restaurant and Café in Jakarta. Set in a 200-year old building is this amazing colonial style place. It is a must to visit in Jakarta. The bar is on the “Top 100 bars in the world”.

Fulfillment t ea m weekly p l a n n i n g The fulfillment team – responsible for logistics, import and CIQ, labelling of products, purchaseand sales order management, warehouse and distribution, controlling, IT/ERP, reporting and customer invoicing is now headed by Aurore Demurger. Aurore is recruited internally after working with business controlling and process development for three years. Her affection to the work and her team is as big as for Burgundy wines – her region of origin. The team consist of Aurore, Anders, Bruce and Winnie and they have taken our supply chain to a new and higher level. The collaboration with clients is guided by the Fulfillment Handbook – a bible in how to avoid delays and extra costs and be efficient.

26

J&J’s FIRST SNEAK PEEK AT INDONESIA In November Johan and Johan went to Jakarta for a first look at a possible future market. We had lunch at Batavia and it’s a wonderful place. With its huge population and well developed retail industry – there are 170 modern shopping malls only in Jakarta - it is for sure interesting for western brands. Big investments are taking place in the eCommerce sector and marketplaces. Keep your eyes open in coming issues of the Gazette. The people in Jakarta – everywhere – were maybe the kindest people we ever met. Hope to come back.

JOHAN & JOHAN Gazette


H e is the best Our photographer Nicky Almasy

Nicky Almasy is one of the most sought-after photographers in Shanghai where he has been based since 2006. His photo and video work has attracted both awards and attention, reflected in his global client base. Nicky has shot for international magazines

Our

In 2010, Nicky was commissioned to shoot Shanghai Tower, Asia’s tallest building and the world’s second largest building after the Burj Khalifa. The project – which has taken five years to shoot and is still ongoing – encompasses the entire construction process of Shanghai Tower, from breaking ground to completion. Nicky’s photograph of the building “Three Brothers” was among the winners of Engineering News-Record

own photo studio

Johan & Johan as a company has many different areas of expertise, ranging from logistics to design of eCommerce sites and market knowledge. Now another specialty area is added - studio photography. Someone might wonder why J&J needs a photo studio? On the Chinese eCommerce market the customers have very high demands on the pictures. There are the usual images from the front and from behind, but beyond that the customer also wants detailed

2016

and newspapers including Condé Nast, Wallpaper*, Financial Times, The Daily Mail, Where and now also the GAZETTE. His photographic portfolio covers architecture, fashion, travel, dining and portraiture. He is also a demanded

filmmaker, principally for music videos and documentaries, which have appeared on television in his native Hungary.

magazine’s annual Year in Construction Photo Contest in 2012. His architectural portfolio also includes work for B+H Architects, the company behind Shanghai building K11, formerly the Hong Kong New World Tower. Nicky’s other major photographic subject is the city of Shanghai itself. For the last nine years, he has photographed China’s largest city in the thrust of one of the greatest urban transformations in history. His photo book, Shanghai, City in Motion: Rebirth of a Modern Metropolis, was published in 2013. www.almasyphotography.com

for a demanding market

pictures of everything from the washing label to images on details like the zipper and seams. There is no limit to the amount of images that can be considered important for each individual product. To meet this need from the market and costumers, J&J now have a photo studio where pictures can be tailored to suit the Chinese market, all in-house. Image; Anders Eriksson, in charge of marketing, shooting detail product images for Tmall stores.

27


Plans

for

2016

1 / HONG KONG OFFICE Our third market is opening up in new and stronger shape. We are establishing an office with the main task to support sales in Hong Kong and south of mainland China. The office is a part of and reports to the sales office at HQ in Shanghai. 2 / JOHAN & JOHAN As presented at our Asia Conference in December 2015 we are now gathering our businesses under one brand name. The roll out will start in March. We will now be called what we are called… 3 / SALES ORGANIZATION We do Sales & Fulfillment and with the growth of existing and new clients the sales team is growing. We take on new tasks such as taking product images, making online banners and store design, increasing marketing activities, social media operation, sales training at physical stores, visual merchandising etc. A lot of focus will be improving the tools and possibilities for the team to increase sales. A Commercial Director is employed to take responsibility and take us to a completely new level. 4 / MOBILE SALES DATA The complete information and statistics work will take a big step forward. We are looking at internet based tools to be even quicker and smarter with our reports. A mobile app for clients to follow sales and inventory updated with yesterday’s sales will be launched. “Retail is detail” and it starts with fast and relevant information. 5 / 4th FLAGSHIPSTORE ON TMALL The set up process is started to launch a store on Tmall for Swedish diaper brand ECO BY NATY.

Next issue #3 out January 2017

6 / SIMPLICITY The keyword for 2016 is “Simplicity” and the reason for this is that together with clients we need to think in terms of simplicity to cope with competition, costs and speed. The constant work with fine tuning processes should be guided by simplicity. Fight bureaucracy and administrative trouble and embrace simplicity, lean thinking and speed !

2016

JOHAN & JOHAN Gazette

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This is our way of presenting our company and ourselves. Our ambition is to offer interesting reading and give you a deeper understanding of...

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This is our way of presenting our company and ourselves. Our ambition is to offer interesting reading and give you a deeper understanding of...

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