Aaron Conant  0:18

Happy Tuesday everybody. My name is Aaron Conant. I'm the co founder and managing director here at BWG Connect. We're a networking and knowledge sharing group of 1000s of brands who do exactly that we network and knowledge share together to stay on top of the newest trends and strategies, different things that are shaping the digital landscape as a whole. I talk with 30 Plus brands a week just to stay on top of those trends more than happy to spend any time with anybody on the phone today. If you are on the line today, you know, if you want to spend some time on the calendar, just ping me always love those conversations more than happy to knowledge share, you know, kind of give you an overarching strategy of who's winning who's not wise, what's working, what's not, especially if you're looking for partner selection right now. This is a time of year I spent a lot of my time just helping brands figure out who's the right people out there for you. So that's everything from Amazon to in this case like an international expansion to your direct to consumer site from you know, paid media performance SEO replatforming drop shipping, you know, Amazon vendor negotiations, whatever it might be more than happy to kind of walk through what's happening, who's working, who's not a couple housekeeping items as we get started today. You know, we're starting three to four minutes after the hour and just you know, we're gonna wrap up with three to four minutes to go or give you plenty of time to get on to your next meeting without being late. The last thing is we want this to be as educational and informational as possible. So at any point in time if you have questions don't hesitate to drop into the q&a section and drop into the chat you can always just email me Aaron Aaron@bwgconnect.com and get questions answered that way and as the email goes, I mean that can be an hour after the call tomorrow next week you don't have a question in the digital space around this don't hesitate to reach out we got some deep roots across the landscape as a whole I'm more than happy to get you an answer to your question usually in under a day. With that being said I'm gonna kick off this particular conversation. You know Joseph Cooke is here with us he's great friend, partner supporter of the network over at WPIC in in the reason I think that this has been popping up is you know, Joseph and I were chatting just before we kick this off. There's this huge, like shift as people have seen their Amazon business grow, have they seen Walmart stumble a little bit target is kind of picky on who they deal with. There's a massive focus in two areas. One is direct to consumer. And the other is international expansion. And one of the biggest markets obviously out there is China, but also broader AIPAC as well. A lot of people say, hey, once I've got it over there, where else can we expand to and so if you WPIC, like, really, truly leaders in this space come highly recommended from a ton of brands in the network, you know, just for the the great work that they're doing. And so I asked Joseph to kind of jump on and say, Hey, you want to give us you know, kind of a high level and then get nitty gritty and some stuff as well around what's happening, what it takes to win. And so, Joseph, I'll kick it over to you if you want to do a brief intro on yourself and WPIC, that would be that'd be awesome. And then we can kind of jump into the info you have today. Sounds good.

Joseph Cooke  3:05

Sounds great. Yeah. Thanks very much, Aaron. Pleased to be here. Always, always good, fun conversations with you in the BWG team over the years. So you know, appreciate doing this and everybody for joining today. So yeah, great to meet we'll talk today but growth opportunities, eCommerce in China mainly and then broader AIPAC and how we can leverage China to you know, scale out in the neighboring markets. Just quick intro in terms of who we are. I'm one of the partners in the firm. I'm stationed right now up in our Vancouver office. We've been in the space for about 17 years. So the firm is about 17 years old, headquartered out of Beijing, where we started it. We've built a footprint across Mainland China. We've got campuses up in Beijing, Nanjing, Hong Joe, Hong Kong, Tokyo, Osaka, as I said, I'm here in Vancouver, a number spread basically coast to coast across North America headcounts about 350. Today, we've launched you know, close to 600 programs inside the market. We've considered ourselves to be fairly sector agnostic in the market. But, you know, work with all sorts of different brands, big brands, and small brands, and all sorts of different spaces and all sorts of different phases of their lifecycle and China, as well. And we've been helping organizations basically, you know, look at data inside the market to identify you know, what's the addressable market size, what's those cash conversion cycles, the return on spend, etc. In the market, we do a lot inside the eCommerce activation space. So we function as a merchant of record, you know, mitigating these guys's needs to have a license in market we function as a receiver of record so you know, taking product from a loading bay in the West, bringing it to China handling duties, customs processing, putting it into our warehouses and market and staging for pick and pack inside China and greater APAC we work on all of the relevant marketplaces, the eCom marketplaces Alibaba Tmall, JD, Rocco tan, Amazon Dakota JP deploying native stack eCommerce inside the market, shopping and Lozada platforms throughout Southeast Asia we do all the ancillary marketing creative does development the live stream indicate walls we typically have about 1000 cables on payroll at any point in time, activation of all the media licensed procures of all these media products instead of the market, the customer service programming we deal with right through to point of sale into tax remittance and then expatriation and reconciliation of USD back out of the market. So very end to end totally vertically integrated inside the the organization. And yeah, functioning basically through a greater AIPAC.

Aaron Conant  5:30

Yeah, it's awesome. So just literally any questions you have in this space, these guys are tackling the issues that you might have across the board. So yeah, it asked away. Um, so I mean, we would kick off here, you know, do you want to kind of just give us the, like an overview of you were mentioning a bunch of the different, you know, eCommerce markets that are over there, you want to kind of walk us through that digital landscape as a whole?

Joseph Cooke  5:56

Sure, yeah. I mean, at the outset, if we just look at sort of eCom and the marketplaces, and it's a very marketplace driven, you know, throughout the region. So just focusing on China. You know, China's basically developed its internet and to being very siloed, oligarchy, oligarchical, and how it's structured, and very challenging for cross platform pollination. So what are we left with in China, we're left with the big eCom marketplaces like JD and Tmall. We've got WeChat, as your big social platform, Little Red Book is sort of like your social commerce, if you do b2b 168 dot com is a relevant platform for you as well. Very mobility, app driven, going to websites unless you're hardcore b2b is sort of a thing of the past in the market. So we're structured inside of these silos inside the market, which again, mobile first, mobile app based, very marketplace driven. And once you're in those ecosystems, these platforms do whatever they can, obviously to keep you inside of them. And pollinating between these platforms, is a little bit of a challenge. So that's the those are the conditions we look at inside the market. Japan, you know, Japan is basically split, you know, roughly, you know, a third Amazon, a third, Rakuten, and about a third of a mix between Yahoo and CO, JP programming inside the market.

You know, Japan is an up and coming eCom market, obviously, it's showing tons of growth opportunities out there, I would be paying particular attention to roku 10. If brands are looking for which platform should they use to build their beachhead, I think a lot of organizations gravitate towards Amazon, just due to the inside understanding of the workings of Amazon and the philosophies that they may have that they've already sort of overcome that threshold to launch on Amazon in the West, they look at Amazon as potentially a proper player, inside Japan, it has merit. But in terms of scale growth velocity, where we see the market going, we always like to include Rakuten in that conversation, certainly push for that, as well. We have an interesting opportunity in Southeast Asia through the Lazada network. For those of you that don't know, Alibaba purchase Lazada years ago, and it's integrated into the Alibaba ecosystem, there is no UX integration from the market standpoint between like Tmall and Lazada, for example. But if you are active inside of T mall or Tmall Global, it does lower that barrier to entry a little bit from an administrative standpoint to get inside Lazada. So we're a partner inside Lazada as well. The fun thing with Lazada is that there's roughly nine or 10 markets, which you can activate in it. So one Lazada account, one payment or payment gateway account, and then you can essentially function inside all of those ecosystems. Just a fun side fact on that we have a large logistics facility inside managing a domestic China logistics facility. And we also have a government bonded Free Trade Zone logistics facility in Nanjing as well. So both domestic are both cross border, we actually fulfill to all of these marketplaces from that single source. So single source inventory, activating all these marketplaces is something to be to be considered as well. So that's the these are the main players that we look at when we look at Commerce inside the space. You know, just quick focus in Japan, you know, obviously look at it's one of the top eCom platform or eCom markets in the world. We look at size of prize, it's getting to be pretty huge inside. We've got good internet penetration rate inside the market, obviously. And Rakuten, you know, has a base there estimated about north of 100 million. So it's a sizable marketplace. Activation inside of it is probably not incredibly user friendly. Basically, what they've done is they've mixed a pretty janky looking front end, as you can see there with a very archaic back end. So it's a homegrown technology that they built many years ago have not upgraded, administrative bit of a headache. And the UX from an administrative standpoint in the back end is also a bit of a headache, but they do have the market in the front end. So take time getting documentation and paperwork in order to be able to activate inside these platforms is definitely marching orders that we would give to anybody. When we shift over and we look at Southeast Asia, we're big proponents of Lazada look at shopee is coming up and they are investing heavily. We're seeing them lose a little bit of focus, though, as they're pushing towards markets like India, and more into the South Asian market. We'd like to see them be a little bit more focused and competing with Lozada. So we can get that kind of Tmall JD competitive nature throughout Southeast Asia. All in although, generally English front end so mitigates some translation issues that brands have fairly easy interface on the back end, fairly straightforward to register inside of it. What brands and organizations need to be aware of is how they localize campaign and promotional activities and play to the local holidays amongst these very different Southeast Asian markets, how it's all made up. So very important platform, no APAC wide programming should not have Lazada prioritized as a key technology and platform that which they're going after. And then of course, inside China, we look at the two main players as being JD and Timo.

You know, we've talked a lot about this. And I know you guys talk a lot about China, we talk a lot, obviously a lot about it over the last decade. But Tmall and JD has obviously been like the main platforms, inside the market access points, typically mobility app based all over our web service interfaces in here. The mobility app interface is the dominant way of looking at it. And then we'll just look at the market as a whole estimations, or they might reach 2 trillion USD this year. So regardless of any sector, space, product size, when we get to numbers this big, we're, you know, we're proponents of suggesting that okay, there's obviously opportunity here for any particular brand inside the market. As you can see from the imagery customization, developing an on brand UX is pretty good. Certainly, we think that the opportunities to present brand and brand positioning inside JD and Tmall are far superior than they are to the other platforms that I've discussed. Whether it be you know, Roku, tan, or Lazada, obviously, Amazon, Dakota, JP, T Tmall. And JD have, I think kind of mastered the art of allowing brands to really own their own brand presentation inside these ecosystems. And of course, we operate very heavily inside of these, you know, looking a little bit deeper into China, obviously, being the largest of the markets in there. Just a little bit of kind of this year's size of prize size of addressable market to give an idea, you know, beauty cosmetics, you know, about 40 billion this year sports and outdoor over 100 billion. And definitely this is growing at a fast clip. And this is a big time thanks to the Olympics coming up next year, and China's general mandates on the push of health and wellness out there in the market. We've talked a lot about the importance of the Olympics coming up. And this any brands that are inside of this category are definitely the net beneficiaries of these government mandates and air cover that have been provided for this food and beverages becoming greater and greater. So you know, you could you could think COVID As a result of people pushing their food and beverage shopping habits from going to basically what markets and local vegetable markets to purchasing groceries online now. So this is a huge surge in area this will definitely be one of the winners in terms of category growth over the life of Corona. home furniture continues to grow continues to be a strong space as we see more people moving into bigger homes and we see disposable and continuing to grow. And we're not necessarily seeing families grow inside China. But we are seeing home furnishing purchases grow and the assessment on that is that people are upgrading they're on the upgrade cycle now to increase the quality of the products that they have for home furnishings inside the house. We've done a lot of work inside this space and we're feeling really good about the future of home furnishings as well. Child baby mom always been a big space next year is going to be a big birth year just as an FYI in terms of the Chinese zodiac so keep watch for anybody who's in the CBM child baby mom space next year fashion obviously strong and consumer electronics obviously in China right? sort of goes without saying but the strength of that

Aaron Conant  14:12

are there So quick question that comes in are there other categories that that aren't aren't performing? I mean this is like everything Yeah, so I was in the I was in the Mother Child baby space right in kind of blend was food as well infant formula, usually in the food space tougher to get into there, but this is a massive business. Is this for like standard food? Is it OTC farmer infant formula is anything and then are there ones that aren't that that aren't, you know, performing?

Joseph Cooke  14:43

Um, you know, when we look at digital, right, I mean, and I should kind of caveat all of this right? Like, I would assume that there would certainly be categories in China like more archaic categories that aren't necessarily having good growth pace inside the market. Our lenses fairly limited to online No, right. And we've just such insanely aggressive digital transformation that's taking place. You know, we can read about, you know, some brands and some sectors who have, you know, experienced struggles in China, maybe if they've been like very hedged around brick and mortar. And then as the purchasing power has moved online, you know, so from our lens, we're going to see increases in online and then offline, obviously might struggle. You know, I know that Nike was putting out intelligence last year on China's performance saying that, yeah, brick and mortar obviously went way down for obvious reasons. But the growth in online not only grew the online business tremendously, but made up for any slow and slowing of growth in offline as well. So look at I mean, from where we sit, I would say the market obviously is growing as a whole. But it's a good question, because then you could look into any of these individual sectors and start to then get some profiling on Okay, well, what's actually going on in there, and some things that are going on, as we're seeing the rise of domestic brands, right. So this doesn't mean that as a global hot brand, one's going to go on there and get these kind of 60% year on year growth. We're going to see more transaction volume inside of these sectors. Now we're gonna see entry of a lot of more Chinese brands that are basically having a good fair shot of competition in there as well. Right. So yeah, when you start to get into these sectors, then you start to see some interesting changes take place on them specifically.

Aaron Conant  16:29

Awesome, love. And just reminder that if you have questions, drop in the chat or the q&a, we'll get an answer.

Joseph Cooke  16:34

Awesome. Yeah. And then, you know, just to kind of finish out a couple market conditions in region, right. I mean, look at live streaming is becoming a huge thing. I mean, anybody who's watching any data or reading any news, I'm kind of trying to try to eCommerce cyber activity inside China, you know, is reading about live streaming in KOLs? K? Well, you know, short for key opinion leaders, aka influencers. Look at this is a complicated space, and it's moving fast, and it's presenting all sorts of opportunities, and then all sorts of issues as well. There is no shortage of money that one can throw at live streaming in KOLs, it's really important to understand how this kind of general space is made up, right? You know, we're seeing live streaming account for pretty significant amount of sales, this number is going up and up and up and up and up. We have, you know, Kardashian level influencers in market with these kind of like, millions and millions of followers, and they command top price for activating with these. You know, what these folks right, and then there's micro influencers and Koc, key opinion consumers and stuff like this. So it's heavy duty, right. And this is what when we talk about the sort of decentralizing of the web, right is, is consumers in the market are having access points to brands, and all sorts of different areas. And what this is requiring brands to do is, you know, gone are the days where you could sort of set up a team all store, run some performance marketing, and, you know, do a four or five or six to one ROI, you know, on your ad spend, right, now, let's get inside team all, you know, activate your digital shelf inside that platform run brand based campaign work, have live streaming that has the same product listed the same price, activate yourself inside social run content, campaigning, work with influencers, inside social work inside more and more and more, you know, inside of all the different sort of like touch points that one can have in all of these different areas. And the reason is, is because from the UX standpoint of where the market is, what people are doing is they're going inside team or maybe seeing product, and they're shooting over a little red book to see if that products there to read about it and look at the reviews. And they're shooting into WeChat to go and follow the official account. And they're going through the historical content in there. Right? Like just on this screen right here. Right. I mean, in the middle, we've got a couple of live stream studios that we have, like we have 10 or 12 Live Stream studios, basically, inside of our campuses, right, we're broadcasting like, literally 200 hours a day, and just straight live stream content in the market. And then these V shoulder windows here you're looking at this is with outside influencers, right? And, you know, you look at, you know, on the on the right hand side there second to the right, you know, that corkcicle product there, right, I mean, some of these products might be worth close to $100 a pop and for somebody to spend that money on that particular product, they're going to look at every single possible touch point that is available inside the market to get credibility around that particular brand to really determine is that the water bottle or the hot water bottle of choice that I should buy, right? So the consumer is relentless, and it's requiring brands to be ever present on every different touch point that's available inside the market. Right and then this even gets further nuanced and complicated when you look at the annual shopping calendar as well. Right so 1111 Singles Day just happened it's a huge bang or everybody reads about it right. You know Bloomberg, you know live streaming from the floor of Alibaba campuses and stuff like this. And yeah, it's a ton of fun and look at some brands fall into the trap of hedging 50 60% of their annual revenue on days like Singles Day, November 11, or in June, June 18, aka the 618 festival needs to triple A festivals can sometimes drive 50 60% of a particular brands revenue, maybe not necessarily the

best way to go about it right from our point of view, we like to do good steady month over month growth, continuous improvement, continuous growth, and build out a really strong business like that. But a lot of brands then get into these different traps, right where they fall into these things. But each brand presents different opportunities, different promotions that come up at any particular point in time, just to give an idea on how one should be thinking about it right, you've just come off a Singles Day right now, you should be looking ahead to December 12, aka 1212, aka couples day, as a big gifting festival inside the market, and how brands are planning to do that. And it doesn't necessarily need to be hyper discount driven. But what's the value that they're bringing to it after that we're looking ahead to Western New Year, which is a purchasing event we look to February for Chinese New Year. And if you think about the importance of Chinese New Year, by law, in almost every county in that country, everybody's entitled to a 13th month cash bonus from their employer. So at Chinese New Year is the one time a year when everybody is literally the most liquid in their wallet. And this is where we have really strong purchasing activity as well. So bigger purchase items like maybe a suitcase or a home appliance or something like that, like something that wouldn't necessarily be discount driven on like an 1111. Right. So 1111 is great for you know, winter wardrobe beauty products are huge. You know, we see women basically stocking up on beauty products, we see mums stocking up on baby formula and stuff like that and baby clothes. Chinese New Year is a great time to sell something like a Vitamix for $1,000 us right because this is when people are most liquid, and they can afford it. You come out of Chinese New Year and march eight basically kicks off the calendar years first real banger of an event. And that's Queen's Day. So anything that's female driven, you can celebrate on Queen's Day, and I think Women's Day, you know, Queen's Day, slash Women's Day is the event to really then kick the year off to a good start. So as I can go on for a long time, right, then you can get to the day by day, and the third Thursday of every month is this and all that kind of stuff. But

Aaron Conant  22:25

present information. How many there are right? I

Joseph Cooke  22:27

didn't ever? I see. Yeah.

Aaron Conant  22:30

Now, it's just singles today. Yeah.

Joseph Cooke  22:33

Yeah. So it goes on and on. It prevents a lot of opportunity. But you know, I mean, as complicated as a lot of this is, you know, and as brands sort of look at it, and they start to glaze over and they think oh geez, right, like this is just kind of too much to handle, we don't have the headcount, we don't have the resources and whatever. We like to look at this as a way of look at all these opportunities, whereby the competitive set are not going to be active here, right brands might just do Singles Day, they might just do WeChat, and they might just do T ball, like a three pronged approach. That's pretty easy to beat as a competitor, right to just go that extra mile and out compete by being active on all aspects of the market. Right. So it does it does prevent a lot of pretty, pretty strong opportunities.

Aaron Conant  23:16

Yeah, so a couple of questions that come in here to elaborate on the $382 billion online fashion market in China. In so I elaborate I'm guessing it's is that everything from shoes to women's to men's to children's to shoes, to accessories to cover pretty much everything

Joseph Cooke  23:38

that's going to be non child baby mom, and that's going to be non fitness. Right? So we talked about fashion Think fast fashion, women's apparel, men's apparel, like adult women, adult men's apparel, as well. So slacks jeans, coats, underwear, outerwear, dress footwear, casual footwear, not trainers, in that category. So pretty, pretty heavy, pretty, pretty big.

Aaron Conant  24:06

Um, can you comment on the way in which items? Another question comes into queue? Can you come in in a way in which items are purchased and monies are extracted from China to US brands? In other words, I don't think the Chinese consumer use us credit cards and curious the ability to extract payments to USD from your accounts.

Joseph Cooke  24:21

Yeah, okay. Sure. Yeah, I mean, I think well, I'll talk a little bit about cross border in a bit, but look at straight up. It depends on how brands are structured inside the market. So from and maybe what I'll do is I'll just, I'll paint examples of this. So in the beginning, when I talked about kind of like our remit, right, so we function as a merchant of record, right? And that means that, you know, we have a scalable, you know, clause 35 plus nine retail licenses in China. And so we can function as that point of sale on the brand's behalf in the market. This is like option one, okay. And so what that means is they quote, authorize us to let's say, set up a T Mobile store, set up the payment gateway, and then we can sell that product inside the market, we can remit the taxes. So you have the VAT tax on that. So the government gets paid. And that tax is included in the sale price. So a $10 item and a 12%. Tax, you list the product for $11.20. If you're following me sell the product, remit the VAT, and that capital, then we're gonna prove Forex buyers. And then we can reconcile that RMB into USD and basically wire money out of the market. That's how we're set up. And that's us being a merchant of record, that's sort of like option one. Option two for brands is for them to basically be their own merchant of record. So they go to China, they get a wholly foreign enterprise, also known as Wi Fi, they didn't get the business license, they get the class 35 to class nine retail licenses and market and then they set all that up and they own their own bank account. And then they function on all of that right, then they get employees in space, and staff insurance and all this kind of stuff. Those are sort of like your standard kind of domestic programs, a lot of brands you go option one, they just kind of like, leverage us. It's easy, they use that till they hit their first milestone of revenue velocity. And then they maybe go to step two, which is setting themselves up in the market, that usually comes down to just like organizational goals and stuff like that. The other way that you can sell into the market is by way of what's called cross border. And cross border is effectively like setting up a Tmall Global store. So you still access the market, you can still sell into the market almost nearly as well as you can, on a quote, domestic play. But the customers actually can make the purchase in USD. Now. They're limited based on social status and social credit. And like their travel history and their banking history. They are limited to how much they can because effectively it's kind of like a version of capital flight. But you know, so I think everybody I think by default is like 2500 us or 5000. Us, I think on an annual basis, don't quote me on that. I don't know exactly what number it is. But that's how much they can purchase in an annual basis over the course of the year. And Alibaba or JD, that's basically just like an automatic Forex process that takes place. And those dollars are directly reconciled into an Ali pay global account, which is then connected to the brand's bank account, right. So that's, that's like an automatic platform system that allows for that as well. cross border is recommended, not necessarily for everybody for cross border is recommended for brands who need to go cross border because of any regulatory conditions. basic example of that non animal tested cosmetics, baby formula, food and something exotic, like an alligator shoe, an alligator leather shoe or something like that wouldn't necessarily be a strong recommendation to go cross border for something like $30 T shirts. Because keep in mind that cross border purchase, the product is originating from outside China, that could be LA. But that should be a free trade zone bonded facility like Hong Kong, Tianjin soochow. Nanjing like our facility, so that logistics only takes an extra day or two to cross your customs on an order by order basis. So not recommended for products whereby it might not warrant the weight or might not warrant using the limited amount of USD conversion that every person has a lot of an expense. Yeah, I

Aaron Conant  28:16

mean, it does it just wonder like, Are you helping brands? I know you guys, you know, on the execution side, but do you help them manage that, but I think a lot of people on the line today, I'm throwing myself back, you know, four years ago when I was you know, spend time in Hong show in Beijing and Shanghai trying to figure it out? Do you like brands come in? Can you help them navigate pay these three ways? Here are the three different options and here is probably the best one for you. Let's go execute on it. Totally. You have to define that yet.

Joseph Cooke  28:47

Totally. Yeah, you we we run discovery, you know, where's the Northstar? What's the organizational goal? What do we want this business to look like? One year, two years, three years from now? Right? It's better to chart that course today. Right? And then kind of move down and look at things are transferable as well. Right? So if we're gonna go down the road of option a leverage us do domestic use merchant record that can be transferred tomorrow, you know, these things aren't usually kind of hyper set in stone.

Aaron Conant  29:15

Awesome. What about us another question that comes in? What about evaluating total opportunity for a brand? Are you able to give them some kind of projection, or estimate roughly like, Hey, this is what we think you can do there? Because that's the other thing that I always ran into is what's the overall opportunity? And like you were outlining at the beginning, it's seems massive, but it's also complicated, right? And, you know, are you are you able to do that as well, we kind of get a run now. Like, hey, this is what I think you guys could do. Yeah, for

Joseph Cooke  29:44

sure. Actually, I've got a slide on that. I'm just gonna go to that. It's kind of like a natural segue. When we look at activating in the market like that you're talking about kind of like data and strategy, right? So I'll just focus on that. So we have got a technology that we built called dis crypto. It's a distributor Good script engine that we launched like 10 years ago inside the market and this indexes, and pulls down and downloads all of the data from these big ecosystems like Tmall, JD, Rakuten, and so on. And what this allows us to do is to identify like, supersize a prize. Right? So, yeah, 382 billion in fashion. Okay. Obviously, your brand does not have a $382 billion addressable market size. You know, it might be like a billion, or it might be 600 million or 40 million, like we don't know, right? So, you know, one of the things that we do in the beginning is we use disk crypto to really identify size of prize, and what the profile of that size of prize looks like. And then also look at the competitive makeup of that size of price. Right? So these examples here are for nutraceuticals, I think up top there, right? Like you can see, like black bars and sweets and stuff like that, and those images, but so maybe I'll stick to that fashion example right there. Right. So let's say the fashion brand is selling winter coats, outer winter coats, and that's the line. Okay? So 382 billion is not winter coats in the market. So what's the size of winter coats, right, maybe that's like a billion, okay, in the market. And outerwear is actually a huge market. So that might actually be close to the real number. But then inside outerwear, let's say the brand is retailing their product for between 508 100 us low model to luxury model. Inside, right, and let's say there is it'll say it's dead synthetic down on the inside. And it's primarily a men's product. Okay, so then we look at synthetic down price between five and $800, primarily targeted towards men, right. And now this market size goes down to like 130 million, okay. And then we get a makeup of like, all of the key competitors that are selling into this lane, and what their behaviors look like in there. So let's say then we look at that, and there are, you know, nine different brands basically dominating 80 to 90% of the revenue inside that space. And that starts to make up what that competitive environment looks like. And then we do dissection of what those competitors are doing. Like I talked about earlier, are they unread? Are they on WeChat? Are they on sign? Are they doing live streaming? Do they work with K walls? Which Kol is how much are they spending? Are they team all? Are they JD? Are they both? Are they selling domestic? Are they selling cross border? What's their customer service program look like? Are they doing seven to seven, six days a week? Well, let's go six till 10, seven days a week, right? So what you do is you use the data from disk crypto to map this three dimensional blueprint of what the market is. And then you can very sort of gracefully decide on what your market conditions should be to achieve the organizational goals that you want to achieve. And then that basically writes the script for the program. And this becomes then the establishment of what the North Star is. And then at that point, you know, you've got a program that you know, like a CFO basically will sponsor, right. So we use to Scripto, solely to deal with this kind of stuff. And then use descriptive for like an ongoing auditing program as well. So that we can watch and monitor what that same set of competitors are doing inside that space. Are they getting more active? Like if we knocked one of them off? You know, one of their top spots? Are they then leaning back in and doubling down on spend or whatever, right? So we can use this crypto is very predictive to plan look historical of what's been done, and then use it as an ongoing tool to monitor what the movements are inside the market so that we're always mitigating any chance of market erosion.

Aaron Conant  33:41

That's awesome. I mean, it's data, right? I mean, that's what we're all being asked for right now. You know, I think, in years past, it's been Oh, it was, you know, we'll dip our toes in, we'll try to figure it out. But now it's, it's so big. It's it's almost table stakes to be launching. But then there's a lot of hesitancy around what's the right thing to do? What's the data? What's the addressable market? How much should we pour into it? How much should we be advertising? And data is, is king at this point in time? So no, awesome. But I see 12345 other little circles on here. Just a reminder, others you have questions, keep dropping them in the chat or the q&a. We'll keep getting them answered. But this is kind of like a a walkthrough, I guess, you know, on people, like, you know, how do you how do you actually get started? So this looks Yeah, one?

Joseph Cooke  34:27

Yeah, yeah. Perfect. Yeah, it was a perfect segue. I mean, yeah, step one, we look at data, right. And this is really important for brands to understand, look at their outlying cases where brands say, hey, my heart of heart, we know we need to go in and we know we want to be there. Let's just do it. Okay, great. And that's kind of like a ready fire aim approach and not wrong, because maybe the dollars and time you invest in data can sort of be figured out in your first 100 days of deployments in media dollars. But you know, a lot of cases descriptive makes a lot of sense to just figure out what the heck to do, right? We move from descriptive Oh, we move right into like admin legal finance. So again, this comes back to those questions of like, you merchant to record, you know, which way do you want to go about it? You know, we've got huge campuses full of tons of people and, you know, for us to, you know, help brands get sorted out to work through that paperwork like it's a nightmare in these markets right to do paperwork like to file an application to get on T mile is brutal, right to file an application on Rakuten is like going to hell and back 15 times, like, I gotta say, they're not great systems to work with, and great organizations to work with. You know, but for us, maybe we've launched 150 team all stores over the years, like, we'll get that documentation done by noon on day one, right. Whereas for the brand that might take, you know, to put it this way, to get an Alipay account on Tmall, you need the board of directors to sign off. And you need the board of directors as passports, like their passport copies, right? It's a weird request, it is never going to happen ever again. But you know, if I'm working with like the manager of international from Brand X in the US, and I say them, okay for us to get the Alipay account, like you got to go get the chairman of the board's passport, photocopied, right, like, depending on the size of organization, right, that can be like two months, right to get that one single thing. So, you know, this administrative legal setup, this is why a lot of brands opt to kind of just have us handle merch record, right. So this is very administrative process right in the beginning, that we take care of, we work on a sprint on platform launch. And so you know, we're doing design, development creative, we typically handle all of the creative development collapse in the Delta, between brand position in the West, and then what's right for China, or what's right for Japan, we work on all that documentation, material designs, work with the brand, you know, get them to sign off on everything you work on the merchandise selection, we have a merchandise diversion, or division, that's like things from the buy side, right on how to organize the right amount of merch. And then, you know, what will sell through yields are going to look like the pricing strategies and so on, we get into the operational setup around things like logistics as well. So, as I said earlier, like, you know, we've got logistics facilities, both in domestic and both in free trade zone, I mean, cumulatively, we're probably sitting on like 100, maybe 190,000 square feet of logistics space between all of our facilities. So lots of capacity, moving lots of product in there. And we've got a good global supply support system as well. So we can allocate the talent and the IQ to sort out logistical issues and get product from the west and get it to China handle the freight forwarding and handle things like duties and customs and all of that. So we sort all of that out. And we work in that process as well. And a lot of what we're dealing with right now is product coming off the assembly line in China, and actually just routing that product directly to our facilities and just holding it there for them, right until they can get yield, or space to basically funnel it into the US because of the obvious issues that are going on currently. So we handle a lot of that as well. You get into the issues around cross border and domestic we talked about that earlier. Right. So just you know, just to sum that up domestic bringing the product into China, staging it inside of a domestic facility, and then cross borders, keeping that product and, you know, basically international waters, so a free trade zone bonded facility. And then that product crosses customs on an order by order basis, we get into then sort of like the Go Live phase as well. So revenue, acceleration and growth. This is the pushing of the programs live inside the market, right and once for live. And then it's it's hyper marketing, hyper content, hyperactivity, engaging Kol influencers, live streaming, doing video doing commercial development, just running content programming inside the market, as well. And so once we go live, we basically move right into that active process right there. And we're trying to basically get the brand as popular as we can, inside the market. And then, and then you go into then the capital in the point of sale programming as well, right. So Alipay WeChat, pay all the different payment gateways inside the market, and will facilitate all those programs as well. But that goes back to like the admin and the registry of getting those things set up inside the market, handling all of that stuff. And then And then basically acting as the merchant of record to handle the point of sale on then tax remains and then reconciliation capital out of the market.

Aaron Conant  39:05

So that's a question that comes in is around the marketing spend. Right? So two questions that come in, actually, now, one is around timing, and one is around marketing spend. So I want to I want to tackle the marketing spend question first because I mean, you were kind of outlining, outlining there that 157,000 different ways you can market including live streaming, which isn't quite here just yet, but just due to the size of what you're talking about in China, it will be here the next couple of years. But you know, what is? What is the marketing budget look like for launch? What does it look like, you know, a year and is it a percent? Is it a you know, is it a standard dollar amount? Like how do you look at it?

Joseph Cooke  39:48

Um, yeah, good question. complicated question. Complicated worlds. You're doing great with the segways Aaron. This This doesn't this doesn't have So the question perfectly but there's there's contextually you have to look at where the brand is, I mean, it's really about product market fit. And it's about brand. I mean, it's sort of like these two things, right? Product Market Fit is like do does the market actually want this? Right? Look at a four selon super marked up silkscreen T shirts, cheap Chinese crap sold back to China, like it's gonna be an uphill battle with a lot of headwinds. If we've got interesting product with great brand, properly priced, the market will pull it through. And that's going to be very then kind of indicative of what that marketing spend looks like, depending on sector as well as another one to look at. But we see first year kind of like performance marketing spends anywhere between like 15 and 30%. Typically, okay, now these spends typically come down over time, obviously, as we're trying to go from zero to one and then from one to 10. Right. But if you just look at like to summarize and simplify the channels, this slide is sort of good for this, right? So ad to Commerce on the left there, sales conversions, Tmall, JD funk, conventional funnel strategy, right driving PPC, various promotional campaign products inside these systems. Yeah, 15 to 30%, in that first year, is where one is likely going to sit right. In the middle, we've got content to commerce, right. So this isn't like definitive direct ad spend. But this is rolling out big content, telling interesting stories, getting high levels of attention, getting conversion of the attention. And then building brand brand awareness and brand addiction inside these ecosystems right now, this can be done really well, with a few staff on payroll, who really get the subject matter and are just really hot damn around content. So we've got an army of people like that, who are basically trying to run the coolest hottest content in the market to just capture share of eyeballs, right and share of time when someone's on the subway or something like that inside China. And then you've got this kind of community to commerce thing going on as well, right. So you know, word of mouth driven, focused on CRM, repeat sales, and building that out. And so if a brand is 100%, unknown in China, which most are, no matter how hot they might be in the West, if they're the top five brand on Amazon, or whatever it is, or they won the Cyber Monday contest in whatever ecosystem they plan, that's cool. But this brand might literally be not known by even 100 people, right in China. So if you're going to launch and market, you need to kind of think about that, right? Like, How is anybody going to know or care that you're live inside the market, what we're going to build brand, right, I can't go and run PPC advertising insight team, all right, with a 15% budget against target and no one's searching for the brand. So then you got to go to this kind of community and content to commerce, to go out into the market run really great content, once you run really great content, get some influencers and K walls to participate in what you're doing, sponsor your product, and then eventually go back to add the commerce. So put this whole thing into perspective, well optimized brand base, sort of like super well, performing brand based campaigns can do 11, or 12, to one role as no joke inside those platforms. Okay. So what you need is a lot of brand search and a lot of brand traffic, to then make that needle moving write really well, product or category based campaigns inside those platforms, we'll do about four or five, six to one really well optimized, that gives you a bit of an idea on like, when you're optimized, if people are searching for your product or your brand, how well you can convert. So that's I know, there's a lot of non answer in there. But that's, that's what the market is, right? You've just it's very complicated. It's becoming more complicated. It's getting bigger and bigger and bigger. So the reward is so much juice here, but it's requiring lots of touchpoints and lots of commitment to be able to roll that out. But in aggregate in year one, I mean, brands should be prepared to do anywhere between 30 and 50% to build brand inside the market, and that's inclusive of media spend, and ad spend and stuff like that. But that should be a year one preparation than year to drop that down by half.

Aaron Conant  44:14

Just think about how much more complicated that answer was. And you know, when we started chatting like three years ago, right, there's been so much advancement, you know, how, how hard is it for brands, and how easy do you make it for brands? And then I do want to talk about time to launch if somebody says, hey, Joseph, I want to get going is that uh, hey, we get you up and running in 30 days, 60 days, 90 days. What does that look like? You know, on a typical I know it's gonna It depends, right? I mean, I'm probably category and size of company and, you know, legal tape to get through. But there what's, what's average? I mean, is this 2022 still doable for most people? Yeah, for sure.

Joseph Cooke  44:59

I'm gonna answer that. Question a reverse, whereas I'll start with the timeline because that's the easy answer, average typical timeline from, hey, let's do it, too. We're selling 100 days, okay? Now instead of 100 days, hey, we've got all sorts of sick days and holiday and give me a couple of days to get back to you type scenarios in there. So lots of breathing space in 100 days, our average time to launch is about 6065 days is typically what we work on fastest has been 27 days that we've done. So things can move quick now keep into consideration things like Chinese New Year, governmental holidays, but usually what takes the most amount of time, excuse me as for the brand to get the product, organized palletized for us. So to deal with that we basically built in our merchandising and supply divisions, to be able to make that as easy as we can for brands. So that's what you're looking at in terms of general timeline in the market. If you look at then, like how to make this easy like that, yeah, there's a lot of complication here that I've talked about and stuff like that. But I mean, just looking at, I'll just, I'm just going to switch to a couple of cases here. Like if you look at how this can be easy for brands, like look at these, these are brands, some examples of brands that come in pretty unknown in generally competitive areas inside the market, right. So you know, this is, this is a baby carrier brand, not huge, not the dominant one, two or third in the space. You know, but look at brass tacks programming, right launch inside JT launch inside Timo launch a program inside Rakuten in Japan, launch on Lazada in Southeast Asia, get all the inventory synergize into one facility. And then just run good creative content. And each one of these markets and all the relevant marketplaces, cooking with the odd Caolan influence many to sugar high, right? price the product competitively offer good returns and offer really good customer service. Like nothing in that is a new, great big idea. That's just core programming right there. And then you build velocity, right, and then these programs really start to go and go and go products, quality prices, right? People care about the subject matter, it's around babies, it's around your own, your own back posterior health, when you're going to carry the baby around. It's about baby's posture, and how they're held inside the carrier, good clean core messaging that we can connect with the bar, we can connect with the mother, we can connect with the grandma who might be buying the product, and just driving that message and driving it driving it driving it and having successful launches, right? So nothing stand out about the brand flat footed, right, but just having a good little fight in the market and building out velocity. You know, these guys, you know, fruit door, they're, you know, small ish, Canadian packaged foods snack company, you know, and going through the pre work with these guys, you know, determining this was actually the 27 day launch, and then determining that based on their certifications that they had in Canada, we were the only brand that could use the word organic in any of our copy campaign and product copy, inside Tmall and JD, right. And so basically drove this home as organic, organic, organic, organic inside use that as the core USP, we brought into the market, and basically owned all of the search and campaign traffic that took place for that, you know, two channels, lien programming, and then these guys were awarded, basically, as tmos global health work seven months into their program launch, right. And then as that happened, as that happens, then because then what takes place is that all the Kol all the influencers start coming out, and all now want to work with patients per door. Right? So, you know, again, complicated market, but you know, looking at it very kind of calmly, good programming, good thought process and just sticking to the core of what the brand generally is, right. And so these, these are kind of the things that we like to look at, you know, when we're going to

when we're going to, you know, kind of launch these programs inside the market. I'm looking back at some of the stuff you spoke about earlier around like data. You know, you know, this is kind of an interesting case here just to give a bit more depth on like how we execute on the plan in the data side of things. But you know, a key one here that we look at right, you look at the bottom left, there's two rays that just looking at the makeup of the market. So Timo oversees flagship Tmall flagship Timo distribution store, online pharmacy, Tmall international Timo market team overseas distribution store, like all of the different kind of like, quote, micro but they're not micro, different types of points of sale that we could build like inside Alibaba as ecosystem, identifying where in the market all of the revenue sits inside of Alibaba as numerous different types of points of sale that they have, and then activating on every single one of these individuals so that we're basically the owner brand in this neutral space that hits every single touch point, right? So, yeah, there's bigger health and wellness and neutral players in this space. Well, how do we beat them, if we can't beat them on spend and big brand budget, we can beat them by being present and being on the most amount of digital shelves inside the market, making it as easy for anybody inside the market to go and purchase the product. Right? Yeah, you know,

Aaron Conant  50:23

a quick question comes in for the fruit company, how much inventory? Do they keep at any time in your warehouses?

Joseph Cooke  50:29

Yeah. So when we when we're looking at inventory, basically, we're looking at a couple of things, right? Sell through pace, obviously, the sell through rate sell through pace. And we're looking at the restock cycle, how long it takes to do it. And then and obviously, it's going to be transport method also. So for them, they're about a 45 to 60 days supply, basically, now at this stage, right? So you you sort of work that out as well, like you work that out in the data phase around. Okay, well, exactly. You know, what's the sell through rate going to look like? How much inventory do we need, and then you get into things like best sellers, and which ones are going to move the most you you you plan the best that you can look at frankly speaking once you put it out there in the market, right, that's really what starts to determine what's going to move. So we you know, we typically in the beginning, we want to work on somewhere around about 100 Day stock is usually what we're looking for, in the beginning for the product. So yeah, that's the cycle that they're on. Now, they started out a little bit longer than that. And now we just got a good cycle going. Now there were many, many cycles of inventory through. I was talking earlier about, you know, outerwear and stuff like this, this is a great example, of rootstock, it's almost like exactly in that space that I talked about in terms of how we were generally looking at it, looking at the competitive set, and then trying to find the right fit for rootstock to sell into the market. You know, and they've been able to bring all the USPS around the caliber, the brand, the efficacy, the price points, you know, knowing what the complaints are the other brands that they compete with inside the market and really just trying to flank any of those other things inside the market as well. You know, same sort of stuff here like with brands like our Turks, right, like how does our church use premium li price generally going to be the most expensive that they have inside the space? Well, you know, content storyboarding, right talking about the stories, there's a lot of aspirational type, you know, marketing that goes along with these guys, they don't need to like outspend, although they do have the muscle to do that. That's not really what it's all about. Right. So outdoor clothing, climbing gear, very aspirational lifestyle, you know, implementing sort of counterfeit protection. And then great storytelling is really what allowed them to, you know, basically own their particular space out there. So I know we're coming up at the top of the hour here, maybe I'll just pause there, right, just to allow No, I

Aaron Conant  52:52

think it's it, I think, you know, we're we are there. So I want to make sure that we wrap it up. But you know, I would you know, just Joseph and the team WPIC come highly recommended, I think you can see why the in depth knowledge here is just so hard to find and executing at this level. So I'd encourage anybody, especially if you're looking at 2022, it is doable. There are startup options that are that are available. And then you kind of graduate through different ones as you grow bigger and bigger. Do you want to take it over as your own? I would 100% encourage, you know, people on the line today set up time with Joseph and his team, have them kind of walk through what they're able to do do that in depth market analysis and just determine before you go jumping in, you know, the first you know, get that background around, hey, what does it going to take? How much is going to toss cost? What are the right products? When should I launch? What platform should I launch it on? And not just in China but across APAC as well. This is a key area for growth and you're not behind the eight ball yet. I do believe just the interest that I'm hearing from the brands that I talked to you know, every week this is a key focus of theirs and it's like one of those times where I think it's opportunity to jump in there's enough things that have been worked out where the size of market is there the facilitation of goods and shipping has been worked out. So anyways Joseph, key things here as we wrap up key takeaways you think people should know or ways they can get in touch with you or your team? Yeah, like

Joseph Cooke  54:19

I like I think like you said they're right. I mean, it's a complicated market, you know, when we do this call again and six months from now, I mean, it'll be totally different subjects, right at the base of change. But you know, look, I always always love talking about this stuff. Always prepared to have a conversation with anybody who wants to happy to run quick ops analysis for anybody if they want to just get a you know, quick brass tag kind of size, a prize and, you know, help brands just, you know, let's think about the first three things right or have a quick conversation around, okay, you know, what do I need to think about if I want to launch in the year or key things about the space that one might want to know about? Always happy to have those quick conversations and, you know, we can guide in any way

Aaron Conant  54:56

you know, don't be shy. Awesome. Well, thanks, everybody for sending in the awesome questions. Thanks, Joseph for your time today again Anybody on the line will connect you with him and his team afterwards? It's worth setting up that time as I didn't do that little deep dive on what's what the total opportunity is for you. With that, we're going to wrap it up. I hope everybody has a fantastic Tuesday, a great rest of the week. Everybody take care stay safe. I look forward to having you on a future event. And again, anybody wants to chat across the board, anything digital, more than happy to network and knowledge share, just shoot me an email Aaron aaron@bwgcconnect.com. Hope everybody has a great day. All right. Thanks again. Joseph. Take care now everybody. We'll be in touch