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. And we do exactly that. We network and knowledge share together to stay on top, the newest trends, strategies, pain points, whatever it is that shaping digital. We've been around for about four and a half years here, we've done over 2000 events in this educational space as well. I connect with about 30 brands a week, and in those conversations is how we get the topics for our calls. And so we stay really relevant. Peter and I was just talking about this, we've gotten back into in person events now, not the large ones, but small format dinners across the US. So if you're interested in any of those, it's usually 15 to 20 brands around a table, just having a great conversation on a digital topic. Just check out the website and send us a note, we can make sure that you're on that list as well. A couple housekeeping items as we get started, we want this to be as educational and informational as possible. So at any point in time, if you have a question, feel free to drop into the chat, drop into the q&a section there. Or you can always email me aaron@bwgconnect.com. And that includes an hour after the call tomorrow, or next week. At any point in time you ever have a question, just shoot over to us, we usually have a connection somewhere in the network that we can connect you with. The other thing is, is we're starting this at three to four minutes after the hour. And just so you know, we're going to wrap this up with three to four minutes to go in the hour as well. We're going to give you plenty of time to get on to your next meeting without being late. And so, as we kind of kick this off, as they know what I'm talking with 30 to 40 brands a week, in this topic of international expansion is now one of the hottest topics. I think people have gotten to the point where Amazon is kind of, they're content with the craziness that say, Amazon, if content is the right word to put on it, or they understand that it's always going to be crazy. And Amazon's going to always ask for more. And then they jumped into direct consumer. And after they've gotten that, now there's a huge push to international. And I don't think anybody's surprised that, a lot of conversations I'm having right now are in international growth opportunities in China in the broader APAC region as a whole. And so we've got some great friends, partners, supporters of the network over at WPIC, they come recommended over and over again, from a ton of different brands. And so they're here. Peter agreed to jump on today and help educate us on what's going on in the market, who's it right for? Who's it not right for? What are the overall opportunities look like? And how hard it is or how much the investments cost, whatever questions we have for him. And so, Peter, I'll kick it over to you really quick, if you want to jump in with the intro on yourself. WPIC, that'd be awesome.

Peter McMath 3:17

Yeah, thanks, Aaron. And great to be with everyone this morning. It's currently 9am here on the West Coast. And yeah, always a pleasure to be speaking with you in the network. And yeah, thanks. Thanks for everyone's time today. Aaron, I think our days are pretty similar and speaking with brands, multiple dozens and dozens of brands every single week. And definitely feel the sentiment around further market diversification and expansion is definitely hot topic today. Obviously, all things digital, all things eCommerce, within the international landscape is pretty high up. But I think a lot of organizations whiteboards, in particular, China's definitely the elephant in the room, at least in our world, especially when it comes to like the broader APAC initiative. And so yeah, really, really excited to be speaking about that today, especially as we look ahead into 2022. Just to give everyone a little bit of background on the firm. For those of you who don't know WPIC, we've been in market for about 17, 18 years now. About nine offices globally headquartered in Beijing, three main operational campuses in mainland China between Beijing, Nanjing, Hangzhou, some presence in Japan and then coast to coast here in North America. We represent over 350 bodies operationally on the ground in Asia and over the years have supported hundreds of brands as I had mentioned. I think something unique about us is probably the types of organizations we work with, large organizations, small organizations, everything in between, we would describe ourselves as industry agnostic. We'll talk about I think some of the industries and sectors that are hot right now as we get into it, but lots of muscle memory, lots of vertical expertise across a really, really wide range of vertical. So yeah, I'm really, really thrilled to be speaking with everyone today.

Aaron Conant 5:16

Yeah. Awesome. So quick reminder for those who have joined, you can submit any questions along the way to the chat, you can drop into the q&a, or you can email them to me, aaron@bwgconnect.com. We'll try to get as many answered as possible. So Peter, I'll get back to you, if you want to kind of walk us through what you guys see going on in the region as a whole?

Peter McMath 5:42

For sure. I mean, we're talking about Asia today. For us, I think, just to clarify, when we look for us, APAC is really three, three main markets, China, Japan and Southeast Asia. I think it's pretty common knowledge. These are pretty pretty walled gardens, especially in the China ecosystem with major marketplaces, major social channels, that really dominate the share of consumer attention and spending. Similar story in Japan, we'll talk about rakuten@amazon.co.jp. Southeast Asia has been a really hot topic as well, obviously, through the acquisition of Lazada, via Alibaba. And so these are the markets that are certainly top of mind for us, and where a lot of our efforts are focused. Going a layer deeper, Japan's been a really cheap market, it represents actually the fourth largest eCommerce market globally, just under half billion in GMV forecasted by 2026, huge internet adoption within the market and quickly growing. I mentioned Rakuten, it represents customer base of just over 100 million monthly active users, which is really impressive. And Rakuten, on its own is transacting about 31 billion in 2019. Next up would be Southeast Asia Lazada, as the dominant platform there within the Southeast Asian markets, Indonesia has definitely the dominant player there supplemented by a number of smaller markets, including Malaysia, Vietnam, Thailand, Singapore, etc. And definitely, strong within some core categories, beauty, electronics, fashion, health and wellness, etc. And this is really becoming the forefront of consumer spending within this market. Amongst the other platforms that we're watching pretty closely. China is definitely the elephant in the room from a GMV perspective, we're just under 2 trillion USD in annual GMV being transacted within the marketplaces. And within the online ecosystem there. This is really driven by the 900 million internet users that are shopping, it's very mobile first. We would have staff that probably haven't visited a.cn website in six months. So definitely a mobile dominated platform. And within that ecosystem, you have the major platforms via T-Mall and JD, that are really owning the market share. Categories, if we want to talk a little bit about that, really, really hot. You look at a category in China, like cosmetics at 39 billion in 2021. This single category is larger than the entirety of consumer spending in Rakuten as a whole, for context. And so, seeing some pretty impressive growth rates, lots of growth within child baby maternity fashion, obviously, consumer electronics maintains a pretty steady growth rate, food and beverage is extremely hot. We see this, especially true for any products within foreign brands that are being consumed, or like a topical product that's being applied, anything that's personal for the consumer, we're seeing some pretty impressive growth rates, which is always a really positive indicator. The other question that gets asked a lot is like, what is really driving the growth rates within these ecosystems, we're seeing the groundswell of it's really starting to come to the forefront and come to the mainstream, it's live streaming, think of this as like QVC style, one click to purchase. This is driving approximately 50% of all eCommerce sales, which is really impressive. And so the infrastructure, the networks, the channels that are really driving that are really coming to the forefront and should definitely be on brands radar as they think about growth within these markets.

Aaron Conant 9:51

Yeah, just a couple of quick questions that come in one is, is the slide deck available after breast to shoot around?

Peter McMath 9:58

Totally, totally.

Aaron Conant 10:01

There's two now that have come in, one is around Rakuten, and is it as difficult to get into, as it's been in years past? So I don't know, if you want to highlight anything around, it seems like breaking into the Japanese markets has been a little bit harder than it's been in the past. And the next question is, do you put shoppable live streams in another category adjacent to the Tmall, JDs? Is this completely separate from that ecosystem? Or is it in it?

Peter McMath 10:31

Yeah, great questions. So yeah, definitely can get the deck out to everyone after today's session on Rakuten. Yeah, I mean, I think it's fair that they're definitely a less mature platform than Tmall, or JD, or some of its counterparts, or Amazon, for that matter, as such, they experience growing pains. And so, it's probably not as smooth as we'd like it to be from a platform application and administrative perspective. We've got a great team and system in place in market, that's pretty helpful in just navigating their internal processes to get up and live within that ecosystem. So totally happy to chat with any brands that are looking to navigate that. But yeah, I mean, it's definitely fair that it's less mature than some of the other marketplaces and platforms. For the live streaming comment in terms of looking at it as a separate channel, yes and no. I mean, yes, in the fact that, as you look at different points of sale, live streaming is happening both inside of Tmall. So allowing the user to check out from a Tmall or store directly within the platform, via a channel. And then to outside of that platform, whether it be Doyin. So the Chinese version of TikTok, which now has commerce enabled functionality, allowing a user to check out within that ecosystem. And so it's more becoming an extension a tactic within these ecosystems versus like an entirely separate channel. So we look at as a tactic that's really relevant within each of the existing channels that brands are typically active in today.

Aaron Conant 12:23

Awesome, yeah. Thanks so much. And just a reminder, drop questions in the chat, the q&a or email them to me, so awesome.

Peter McMath 12:29

Great. The other real pillar here that is probably worth touching on. from a growth perspective, when we look at the growth rates is really the annual shopping calendar in these markets. Very festival driven, promotional driven markets. I think everyone's familiar with the large November 11 11, Singles Day, on the back half of the year, the front half of the year, the second largest shopping festival would be the June 6 18 festival. These represent the two peaks of China's eCommerce around consumer spending. Last year US brands transacted just over $100 billion in GMV, in the month of November. And so, some pretty serious numbers happen, traffic levels that are an all time high, there's a series of other smaller festivals that are really relevant for brands to be able to participate in, that really drive traffic, awareness, demand within these ecosystems, and provide lots of opportunities for brands to gain further exposure, with proper positioning and planning. And then the other question that gets asked a lot is, promotions and discount mechanisms. This is a whole underlayer to the ecosystems. There's a lot of couponing, a lot of subscribe to the store to get 5% off things of that nature. The bigger festivals will have rules of engagement for brands to follow to gain access and participation within these platforms. And so brands really need to be aware of what they're getting themselves into, first and foremost, to establish proper pricing structures so that they're able to maintain margin integrity throughout the calendar year in China. And so this is another tactic that gets deployed by these marketplaces that has really led to their dominance within these ecosystems and is ultimately driving I think, the third pillar that's driving a lot of the growth within these ecosystems.

Aaron Conant 14:32

So another quick question comes in, I think a lot of people are thinking about launching China, how much it costs to do it, what is the marketing spend? Maybe you're going to get to this, are you helping brands figure out profitability in China ahead of a launch? Kind of like understanding the market and if it's right for them, and then what does it look like to launch it? Maybe we're going to get into all of that, but those are kind of questions that are rolling in, people are wondering, hey, it's massive, but is it right for me? And if it is, what are the steps I need to do to launch it? And then what does the profitability look like?

Peter McMath 15:14

Yeah, great question. And definitely a prudent step for, I think any organization to take. We do a lot of work with brands, way in advance of them filing a store application, putting product into a container or on a plane to really model out growth trajectories, cash flow, positivity, total investment, row as and ultimately profitability within all these ecosystems. When we look at market activation, we definitely look at that holistically. I'll certainly speak to the different stages. And I think what you've pointed out, ultimately, going in with the right business plan, is really crucial to ensure and have full line of sight to a lot of the moving components that are relevant, that are ultimately going to be responsible for driving profitability. One of the tools that we've built out to support that is within our data in our advisory division, we have a proprietary technology called discripto, that allows us to go into these ecosystems, download large information repositories on mass. And so we're able to actually track performance at a brand level at a skew level at a category level, within all of these ecosystems to really start to understand what is this? I think it's an obvious statement that, hey, China does $2 trillion in annual GMV. But what about my brand at our price points for our particular categories and subcategories of products in our particular competitive set? That becomes a much more relevant question for a brand to understand. And so we do a lot of work with organizations from our advisory perspective, to really pull in direct line of sight so that they can truly understand what they're getting themselves into, who are they performing up against? And where really what is it going to take for them to outperform the competitive set. So we did this inside of discripto to really help provide both quantitative and qualitative information. And I think this is a critical step for most organizations to take as they think about market launch or market entry to really have the truth of the market prior to making decisions around how big of a business do they want to build? And really, what are they in a position to afford to take on? And how quickly are they going to need to ultimately ramp things up? And so we do this through our advisory division, as organizations get through these steps are they've done that homework and that planning process, and they really have clarity into what it is that they want to build and how quickly do they want to build up to that, it's then ultimately go to market programming. This is combined of a few different steps over about a 90 day window from when a brand says to us or any organization, hey, we want to go live? How quickly can we get transactional? It's about 90 days or two to three months on average for us to go from a store application to they're transacting the first dollar revenue. This is largely administered by our operational group on the ground. The core components here are like store applications. We have to register trademarks, we have to prove, you know, business licenses and things of that nature. So each platform has a pretty similar but unique set of requirements for brands to be able to successfully launch and onboard in their ecosystem. That then ultimately goes into a localization component. And so we need to take effectively a Western brand and appropriately localize it for the market. So whether that's store design, imagery, photography, copy, brand positioning, all the localization and translation that needs to take place in advance would really be administered between our marketing brand, creative teams, in advance of a go live. And then we have all the backend operational components. So this is ultimately made up of logistics, warehousing, last mile fulfillment, any finance and reconciliation, customer service onboarding, think of effectively a full end to end team being on boarded. That really becomes an extension of a brand's team on the ground to facilitate ongoing operations and growth of a given point of sale inside of a market. Once a brand is up and live, you're now at about day 90 in the process. It's then all about driving growth. So there's really and maybe before I get into the growth component, talking a little bit about operationally I think this is a hot topic for a lot of organizations of how do we move product into market. There's really two steps here are two different paths. There's domestic commerce as well as cross border eCommerce. Domestic commerce is effectively more traditional in the sense of products actually domiciled in mainland China, we need to have an importer of record, a merchant of record that can basically hold title in market. Whereas cross border eCommerce, the product is going to sit in a bonded free trade zone, where the consumers upon purchases are going to act as an importer of record. From a platform perspective, this would be the difference between tmall.com versus tmall.hk. From a consumer UX perspective, it's the same app, it's the same levels of traffic, there's no difference in size between tmall.hk versus tmall.com. It's a back end operational difference that allows brands that have high regulatory components or whether it's vitamins, supplements, skincare products that don't animal test, things of that nature, to effectively sell directly in the market. The logistics systems here now enable close to same day next day shipping via cross border products actually physically in mainland China, but they're in these government approved bonded and FTZs that exist. Domestic shipping is going to have slightly faster, you'll be able to enable same day shipping, and components of that, that are really critical. One of the probably the largest differences between cross border eCommerce versus domestic eCommerce that doesn't really get talked a lot about is the consumer quota on cross border spending. So each individual has an annual limit of how much they can spend via cross border purchases, where there's obviously no limit on domestic. And so for brands that are in higher price points, higher AOV's, this is definitely something to consider when you look at an individual consumer quota of about 25,000 renminbi per annum. So this is one of the key differences operationally that we usually talk about with brands.

Aaron Conant 22:02

Quick question comes in, is there a preferred method that you guide people towards? If people are going down this path, is one better than the other? Or statistically it doesn't really matter, same day next day? And then, what are the regulatory in tax implications on doing either one? Those are the couple questions that come in. And thanks, everybody, if you have more questions, drop into the chat, the q&a, or keep emailing them to me aaron@bwgconnect.com.

Peter McMath 22:31

Yeah, great question. From a recommended path, it's very brand by brand basis and maybe more broadly category by category. In highly regulated categories, Cross Border eCommerce is definitely low hanging fruit, where it enables a brand take existing US, Canadian, European product that does not need to meet domestic Chinese regulations. So we don't need to register at the Ministry of Health or any other governing body, we're able to take existing product, we can keep us packaging, US labeling, and activate on a cross border platform in a 90 day window. If you were to take that same product that's regulated in China and try to sell it domestically, we now need to go to the governing bodies to gain those approvals. And so this becomes a much more expensive and timely process to do that. And so the fastest path for brands that participate in highly regulated categories is always going to be cross border eCommerce. And generally, for the first year to three years of growth within the market, our recommendation is going to be let's start, lean and mean, let's start as quickly as possible to build up a profitable p&l via cross border. And as you get to scale, then we would transition into a domestic commerce environment when the market volumes justify it. However, if you're an apparel brand, where there's really low regulatory compliance that's involved, we're going to recommend we go straight to domestic to take advantage of maybe lower logistics rates and things of that nature and faster shipping times. And so the decision is going to be more based on a regulatory perspective based on the category and ultimately the size of the p&l that a brands looking to build out and whether the investment in domestic regulatory approvals is worth it from day one. At scale, we generally want both platforms running in parallel, as there's algorithmic advantages to a brand to have both cross border and domestic channels activated. And so this would be common with most large programs that we operate, to actually be running both in parallel, if that's helpful.

Aaron Conant 24:40

Yeah, that's super helpful. Super helpful.

Peter McMath 24:44

Yeah, so good segue into ultimately growth from a revenue generation perspective. As we think about growth in these markets, there's really kind of three pillars that I think are relevant for brands. There's traditional performance marketing, so think of this ad the commerce, so traditional Pay Per Click advertising that exists within the marketplaces similar to an Amazon. The second pillar would be then content to commerce. This obviously benefits from high levels of consumer attention, you're able to convert that attention into clicks, into ultimately sale. This would exist within the big social platforms, whether it's quite show, shop shoes, Doyin, Weibo. And then ultimately, community commerce where we're building loyal consumers, loyal communities, high attentions of like word of mouth, building up a CRM to ultimately support remarketing activities. And this is going to happen within platforms like little Redbook, and WeChat. Ultimately, depending on the brand, the right strategy for each of these particular brands, we would want to have a balanced approach across whether it's traditional performance marketing, content, or community building, really, depending on the growth rate, the resources and how quickly a brand is looking to grow and acquire traffic. And so we ultimately want to identify low hanging fruit within each of these areas to convert any existing brand attention that exists to take advantage of that. But then ultimately drive new consumer awareness, and new customer acquisition through content and through community development. All of this traffic is then ultimately driven to a particular point of sale, whether that is happening within one of the marketplaces like Tmall, where you have the exclusive payment gateway of Alipay, or WeChat. With WeChat pay, we're ultimately driving that traffic to a preferred point of sale for the user and converting them accordingly. And so this is really representative of the full circle end to end that allows a brand to go from strategy and planning, product in operations, and then ultimately, growth and conversion.

Aaron Conant 27:12

So question, how much is a brand supposed to dedicate to marketing? So I put that, people on Amazon, they had a US brand, you're dedicating anywhere from seven to 15%, maybe five to 15, depending on if it's an established product, or if it's a new launch, and they're trying to really accelerate pageviews, and conversions and everything else?What does a marketing budget look like for launching on these platforms as a whole?

Peter McMath 27:46

Yeah, really great question. Ultimately, we need to assess the level of brand awareness that exists or doesn't. I would suggest, with most brands, especially most foreign brands, US brands that are entering these markets, we're generally starting from a place of zero brand recognition, meaning there's low or no levels of awareness within any of the ecosystems And so we need to start that zero to one journey. In an initial first year, of go live, depending highly on the category, and this is ultimately dependent based on what levels of spend the competitive set and how competitive the segment is, would really range from whether it be 20 to 30% of investment in maybe a low competitive category, up to call it 40 to 50% 55% in a highly competitive category, such as cosmetics or skincare, for example. So very category dependent, very competitive set dependent in terms of aggregated media spend throughout the first year, and then ultimately, highly dependent on is this a brand that has any awareness? And do we need to capture that attention? Or is there existing demand that we're able to leverage out of the gate.

Aaron Conant 29:16

Awesome. Love it. And then just a reminder, keep the questions coming in. They're fantastic. Another question that comes in Are there any categories that you would carve out?

Peter McMath 29:32

From do not pass go perspective?

Aaron Conant 29:36

Yeah, that's right. I would guess what it means right? I mean, it's time effort money. Nobody wants to waste any, we're all hyper busy right now. Are there any like categories where it's at? I came from OTC pharma, right? And so I could spend some time over there trying to blow it out. We ended up going with just our BMS and infant formula. And so OTC was kind of a stopper. Are there others that you see? Pet food or anything like that?

Peter McMath 30:06

Yeah, I mean, I think historically, there was definitely some categories that were really challenging pre cross border expansion, simply due to the regulatory environment. It was really, really difficult for call it a pet food brand to be able to transact domestically in the market, the manufacturer needs to be on the whitelist, etc, etc. Fast forward to today, the cross border channels really enable brands with a much, much lower lift, to be able to sell their products to consumers in these markets. And so that first and foremost, has really paved the way in these highly regulated spaces, as opposed to, a decade ago when that really didn't exist. So that's really opened up many, many of these categories that historically were ones probably no go. I think there's still a handful of categories that have a hard line on them, CBD, had a little bit of a splash in 2019 2020, where there was an opening, and then the government actually clawed back and put a stop to it. Outside of some of these categories that have banned ingredients, or have product components that are simply not allowed in market, they're pretty few and far between. And so, we would certainly suggest that it's certainly worth exploring the majority of categories that are relevant today,

Aaron Conant 31:44

The flip side view or whatever, are there any like no brainers? Like, is it a beauty or fashion, these are absolutely no reason not to go?

Peter McMath 31:55

Health and wellness, for sure. The brands that are in this segment, the demand is massive, especially from foreign brands, the levels of consumer trust that exists for foreign brands selling into that market is extremely high, the wave of COVID, that obviously took place in market and seen peak demand for products that are promoting healthy living, healthy eating, healthy diets, is really strong. Fitness, sports as a parallel to that are also seeing huge amount of growth largely driven by the Olympics, whether that'd be outdoor sports. I know, we're talking about skin at the top of the call. That does seem really impressive growth. And then the categories that have historically been strong maintain that. But there's still extremely high levels of competitiveness and see that would be categories like beauty, skincare, personal care, haircare, massive growth rates, massive potential for brands that have a unique product offering that can be competitive within the segment, really, really impressive opportunity for brands that would be within those ecosystems.

Aaron Conant 33:21

Yeah, the next one is just around timing. And it's one of the reasons we wanted to have this earlier in the year. I know, a lot of people have large numbers to hit in the digital space for 2022 as a whole, what is the overall? You touched on this a little bit, somebody like reaches out, a typical company reaches out to engage with you, you have the data strategy, deep dive, and then what does that look like, start to finish? Because I know, when you look at, Singles Day, it's massive. And it's a great thing to be a part of brand awareness growth, for setting up success in 2023. So what does that timing look like? And is it still early enough to hit that? Or is this a year long process?

Peter McMath 34:08

Yeah, the process for go live can be really, really fast. If I reflect on brands that we've launched historically, I think our fastest deployment was about 28 days. And the biggest dependency there is product availability. I mean, I think the theme of 21 has been supply chain challenges. We definitely see that continuing into 2022. And so for brands that have product available that can get product into market, or we can pick up from their vendor directly in market, they have a huge opportunity to take advantage of the growth that exists where some brands are maybe still scrambling to even supply their domestic market. That's probably represents one of the largest opportunities for brands to get activated and to get into market assuming they have a solid supply chain. Once that's in place, and we can get parked in the market all the digital components of a go live happened really, really quickly. I mean, this is administrative, this is design, we can measure these activities in weeks, not months. And so, we run really strict programming there on on a really well oiled machine. That can happen extremely quickly to get a brand up live and operational and ultimately transactional in market,. Once they're up and live, I think the growth rates speak for themselves. And brands that have a competitive offering that can supply the market are ultimately able to take advantage of the growth and the traffic that exists. And this really becomes pretty algorithmic, as we're able to measure Traffic Conversion, and ultimately row as to continue to drive growth within these ecosystems.

Aaron Conant 35:54

Awesome, love it. Yeah, I think the other thin is, just examples as a whole, people are just wondering a little bit about that. I don't know, if you have examples you can share, kind of a start to finish, what does it look like? What does growth potential look like is a whole? If people want a follow up conversation with Peter and the team at WPIC, they're the leaders in this space, they're helping more brands in the network than anybody else, just great friends and partners. I'd say 100% worth of follow up conversation, and to explore it and see if it's a fit for you. They want to work with people that are going to win there. So they're incredibly straightforward around whether or not they think it's going to be a fit or not. So worth a follow up conversation to do that gauge, and then have it back in your hands to say, hey, here's a total opportunity. It's worth moving forward with or it's not. But anyways Peter, I don't know if you have anything, case studies you can kind of talk about. I don't know how you guys are doing that. And then obviously, there's more questions, keep dropping them in the chat. I'm getting a lot through email aaron@bwgconnect.com. If you have those questions, the chat, the q&a, or email them to me.

Peter McMath 37:10

Yeah, totally can get into some casework here. Have a couple of examples that we can run through. And yeah, I mean to your comment Aaron, and always happy to just have a friendly chat with any brand in the network to share some thoughts and feedback that'd be relevant to them. So anyone from our team or myself will be happy to speak with anyone after the call today in the coming days and weeks. So casework, yeah, I think a couple things that are probably interesting for brands, just to look at a little baby, really, really upstanding client of ours. One of the themes that I touched on the top of the call was the broader APAC story and the break broader APAC initiative. This is an example of a brand that we first launched in China, through the JD platform. We're seeing some really, really great growth rates wanted to continue the expansion into multiple markets. We followed that with a Rakuten, Japan launch and then most recently, within Southeast Asia through Lazada. Really what's impressive about this is singular back end operations, single logistics to really allow streamline efficiencies, both operationally, but unique segmentation, unique operations within each individual market for the brand. And so really great theme here. This is something that we're doing with a whole lot of brands that we're currently operate in China's expanding them into multiple markets. The child baby maternity categories, obviously extremely hot right now. And so this is really low hanging fruit for a brand to be able to plug into five, six other markets with a pretty low lift, relatively speaking. The other example that I think I'll touch on is in food and beverage. We talked a little bit about some of the categories here that are really hot. This is a brand that participate in one of our eCommerce accelerators, effectively a fast track to go live within the market. Their primary categories are in the dried fruit snacks and juices space. They have certified organic labeling. This was one of the first in the category, this is a Canadian brand. We were able to launch them in sub 30 days to go live within the Tmall Global ecosystem. Again, another brand that was able to take advantage of ultimately cross border eCommerce. Fast forward today, I mean, they were the winners of the Tmall Global Health award. This is one of the highest converting stores within the product category. And they're actually one of the first brands I mentioned to allow to officially market their products is organic within that ecosystem. So unique product offering, fast entering the market, were really able to come in and arbitrage the category extremely quickly, really operating on all cylinders, you're seeing the shot of the live streaming there, great content, great positioning, within a category that we're seeing some pretty impressive growth rates and there's ultimately continuing into 2022.

Aaron Conant 40:18

Really quick, what are the biggest roadblocks you've seen? Is just a question that comes in, or they're like, a common stumbling block comes to mind for me that I ran into, trademark, what are the biggest stumbling blocks that people should be looking out for as a whole?

Peter McMath 40:34

Yeah, I think the trademark question usually gets answered really early on in the process is it's pretty black or white. Either we have it or we don't. And we generally want to have it, the cross border platforms actually leverage global trademark, so it'd be a US trademark a Canadian trademark, in the case of fruit door, for example. Domestic platforms required domestic Chinese registered trademarks within the product classifications, and potentially a couple others. So we're able to deal with that way in advance of like a go live. What I would suggest the most common stumbling block that's relevant today is I think my earlier comment on brands not being able to keep up with demand. When we get a winner like this, ultimately, ensuring that products are in stock and available for the consumer is really, really critical. The last thing we want to have happen is ultimately that product go out of stock and be unavailable. That listing is going to get totally tanked in the algorithm, and all that hard work, all that that momentum is really lost. And so that can really kill a program, if we're running into that type of scenario. And that's probably the biggest stumbling block today that we're seeing. The platform's are really, really good at brand protection. They really uphold their responsibility of that. These are pretty walled gardens, not any organization can come in and transact. And so, it provides a really, really secure infrastructure for brands to be able to launch effectively, without having to deal with trademark infringement. And if it does happen through like a multi brand store it's a pretty streamlined process to be able to take on authorized sellers down and off the platform, which is really great. Talk a little bit about another client here, Mechanics Wear within the tactical glove space. This was a China launch within both Tmall and JD, a really good example of a brand that, I think, here in North America, had really strong levels of awareness, but really trying to understand, where they fit in China. The culture of open your garage and start working on your vintage car isn't a strong hub in mainland China, as it is in parts of North America here, and they're really trying to understand where they fit in. A big part of that, for them was in communities like the Shanghai Ducati club, for example, finding influencers in the street bike scene that needed tactical glove wear, that really resonated with the brand. The industrial manufacturing networks also really picked up on the brand. And this became quickly one of the largest players within this segment, really within their first 12 months of operation. And so I think a good example of a brand that had a really high quality product, a really strong message for its audience was able to pivot from mechanics, in a traditional sense, to more lifestyle based, manufacturing based applications to really identify their target audience in the market, position the product appropriately for them, and then ultimately start to realize the growth that came thereafter. The next example I'll talk about is within the health and wellness space in probiotics. We did a lot of work with this organization, Microbiome Labs. really unique product, really innovative within the category, but really high competition. You're seeing brands that had individual product categories doing millions of dollars per month, just inside of Tmall. At a skew level, you're seeing some of the top star players here have a 19% market share within the probiotic space. So, lots of opportunity, lots of growth potential, but highly competitive. And so we spent a lot of time around assortment planning, merchandising planning, pricing planning, campaign planning, totally built up the launch. We did really, really big deep dives on understanding demand within these ecosystems. So looking at keyword volumes, around brand, product, product categories, one to understand the highs and the lows of the calendar year relevant to their segment to understand when we should ultimately launch the brand.

And ultimately, seen peaks around like the 618 festival, for example. So this is a really, really successful launch. As we went through those exercises of helping the organization understand the nuances of the market, and then ultimately putting together a plan, and a go to market program that was going to be relevant for them. The other ecosystem that we really wanted to look at was just around broader consumer awareness, much of their product portfolio is really targeted to like leaky gut syndrome. And so understanding within Baidu, which is the Chinese version of Google, where two thirds of all web traffic start, what is the level of awareness there? And within that, are consumers buying and shopping for products? And so, being able to help them understand and build out keyword strategy, performance marketing strategy to be able to go in arbitrage the category, and ultimately drive really, really impressive growth from day one, became the backbone of their go to market program. And so this has been a really successful case study that we've recently taken live.

Aaron Conant 46:42

And another quick question that comes in is around staffing. So as people look, to launch this international business what kind of additional staffing do they need? Like, typically, when you engage with somebody, you're saying, hey, add somebody that's for growth international or marketing person? Or are you handling it all soup to nuts? People want to know, from that side, what's your overall total investment?

Peter McMath 47:10

Yeah, great question. I think the one thing that's true is every organization is a little bit different in how involved they want their team to be in, like the on the ground decisions. I would suggest most of our clients engage us in a pretty turnkey fashion. So as you say, soup to nuts, we're generally working closely with like a Head of International, or like a VP of growth. The key stakeholders that are really required are decision makers around brand marketing, product, logistics, and ultimately the p&l. And so whether that's a CFOs office around overall governance of the relationship, and the program, ensuring profitability and monitoring budgets and investment, to having the guidelines, and the reporting mechanisms around decisions that involve the brand, brand positioning, and things of that nature. And then the fourth component is ultimately, as I mentioned around product and logistics, we need to get product in the market, we need to have smooth operations. And when our team's ultimately requesting reorders, and reopen of inventory levels, that we're able to get that effectively. As we work in synergy with a brand, whether that's a single individual, whether that's teams across each of those divisions, or whether they have supporting teams on the ground, everyone's a little bit different. I would suggest most brands in the mid market, upper mid market, generally rely on us operationally for all of that end to end, but have either a small team or an individual and each of those divisions that we report into, to support their operations accordingly. But everyone's a little bit different in their comfort level of how they want to scale up.

Aaron Conant 49:07

Awesome. Love it. Yeah, and I can see we're almost out of time here. I don't know if you have additional things to cover.

Peter McMath 49:19

Yeah, I think we've covered a lot of the home bases here. I'm happy to open it up for some further questions that any one has.

Aaron Conant 49:32

Yeah, is awesome. Great time, if you have any last minute questions, you can drop them into the email, or the q&a or the chat, but I do want to say a quick thank you to everybody who sent in questions today. Obviously, as I stated, Peter and the team here at WPIC are the leaders in this space for figuring it all out in the launch and execution as a whole. 100% worth of follow up conversation, worth putting time I'm on the calendar for sure. Just to do a quick look, see and see what's the potential over there? And is it worth going over or not? It's been such a hot topic for a lot of brands that I'm talking with. Just incredibly thankful for, Peter for you jumping on the phone today and help educate the community as a whole. Any key takeaways on your side for people, if we don't have any more questions coming in? Any key takeaways people should know, be thinking about, timeframe to act, timeframe before they might miss like the the June event or the 11 11 event? We'd love to hear kind of key takeaways, and we can wrap it up.

Peter McMath 50:42

Yeah, thanks, Aaron. And thanks, everyone, on today's call, definitely happy to take this offline with anyone that wants to go deeper, has any specific questions for their brand. We're just kicking off Chinese New Year. So Happy Lunar New Year to everyone and my Chinese colleagues. Look, the markets seen a bit of a downtime right now over the next couple of weeks, as we go through CNY. Coming out of that, the markets quickly heating up for the June 6 18 event. This is a great time for brands to be thinking about getting activated and getting launched in market, it's a great window in the 2022 calendar year, to start planning and start some of those administrative processes to get up and ultimately live. I think one of the key takeaways I would have is, as we look ahead to 2022, I think the importance of brands having built true community, true awareness, having really loyal fans and customers is more true than ever before. And the best time to quote plant a tree was yesterday. It takes time for brands to to get activated and to ultimately build that awareness. And so, whether or not we need to rush into a point of sale, I think there's a number of dependencies that are very specific to each individual brand to start that process. However, it can never be too early to start building some awareness, eating some product, getting some feedback from the market. And that's a journey that we can start really, with any brand at any point in time. And so, if a brand is curious about the market, the rise of social commerce, the rise of these social ecosystems that exist today are more relevant than ever before, and provide a great opportunity for a brand to quote, dip a toe into the market to start exploring. And that and that's something that we'd be thrilled to support on. So yeah, lots of opportunities. We're super excited for the year ahead. And yeah, I really, really appreciate everyone's time today.

Aaron Conant 52:51

Yeah. Awesome. And we're going to finish right here on time. Hey, thanks so much, Peter, for your time today. Thanks for being such great friends, partners, supporters of the network. Again, thanks to everybody who dialed in and everybody who sent in some great questions. Look for a follow up email from us. I'd love to have a conversation with you. We don't sell anything here at BWG Connect. We're just a networking group. But it's through those calls that we get to topics that are the most important to brands that are out there. Obviously, of course, if you need any other recommendations across the digital landscape from drop shipping to replatforming and SEO, to Amazon, whatever it might be. We've got a shortlist of top service providers provided by the brands and the network. Obviously, in this space, Peter, the team of WPIC. So thanks again, hope everybody has a fantastic Tuesday, a great rest of the week, everybody, take care, stay safe. Check out our website if you're looking for upcoming events or shoot us an email if you'd like to be on the list for in person events as we roll those out. We're going to do close to 100 this year. So thanks again. Everybody, take care. Thanks, Peter. Have a great one. We'll be in touch.