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CJ O Shopping Starts a Chinese E-commerce Solution

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CJ O Shopping Starts a Chinese E-commerce Solution Business

CJ O Shopping (President Heo Min-Heoi www.CJOShopping.com) has launched a Chinese e-commerce solution business for Korean brands in collaboration with 'Baozun’, the largest partner of Alibaba.

CJ O Shopping establishes joint corporation agreement with 'Baozun’, the largest partner of Alibaba!

CJ O Shopping and Baozun logo

CJ O Shopping and Baozun are set to establish a joint corporation, BCJ (Baozun-CJ E-commerce Co., Ltd. 宝尊希杰信息科技有限公司), in August this year, investing capital of 6.7 million USD in a ratio of 49 to 51, and operating it from September onwards.

CJ O Shopping will take charge of the CEO supervising the operation of BCJ, product development and sourcing, while Baozun will provide resources for product distribution, marketing, logistics, and IT to support the operation of BCJ by capitalizing on the excellent local platform network and infrastructure.

Baozun, the partner of CJ O shopping, is China's best online brand operator and the biggest partner of Alibaba, China's largest e-commerce enterprise.

Alibaba and SoftBank, the Japanese multinational telecommunications and Internet corporation headed by founder Masayoshi Son, are currently making a strategic investment in Baozun. The company operates about 160 global brands, including Nike, Burberry, Zara and Philips, in the Chinese market.

Baozun was listed on NASDAQ, in May 2015, and is expected to reach two trillion won (about 12 billion yuan) in total sales this year.

When it comes to the market for the direct purchase by foreign customers of domestic products in the first quarter of this year, it recorded a market capitalization of 478.7 billion won, up 84.5% from the same period last year. This suggests that it surpassed the size of the market for the direct purchase by domestic customers of foreign products, according to the Korea National Statistical Office. However, there are increasing cases where the closed systems and various regulations of China make it difficult for Korean companies to enter the Chinese market.

BCJ Chinese e-commerce solution business

▲ An overview of BCJ's Chinese e-commerce solution business

BCJ's new service is provides small and medium-sized companies with services in all areas, except product provision, such as online product sales, marketing, logistics and CS, as well as various kinds of information about local customers to help them more easily enter the Chinese online market.

BCJ is planning to operate the Korean brand zone in the form of a flagship store on 'T-mall' operated by Alibaba, 'JD', 'Suning' and other B2C platforms.

BCJ has differentiated business strategies for responding quickly to the needs of demanding Chinese customers by locating its head office in China, recruiting many local people; and building up a rapid and stable CS system to raise customer satisfaction levels.

CJ O Shopping aims to provide a total solution involving online produce sales, marketing and logistics for Korean companies seeking to enter the Chinese market by offering them various sale channels, such as TV home shopping, online shopping mall and offline store, capitalizing on the operation experiences of Dongbang CJ with more than a trillion won in total sales, and the operation know-how of the 'CJ mall zone' within T-mall.

"The joint corporation will offer Korean brands an opportunity to more easily enter the world's largest online market, which has been growing rapidly," said President Heo Min-Heoi of CJ O Shopping who participated in the signing ceremony of BCJ held in Shanghai, China in July 28. Present Heo added that "CJ Group will make efforts to deliver the values of Korean products to Chinese customers based on the high level of trust it has built up around China across various areas, including broadcast contents, distribution and food."

CEO Vincent Qui of Baozun said "I'm glad that through this collaboration, Chinese customers will be able to access excellent Korean products, and I hope many Korean companies will enter the rapidly growing Chinese market through BCJ."

Meanwhile, the size of the online distribution market within China is expected to grow up to about 900 trillion won this year and at 20% over the next five years, according to the Chinese State Council. As for the size of the market for the direct purchase by domestic customers of foreign products, it reached 37 trillion won in 2015, and its growth rate is expected to 30% in five years.