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Samarkand (SMK: AQSE) is a cross-border e-commerce and retail technology group focused on connecting international brands with China, the world’s largest e-commerce marketplace. The Chinese e-commerce market alone accounts for over 50% of global e-commerce sales, more than the following top 10 markets combined. China is clearly the world leader in electronic commerce. In 2021, eMarketer predicts that 52% of retail transactions in China will be done online.

While this is a large and attractive market for many international brands, accessing it can be complex, costly, and comes with a unique set of risks and challenges. The e-commerce landscape is completely different from that of the West.

There is no Amazon, Facebook, Google, Visa, Mastercard, or many other familiar Western technologies and services that international brands rely on for their international expansion. Instead, a completely different range of e-commerce platforms, social media, payment companies, and logistics dominate e-commerce in China.

Samarkand has developed a proprietary software platform, the Nomad Platform, which is integrated with all touchpoints necessary for e-commerce in China, including e-commerce platforms, payments, logistics, media. social security and customs. The Nomad platform is the foundation on which the group’s technological and service solutions are based. The business is built on three pillars of growth which together provide a balanced platform for short, medium and long term growth. It is about brand ownership, e-commerce acceleration and SaaS technology that makes cross-border e-commerce in China accessible to brands and merchants of all sizes.

BRAND PROPERTY

In addition to the technology and managed services, a “buy in the west, build in the east” acquisition strategy has been successfully developed. Samarkand now has a portfolio of three unique and complementary consumer goods brands, all of British origin and with high growth potential in China and beyond. Brand ownership has played two important roles for the group during its development.

First, the high gross margin sales funded the growth of other parts of the business, allowing the group to grow organically during its formative years. Second, it has made it possible to develop new solutions, to open up new channels and platforms which can then be deployed for client brands.

ACCELERATION OF ELECTRONIC COMMERCE

The Nomad technology platform offers two solutions designed to accelerate sales of international brands in China. These work on major e-commerce platforms and social media channels in China. The first is Nomad Storefront which facilitates sales on major platforms such as Tmall and RED. E-commerce stores are built and operated on behalf of third-party branded customers. Thanks to integrations with Nomad and the support of operational teams in the UK and China, brands can access the 900 million buyers using these platforms every month.

The second is Nomad Distribution which harnesses the enormous selling power of social media in China, known as social commerce. Social commerce in China is highly fragmented with many KOLs working across a range of e-commerce channels and platforms, making it difficult for international brands to access this channel of marketing effectively.

Nomad Distribution integrates with multiple social commerce channels and provides a way for brands to enter this market and promote their products in China. Through Nomad Distribution, subscribers of a KOL can purchase and receive the customer’s products via direct delivery from the group’s distribution centers in the UK and China.

CROSS-BORDER E-COMMERCE AS A SERVICE

Marketplaces like Alibaba’s Tmall enjoy a large share of consumer spending but are not suitable for all international brands, many of which have great products with great potential in China but are unable or unwilling to operate in Chinese marketplaces. Traders prefer to maintain the direct-to-consumer sales strategies that they have in other international markets rather than relying on the markets.

However, the problem they face is that there are many barriers for Chinese consumers buying products from foreign websites, including site speed, location, payments, shipping, and customs. Nomad Checkout works with e-commerce software platforms such as Shopify as a plug-in technology that quickly and cost-effectively removes these barriers and enables customers to use their existing e-commerce infrastructure to reach and sell directly to them. consumers.

CHINA – WORLD LEADER IN ELECTRONIC COMMERCE

Samarkand Group plc is one of the few Western companies leading the next generation of e-commerce that has evolved in China. Due to the size and rate of change, Chinese e-commerce is a much more developed market than the West, commentators suggest China is five or 10 years ahead in some cases. Innovative technologies, trends and business models have developed at an incredible speed and scale, some of which are beginning to appear outside of China and appear poised to revolutionize e-commerce on a global scale.

One of those areas is online commerce, which has grown from $ 3.6 billion in 2017 to around $ 423 billion next year. If online e-commerce were a country, it would be the third largest market in the world. In the United States, companies such as CommentSold have already achieved Unicorn status as pioneers in this e-commerce format, and Chinese tech giant ByteDance recently launched live commerce in the UK on its platform. TikTok video form.

The growth of global e-commerce has accelerated during the pandemic, and more consumers than ever are shopping across borders and online. Samarkand Group is laying the digital pipes and plumbing that will help international brands to transact easier and more profitably with everyone’s biggest market, China.

WARNING: This article was written by Samarkand and published by Actions as part of a trade agreement. This is not a recommendation to buy or sell the shares. The article originally appeared in Actions‘Flagship report from November 25, 2021.

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Issue date: December 10, 2021