NetEase Explores An Innovative Model For China's E-commerce
The Company's net revenues for its two e-commerce businesses -- NetEase Yanxuan and NetEase Kaola (a cross-border platform) -- stood at US$660 million, a 75.2% year-on-year increase, which is a significant increase from the previous quarter; while the gross profit margin for its e-commerce business increased to 10.1%. An ODM Model That Directly Connects Manufactures and Consumers. As one of NetEase's two primary businesses within its e-commerce segment, NetEase Yanxuan has become very popular after it was officially launched in April 2016, mainly through word-of-mouth effect. In addition, through careful selection, NetEase Yanxuan has devoted special attention to the aesthetics and style of each item; it also boasts simplicity and environmentally friendly materials. As a result, the quality and service of consumer shopping have been greatly improved, and consumers' decision-making time has been considerably shortened. Additionally, since the design patents used by Yanxuan-contracted ODMs belong to the manufacturers, they are able to sell their products to multiple brands. Therefore, NetEase Yanxuan is not involved in any potential theft of intellectual property and the Yanxuan Model is rapidly becoming regarded as the third mode of China's e-commerce.