Davco has been active in the e-commerce business since 2014 and growing successfully ever since. With the Chinese e-commerce market expected to surpass the US in size this year, Davco is set for another strong year.
Since the acquisition of Parex, a strong cross-selling set-up was put in place in China, with generated sales of Sika products in over 3,200 exclusive Davco shops and in over 36,000 Davco points of sale. An additional key channel with large opportunities is Davco Chinas’ e-commerce platform.
In 2014, Davco China started with its first e-shop on Alibaba’s Tmall platform. In the beginning, Davco operated an online-to-offline (O2O) model, linking online orders to the Davco exclusive shops. Later it added a B2C model for smaller items like epoxy tile grout, which are directly delivered from the factory to the customer. Right from the start, Davco set up an independent entity and in-house team to operate the e-commerce and invested in traffic to quickly transform into the leading brand in the categories WP mortar – tile adhesive – tile grouts. With its own Home of Heart (HOH) entity in place, Sika still strongly benefits from this platform advantage, further concentrating its e-commerce expertise. As one of the post-acquisition synergy initiatives in China, the management of the Sika brand flagship store was transferred to HOH, saving third party operating fees and leveraging the expertise. While most competitors rely on third parties like Tmall partners to operate their e-shop, Sika China has it all in-house.
"Just like the name of the company – Home of Heart (HOH) – it’s all about the dream and determination. Since the first day of our e-commerce business in China, we were building a retail fortress directly reaching millions of users. Thanks to the integration, Sika can strongly profit from this in-house expertise in e-commerce, using this channel to cross-sell a broad range of products to our customers." Alex Zheng, Stretegy & Business Development Director, Sika Building Finishing Materials, China
This year, the Chinese e-commerce market is expected to surpass the US in size. Due to the fast growth in internet and mobile users, widely spread mobile payment, and extremely fast logistics, the market is booming. The pandemic further accelerated this growth and in the first seven months of 2020 the Chinese e-commerce market grew by 15.7%1.
In the first seven months of 2020, Sika’s total sales in e-commerce in China grew by more than 20%. For the full year 2020 a growth of over 30% is expected, along with fast growing sales of Sealing & Bonding products under the Sika brand.
While Chinese Shopping Festivals that take place on specific dates throughout the year are huge events, a special form of interactive e-commerce has recently grown and gained in popularity: livestreaming. Since May 1, 2020, HOH introduced livestreaming by hosting daily sessions of several hours with over 1,500 viewers per session.
The most important of all Chinese Shopping Festivals, “Double 11”, will take place on November 11. Last year, the combined gross merchandise volume (GMV) of Double 11 related promotions on the two largest Chinese online platforms Alibaba and JD.com was no less than USD 67.6 billion, an increase of over 25% compared to 2018. Last year, HOH realized 30,000 online orders in one day which represents a 139% increase in sales. The HOH team that is responsible for the Davco and Sika brand flagship stores on Tmall and JD is well prepared and excited for this year’s countdown.
1 Online retail sales of physical goods, CNY 5.1 bn, source:China National Bureau of Statistics: http://www.stats.gov.cn/tjsj/zxfb/202008/t20200814_1783053.html