NetEase Kaola capitalizes on demand for U.S. brands among Chinese consumers with US$3 billion commitment

HANGZHOU, China, Nov. 6, 2017 /PRNewswire/ -- Today, China's leading cross-border e-commerce platform NetEase Kaola announced a commitment to purchase US$3 billion of products from U.S. brands over the next three years. This decision will vastly increase access to U.S. brands for China's rapidly growing segment of middle-class consumers, which according to current industry estimates have exceeded 109 million.

Ahead of Singles Day on November 11, the world's largest online shopping holiday by sales, NetEase Kaola CEO Lily Lei Zhang visited the U.S. to highlight the importance of U.S. brands for the company. The U.S. is the second-largest source of products sold by NetEase Kaola, and the number of U.S. brands available on the e-commerce platform will increase from almost 900 to 3,000 by 2020.

Ms. Zhang stated, "As Chinese consumers become increasingly sophisticated, their focus has shifted from pricing concerns to a search for high-quality and reliable brands, as well as an enhanced and tailored user experience. With our unique insights into the needs of our customers, who are largely well-educated young women living in China's major cities, we believe that we will be able to help them discover the exclusive American brands that speak to their individual style. In addition, our commitment to one-stop services for our suppliers makes us a perfect match for U.S. companies seeking to broaden their exposure in the China market."

Major U.S. brands currently available on the NetEase Kaola platform span product categories from luxury goods and cosmetics to infant and nutrition products, including well-recognized names such as Gerber, GNC, Herbal Essences, Huggies, Levi's and Revlon. Last month, NetEase Kaola signed four additional partnership agreements with beauty, health and nutrition brands Aqua+, Garden of Life, Ocean Spray and Wei Beauty. The top product categories that NetEase Kaola aims to bring from the U.S. to Chinese consumers include luxury goods, maternal and infant products, cosmetics, electronics and food products.

To meet the surging demand for U.S. products among Chinese consumers, NetEase Kaola is increasing the capacity of its U.S. warehouses by adding one in New Jersey before the end of this year, in addition to three existing warehouses located in the key transportation centers of Los Angeles and New York. This unique business model allows NetEase Kaola to maintain a secure supply chain, ensuring that customers receive only authentic and high-quality goods.

As Singles Day celebrates its ninth anniversary in 2017, millennial Chinese consumers are increasingly choosing well-recognized and trustworthy brands, even indicating their willingness to pay a premium for such products. This trend has served as the foundation for NetEase Kaola's remarkable growth, and last year, the first time that NetEase Kaola participated in Singles Day, sales in the first 23 minutes managed to surpass the platform's total sales for all of 2015. For this year's Singles Day, more than 30,000 products from about 900 U.S. brands will be available on NetEase Kaola during the annual online shopping spree.

NetEase Kaola is owned by NetEase (Nasdaq: NTES), a leading internet technology company in China which listed on Nasdaq in 2000, and one of the most profitable Chinese technology companies worldwide with more than 800 million users. With a market cap of US$36.8 billion as of May 2017, NetEase is ranked No. 31 on the 2017 Forbes List of Growth Champions, and No. 191 on the 2017 Forbes List of Top Regarded Companies. E-commerce serves as one of the main growth engines for NetEase, and NetEase Kaola's per customer transaction value is more than double the average transaction value in the cross-border e-commerce industry.

About NetEase Kaola

NetEase Kaola is China's leading cross-border e-commerce platform. It provides a platform for international brands to sell their products securely to Chinese consumers and for Chinese consumers to purchase safe, quality international premium goods in a convenient way. Launched in 2015, it carries over 5,000 brands from 80 countries. The transaction value per customer is double the average transaction value in the cross-border e-commerce industry.

About NetEase, Inc.

NetEase, Inc. (NASDAQ: NTES) is a leading internet technology company in China. Dedicated to providing online services centered around content, community, communication and commerce, NetEase develops and operates some of China's most popular PC-client and mobile games, advertising services, e-mail services and e-commerce platforms. In partnership with Blizzard Entertainment, Mojang AB (a Microsoft subsidiary) and other global game developers, NetEase also operates some of the most popular international online games in China. For more information, please visit: http://ir.netease.com/.

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SOURCE NetEase Kaola

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