1.Letter of Transmittal

ZiWatches is to be a new online watch shop selling trendy watches to the global market where there is a persistently great demand on medium to low end products. This business plan is to reveal the opportunities and invite a strategic business partner to join the company.

ZiWatches aim to specialize in trendy, collectible, and affordable watches for the young and fashion-conscious. The brands and collections on offer should already have achieved cult status. The core brand in this shop would be Swatch watches. Swatch watches are inexpensive, stylish and have a large collector base. All Swatch watches are limited editions issues, and the company purposefully ships different editions to different countries. Therefore, there is leeway for a Hong Kong based retailer to sell Asian editions to N. American and European markets, even at higher prices than local products.

Hong Kong is located at the center of Asia Pacific region, with the highly developed IT infrastructure, relatively low priced and high-speed broadband service, good logistic facilities and low postal cost, so it should provide competitive advantages for an online retailer of watches. Moreover, it is the second largest importer of Swiss watches in the world after the U.S., most of which are for re-exports to China and other countries.

Being an online company, ZiWatches would be able to market products to the global market 24hours a day, 7 days a week. Customer inquiries can be catered in real time during working hours.

This business plan aims to project the growth of ZiWatches in a 3-year time period with 5 development phases:

A. Marketing research & analysis

This is an on-going process so that the global market can be evaluated and re-adjustments are made from time to time to respond to the ever-changing demands.

B. Execution

A professionally designed e-commerce Web site would be established. This phase is presumed to take 1-2 months to establish.

C. Promotion

Once the site has been set-up, it will be promoted through various channels. The individual response rate to these campaigns will be monitored. Various promotional tactics will also be tried such as coupon discounts and special offers on particular items for a limited period.  This is a ¡®Try & Error¡¯ phase and is presumed to take 3-6 months before consolidation.

D. Consolidation

During the consolidation phase, the success rate for each promotional campaign will be accessed in order to concentrate advertising resources more accurately. A full-risk assessment would also be undertaken with regards to the frequency of lost orders, returned products, and credit card fraud. The range of questions and problems raised by customers will also be evaluated. The current staffing level will be reviewed with an eye towards expansion. The consolidation phase is expected to begin 6 months after the Web site has gone on live.

　

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E. Expansion

Once all the data had been analyzed and one is reasonable confident on the business, the business can then go onto the expansion phase. During this phase, the range of products would be increased and the prices reduced. Collections from other brands with definite fashion statements, cult-image, and large followings may be added later on e.g. Citizen Spoon Watch, Casio G-shock, Xemex, Nomos and Ikepod. Accessories other than watches may be added to the site, such as pens, lighters and watches cases.

Affiliate partners and re-sellers would also be taken on. Alliances would be formed between non-competing businesses, and the advertising budget would also be increased. The level of customer service would be increased by providing live-help through the Internet, and telephone support. A membership based Swatch interest group will be set up to attract Swatch collectors to the site. Other services may include sending periodical newsletter to its members, running an auction site, and running a discussion forum where members can post threads, voice their opinions or seeking advice. At the same time, marketing research, promotions or advertising will be sent to this group of potential customers.

Since ZiWatches is an online company, the start-up cost is far less than the conventional business. The substantial amount will be spent during the Execution and Promotion phases, which normally are paid in a monthly basis. The Little or No inventory strategy can also reduce the cost to minimum. It is expected that the initial investment cost would be recouped within 2-3 months.