Cross-border e-commerce has been a "gold mine" in the past few years, and cross-border development has become the "gold rush" in the e-commerce industry.
This "gold rush" is not groundless, but a practical business opportunity with various factors superimposed.
In North America and Europe, the slowdown in economic growth has made consumers pay attention to cost-effectiveness, and cross-border e-commerce has made the competitiveness of Chinese products more and more obvious.
In regions with poor development, such as Southeast Asia, the penetration rate of e-commerce in the past was less than 5%. With the improvement of infrastructure construction such as logistics and payment, the scale of e-commerce has begun to grow rapidly under the acquisition or indirect investment of Chinese Internet companies.
Under this "time and place", cross-border e-commerce has begun a few years of "winning" time:
In 2021, the scale of China's cross-border e-commerce industry reached 14.2 trillion yuan, a year-on-year increase of 14%, and the export scale exceeded 10 trillion yuan, a year-on-year increase of 13%.
Among them, the scale of goods sold directly in the form of B2C reached 3.4 trillion yuan in 2019, accounting for more than 20%.
But after entering 2022, the gold rush of cross-border e-commerce has been poured with several pots of cold water:
On the one hand, the cost of shipping and energy costs have increased significantly. Coupled with the new tariff policies in Europe and the United States, the cost-effectiveness advantage is not that obvious:
On the other hand, the global economic recovery has not met expectations, foreign market demand has begun to shrink, consumption capacity has declined, domestic epidemics have often recurred, and foreign trade enterprises have been shut down on a large scale.
Under this background, cross-border e-commerce seems to have become a "siege":
People in the city are "slimming down and improving efficiency", preparing to spend the winter:
Historized player Shopee announced layoffs in September, and the financial reports of cross-border businesses such as Shopify and eBay are not good this year.
But outside the city, the giants are also sharpening their knives and preparing to come in and show their strength:
Pinduoduo launched the cross-border platform Temu, which ranked first in the Google app store in one month.
Ali launched an independent site solution called "OKKI";
Douyin Tik Tok has also begun to deploy e-commerce business in Southeast Asia.
This makes us start to think about what is cross-border e-commerce going and where will it go in the future?
In the cross-border e-commerce industry, there are three main players:
Upstream supplier, midstream platform and support service provider.
Upstream suppliers can be roughly divided into three categories:
Brands, dealers and foreign trade factories.
Brands are proficient in product design, dealers master store operation capabilities, and foreign trade factories can accurately grasp the production process.
The midstream of the industrial ecosystem is the major cross-border platforms:
Some imports, exports, B2B, and B2C. Of course, most of them are TO C in major cross-border e-commerce platforms.
support service providers are not well known, but in fact this group is larger and richer.
, such as cloud computing , big data and other underlying technology support enterprises, as well as cross-border payment, cross-border logistics, and SaaS services solution service providers.
Although these companies do not directly participate in cross-border business, their services are related to the efficiency of the entire cross-border e-commerce operation.
Therefore, the market's demand for such services and capital's favor for such companies is even far more than that of cross-border e-commerce companies themselves.
Then come back to us, for the majority of small and medium-sized enterprises that have entered the market or want to enter cross-border e-commerce, the main thing related to us is the upstream suppliers, that is, the sellers' strategy. How to play with
sellers mainly depend on which category you are doing: is it a high-quality brand or a large-scale seller of general products? The business logic of the two
is completely different.
general product sellers generally adopt multi-category layout, mainly home furnishings, clothing and shoes with relatively low technical thresholds, and the SKU may reach tens of thousands.
In this case, talking about brand effect is far less effective than using the enterprise external network construction, paid promotion, and video traffic to build, cast a wide net and catch more fish.
While being able to sell goods, the core competitiveness of large sellers of pan-products lies in how to manage the operation and inventory of tens of thousands of SKUs and find the optimal balance between efficiency and cost.
What is the business logic of high-quality brands?
boutique brand owners focus on specific categories, such as 3C, home appliances, and smart homes, categories with relatively high customer unit prices and certain technical barriers.
is a company like this that mainly engages in large single product strategies. In this case, it is important to whether “hot products” can be produced. On the one hand, consider product development and design capabilities, and on the other hand, whether the brand can be recognized by the platform and users. Neither of these two types is essentially high or low, but for players in this industry, there is a difference between good or bad. What are the good or bad things about
?
is the difficulty of making money, and whether the business can continue for a long time.
From the current perspective, taking the high-quality brand route is more in line with the current trend.
has two reasons: First, the profitability under the brand model is stronger.
The same power bank can be sold for $23 by sticking the trademark of ANKER, but without labeling, it can only be sold for $3.
Second, under the boutique mode, the advantages of user loyalty and user stickiness are more obvious. The platform's recommendation mechanism is intended to favor the boutique brand owners who abide by the rules, and they are more willing to recommend high-rated and high-repurchase brands to users.
For example, Amazon , the top 11.3% of the big sellers contributed 80% of the platform's sales. This is the "synergy Matthew effect " formed by the brand model and the platform recommendation mechanism.
Especially after the Amazon account ban incident, the advantages of brand owners have been further highlighted.
Of course, this does not mean that general product sellers cannot do it. In the long run, general product sellers will also have a place, but overseas merchants have a better destination to brand and boutique, leverage the platform to get traffic, acquire customers, and then slowly pour it into their own external network for transactions, and even enter their own private domain .
So, what is the future prospect of cross-border e-commerce? I think the problem of
should be viewed from two perspectives.
First of all, the pressure in the short term is still very large:
Economic recovery slows down, market demand shrinks, consumption desire declines, international conflicts intensify, and raw material prices are high. These are problems that cannot be solved in a short period of time.Enterprises in the value chain, from service support providers to cross-border platforms, are carefully "slimming down and improving efficiency" in stages. They do not immediately lay off employees, but retain core business and take one step at a time.
Because in the long run, China still has stable competitiveness in the field of cross-border e-commerce, and has always maintained a relatively smooth supply chain system under the impact of the epidemic.
In January-August, China's total foreign trade import and export volume reached 27.3 trillion yuan, setting a record high, especially export growth of 14.2%, which proves that other countries have a significant dependence on China's exports. For example, the energy crisis of European companies caused by the Russian-Ukrainian war also transferred some orders and investments to China. In this cold winter, Europeans may need the strong support of Chinese sellers during the winter.
As a micro individual, in the cross-border e-commerce track, in addition to making high-quality products, we should pay attention to a few points.
First, the profits of cross-border business are highly correlated with foreign exchange settlement, especially in the trend of depreciation of the RMB, the date of foreign exchange settlement must be done well. For cross-border sellers with large revenue, foreign exchange hedging can use foreign exchange hedging to avoid the risks of exchange rate fluctuations, reduce exchange losses, control operating risks, and ensure basic profits.
Second, don’t pay attention to “flexible”, try to be compliant, and avoid foreign regulators and platforms having reasons to cause trouble.
Third, diversification, that is, multi-platform layout, do not put all eggs in one basket, preventing the platform and supervision from really coming to the door, and preventing the eggs from being broken.
fourth, refinement, as the cost advantage is no longer obvious, operating costs have become the main battlefield for "reducing costs and increasing efficiency", especially to understand digital marketing operations. Consumers at home and abroad are different in habits and rules, and you must use data to guide your operations.
Fifth, integrate resources and find the right partners. In cross-border business, no company is a one-person process for production, sales, website building, store operations, traffic promotion, payment, transportation storage, and customs declaration. These are all with the help of partners.
In the cold winter, we must look back and examine where our core abilities are? Strengthen the reservation of advantages, leave the disadvantages to partners to take responsibility, join them in to keep warm, and make the cake bigger together.
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Editor in charge | Luo Yingfan
