Over the past decade, the overseas travel pattern has undergone earth-shaking changes. What are the moments worth recording? Learn from history, how can we become a winner in the future?
Enjoy special launches the "10 Years of Going Overseas" series of special articles to record every detail in the field of going overseas in the past decade. This article will focus on Lege, a leading cross-border e-commerce company located in Ningbo .
With the addition of major players such as Pinduoduo and TikTok, the cross-border e-commerce track has heated up again this year. Unlike games, applications and other categories that rely on the rapid rise of the Internet, the development of cross-border e-commerce is more like a long-term flow, testing the comprehensive strength of multiple links. Some veterans have been deeply involved in it for more than 20 years.
, which founded Lege Loctek and FlexiSpot, is one of them. He has experienced the transformation from labor export work to opening a factory, and has also endured the burden of losing 40 million in four years. He eventually grew up to be the leader of a listed company, leading Lege to achieve the second-largest market share in in the field of ergonomics with linear drive technology as the core. The overseas brand FlexiSpot was also selected as the top 50 global brands in the 2022 Kantar BrandZ. In addition, Lege's layout in independent sites has achieved results, and the sales of nine independent sites under accounted for 40% of the company's overall cross-border e-commerce revenue .
Recently, Enjoy went overseas to have a conversation with Lege Co., Ltd. chairman Xiang Lehong and Lege Public Relations Director Yu Haoying to deeply analyze Lege's survival under multi-dimensional and multi-level competition in the overseas ergonomics track. Whether in infrastructure construction (overseas warehouses, shipbuilding) or to the next level of independent station brand operation, Lege's development history over the years is also worth more reference by cross-border e-commerce sellers.
年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年年� In 1998, Ningbo introduced a policy that individuals can open foreign exchange accounts, which means that individuals have relatively mature conditions for foreign trade. Xiang Lehong realized that this might be a hot topic and his English foundation was pretty good, so he quickly went into business.
At that time, there were quite a few small factories in Ningbo. Xiang Lehong looked for orders through the Canton Fair on the one hand, and on the other hand, he found suitable local manufacturers to produce them. In order to make the product quality more controllable, he had the idea of opening a factory for research and development. So in 2004, Xiang Lehong founded his own factory and engaged in the OEM model of integrated industry and trade.
After four calm years, the global financial crisis of suddenly appeared, causing a rapid decline in factory OPC orders. Xiang Lehong has a premonition that the future prospects of Chinese companies in foreign trade will be more severe, and selling products directly to overseas consumers will be much more proactive in the transformation from B2B to B2C. Therefore, in 2011, Xiang Lehong embarked on a new path of cross-border e-commerce.
Lege sold TV stands and computer stands in the early stage. The products are too complicated and relatively simple. With some exploration costs in unknown fields, Lege has been almost 40 million in more than four years. During this period, Lege also suffered a heavy blow - the failure to go public, which was due to the attributes of foreign trade enterprises, and on the other hand, the technical threshold for the product was too low. In Xiang Lehong's eyes, falling is not terrible, what is terrible is losing the ability to stand up. After reviewing, Xiang Lehong made another transformation.
This transformation revolves around product refinement, abandoning products with insufficient technical content, switching to the field of linear drive, focusing on product brands, and launching overseas brand Flexispot. The main products include smart lifting tables, smart electric beds, , smart learning tables, smart lifting tables, smart fitness office chairs, etc., so as to provide users around the world with healthier, more comfortable, safe and efficient overall intelligent solutions.
Internet celebrity blogger Austin Evans Experience Lege Li Ge Lift Table
In the United States, Humanscale and HermanMiller are two old-fashioned companies with a century-old history and are also benchmarks in Lege's field.Xiang Lehong believes that the two companies have the advantages of offline office solutions, and other players are not without opportunities online or in the more vertical track of lifting table .
In terms of product differentiation, Lege incorporates horizon adaptive design, which can level the table in complex ground environments; the lifting table also supports the placement of yoga poles and smart screens, turning into body beauty products; when users use the dance video downloaded by Lege, the dance movements can match the height of the lifting table... A series of scene innovations based on humanization are all in order to make the product more high-end and the quality is more guaranteed. Xiang Lehong set a "small goal" for the company, hoping that the brand will bring users a better, better and trustworthy image, and become the mainstream ergonomic lifting table brand in the US market.
Fortunately, Lege received the help of Google and did a lot of popularization of lifting table knowledge and content marketing at the platform level. This also allows them to focus more on the iteration and update of their products and have more energy to explore more tools for the growth of cross-border e-commerce - independent stations and overseas warehouses.
Expansion path: 9 independent sites and 17 overseas warehouses
After experiencing the global financial crisis and transforming and launching independent brands, Xiang Lehong quickly put his own warehouse on the agenda. In 2013, Lege established its first warehouse; in 2015, Lege invested in and built a factory in Vietnam. With its development to this day, the company has four factories in Ningbo, Guangxi and Vietnam, and has a R&D team of more than 700 people conducts independent research and development and independent marketing.
Independent sites are also expanding rapidly. In 2016, Lege's first independent website was launched. So far, 9 independent websites have been operated. The sales of are increasing year by year, and now the sales of cross-border e-commerce can account for 40%. Compared with selling on three-party platforms like Amazon , making independent websites does not have to be subject to platform rules, and can better practice product innovation, but in 2016, the challenges of independent websites are far greater than opportunities. One thing that Xiang Lehong still remembers is that Lege once failed to predict the huge number of visits to come when Black Friday in Germany was approaching, which resulted in the collapse of the independent website.
After this mistake, Lege formed an IT team of more than 100 people, with the goal of ensuring the smooth progress of each process within the independent site. Although it is very difficult, Xiang Lehong believes that the early investment is worth it in the face of the gradually huge private domain traffic pool. In his opinion, it was precisely because of his early years of work that he was able to take over the first wave of bonus when the independent website exploded. "In another year or two, Lege's independent website sales business may account for half of cross-border e-commerce, exceeding third-party platforms," said Xiang Lehong.
Lege team
In recent years, Lehong's strategic choices for overseas warehouses can be said to be bold enough, with as many as 17.
In 2018, when the third warehouse was built, Xiang Lehong thought about a question - is it possible to build more warehouses to achieve a delivery speed of 1-2 days? In this way, there may be more than ten warehouses, but Lege does not need so much size, so Xiang Lehong decided to form a public overseas warehouse .
public overseas warehouse means that it requires about US$100 million. The people around him expressed strong opposition, believing that heavy assets can only rent it. In order to prevent the decision to form a public overseas warehouse, some people even slapped the table at the middle and senior executive meeting and said they "resigned", but they could not resist Xiang Lehong, and the majority of those who agreed in the end were occupied.
Why do you insist on doing this? Xiang Lehong has a complete set of logic: First, the world's largest manufacturing base is on the west coast of Pacific , and the world's largest consumption area is on the east coast of Pacific Ocean, that is, the United States; secondly, from the perspective of interaction, 24,000 TEU super-large container ship can be used for transportation between the Pacific, which only takes 15 days, which is even shorter than going to Europe; finally, more importantly, Lege's overseas warehouse business has accumulated good reputation, and with heavy assets, public overseas warehouses are more feasible.
In 2020, the sudden outbreak of the epidemic caught many offline companies off guard, the development of cross-border e-commerce accelerated, and the demand for warehouses increased significantly, which also increased land costs. "In 2019, I bought a warehouse in Los Angeles. The warehouse of 10,000 square meters was about 12 million US dollars, but now it costs more than 30 million US dollars," Xiang Lehong concluded that the window for small and medium-sized enterprises to go to Los Angeles, USA, , San Francisco , economically purchased overseas warehouses and land has been closed because the cost is too high. Those companies that lease overseas warehouses often get discouraged in the face of the high warehousing cost after the lease contract expires. To a large extent, Lege Overseas Warehouse has formed its own barriers.
Lege Overseas Warehouse Past layout
With the help of overseas warehouses, Lege has served more than 400 companies in the United States, and may exceed 500 by the end of the year. "This can greatly reduce the impact of inflation on cross-border e-commerce. It will not only help small and medium-sized enterprises, but also help Lege. Using innovation in technology and business models to become a company that needs in society," said Xiang Lehong. In the future plans, Lege also has a plan to build a ship to increase routes to achieve ship-to-house traffic linkage.
On the other hand, because of the fluctuation of sea freight prices exchange rate , overseas warehouses have also suffered a certain impact. "The first half of this year is still at a high level. Since May and June, the shipping fee has dropped a lot. Recently, the freight rates of a cabinet on the US-Western route are about 1,800 or 1,600 US dollars," Xiang Lehong said that in the past two years, demand in European and American countries has also been decreasing, and more inventory is a challenge for the company.
Lege did two things to this. First, incorporates small warehouses that do not have many advantages into large warehouses to reduce labor costs, equipment costs, water and electricity costs, and comprehensive costs; secondly, conducts information transformation , and improves the efficiency of listing and aggregating the entire warehouse and aggregating goods through a WMS intelligent algorithm for accruing goods inbound. As well as some fully mechanized operations, we can meet the needs of each link.
From the perspective of supply chain, Lege has made more efforts in localization, such as looking for timber resources in the United States and Europe this year, and doing a lot of charity activities, integrating into the local community, overseas warehouse operations recruit a large number of local American employees, etc. Overall, Lege's huge wave journey has achieved success, and the role of these grasping tools has made great contributions.
mining penetration rate is less than 2% of the domestic market
has been overseas for more than 20 years, helping Lege go public, and achieving the second largest overseas market share. Xiang Lehong's attention has gradually turned to China.
Interestingly, Lege became "unexpectedly" outside the circle in China last year, relying on a cooperative video. This time, they found tens of millions of fans of B station, UP host, , He and his , implanted the Lege brand in "I made the product that Apple gave up...", and gained an astonishing 23.58 million video views. Xiang Lehong used "magic" to describe this linkage, which attracted very high attention without much cost investment, and even drove the rise of 's stock price .
Source: Screenshot of B station
This year, Lege chose to focus on the Chinese market for more considerations. " lifting table will start to try at per capita GDP 15,000 US dollars. This is the experience of countries around the world. If the penetration rate is very high in economically developed regions, ," Xiang Lehong believes, ", such as Ningbo, has reached a high level, and there is no gap with developed countries. In the future, China's market momentum will be very large and its development speed will be very fast. "
From a long-term perspective, lifting tables have the opportunity to adapt to the future trend of Healthy China 2030. When the pressure on medical resources increases in the ageing era, national health will become the slogan of more and more people. Using a healthy way to fight aging is not only a demand judgment of a A-share listed company for the domestic market, but also a topic that Lege can deeply participate in.
At this stage, in addition to the traditional Tmall , JD and other e-commerce platforms continue to strengthen their energy, Lege has opened 5 offline experience stores in Ningbo area and launched lifting beds. Before Double Eleven, it has launched ladder media advertisements in 36 key cities across the country, and has invested a lot of investment in brand promotion.
ladder media advertising
1 Lehong judges that domestic consumption of improved demand for lifting tables still has a relatively large room for future consumption. "The penetration rate of lifting tables in developed countries with a penetration rate of about 15% in the domestic market is less than 2%.
domestic and foreign trade integration, the future in Lege's eyes
As a veteran cross-border e-commerce company, Lege's export business accounts for more than 90% of the total business, and ranked first in the lifting table category sales rankings of e-commerce platforms such as Amazon, , Debao , , Walmart , , Lotte , Yahoo, etc., and has been shortlisted for the "2022 Kantar BrandZ Top 50 Global Brands in China", with domestic sales accounting for about 10%.
Home furnishing brand FlexiSpot is on the list
In the development territory of Lege, the European, American and Japanese markets have always been important markets, such as developing some B-class customers and agents on Japanese independent websites to launch FlexiSpot overseas brands. In view of the current situation and weak consumption in Europe, Xiang Lehong has paid attention to emerging markets such as Southeast Asia, especially other countries such as Vietnam and Southeast Asia, which have undertaken a large number of Chinese manufacturing production capacity in the past two years. He believes that the economies and people's incomes in these countries will increase significantly, which will help promote the lifting table.
Looking at the global trend of cross-border e-commerce, the overall situation in 2022 is relatively complicated. Although the sales of independent sites increased, the growth rate was not as high as in the previous two years. The Russian-Ukrainian war made overseas inflation particularly severe. Xiang Lehong showed an optimistic side. In his opinion, the economy is a spiral upward process, and cross-border e-commerce sellers must be confident. "For ordinary families, energy and food expenditures are necessary, and the consumption demand that can be saved will be suppressed. However, some high-consumption groups have increased their expenditures. Judging from the feedback from a recent internal exchange meeting, the demand for some high-end home improvement products has increased."
In the complex and changing environment, this cross-border e-commerce veteran's pioneering journey continues, and Lege is also moving steadily on the strategic route of domestic and foreign trade integration.
