Image source @ Visual China
Text | Internet jianghu
Someone once concluded that the development path of domestic Internet companies is nothing more than three directions: going to heaven, entering the earth, and going to the sea. Among them, the heavens are specialized in high-tech technology, such as AI, chips, etc., and entering the ground is to go deep into the sinking market to meet the broad sinking market demand. At a time when enterprises are physically and mentally exhausted by the domestic war, going to sea seems to have become the consensus of mainstream Internet companies.
To say the most lively area in the sea, it is not cross-border e-commerce. The COVID-19 pandemic has accelerated the shift from global consumers to online consumption, and accelerated demand has led to a large number of Chinese sellers pouring into the cross-border e-commerce industry. According to the Tianyancha Professional App, there were as many as 9903 results for cross-border e-commerce-related enterprises within one year of its establishment.
Subsequently, Amazon began a large-scale blocking operation, sealing accounts, banning brands, and sealing funds, which affected more than 50,000 Chinese merchants, involving more than 100 billion yuan of funds. On the other side of the blockade, cross-border e-commerce players such as Zi Buyu and Dunhuang.com are applying for IPO. Just like the Haidilao hot search incident two days ago, on the one hand, a table of people celebrating their happy birthdays, on the other side is a group of people fighting and fighting, and the two sides do not affect each other.
Great joy and great compassion, great ups and downs, half seawater, half flame, how the cross-border e-commerce industry will dig for gold in the future, it is worth thinking.
Beware of the "midfield whistle" of going out to sea
The encounter of cross-border e-commerce, in the final analysis, is still inseparable from the word inner volume. The cross-border e-commerce field is already hot, and with the acceleration of the epidemic, more Chinese sellers have accelerated their influx to this industry, and the process of internal volume in the industry has also accelerated.
From metcalfe's law, due to the externality effect of the network, the more users, the greater the value of the network. The Internet will eventually have to concentrate users in a pool, which is equivalent to focusing the competition of all companies on one point. For users, the larger the scale, the higher the value, and for enterprises, competition is too focused and goes to the inner volume.
The key to the inner volume is a "inner" word, if you want to break, you must expand outward, to a wider space to release the pressure of the inner volume, that is, to go to sea. But this can only cure the symptoms, not the root causes. Because no matter how companies expand outward, they are still trapped within the Internet, so it is easy to touch the boundaries.
The same is true for the cross-border e-commerce industry, according to the cross-border e-commerce data company Marketplace Pulse, the proportion of Chinese sellers on Amazon's US site has soared from 28% in 2019 to 63%. Among them, the overall sales share of China's top sellers ranked second in the platform, from 11% in 2016 to 42% at the end of 2020, second only to the United States.
Data from Marketplace Pulse in June showed that prices are rising across all ad types on Amazon's platform. In 2020, the average cost of clicks on Amazon Advertising was $0.85, and now that cost has risen to $1.20, an increase of more than 40%. However, the average conversion rate of ads has not increased accordingly, but has remained stable at 12%-13%.
Moreover, in the field of going to sea, we must face a problem in the first and second halves, and we must be vigilant against the arrival of the whistle-blowing moment in the first and second halves.
Most of the domestic Internet companies going to sea are facing a key node, and if they can cross this node, they can be more crazy in the overseas siege and sinking, but they can only gradually disappear. This key node divides the first and second half of the Internet company's going to sea.
For example, Cheetah, starting with tool-based products, due to the lack of breakthrough in the red sea on the DOMESTIC Internet PC side in the early days, it chose to go to sea, who expected to directly transform from a traditional software company with internal and external troubles to a successful overseas Internet company. After the cheetah was listed on the New York Stock Exchange, its market value reached $5 billion at its peak.
As a result, in February last year, as part of a massive campaign to combat ad fraud and "disruptive" mobile advertising, Google removed nearly 600 apps from the Google Play App Store, and Cheetah Mobile removed about 45 apps from the Play Store, while being excluded from Google's ad network, and Cheetah gradually lost its voice.
And then there's Tik Tok, which is exploding around the world at an unprecedented rate. In July, SensorTower data showed that TikTok (including the domestic iOS version of Douyin) has become the first non-Facebook app to reach 3 billion downloads, but it is not immune to U.S. sanctions.
Now it is the turn of the cross-border e-commerce industry, amazon has become a "midfield whistleblower", the next large-scale crackdown on false reviews and single behavior on the platform. According to the South China Morning Post, the total loss caused by this round of suspension may exceed 100 billion yuan.
This can be found a law: domestic enterprises go to sea, the first half of the general domestic play copied overseas, like the invasion of alien species like barbaric growth and impact on the global industry environment, and then after a fierce collision with overseas participants, it is inevitable to change the thinking of going to sea and change the way of playing at sea.
Therefore, the inner volume is not entirely a bad thing, it symbolizes a trend of the Internet industry from quantitative change to qualitative change. Just like boiling water, from heating to boiling, after reaching one hundred degrees, it will become water vapor and enter the vast space of the next dimension.
The opportunity of the whole industry chain is coming
So how will the second half of cross-border e-commerce be interpreted? In essence, the differentiation of cross-border e-commerce in the second half is facing the reconstruction of the entire industrial chain, bringing opportunities for the entire industrial chain from upstream to downstream.
In the upstream of the industrial chain, cross-border e-commerce is no longer limited to centralized e-commerce platforms. Affected by Amazon's suspension, many merchants have begun to deploy multi-channels, reduce the dependence of e-commerce platforms, and grasp autonomy. Independent station, Tik Tok is bringing about the rise of a new model of cross-border e-commerce.
Independent sites are self-built e-commerce platforms in the form of websites and other forms for online sales, which are sold directly to users. At present, the number of independent station manufacturers has skyrocketed, and a large number of newly established independent station manufacturers have emerged in the recent year. According to public data, there are currently as many as 477 SaaS tools on the market, shopify is one of the well-deserved leaders, and Shopyy, SHOPLINE, Shopmaker, Ueeshop, XShoppy, etc. at home and abroad are trying to catch up.
Tik Tok is also constantly moving. It is reported that TikTok has launched its latest e-commerce product, TikTok Shopping, which is a set of solutions, specific functions and other tools as one of the products. According to a post by Burning Finance, TikTok shopping has achieved a stage success in the UK station. In mid-November, a company called Made in London announced that it had an account that sold around £100,000 for a live broadcast.
In the middle of the industry, cross-border e-commerce service providers must also turn to help cross-border e-commerce sellers transform and increase efficiency.
Stimulated by the Amazon suspension event, sellers may move towards a multi-platform cross-border e-commerce route in the future, at which time cross-border e-commerce service providers need to strive to provide cross-platform capabilities, such as leading the star, choosing to cooperate with Jushuitan, at present, in addition to Amazon, you can also dock with 1688, WISH and other platforms to increase cross-platform ERP capabilities. Jijia is also developing multi-platform ERP capabilities.
At the same time, from the output of shop-type products to the output of high-quality products, higher requirements are put forward for the seller's ability to select products. In terms of selection tools, Captain BI, Hugo Cross-border, Jungle Scout Paddle Song, and Digital Magic Cross-border have repeatedly obtained financing in the first half of the year, and data selection software such as Shence, Seller Genie, Oulu, and Sorftime has gradually gained market attention.
Independent site manufacturers and cross-border e-commerce service providers are essentially cross-border e-commerce SaaS, the difference between the two is that one is to open up new channels or entrances, in the upstream of another way; the other can provide sellers with multi-channel operation capabilities, in the midstream to empower merchants to increase efficiency and income.
In the downstream of the industry, it is facing the transformation from products going to sea to brands going to sea. Moreover, a wind of "brand acquisition + brand operation" is blowing from overseas to China.
Products have commonalities, such as water cups, whether in the West or the East, need water cups, the role is to drink water, determine which style is popular and sell directly on the line. However, brands are different, they need to create personalized brand concepts, brand images, and are for foreign audiences, which must understand each other's local culture, concerns, local unique needs, establish emotional links with consumers, and gain user recognition.
There are two paths to the creation of overseas brands: one is to adapt to the culture of overseas local markets, and the other is the reverse output with its own cultural characteristics.
The representative of the first path is the fast fashion brand SHEIN, using China's advanced e-commerce experience and the flexible transformation of China's high-quality supply chain, SHEIN opened pop-up stores to Miami, Paris, and participated in paris fashion week, "traffic + low price" model quickly conquered the overseas fast fashion market.
Another path is to see Huaxizi. Domestic makeup brand HuaXizi has also embarked on the "road to the sea", and the preferred platform is Amazon, which has absolute advantages in the e-commerce field. Relying on a domestic price of 219 yuan of "Concentric Lock Lipstick", it was listed on Amazon in Japan at a price of 6129 yen (equivalent to 371 yuan), and on the first day it entered the top three of the lipstick sales list.
For the "acquisition + operation" model, it is neither a capital acquisition in the traditional sense, nor a known brand operation in the past, but it has attracted the crazy pursuit of capital. According to incomplete statistics, these companies have raised more than $13 billion. Among them, the total financing of the head company Thrasio has reached $3.4 billion.
Some people call it the "Procter & Gamble model" or the "Unilever model", but there is actually an essential difference between the two.
As a multi-brand giant, Procter & Gamble chose to shrink its product line after the acquisition of Gillette, because it faced difficult challenges in product development and could only concentrate on further development in the already successful brand. The emerging "acquisition + operation" completely skips the process of products from 0 to 1, and the brands they choose are mostly small and medium-sized brands, and their value lies in the process of enlarging the brand from 1 to 100.
An action of the industry giant directly affects the breakthrough and adjustment of the entire industry pattern, and Amazon may have its own bitterness in order to ensure the stability of the platform rules. Imagine that after the independent station and TIKTOK really rise, does Amazon dare to ban the number on such a large scale? In the eyes of the Internet jianghu, it may not be, at most a small punishment, because doing so is equivalent to giving the platform merchants to each other.
Mutual integration outside the carrier of the commodity
For now, in the short term, Amazon will still be the main channel for cross-border e-commerce.
According to Marketplace Pulse, a cross-border e-commerce data company, in January 2021, Chinese sellers already accounted for 75% of all new sellers on Amazon. In the future, more inexperienced Chinese sellers will pour into the cross-border e-commerce field. For small and medium-sized sellers and small and medium-sized sellers, the economic cost and time cost of building independent stations are not low, and they do not have relevant experience.
As for Tik Tok, there is no perfect e-commerce closed loop at present, although Tik Tok Shopping is an independent development, but the dependence on Tik Tok is too high and lacks many functions of independent e-commerce APP, and Tik Tok is mainly cooperating with many independent stations.
In the future, brand going overseas will become the consensus of the cross-border e-commerce industry, but different channels will still have different characteristics.
Among them, Amazon will tend to be boutique. Different from the rules of domestic e-commerce platforms, such as Tmall is more brand-heavy, while Amazon is more heavy on goods, everything is centered on goods. After the shop model has been hit unsustainably, commodity quality is a better way out for sellers.
Independent stations are moving towards socialization. For sellers, there are cross-border e-commerce service providers that provide website building capabilities, but traffic still needs to be obtained from platforms such as Facebook, INS, and Twitter. If you want to do a good job in exposing and obtaining customers on independent sites, you must do a good job of social networking and create private domain traffic. Unlike Hua Xizi who chose Amazon as the first stop to go to sea, Perfect Diary first launched an independent small station for overseas brands, after all, Perfect Diary pays more attention to the mining of social traffic in China.
Tik Tok is interested. Although different from the team behind Douyin, the essential logic behind the two products is the same: through algorithmic data, understand the user's interest preferences, accurate product recommendation, and improve the matching efficiency between users and products.
Of course, for the seller, if you have the ability, you may be involved, the three are not separated, just three baskets that can put eggs. Amazon is a better choice as a "novice village", for the independent station needs to slowly accumulate experience, is an advanced option, and with the perfect layout of Tik Tok in the field of e-commerce, the same is a local origin, domestic sellers will inevitably be more adapted to Tik Tok's gameplay.
Cross-border e-commerce is not only a situation, but also a culture and concept. E-commerce output is not only physical products, but also the flow and integration of business models. In addition to the carrier of cross-border e-commerce physical goods, it brings a kind of mutual integration.