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After experiencing a surge in 2020, no one expected that cross-border e-commerce would suffer multiple blows in 2021, and the market environment cooled down rapidly.
Data from the General Administration of Customs show that in 2020, China's cross-border e-commerce imports and exports will be 1.69 trillion yuan, an increase of 31.1%, of which exports will be 1.12 trillion yuan, an increase of 40.1%. In 2020, 2.45 billion votes were checked and released through the customs cross-border e-commerce management platform, an increase of 63.3% year-on-year.
Among them, more than 70% of the country's cross-border e-commerce products are exported through the Pearl River Delta, and Shenzhen can be called the focus of the cross-border e-commerce industry in Guangdong Province. One-third of Amazon's third-party Chinese sellers are in Shenzhen. It is estimated that this is the city with the largest number of Amazon sellers in the world.
In Shenzhen, there are not only Saiwei, Aoji, Tongtuo, youshu and called the four young people of South China City, but also the Amazon Sanjie, which is called Anke Innovation, Patuoxun and Zebao. In 2012, Amazon launched the "global store" business and attracted investment to China, and these thunderous sales accounted for the industry dividend.
In 2020, they have caught up with the market opportunities brought by the epidemic. At the end of that year, "the house of Shenzhen Bay No. 1 was bought by Amazon" became a joke circulating in the streets and alleys of Shenzhen. However, just as the entire industry is preparing for 2021 with great expectations, the repeated blows have plunged the entire cross-border e-commerce enterprises into the double day of ice and fire.
No one expected that layoffs and inventory clearance would be the end of the big sale in 2021, and this is also the end of the big selling era. "The information released by the platform is very clear, and the store group model in the past is not encouraged by the platform, and the risk is getting bigger and bigger." An industry insider revealed.
In the cold wind, the big sellers are still struggling to support. Zhixiang Network learned that in mid-2021, Aoji received financial support from the local government of Shenzhen. Several other well-known big sellers have also received partial funding. However, after all, their time has passed, where are the big sellers?
Big selling fell
Once upon a time, Patoson Patoson was a well-known "honor student". According to the cross-border financial report, Patoson's revenue in 2020 was 4.94 billion yuan, an increase of 43.88% year-on-year, and the net profit was 310 million yuan. In the first four months of 2021, Patoson continued its past excellent results, contributing 1.717 billion yuan in operating income to cross-border communication and generating a net profit of more than 80 million yuan.
However, on April 29, 2021, everything came to an abrupt end. Not only was Patoson's products removed from Amazon's shelves, but many of the main brand Mpow's products were "unsellable" on Amazon's US and UK sites, and worse, the filing of the brand Mpow was also cancelled, and the funds have been frozen.
This time, the attention of the cross-border e-commerce industry to Patoson is much more complicated. Just over a month ago, Cross-Border Tongcai sold Patoson for 2.02 billion yuan and received a life-saving fund. Among the acquirers are Xiaomi, Shunwei, ByteDance-backed Quantum Leap and Shein International.
With the blessing of many top investors, as the head enterprise of cross-border e-commerce, any change in Patoson will arouse the attention and speculation in cross-border circles.
Then came the bad news. On May 8, another cross-border e-commerce company, Aoji Technology Amazon's US station and the United Kingdom's store stores also showed that they were not available for sale. Since then, almost every once in a while, it will be reported that new cross-border e-commerce companies have been banned by Amazon, and the blocked sellers have spread from head sellers to small and medium-sized sellers, and the categories have expanded from consumer electronics to home, health, beauty and so on.
Amazon soon announced the reason for their violation - brushing orders. Although Amazon punishes illegal accounts every year, after the accounts are frozen, by appealing to the platform, the big sellers can always find their accounts. But this time, for the first time, companies realized that the account really can't come back.
Huang Bo (pseudonym), who once worked at Aoji, experienced the period when he was banned by Amazon. "To be honest, after being blocked at that time, it had a great impact, basically it can be understood as no income, because most of the business of Aoji came from Amazon, although it was not completed at first."
In fact, this is not the first time that Aoji has encountered an Amazon ban. In 2018, Aoji also encountered the same problem, "At that time, the company's pressure was very large, the company's income depended on that part, and the direct capital chain was broken, which was actually quite dangerous at that time, but it was unsealed later." Huang Bo said.
It is also based on past experience that this time Aoji took the lead in communicating with Amazon on the issue of suspension, but this time, their emails were all sunk in the sea, and they could not get any reply from Amazon. "At that time, we had no choice but to wait for a while, but after waiting for more than a month, the second brand was also sealed." Huang Bo said.
Unlike in the past, this time Amazon's punishment is beyond the imagination of all cross-border sellers. Once the brand is blocked, it means that the account associated with the brand will be discovered by Amazon and punished together. Judging from Amazon's actions, the platform has long been aware of the operating routines of the big sellers, so this time it has adopted a strategy of clearing the wild.
However, in the view of Hu Lan (pseudonym), an investor in the cross-border e-commerce industry, even if there is no Amazon ban, cross-border e-commerce will fall into the state of inventory clearance throughout 2021, "Everyone expects the growth rate of the previous year to be too high, and at the beginning of 2021, there are too many goods, even if there is no Amazon seal, if the annual growth rate does not reach such a high forecast, everyone is in the process of clearing the goods throughout the year." ”
It is the overly optimistic expectation of the market that makes cross-border e-commerce companies particularly miserable when they encounter Amazon's ban. In fact, looking back, the bleakness of 2021 has long foreshadowed.
"From some macro data, in fact, online shopping in the United States, even if the entire market is growing, but many categories have shown negative growth in Q2 and Q3 in 2021, in addition, the online business of traditional American companies such as Home Depot and Costco has also begun to exert efforts." Hu Lan pointed out that coupled with the increase in the entry of a large number of new sellers and traffic and freight rates, Amazon sellers have encountered multiple internal volumes in 2021.
However, cross-border e-commerce sellers on the other side of the ocean failed to capture the signal of the market in time, and what is worse is that most cross-border e-commerce sellers suffer from "Amazon dependence", once Amazon's business is forced to stop, it immediately encounters a capital flow rupture, even if it is laid out in other channels or independent stations, compared with Amazon's volume, it is also a small witch.
Layoffs and inventory clearances
Therefore, how to quickly recover funds to reduce losses and survive the ban has become the consensus of the industry.
Entering the second half of 2021, liquidation and layoffs have become keywords in the cross-border e-commerce circle. On August 6, an announcement from a cross-border seller, Patoson's "Notice letter of suspension of work for employees in R&D technology positions", circulated in the industry. In the announcement, Patoson pointed out that in the face of the recent great changes in the industry, combined with the company's current strategic planning and actual operations, as well as the objective conditions for the development of technical work, it was announced that from August 6, 2021, a six-month suspension and waiting arrangement would be implemented until February 6, 2022.
For Patoson, who is in the middle of a deal, the situation has never been worse. "Patoson has dismantled all the businesses that can be dismantled and independently financed, and the people inside have also been cut in a hurry, and they have encountered such a big blow in the transaction process, and it is not clear whether the transaction was completed in the end." Li Ke (pseudonym), an investor in the cross-border e-commerce track, said, "If the ban occurs after one or two years of integration, it may be able to breathe a sigh of relief, objectively speaking, the current situation will be more difficult." ”
"There is a tree must be very bad, a lot of senior executives, directors have left, the entire team of the independent station has basically been cut down, from the beginning of 2021, the team of hundreds of people on the independent station began to lay off employees, and now it is basically laid off, Amazon itself is not doing well, Amazon is also a bunch of inventory, many senior executives of the Amazon team have also gone, so they basically did not get better, it was very difficult." Hua Ning, an executive of a cross-border e-commerce company, said.
Inside Omgi, it is also going through personnel changes and departures. "People must have gone a lot, after all, a lot of brands are gone, and the person in charge of the biggest brand as far as I know has gone out." Huaning said, "Including Zebao and Patuoxun, their situation is similar to that of Aoji, and the main energy must be to clear the inventory, and then shrink if it can be contracted, and then multi-channel layout." ”
On the other side of the ocean, backlogged inventory is being sold at low prices. "In several warehouses in Los Angeles, many goods may be sold at a one-fold to three-fold discount on the cost, and local Chinese and Americans with offline capabilities will buy them." Hu Lan said, "It may be mainly small and medium-sized sellers, and it will not be done if it is directly cleared." ”
According to Huaning, until now, Aoji is still trying to solve the backlog of inventory problems. "One of the bosses of Aoji has not returned in the United States, and should be connected to the local channel in the United States, and most of the energy should be digested to digest the inventory."
In the midst of dismal gloom, Zhixiang Network learned from different channels that after the suspension, Aoji obtained new financing.
"Whether it is a shop or a boutique model, there are very few companies that can achieve 3 billion or even more than 5 billion, and Aoji will reach a scale of 10 billion in 2020." Hu Lan said that from the perspective of Amazon's sales operation system, Aoji is a very good company.
Pathfinding
After being hit by the suspension, cross-border sellers have also announced new business directions.
According to Zhixiang Network, Aoji, who has obtained valuable funds, does not intend to go back to the original road. "They are also trying to transform, can not purely take this kind of seller's road, the seller's road at present, I estimate it is difficult to turn over." Hua Ning said.
At the end of December 2021, Aoji announced that it had established an ecological chain project incubation center. The target cooperation objects of the ecological chain project incubation center are mainly divided into two categories, one is the Tao brand experts, including in the Taobao / Tmall / Jingdong and other domestic e-commerce platforms, subdivided category head sellers, at least 1 explosive product has been created; the second type is product experts, requiring rich experience in product development, design, production management, and sellers with their own factories are preferred.
"The support provided by Aoji to the incubation project includes project resources, category planning, brand marketing, data management, supply chain system and functional management." Aoji Technology pointed out to the outside world, and said that as of now, Aoji Technology has successfully incubated 4 projects, and has grown into a medium-sized cross-border e-commerce enterprise. Another project is still in the process of being incubated, and it is expected that after the official launch of the product in January 2022, the annual sales will exceed 60 million.
In fact, this is not the first time that Aoji has tried to transform, as early as 2017, Aoji had established a similar strategy, planning to vertically penetrate into the branding route of 3C, health, small household appliances, home and other major categories.
However, the early investment of the brand route is not cheap, and the effect is slow, and in the comfort zone of Amazon's rapid start-up and rapid profit making, the attempt of Aoji branding is not firm.
Huang Bo said, "In terms of research and development and brand investment, Aoji is definitely there, but it is not so big. Overseas marketers with brands will use celebrity promotion and other ways to shape the brand image, which is actually a very standard brand road, but the investment is not so large. ”
The problem is that Huang Bo said, "Aoji pays more attention to the output ratio, advertising investment, output must reach the set value, but it is difficult to take the brand route to carry out similar measurements, it takes time and accumulation to produce a chain reaction." ”
Similar to Huang Bo's view, Hu Lan also believes that Aoji is a very good enterprise, and can also see the signs of Aoji trying to develop towards the branding route, and there are R& D teams in some categories, but the atmosphere of the entire company is still growth and profit-oriented, and the entire company still takes sales as the driving force for development.
"Sales-oriented companies and R&D-oriented, brand-driven companies are completely different in terms of personnel structure and organizational structure and incentive mechanism." Hu Lan said.
Another core question is whether these companies can build real brand barriers. "If it's a small appliance or an electronic product, like tWS headphones, that needs to invest in research and development, design and define the product, then whoever can define the product can earn the highest brand premium." However, if the sales are relatively small technical categories, the barriers come from channel capabilities and sales capabilities. Hu Lan pointed out.
Different big sales give different answers to the future.
On July 6, 2021, Tianze Information announced that there are trees that have added as many as 340 Amazon accounts that have been blocked or frozen this year, and the revenue of independent stations has also dropped sharply from 45 million in January to nearly 1 million in May, and it is expected that the overall revenue of a tree in the first half of 2021 will drop by 40% to 60% year-on-year.
This set of data means that in the past 2021, there are trees that have at least experienced multiple blows of platform suspension and independent station failure.
Now, a tree has woken up and given the answer to the transition to a boutique model.
Its parent company Tianze Information pointed out in the "Announcement on the Partial Reply to the Inquiry Letter of the Annual Report of the Shenzhen Stock Exchange" that in the future, it will fully focus on the development of the cross-border e-commerce business of the subsidiary youshu, focus more resources on the boutique e-commerce platform represented by Amazon, transform the boutique route, and gradually increase the proportion of sales of its own brands.
Tianze Information pointed out that the traffic entrance is gradually occupied by the boutique e-commerce platform represented by Amazon, and the cost of diverting customers from small and medium-sized platform e-commerce and brand independent stations will continue to rise, and the scale effect of the boutique e-commerce platform will gradually be reflected. Therefore, in the future, Youshu will focus on specific categories, streamline the number of products, carefully polish in product definition, industrial design, product research and development, quality control, engineering improvement, etc., develop its own brands, and form a multi-brand matrix. In order to seek brand premium, extend product life cycle, and share long-tail benefits.
In Hu Lan's view, the traditional cross-border big-selling transformation has two feasible paths, "one is to re-emphasize research and development in the vertical field, to enhance competitive advantage in research and development, and the other way is multi-channel operation, and the future increment of cross-border e-commerce is likely to be the increase of omni-channel, especially offline channels." ”
This is also the focus of his attention to the amazon track project in the future, "Now, we will increase the consideration of Amazon's on-site operation and multi-channel operation capabilities and offline channel operation capabilities, in addition to selecting categories with real R& D barriers to investment layout." Moreover, in the second half of 2021, the Amazon project itself that received financing seems to have a certain technical content. ”
Not only cross-border e-commerce companies, but also capital has paid enough tuition fees in 2021. The popularity of cross-border e-commerce in 2020 has attracted a lot of new capital to join. In March 2021, Yan Ni, an investor looking for cross-border e-commerce projects in Shenzhen, witnessed the heat of the market during that time, "Shenzhen is full of investors, all cafes are, to seize the time to fight for opportunities to chat with the founders."
Immediately after, the Amazon ban arrived. "A lot of people are hit by Amazon and leave after casting, and there are quite a few such people." Hu Lan noted.
Investors have also experienced the baptism of the suspension incident, and their understanding of the cross-border e-commerce industry has undergone many changes. "In the past, everyone recognized the model of brutal growth, recognized the model of doing quantity first, then research and development, and then doing branding. Including when I looked at the project at the beginning of this year, I knew that I might brush 8% to 10% of the orders when I was due diligence, but at the time we didn't realize what this might mean. Li Ke said.
(The above interviewees are pseudonyms)