Ignition Dimension (ID: chaintruth) original
Produced by Burning Finance
Author | Hou Yanting
Edit | Rao Xiafei
Over the years, China's overseas boom has been in the ascendant, and in the context of the global epidemic, Chinese companies have entered a new stage. In 2021, especially the Internet industry, a new climax will be set off.
In the past two years, cross-border e-commerce has shown a contrarian growth trend. According to customs statistics, in 2020, the total import and export volume of China's cross-border e-commerce was 1.69 trillion yuan, an increase of 31.1%. Among them, exports were 1.12 trillion yuan, an increase of 40.1%.
In the past two years, the sales of new generation D2C independent brands such as SHEIN and Anker and cross-border e-commerce companies with complete supply chains have repeatedly reached new highs. A large number of small and medium-sized sellers are also scrambling to occupy the global market. According to Marketplace Pulse data, as of January 8, 2021, 45% of sellers on amazon marketplaces are located in China, up from 16% in 2017.
Xiaolin works for a billion-dollar cross-border e-commerce company in Changsha, Hunan Province, and is also the seller with the largest sales volume of Amazon footwear products. She found that in the two years since she joined, the company has been expanding, from about 160 people before to 300 people, and the company's performance in 2021 has doubled. "In the past two years, the annual sales of the brands I manage have grown from 300 million yuan to 500 million yuan." She said to Burning Finance.
According to the "B2C Cross-border E-commerce Platform "Going to Sea" Research Report" released by the global think tank in June 2021, the total amount of global B2C cross-border e-commerce trade in 2020 will rise due to lifestyle changes, and it is predicted that it will rise from $780 billion in 2019 to $4.8 trillion in 2026, with a compound growth rate of 27%.
The report pointed out that about 26% of the world's business-to-consumer (B2C) cross-border e-commerce transactions occurred in Chinese mainland, and China surpassed the United States, the United Kingdom, Germany and Japan, ranking first in the world.
The popularity of the cross-border e-commerce industry has also led to the development of innovative overseas service enterprises in the upstream and downstream of the industry. Dabing, one of the founders of the cross-border e-commerce server "Purple Bird Browser", told Burning Finance that the company's product was put on the market in 2018 and has now settled in more than 140,000 merchants and 1.7 million stores, involving amazon, eBay and other different platforms.
However, factors such as the epidemic have also brought resistance to cross-border e-commerce. Dabing pointed out that due to the circuit breaker of civil aviation passenger aircraft and the limited number of professional cargo aircraft, cargo transportation now relies solely on sea transport, "a single channel has undergone systemic risks, the major ports have accumulated too many goods, ships can not dock, caught in a vicious circle, the original 1 month to the cargo is now 4 months can not reach." This situation has not been alleviated, in addition to the longer time, the freight rate has also increased by 10 times than before. ”
In addition, in May 2021, the Amazon store closure incident also triggered major fluctuations in the industry. In this regard, Chinese merchants are also actively turning to new platforms. In March 2021, Walmart's e-commerce platform US officially opened an official investment channel for Chinese cross-border sellers. According to Marketplace Pulse, Walmart has added 5,000 Chinese sellers by October 2021.
Bai Xiaosheng, who specializes in the European and American markets, also has two Amazon stores sealed in 2021, and he also entered the Wal-Mart platform, "Compared with Amazon, Wal-Mart does not need to operate, it is simpler." ”
The global gold rush is still rolling, and Chinese seafarers have witnessed the ups and downs of the industry. There are opportunities and challenges in these two years, but in 2022, a new journey is also beginning.
Go to sea to pan for gold
On New Year's Day 2018, XiaoXiang found that e-commerce in Southeast Asia was developing well, so he decided to resign from the company and start a cross-border e-commerce business with another partner.
In the beginning, because they had almost no experience, they didn't know what platform to choose and what products to sell. As a result, they registered many stores on Amazon, selling various categories of products. Xiao Xiang told Burning Finance, "At that time, I received an order, the next order on Taobao, after receiving the goods, I contacted cross-border logistics and sent it abroad." Slowly, we found that the number of individual categories grew rapidly, so we closed some stores with bad orders, leaving two or three accounts with good sales. ”
Xiao Xiang found that among all products, the household category sells relatively well and grows fast, and decided to monopolize this category of products, "It may be that our products are in line with the climate environment of Southeast Asia, such as particularly hot, frequent rain, some sunscreen, heat-resistant products, it is very popular." As they became more familiar with the Southeast Asian market, they also found that the top two platforms in Southeast Asia were Shopee and Lazada, so they abandoned Amazon and switched to these two platforms.
Today, Xiaoxiang's development and operation team has nearly 20 people, and there is a small factory of about 10 people in Shanxi's hometown, "We directly purchase goods with manufacturers, and then we will carry out secondary processing of products in the factory according to the needs of the store, and develop products that meet the market." He introduced that the company now operates 6 stores in 6 countries, involving 4 languages, with monthly sales of more than 2 million yuan, and following the pace of Alibaba's platform expansion, the team will also open up the South Asian market in 2021.
In the European and American markets, a large wave of Chinese sellers are also constantly panning for gold, with annual sales of tens of millions of dollars, Bai Xiaosheng, also belongs to the waist sellers, head sellers can reach billions of dollars in annual sales.
Bai Xiaosheng began to enter the cross-border e-commerce industry as early as the end of 2015, when he joined a foreign company in Shenzhen, responsible for product development and operation of Amazon stores.
In 2016, he through the investigation of the European and American markets, developed a mobile phone data line for market demand, the company found a supplier in Taiwan to produce 12,000 pieces, invested 90,000 US dollars in costs, after the product was on the shelves, he released promotional information on foreign discount websites, found foreign Internet celebrities to cooperate and post, on Thanksgiving Day, 1 hour sold 10,000 products, but also led to the sales of other products in the store.
The experience of this explosive model development has made Bai Xiaosheng famous in the industry, and he began to share his experience as a lecturer to other teams, and at the end of 2016, he resigned to start a business. At the beginning, Bai Xiaosheng was mainly engaged in lectures and training, but in 2018, the company's operation had problems and fell into difficulties. "I decided to return to employment and do cross-border e-commerce, so I started doing Amazon stores with my girlfriends and two people, I was responsible for developing products, and she was responsible for operations."
At that time, they got up at 8 o'clock every day and worked until 11 or 12 o'clock at night to come home, "On my birthday in January 2019, my girlfriend and I forgot to work overtime every day, or my family called me to remember." ”
Kung Fu pays off. In September 2019, there is a batch of supplies, the factory is more stocked, they do not want to waste, they all sent to overseas warehouses, according to the original rhythm, this batch of goods will be sold until the spring of 2020, did not expect the product to fire, "just one month, we sold 1 million US dollars, in the past even if the membership day and other promotional seasons, we are selling at most 200,000 US dollars." At that time, with the addition of 3 people invited by the factory, we were also a team of 5 people. ”
In 2020, Bai Xiaosheng's team expanded to 10 people, and the store targeted the European and American markets, selling products including home, outdoor sports, clothing and other categories, with annual sales of more than 10 million US dollars.
Changsha Xiaolin graduated and entered the cross-border e-commerce industry, in 2016 as a management trainee into Changsha's largest, China's top 10 cross-border e-commerce company Anker Innovation, three and a half years of employment, she participated in the company's Amazon store operation work, from product listing to promotion of the whole process management, global goods overall allocation and completion of quarterly sales targets, profit targets.
Kobayashi told Burning Finance, "At that time, the company only had one Amazon store, and the annual growth rate of sales of ordinary products was about 20-40%. With its listing on the Shenzhen Stock Exchange in August 2020, Anker's annual sales have reached 10 billion yuan.
At the end of 2019, Xiaolin left Anker and had plans to study abroad, but when the epidemic broke out, she joined the cross-border e-commerce company of today's footwear brand.
As a footwear store, the company has developed three brands, men's shoes, women's shoes, children's shoes, hiking shoes and other products are involved, "In 2021, I began to build a shopify independent station, no longer manage the Amazon store, but the brand I managed, now the annual sales have exceeded 500 million yuan." ”
Highs and lows
Under the epidemic, China's cross-border e-commerce business has ushered in a climax, but the risks caused by uncertainty will continue to appear in 2021.
"We are part of the group that benefits. Originally, the penetration rate of e-commerce in Southeast Asia was relatively low, and the epidemic situation prompted the market to mature, accelerating the development of local e-commerce. In 2020 and 2021, our performance growth rate is very fast, two or three times a year. Xiao Xiang told Burning Finance that in the past two years, the company is in a state of contrarian growth.
He pointed out that the epidemic is mostly a positive impact on their business, because there are more people shopping online, people's needs are diversified, but there are also adverse effects happening, in the past two years, Southeast Asian people have less money, spending power has declined, "the overall is growing, but we can also see the phenomenon of weak demand, such as some people buy less frequently, or the amount of each purchase is reduced." ”
It is worth mentioning that in 2021, Xiaoxiang also ushered in a major breakthrough, that is, they opened a company in Malaysia, rented a warehouse, recruited locals, and did a localization team, "In 2022, we hope to be able to do some localization attempts in Thailand and Vietnam." ”
However, for Chinese cross-border merchants who do Amazon stores in the United States, the store closures in 2021 have a huge impact.
On September 17, 2021, Cindy Tai, Amazon's global vice president and executive president of Amazon Global Selling Asia Pacific, said in an interview with the media that Amazon banned a total of 600 Chinese brands and about 3,000 seller accounts, all of which have repeatedly abused comments.
This incident also directly affected China's top cross-border e-commerce companies, such as Aoji, Youshu, etc., and because the store was sealed, many companies also had a phenomenon of department layoffs, and the industry fluctuated greatly.
Bai Xiaosheng's Amazon store has also achieved great performance growth in 2020. But in the wave of store closures in 2021, they also have two stores "hanging up". In addition, the performance of two or three stores in 2021 has also declined compared to 2020. "In 2021, Amazon's Chinese sellers, the overall sales are declining, in addition to many high-selling stores are blocked, that is, everyone can not brush orders, the original routine can not be used, this time the market can not do." "It's an adaptation process," he said. ”
He pointed out that amazon cross-border e-commerce sales declined, in addition to the store closure incident, and as Xiao Xiang said, people's purchasing power, demand has declined, and in 2021, Amazon's more fierce competition, and even the vicious competition of playing a "price war".
"Everyone knows that Amazon is easy to do, and even the aunt who sells vegetables and the aunt who sweeps the floor know Amazon." The competition in 2021 is very fierce, many new sellers go in directly to hit the low price, sell at a loss, resulting in many old sellers have losses..." Bai Xiaosheng said for example, a normal table in the United States sells for 50 US dollars, even in China, the ordinary folding table is also sold for about 100 yuan, that is, 10-20 US dollars, plus freight at least 20-30 US dollars, "Some sellers enter the US station, (a table) 10 US dollars or even 5 US dollars to sell, in the country can not be so cheap, As a result, there is market chaos, and everyone can't make money. ”
An overseas marketing promoter told Burning Finance that the domestic sellers pouring into cross-border e-commerce are getting more and more every year, and the competition is becoming more and more fierce, and 2021 is a "big outbreak", many sellers are making "full pots", and in 2022, more merchants will want to share a piece of the pie.
As a head brand seller, Kobayashi pointed out that the company will not be affected by the "price war". She analyzed that new sellers will engage in the "low-price spiral method" and use low prices to seize the market, "because the products are not competitive, the stores are not accumulated, and the operating methods are not innovative, so they can only do this to accumulate reviews and increase the weight of the stores." But our brand stores are different, there are already thousands of reviews, as long as we pay attention to not infringing on large brands, generally will not affect us. ”
For Kobayashi, in 2021, she also achieved an achievement, that is, to push a product to the top five in Amazon category sales, "The competition for shoes and clothing is very fierce, generally american sellers, Amazon self-operated selling better, this one has achieved the first place of third-party sellers, the company's previous category has not been able to do (this ranking). ”
"The company has now recruited a lot of former employees of Anker, in the benchmark Anker, the internal fine management is getting better and better, the sales volume of the store has gone up, the market share has increased, but it is not the impact of market changes." She said that the impact of the epidemic on stores is within the normal range, such as party, outdoor or workplace shoes that do not sell well, but home shoes are selling higher, and extremely cold weather has also made snow boots sell well.
The increasingly fierce competition in the cross-border e-commerce industry has led to the financing of upstream and downstream Internet science and technology innovation companies. Dabing revealed to Burning Finance that Purple Bird Browser is now valued at hundreds of millions of dollars. According to the information of Tianyancha, Fujian Zixun Information Technology Co., Ltd., which belongs to Purple Bird Browser, has obtained a strategic investment in June 2021, and the investors are Gaorong Capital and Gaocheng Capital, and the specific amount has not been disclosed.
Dividends are getting shorter
The above-mentioned overseas marketing promoters believe that the cross-border e-commerce industry is still worth investing, but the dividend period has become shorter and shorter, "Amazon began to recruit Chinese sellers to settle in 2012, 2013-2016 is the Amazon outbreak period, 2018 began to decline, these two years are a new outbreak period, but it is not expected to last long." ”
Kobayashi also found that the difficulty coefficient of cross-border e-commerce in the past two years is definitely higher than that in 2015 and the beginning of 2016, and many colleagues who went out to start a business failed. "The market is more saturated than before, the requirements for products, operations and other aspects are higher, and now the resistance encountered by new sellers is greater than before, and now it must be compliant and refined, and the products must be competitive, otherwise they cannot occupy the market."
Starting in 2021, Kobayashi is responsible for helping the company build independent stations from scratch, "After the wave of store closures, everyone realized that they can't rely too much on Amazon, put everything in one basket, and let multiple channels, multiple countries, and multiple sites have sales." At present, the company still has 90% of its sales on Amazon, but after the independent station is established, it will change in 2022.
Shenzhen, the "cross-border capital", also reacted to this. On August 5, 2021, the Shenzhen Municipal Bureau of Commerce issued a notice to provide financial support for cross-border e-commerce enterprises that explore overseas markets through independent sales channels: 2 million yuan of subsidies will be given for a single project, and up to 3 million yuan can be declared for a single project.
Some trees also publicly stated that while deeply cultivating mainstream third-party platforms such as Amazon, eBay, AliExpress, and Wish, it will also actively develop emerging platforms such as Shopee and Lazada.
Xiaolin believes that for China's cross-border e-commerce business, 2022 is definitely a growth trend, but the industry requirements will inevitably be more, competition will inevitably intensify, "because the strength of China's supply chain is placed here, many things are going out from China, but it will really look at the comprehensive strength of a seller, like my company is definitely still a growth trend." ”
It is worth noting that in the previous series of reports on TikTok by Burning Finance, it was also pointed out that in 2021, ByteDance will force TikTok's e-commerce business. Subsequently, a large number of Chinese sellers also began to abandon Amazon and dig up the traffic pool of TikTok.
At the beginning of 2021, TikTok launched the small shop function, the first batch of Indonesian, British, and American sites have been opened, and in November of the same year, a new seller application "TikTok Seller" was launched in Indonesia. Burning Finance was informed that in November 2021, TikTok shopping in Guangdong investment policy is very strong, such as the new British cross-border e-commerce merchants settled in, enjoy 90 days of all order commission-free incentives, only charge 1.8% of the payment fee, and provide order free shipping, freight subsidies and other policies.
Xiao Xiang judged that the Southeast Asian market still has a growth period of 5-10 years, and the shortest will also have 5 years of development, but the competition is also becoming increasingly fierce, and many brand owners will consider more about this potential market when they go overseas.
He said that the competitiveness of Chinese merchants in Southeast Asia is also strong, "China's huge supply chain and product demand, for us to open up the Southeast Asian market to create an advantage." For example, Taobao women's clothing may have 100 million styles, counting sizes and colors, etc., hundreds of millions of women's clothing products, to Malaysia's population of 30 million, one person wears one, can be changed several pieces a year. This is also the reason why some local women's clothing companies can't compete with our Southeast Asian practitioners. ”
Of course, he also believes that if you want to achieve better growth in the future, you may need to do brand effects, enrich operational means, optimize the supply chain, and even the entry of capital, "When the dividend is getting shorter and the market is mature, it will be difficult to survive by blindly relying on low-cost melee." ”
*Captions and text images are from Visual China. In the text, Xiaolin, Dabing, Bai Xiaosheng, and XiaoXiang are pseudonyms.
*Disclaimer: In no event shall the information herein or the opinions expressed herein constitute investment advice to any person.