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"2022 or the first year of the brand's going to sea."
Author/Xi Rui
Cover Source /Tech Planet
This trillion-dollar cake of cross-border e-commerce has once again attracted the attention of Internet manufacturers.
Online celebrity live broadcast, short video with goods, online small shop, ByteDance almost copied the model of Douyin e-commerce to Tik Tok. Not only that, ByteDance launched an overseas independent e-commerce platform Fanno at the end of 2021, increasing the number of e-commerce to go overseas.
According to practitioners, Kuaishou will also bring live e-commerce to Latin America in 2021. In addition, Jiang Fan's transfer to Ali's "overseas digital business" sector has also led to speculation that AliExpress will start Tmall.
But cross-border e-commerce is now a "mythical" industry. Overnight riches, overnight bankruptcies are all in the blink of an eye. It can be said that in the past two years, the cross-border industry has experienced rollercoaster-like ups and downs.
The impact of the epidemic and the cooling of consumer enthusiasm have added a bit of cooling to cross-border e-commerce. However, also affected by the epidemic, some overseas consumers have been forced to rely on online, and the e-commerce penetration rate in the Middle East, Southeast Asia and other regions is far less than that in China. For domestic e-commerce sellers who are extremely involuted, the foreign market is another blue ocean.
In particular, the story of the "sudden wealth" of the domestic cross-border e-commerce brand SHEIN has made domestic merchants more eager to go to sea to pan for gold.
According to Bloomberg's October 2021 report, SHEIN achieved sales of $10 billion in 2020, an increase of more than 250% year-on-year; its final round of funding completed in 2020 was valued at $30 billion; and in the first quarter of 2021, its average monthly sales were $1.2 billion.
The flexible supply chain capabilities that SHEIN relies on are already "standard" in China. Most of the domestic merchants do not lack strength, but the opportunity to go out and break through.
So, what is the real development of cross-border sea trips? Why do big manufacturers collectively focus on cross-border e-commerce? Will 2022 be a good time to go to sea?
1
The eyes of the big factories turned overseas
"E-commerce is definitely the focus of Tik Tok in 2022," a Tik Tok partner told Tech Planet.
As early as 2020, Tik Tok tested the waters in the US market to live e-commerce with goods. Partnered with Walmart to sell Merchandise on Walmart Malls through influencers. At the beginning of 2021, Tik Tok launched small stores in the UK and Indonesia respectively. By the end of the year, Tik Tok's independent e-commerce platform Fanno was launched in five European countries.
For more than a year, Tik Tok's e-commerce map has landed in many regions. Live streaming with goods, short videos with goods and other forms are involved.
Since last year, Tik Tok has built an e-commerce basic network through cooperation with third parties and investment.
Xingyun Group was one of Tik Tok's first KA supply chain partners. Xingyun Group, which was established in 2015, has established a global commodity comprehensive service system integrating overseas, brand, channel and cross-border logistics services. According to internal employees, at present, Tik Tok has cooperated with TSP service providers, MCN/celebrity brokers, etc., to help Tik Tok build an infrastructure.
Tik Tok is the one with the most active cross-border e-commerce performance. In fact, since last year, cross-border e-commerce has become a field of layout for domestic Internet manufacturers.
Kuaishou will also live stream goods in the Latin American market. According to industry sources, the 2021 Kuaishou overseas version of "Kwai" has already conducted live e-commerce tests with the largest local home appliance department store retailer in Brazil.
At the same time, on May 25, 2021, Kuaishou E-commerce launched the cross-border e-commerce business "Kuaishou Import Store". According to the official introduction of Kuaishou, overseas merchants can open import stores to provide users with overseas goods.
Compared with ByteDance's positive and decisive layout, Kuaishou's attitude on cross-border e-commerce seems to be slightly hesitant. Some service providers told Tech Planet that it had contact with Kuaishou last year, but so far there has been no specific business landing. Can't wait, they already started working with Tik Tok last June.
For Kuaishou's layout and thinking on cross-border e-commerce this year, the official has not disclosed it to the outside world. However, whether it is from the perspective of competition with Tik Tok or the direction of Kuaishou's own business expansion, Kuaishou will continue to explore cross-border e-commerce this year.
In addition, some practitioners revealed to Tech Planet that some large factories that did not have e-commerce genes before have also begun to lay out cross-border e-commerce. "Last year, some Internet companies were also in contact with us, wanting us to provide third-party services, which is also the head company."
The constant layout of new players has given the entire industry fresh blood. As an "old player", Ali also paid more attention to the overseas market at the end of 2021.
At the beginning of this year, AliExpress launched an adjustment policy for sellers. Behind this releases the signal that Ali wants to readjust the direction of overseas business, and Jiang Fan's transfer also makes the market full of imagination for Ali's overseas business.
Whether it is preliminary testing, finding partners or readjusting strategies, Internet giants are invariably focusing on overseas. These signs indicate that this year's cross-border e-commerce competition will become more intense.
2
The maturity of the domestic supply chain has promoted the brand to go global
In fact, cross-border e-commerce has gone through many stages of ups and downs. And why is cross-border e-commerce once again optimistic about Internet giants in recent years?
Amazon's store closure, Jiang Fan's transfer, Tik Tok's entry, these events will not happen by chance. Behind the change of head players is the industry changes that are taking place in cross-border e-commerce.
The primary market tends to have a sharper sense of smell. In 2020, Huaying Capital invested in Hibobi, a mother and baby e-commerce brand that mainly focuses on the Middle East market.
As for why they will pay attention to cross-border e-commerce, huaying capital related investors said that it is mainly from the supply and demand sides that they see the dividends of cross-border e-commerce. "The absolute maturity of the domestic supply chain allows domestic brands to have absolute efficiency, and even if the performance is added, the cost is still very low."
"Like 3C digital, large furniture and other categories, there are a large number of industrial clusters in China, from a radius of three kilometers, all the core suppliers are all in one piece, can do very fast proofing, iteration and research and development, even in the United States can not complete such an efficient deployment." Huaying Capital related investors said.
The transformation of Tik Tok's service provider Cloud Group is also a side proof. At the end of 2020, Xingyun Group shifted from imports to exports, on the one hand, to supply large C-end online and offline channels, on the other hand, to connect the Chinese industrial belt and help Chinese brands go overseas. In their view, China's supply chain has reached a certain stage of development, and it is inevitable that there will be spillovers. At this stage, it is a new window period for domestic supply chains and manufacturing.
This year, xingyun will focus on expanding nine major markets such as the United Kingdom, Germany and Indonesia on the basis of the original internationalization, and further expand its export business.
It is also under this underlying logic that the maturity of the industrial belt has spawned more domestic brands to demand for going overseas.
E-commerce service company Jet Commerce has clearly felt the increase in the demand for brands going overseas in the past two years.
Jet Commerce, founded in 2017, previously took root in the Southeast Asian market until September 2020, when it returned to China and turned to serving domestic brands overseas in Southeast Asia. "The whole trend of going to sea is that it is still very hot in China, and the demand for exports is also expanding, plus the e-commerce talents are all in China, so we return to the domestic market."
At present, Jet Commerce has served domestic brands such as DJI and OPPO, and a number of new consumer brands represented by Yuanqi Forest and Perfect Diary have also had many contacts with Jet Commerce.
Some practitioners also told Tech Planet, "Basically domestic sellers will more or less understand cross-border, or are already doing cross-border." ”
According to data released by the General Administration of Customs in January this year, the total import and export value of China's trade in goods in 2021 will be 39.1 trillion yuan, an increase of 21.4% over 2020. Among them, exports of 21.73 trillion yuan, an increase of 21.2%; in 2021, China's cross-border e-commerce exports increased by 24.5% year-on-year.
Shu Jueting, spokesperson of the Ministry of Commerce, also said in January this year: In recent years, China's new foreign trade formats have flourished and continued to innovate. Cross-border e-commerce has increased by nearly 10 times in 5 years.
Catalyzed by the global epidemic, overseas consumers have to adapt to online shopping, and passively changing consumption habits have also stimulated the demand for going overseas.
On the other hand, Amazon's 2021 store closure wave has made Chinese sellers on the platform jealous. A number of cross-border sellers told Tech Planet that they will consider multi-platform development or consider establishing independent stations this year.
In September 2021, Amazon shut down about 3,000 seller accounts backed by about 600 Chinese brands in its fight against seller manipulation of reviews and other irregularities.
At the beginning of 2022, AliExpress also issued four major policies for sellers: "Conduct an annual sales assessment for already settled merchants; raise the entry threshold for new merchants; close the entrance of individual industrial and commercial households; and limit the number of products released." "It can be seen that Ali is also cleaning up low-quality merchants on the platform and paying attention to branding."
The outflow of these merchants will inevitably bring opportunities to emerging platforms such as Tik Tok. Even if the merchants who have not been rectified will consider entering more platforms in order not to be restricted by the platform.
Interestingly, Fanno is known as the "overseas version of Pinduoduo" by the outside world, focusing on low-price strategies, attracting users with promotions, and the white-label merchants in the mall are not in the minority. According to 36Kr, most of the goods in the Fanno mall are currently priced between 1 and 16 euros, and some clothing, accessories and watches are even priced at 1 to 5 pounds.
This means that in the early days, Fanno can naturally connect with the merchants flowing out of other platforms to quickly establish the basic framework.
3
In 2022, cross-border ushered in the third wave of dividend period?
According to what Tech Planet has learned from multiple TikTok partner service providers, TikTok e-commerce is progressing faster than expected.
It is understood that at present, some SaaS service providers have completed the docking with Fanno, and the follow-up will be sellers on the mass service platform.
According to Jet Commerce, the current Tik Tok small shop is in its infancy, and the growth rate is considerable. In 2021, Jet Commerce's vertical stores operated on Tik Tok Indonesia will reach top 5 sales in Q4 of 2021. Its OPPO brand stores also rushed into the top 10 of the brand sales list.
In addition, according to other service providers, Tik Tok should launch small stores in more regions this year, and they will also be the first to settle in. "Tik Tok's user data in many parts of Southeast Asia is doing well, and if there are new sites in the future, we will also cut in."
The birth of the emerging platform means that there is new traffic, but it does not mean that all merchants can eat the cross-border e-commerce dividend at this stage.
A number of practitioners told Tech Planet that the industry is currently in a period of great reshuffle, and compliance is a major trend. The more brand premium merchants are, the more popular they are. 2022 may be the first year of the brand going to sea.
Huaying Capital also said that it is currently the third wave of cross-border investment boom. "The first two waves are trade-oriented, e-commerce platforms to go to sea, at this stage I don't think we have to care about whether it is imports or exports, we just want to globalize the brand."
At the end of 2021, Huaying Capital invested in a domestic brand on Tik Tok. The project leader told Tech Planet that the ultimate goal of this company is its own brand, but in the early days, in order to cope with the instability, it first did e-commerce service providers to help other Chinese brands go to sea. "In fact, it is waiting for Tik Tok's entire product and model to be more mature, and secondly, he also trains the team, becomes its ability, and waits until it is more mature, and then brand it."
It will still take time to switch from Chinese products to Chinese brands going overseas, but there are already some category trends emerging. According to a number of practitioners, categories such as mother and baby, 3C digital, and bulk home furnishings have become the mainstream of the current overseas, and fashion clothing has been regarded as a traditional cross-border category.
From another perspective, the increase in the demand of merchants going to sea at this stage has incubated many cross-border service providers. According to orange statistics, cross-border service providers will raise more than 10.818 billion yuan in 2021. Compared with before, the chain of cross-border industry is more perfect.
However, the cross-border industry is still greatly affected by the epidemic. According to cross-border logistics practitioners, the price of cross-border logistics will continue to be high this year.
Huaying Capital also said that the current difficulty of cross-border e-commerce lies in the implementation of the contract, and the uncontrollable global epidemic has increased the uncertainty of consumption. "On the one hand, the implementation of the contract, the epidemic will definitely affect the turnover efficiency of logistics, and the second will also affect the purchase mood of consumers." Because of the epidemic, some people may prepare goods in advance, and some may not buy for the time being, which is at the risk of inventory for merchants. Therefore, from the perspective of purchasing habits, the variables that the epidemic can bring are actually quite a lot. ”
But in the long run, the compliance of the entire industry, the introduction of new forms of live broadcasting, the branding of sellers, and so on are all driving the entire field into a new stage.
The actions of the Internet giants will also bring new variables to this year's cross-border e-commerce. The ship that seems to be blocked by the epidemic is actually ready for action. Cross-border e-commerce, which seems to be cold, is actually a dark tide.
END
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