In mid-2021, Amazon's name ban storm began, and cross-border e-commerce entered the public eye more. Self-built independent stations, layout of overseas warehouses, building its own brand and multi-channel multi-platform multi-market development have become new development strategies. Capital has also accelerated its influx into the track.
Recently, we have paid attention to the fact that in 2021, the number of cross-border e-commerce financing events was 77, an increase of 133.33% year-on-year; the total amount of financing was 20.7 billion yuan, an increase of 191.96% over the same period last year of 7.09 billion yuan.
Shenzhen (Bay Area) as an important town and weather vane of cross-border e-commerce, where will the wind of cross-border e-commerce blow in 2022? How will the recent hot developments affect the development of the industry? In 2022, as the opening year of the upgrading of enterprises going to sea 2.0, what challenges and opportunities will be ushered in? In this issue of "Big Money in the Bay Area", the enterprises of the insight series went to sea were invited to Wang Xin, executive president of the Shenzhen Cross-border E-commerce Association, to be a guest in the live broadcast room to discuss the topic.
Since the release of a series of relevant reports in the cross-border e-commerce field in the Bay Area in 2021 and the public response of the Ministry of Commerce, Nandu will focus on the field of enterprises going to sea in 2022, set up a column related to "looking for gazelles out of the sea", and continue to deepen the new outlet of cross-border e-commerce.
From the wholesale market to the transfer to the deep link of the industrial belt, enterprises going to sea ushered in the key node from 1.0 to 2.0. As the opening year of the new upgrade of enterprises going to sea, in 2022, it will be difficult to break the talent of the industry upgrade and the brand difficulty of the industry to go to sea, which will be a key point in the middle of the attack.
Dialogue guest: Wang Xin, Executive President of Shenzhen Cross-border E-commerce Association
Insight into the wind direction of cross-border e-commerce in 2022, the following is part of the dialogue
Industry overview and hot spot tracking
Shenzhen cross-border sellers account for half of the country
The industry has become a new trend of going to sea
Nandu: Enterprises going to sea are naturally inseparable from cross-border e-commerce. As far as we know, the industry chain of cross-border going to sea is very long, and many players and formats are involved in the ecology, can you briefly introduce the different formats, and what is the status of Shenzhen cross-border e-commerce in the entire domestic ecology?
Wang Xin: The global cross-border e-commerce looks at China, and China's cross-border e-commerce looks at Shenzhen. Amazon, the world's largest e-commerce platform, most of the sellers are from China. In 2019, the proportion of Chinese sellers reached more than 80%, and in 2020, the proportion is still more than 65%. On other global e-commerce platforms such as Cdiscount, Jumia, Shopee, Lazada, etc., Chinese sellers can still account for about 70%.
China's cross-border e-commerce looks at Shenzhen because of nearly half of the sellers in Shenzhen, and the head sellers are almost concentrated in Shenzhen. 70% of China's cross-border sellers are from Guangdong, 70% of Guangdong sellers are from Shenzhen, and about 49% of sellers are rooted in Shenzhen, which can be said to occupy half of the domestic cross-border e-commerce.
As the association conducts industry research in 2021, we can also see many new trends at present. In addition to sellers, service providers such as finance, logistics, saaS and other services on the overseas ecological chain have also poured into the Shenzhen base camp.
At the same time, we see some new trends, and china's industry will begin to shift after 2020.
It turned out that most of the production plants that relied on OEM and ODM orders lost some orders due to the impact of the epidemic, so they turned their attention to cross-border e-commerce for overseas transactions. This has also made changes in the ecology of going to sea: cross-border e-commerce has slowly shifted from taking goods in yiwu, Alibaba or wholesale malls such as Shenzhen Huaqiangbei and Baima Market in the past to linking with the production and processing of industrial belts. In this context, we see that our industrial belt has begun to shift to the mainland.
Nandu: Just mentioned, Shenzhen cross-border e-commerce occupies half of the domestic ecology. As a barometer and weather vane in the industry. Will the recent hot developments also have some impact on the development of the industry? For example, the ban on Bantian under the epidemic situation, and the recently hotly discussed Russian-Ukrainian conflict?
Wang Xin: In fact, the side section of the Bantian base is precisely a microcosm of the impact of the current epidemic on cross-border e-commerce. The impact of the epidemic on cross-border e-commerce is more focused on logistics at present. Cross-border e-commerce itself is an Internet work system, remote work can achieve online transactions, but offline commerce will be hindered by the tightening of customs control of people and goods and the reduction of sea and air freight trains.
The instability of the situation in Russia and Ukraine will also affect cross-border trade in relevant regions. In addition to offline logistics, the damage to the basic network communications in some Russian Nordic NATO markets has affected online transactions, and the fluctuation of exchange rates has also become a major influencing factor of overseas trade.
Although there are challenges, it is still full of opportunities for cross-border e-commerce. Because China is still a huge logistics supply chain country, in the future, in the entire NATO market, we can see the increase in demand for goods, which is an important opportunity for cross-border e-commerce to prepare goods to attack the market.
2022 water temperature prediction
11% of export sellers fell into the tide of Amazon bannings
2022 to go to sea needs to solve the drainage pain points
Nandu: In the past 2021, it was also a mixed year for cross-border e-commerce, and amazon's wave of banning Chinese sellers in the past was still vivid. Will there be new highlights or challenges in 2022? For the Amazon platform, is it accurate to say that this will be the year of intensification of the reshuffle?
Wang Xin: Before answering this question, let's review some of the data reports after the amazon banning wave last year. Last year, after the "suspension storm", we surveyed most of the sellers.
Among them, in fact, we see that Shenzhen is the most seriously affected. In this Amazon suspension storm, 11% of the national export sellers have been hit hard. Although the government has introduced a number of policies, these sellers are still basically in a state of semi-paralysis or self-help. And the 11% of the export sellers who have been hit hard are mostly from Shenzhen. Nearly 70% to 80% of the big sellers in Bantian were seriously injured.
30% of the country's export sellers were only injured but did not hurt their vitality. They can also continue to shop on Amazon, whether it is a logistics system, their own capital system or an employee system, etc. can support the continued development and growth.
About 30% of them were actually untouched. The remaining 10% to 20% are relatively optimistic, they feel that the platform should have such rules, so as not to have the head seller monopolize the industry, and many of their categories sell well.
In the future, in the choice of overseas platforms, a diversion trend can be foreseen. In the tail report of the third and fourth quarters of 2021, Amazon's growth rate was not optimistic. In the year-end reports of other cross-border platforms such as New Eeg, Walmart's Wayfair, Southeast Asia's Lazada, Jumia, etc., it can be seen that these platforms have recorded rapid growth of 100% to 200%. Among them, some of Wayfair's categories even showed an increase of nearly 400%.
While Amazon is standardizing the platform and constantly establishing new rules, other overseas platforms are also increasing their investment efforts. There are also channels such as Xiyin and Dunhuang.com in China, Rakuten Platform in Japan, Gmarket in South Korea, Otto in Germany, jumia platform in Africa, and the sellers we see at present are half the sky mentality: while entering this track with enthusiasm, they also have a calm and prudent attitude towards the choice of this platform.
At present, sellers are now basically multi-platform layout, and began to cultivate into vertical categories. In the past, many sellers adopted the platform group model, in order to play out a category, at the same time open several categories with the same account to do, but in fact, the same category does not make money at all. With the arrival of the ban storm, sellers have closed these accounts this year, and the spearhead has turned to accurately conquer a category. To make this category to the extreme, it is a good thing for Chinese brands to go to sea.
In fact, many emerging markets are also attracting everyone's attention. For example, the implementation of the RCEP agreement in Southeast Asia, since last year, nearly ten countries have begun to implement zero tariffs, so the circle is very optimistic about this market. For example, a small cutting board of five or six yuan in Yiwu in China can sell for three dollars in Africa, and a pair of soft-soled shoes from China for less than ten yuan in Cambodia in Southeast Asia can go to ten dollars. You can see the price difference in the middle, in addition to 30% of the logistics warehousing fee, 3% of the financial cost, at least a few tens of percent of the net profit back.
Nandu: Independent station, becoming a kind of channel to go to sea. Just mentioned the diversification of platforms, markets, and categories, will there be new changes in the independent station model of channels?
Wang Xin: Represented by Shopify, the development of independent stations began in the second two quarters of 2020 and became particularly hot. Among them, capital also moved by the wind and chased after it.
With the continuous development of independent stations, sellers will also notice the pain point of independent station operations, that is, traffic disputes. Compared with the platform itself, sellers often need to buy traffic from Platforms such as Facebook, Google, and Linkin to enter independent sites. This is similar to the logic of the Amazon platform in that year, when the seller brings the platform traffic up, the platform in turn can charge the station traffic. If you stand independently and can drain yourself, it is still very attractive to sellers.
New trends in capital
The focus of capital shifted from the seller track to the layout of the whole industry chain
It is expected that a new dark horse will run this year and next year
Nandu: From the beginning of the epidemic in early 2020, to Amazon's suspension measures in mid-2021, and then to the financing of cross-border e-commerce in 2021, which is nearly double that of the year-on-year, and in recent years, there are also many cross-border e-commerce companies in the sprint IPO.
Will there be some new changes in the current focus of the capital circle on the cross-border e-commerce field? How to view the entry of capital, will there be advantages and disadvantages?
Wang Xin: The entry of capital has indeed brought challenges and opportunities to this ecology. It is believed that there will be many dark horses running out from 2022 to 2023, but the entry of capital has indeed brought some disorderly competition to the industry. Some of the head sellers who accept investment can see that their performance is under pressure in last year's tail report, and their later development is very painful.
At present, capital's attention to the track has become deeper and broader: the scope of seller categories is broader, and professional support systems such as finance, logistics, finance and taxation and even carbon tax are all concerned by capital.
It can be seen that many new industries have begun to enter cross-border e-commerce, in the past, seller categories were more concentrated in the Pearl River Delta electronic clothing shoes and furniture categories, after the epidemic last year, health, family, health, outdoor, toys and other supplies, and even tea, porcelain and other cultural supplies, have entered the cross-border category track.
In addition to the more lively category tracks, new tracks have also poured into the focus of capital. Logistics, warehousing, finance, finance and taxation, intellectual property rights, training and other industrial chain systems, have run out of the enterprises worthy of attention. For example, ERP represents the store secretary, which has six million cross-border e-commerce seller data and has recently obtained $100 million in financing. In the fiscal and tax compliance track, there is also a lot of capital pouring in. In the future 2030, China will carry out the standard requirements for carbon compliance, and carbon tax compliance will also enter everyone's attention.
Therefore, capital in this track is not only a track that we originally said to see the seller, but today it is a layout of the whole track and the whole industry chain.
Recommendations and Outlook
The industry went to sea to welcome the 2.0 era
Brand and talent building are both in hand
Nandu: In the future, what new layout or new considerations will the association have in the field of going to sea? Do you have any comments and suggestions on the development of the industry?
In 2022, the era of cross-border e-commerce or enterprises going to sea 1.0 has ended, and the 2.0 era has just begun. Affected by the epidemic, many factories lost orders and turned their attention to the track of cross-border sea. The industry goes to sea, and it also sells goods from the original wholesale mall or wholesale website to overseas, and deeply links and transfers to the upstream of the industrial belt and the factory end.
It is precisely because of this that the association has set a new five-year strategy as early as 2021 to escort enterprises to the sea in the journey of pointing out the future shipping lane and leading more Chinese industries to go to sea. Solving the brand difficulties and talent reserve pain points brought by the industry to the sea has become the next thing that the association needs to complete.
For example, there are more than 220 billion industrial belts in China, and the association hopes to deeply link 100 such industrial belts. For example, Henan's wig industry belt and Haimen's home textile industry belt are the leaders of the domestic 100 billion industrial belt. The association wants to take the whole industry to the industrial belt, to the government, to our production factories, to let them connect and then help China's production and processing plants go to sea.
The key to the industry to bring out the sea, we must build a Chinese brand, if in the international community you have been doing a white card, your products will never be competitive. What kind of brand is needed in each market can be traced from the consumer demand side to the production end for customization.
Finally, it is the high-level talent reserve of knowledge, high-tech, and Internet culture. The training of overseas talents requires knowledge of the whole chain of big data, Internet, high technology, character portraits, finance, logistics, international trade, game rules, legal finance and taxation. Therefore, I hope that the government can combine university talents with practical scenarios for all-round training, and this year we are also invited by the government to enter the Western Fair and try first in the cultivation of industry talents.
Planner: Wang Ying
Coordinator: Li Ying
Written by: Nandu reporter Lu Liang
Moderator: Lu Liang
Camera: Huo Jianbin, Liu Yuhao, Gong Zhengyu, Mao Weijun
Editing: Intern Hu Ailing
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