Image source @ Visual China
The text | Zero State LT, written by Gu Nianqiu |, and edited by Hu Zhanjia |
From 2020 to 2021, due to the impact of geography and the black swan of the epidemic, Chinese entrepreneurs are undoubtedly experiencing unprecedented new changes. The hour hand has been set for 2022, how are they doing now? What experiences and lessons are worth sharing? Is there still a chance to go to sea in the future?
Zero-state LT specially launched the sea observation column "Sea Mirror", which records the new journey of Chinese enterprises to go to sea from multiple dimensions. This article is the 10th in the series, focusing on the Southeast Asian market, Lazada, Shopee, Shein, TikTok gathered in Southeast Asia, and the white-hot war between Chinese e-commerce players and overseas giants has begun.
In 2022, the e-commerce competition in Southeast Asia has entered a white-hot stage.
Of course, the protagonists are still the ambitious Chinese Internet giants - Lazada, an e-commerce platform backed by Alibaba, an e-commerce giant that has swept many countries in Southeast Asia, Shein, whose valuation has exceeded the sum of H&M and Zara, and latecomers, but the popularity exceeds Facebook's TikTok e-commerce.
In April, Bloomberg reported that Shein, a cross-border e-commerce independent station, was raising a new round of financing, and after the completion of the financing, Shein's valuation would reach $100 billion. At the same time, ByteDance's TikTok e-commerce has long been "on the string", as a world-class unicorn, ByteDance holds the two major nuclear bomb-level social products of Douyin and Tik Tok, with a valuation of about $140 billion, and Shein is almost standing on the same runway with a gap of $40 billion.
Now, the giants come to the Southeast Asian market together, how do they open up overseas markets? In the face of local local e-commerce platforms and competition from international giants eBay and Amazon, what is the unique way of playing Chinese players?
01, Shopee staged a Pinduoduo-style counterattack
When it comes to Southeast Asian e-commerce, Shopee backed by Sea cannot be ignored.
Although Shopee is known as Singapore's "local company", it still has the blood of China's e-commerce. Whether it is Li Xiaodong, CEO of Sea, who is extremely familiar with the Chinese market, or Feng Zhimin, CEO of Shopee, their reference is still the domestic e-commerce "playing method". In particular, Feng Became min, after 7 years at McKinsey, became General Manager and Chief Purchasing Officer of Lazada Southeast Asia. It can be said that before joining Shopee, Feng Zhimin's cognition of Southeast Asian e-commerce laid the foundation for Shopee's "counterattack".
Shopee's success is very similar to Pinduoduo's play on Taobao. Most of Lazada's resources rely on Taobao, and Ali's expectation for Lazada is to recreate Taobao in Southeast Asia. Therefore, the overall operation strategy is more like a mirror image of domestic Taobao. Considering that Singapore's per capita disposable income is higher than in China, Ali positioned Lazada as a Tmall-like platform that targets middle- and high-income groups. At the same time, for Southeast Asian countries, Lazada also adopts a system, the same promotion model.
Image source@Shopee Official Micro
Lazada's strategy is essentially because Southeast Asian e-commerce is only an "auxiliary" to domestic e-commerce. Southeast Asian e-commerce and mobile payment development prospects are considerable, which is an opportunity for Ali. More importantly, Southeast Asian e-commerce can help domestic merchants to better distribute to solve the relatively excess "production capacity" of domestic e-commerce.
However, Shopee is different from Lazada, Southeast Asia is the main battlefield of Shopee, which also makes it pay more attention to strategy and sustainability, launching local applications for different markets, while establishing local warehouses and multi-party supply chain channels, which has also become the magic weapon for Shopee to "surprise" Lazada.
As a result, Shopee knows more about Southeast Asia.
For example, applications for different countries are launched to meet the cultural needs of various countries and regions, corresponding activities are launched in different traditional festivals, and inventory categories are also different. On the other hand, use flash purchases, add-on purchases and other activities to attract more users who prefer low prices. After all, Singapore's high-income people are only the tip of the iceberg in Southeast Asia, and low-income people are the bigger part.
"Competition is of course positive for industry growth. Shopee is on fire, and Southeast Asian e-commerce companies have begun to 'ride on rockets'. A Southeast Asian e-commerce practitioner said, "Shopee's impact on Lazada has also made Lazada no longer regard the Southeast Asian market as an accessory." ”
Shopee's counterattack in Southeast Asia's Pinduoduo has also promoted the development of parent company Sea in the field of games and digital payments. At the same time, Shopee's large-scale market expansion in various countries in Southeast Asia has also allowed the "giants" who are eager to move for Southeast Asian e-commerce to see the potential of this market.
02, the spoiler is coming
The market never follows the first come, first come, the early start of the "pioneer" will eventually become the "front wave", e-commerce unicorn Shein and traffic giant TikTok let Lazada and Shopee feel the crisis.
Shein is the dark horse of Southeast Asian e-commerce stories, its rapid rise has disrupted the rhythm of many players, how hot is it?
According to public data, in 2021, Shein was the number one iOS shopping app in 54 countries and regions around the world, and even replaced Amazon as the most downloaded app in the United States that year. In addition, Shein's revenue in 2021 is close to $10 billion, and it has achieved revenue growth of more than 100% for eight consecutive years, which is evident in its explosive power.
And how was such a rapidly growing global-level e-commerce company born?
This may be due to Shein's unique business model. Shein's price advantage comes from the Guangzhou factory, and it is understood that more than 200 textile suppliers near Guangzhou have cooperated with Shein. Coupled with the convenience of sea and air transportation in Guangzhou, shein has built an efficient supply chain, reducing product costs while shortening the entire production cycle and delivering products to consumers faster.
But in the highly competitive e-commerce market, Shein's supply efficiency still can't meet its current scale, which has become an opportunity for Shein to settle down in Southeast Asia.
The source of the figure is @Shein The official micro
Shein's CEO Xu Yangtian also joined the Singapore nationality, it is understood that Shein has been recruiting in Singapore since last year, in order to form its own product center in Southeast Asia, with Singapore radiating to the entire Southeast Asian market. The CEO 'landing' in Singapore means that this e-commerce dark horse has begun to rush into the Southeast Asian market.
Undoubtedly, Southeast Asia is the most ideal bridge between domestic production and foreign sales for Shein. On the one hand, the supply chain industry in Southeast Asia is very developed, and if the product center is built in Southeast Asia, shein products sent to European countries will be more rapid in the future. On the other hand, both the Malaysian and Indian markets are still ideal "gold digging ground". Shein's wave is also hitting Shopee and Lazada.
Obviously, for Shein, Southeast Asia is more like a springboard to point to the global market. For TikTok, the story to be told is not exactly the same.
TikTok's entry into the Southeast Asian market is naturally expected.
Similar to the current situation faced by domestic Douyin, short videos have built a huge traffic pool for Tiktok, and Tiktok, which is located in the upper hand, needs to revitalize this traffic pool with more profitable trading, and e-commerce closely related to live broadcasting is the best fertile soil. Relevant data show that TikTok e-commerce GMV in 2021 is up to about 6 billion yuan, and this target is $12 billion in 2022.
TikTok's user time overseas continues to rise
"Advertising is the most profitable, TikTok's advertising revenue is very impressive, KOL influence is superior, 1.2 billion monthly active and e-commerce combined, this will be an unprecedented scale of e-commerce." A veteran user of TikTok in San Francisco, USA, said of zero-state LT (ID: LingTai_LT). "Singapore and Malaysia will be the first stops for its (TikTok) soft landing, and the model of TikTok is unlikely to be directly replicated in the United States." He added.
Just as Shein uses Southeast Asia as a bridge, for TikTok e-commerce, Southeast Asia is more like a runway for buffering.
The model of overseas live e-commerce is very different from that in China, and the strong stimulation of prices and the efficiency of logistics may fail overseas. Compared with the rest of the world, the market situation in Southeast Asia and China is different, but there are also many similarities. Including the high proportion of Chinese, state-owned brands are the main force in the market.
Shery, who has been permanently residing in Singapore, describes LingTai_LT the difference between Southeast Asian live e-commerce and China: "I have seen Via, sitting in the live broadcast room in beautiful makeup, so that it will certainly not sell in Southeast Asia. Shopee's well-sold live broadcast rooms are very exaggerated, with humor and funny as the main tone, more like the domestic TV shopping channel. ”
It is precisely because of this that TikTok e-commerce non-entry into Southeast Asia has become very necessary, and the potential market will bring more traffic and revenue to TikTok, and also become the best test field for TikTok e-commerce to revitalize the global traffic pool.
Shein and TikTok are menacing, and naturally the biggest shock to veteran players Lazada and Shopee. Who is most likely to recreate the growth myth under the scuffle of the princes?
03, who can outperform the Southeast Asian e-commerce market
Gaining the upper hand in the Southeast Asian market is crucial for the Internet giants. In essence, China's Internet giants need new engines, and although the prospects are considerable, the giants also have their own dilemmas.
From the current action of the giant, Ali has elevated the sea to Southeast Asia to a strategic height, at the end of 2021, Jiang Fan was also transferred to the front line of the group, in addition, Ali also sent more resources to Southeast Asia, for Ali, the Southeast Asian battlefield is inevitable, Lazada is not only Ali's key to open Southeast Asia, but also a transit station to overseas markets.
Of course, Shopee is not to be outdone, for different countries, Shopee has developed completely different applications for users, in order to adapt to local conditions. For merchants, Shopee offers a variety of subsidies to quickly open stores in a short period of time. However, the Issue of Shopee's Monetization Model also needs to be addressed urgently.
For TikTok e-commerce, the process of going to Sea Southeast Asia is accelerating, which is due to the fading boom of domestic live e-commerce. According to reliable sources, ByteDance has been recruiting in Singapore since 2019 and vigorously "throwing coins". This year, many jobs related to TikTok e-commerce have also begun to open.
Shein also set up chess games in Southeast Asia. In addition to the CEO's Singapore citizenship, Shein's new round of financing is also on the agenda, you know, in the "2021 Hurun China Top 500", China's more than 100 billion US dollar unicorns are only ByteDance and Ant Group, according to industry speculation, Shein is likely to become the third trillion club member. Once Shein's investment is finalized, the battle for the Southeast Asian e-commerce market will become more and more intense.
What does the competitive landscape look like in the future?
What is certain is that the super competition in the Southeast Asian e-commerce industry has formed constraints, making it impossible to dominate. But external resistance from the industry has also made it difficult for e-commerce giants to expand in Southeast Asia.
How to crack the localization and how to avoid the policy black swan will become many uncertainties in the future development, such as the sudden withdrawal of Shein and Shopee in the Indonesian market in the past two years, which is constrained by local development policies.
However, it is not easy to establish its own e-commerce ecology, and the next competition is comprehensive ability, but also the multiple tests of localization operation, supply chain and marketing strategy, as well as a multi-dimensional struggle for brand image, capital flow and talent competition. However, 2022 is still the "year of fighting" of Southeast Asian e-commerce, and Chinese giants have gathered in Southeast Asia and begun to compose a new prelude to e-commerce in the "shadow of the sword and light".