What are the surprises at The AliExpress Seller Conference 2022?

Author: Dai Runze

Editor: Mak Kwong Wai

Since the beginning of this year, Alibaba's overseas business has undergone major structural adjustments, and the industry is very much looking forward to the future development of AliExpress.

On April 19, AliExpress held the 2022 annual summit, and the new general manager Zhang Kefu announced the three most important things in the future of AliExpress. To sum up, improve the growth system of high-quality small and medium-sized cross-border merchants, upgrade the gold and silver medal system and launch a new track of AE Mall; expand the construction of preferred warehouses and overseas warehouses, link the logistics service level of merchants with traffic, and strive to achieve 90% of merchants to ship within 72 hours; resolutely crack down on unfair competition. In terms of specific measures, AliExpress has policies such as full reduction and free shipping in marketing, logistics has a single reduction in costs, the introduction of service providers to assist sellers to solve compliance problems, avoid stepping on pits, develop one-click tools to simplify operations, reduce the threshold of use...

After the conference, many sellers complained that they did not seem to see the actual sweetness, and we did not hear the determination to fully enter the market in emerging markets such as Brazil, so what everyone is concerned about is whether AliExpress can be re-glorified after a new round of reform?

Deeply cultivate high-quality merchants and promote logistics deployment

At this conference, AliExpress repeatedly expressed its determination to quality.

In fact, in the past two years, AliExpress has been investing energy and manpower into high-quality sellers with funds and supply chains. In 2020, the brand support plan was launched, aimed at sellers with brand power and focusing on the supply chain, and last year, the G100 brand overseas plan was launched. In terms of effect, public data shows that since 2020, the number of sellers with millions of dollars in AliExpress in the previous year has increased by 43%, new users have increased by 30%, and the comprehensive timeliness of logistics has increased by 25%.

This year, AliExpress still emphasizes the importance of quality going to sea, and hatches a new track for merchants - AE Mall. AliExpress mentioned that AE Mall has a label attribute, and merchants will enjoy multiple services when they join. Specifically, there is a special shopping guide channel traffic support on the traffic; there is an exclusive account manager in the operation, the merchant can find the small two for the first time, and the small two will also take the initiative to help the merchant operate; on the realization, there are commission incentives, such as financial solutions, commercial traffic rebates, etc.; logistics, for large merchants, will help to host, assist in warehousing... At the same time, AE Mall is also facing consumers, with AE Mall label goods, so that consumers can perceive that the brand, logistics distribution, after-sales guarantee, etc.

And AliExpress also said that it can provide differentiated services, divide products into three types, and develop corresponding plans. For example, solve logistics costs for small households, jewelry and other light and small pieces; around the female population of small single fast reaction, help merchants improve pre-sale capabilities, formulate product selection strategies, the use of social media resources such as Internet celebrities; for such as consumer electronics standards, establish a new track supported by high-quality businesses, to help quickly incubate brands.

In addition to the support for high-quality businesses, AliExpress said that it will take the country's industry to the sea, and the base camp is Guangdong.

The excellence of China's supply chain is obvious to all, such as Jiangsu and Zhejiang, Fujian, Guangdong, Bohai and other coastal areas. In 2021, AliExpress launched the G100 brand overseas plan, for enterprises with supply chains and no brand power. At that time, the proposed goal was to support 10,000 cutting-edge brands and establish direct and in-depth supply relationships with 100 super brands. When it comes to effect, some sellers switch from B2B to B2C, and the gross profit margin can be increased from 20% to 30%. AliExpress also cited Juncan, one of the top ten brands of AliExpress this year, and many Korean user experience products have requested cooperation.

At present, AliExpress has established six service centers across the country, Guangzhou is the base camp, the first stop is Shenzhen, and in February this year, Guangzhou was opened, and the others are Hangzhou, Yiwu, Fujian and Qingdao. Among them, the growth rate of merchants in Guangdong is rapid, reaching 370% from January to February this year, and the growth rate of sellers in Shenzhen has reached 200%, and AliExpress also emphasizes the importance attached to the Guangdong market.

Logistics is a very important part of cross-border e-commerce. With the advent of the epidemic and the rapid development of the industry, sellers are suffering from problems such as expensive freight, small transportation capacity, and poor timeliness. Shipping, for example, has seen a 10-fold increase in costs compared to before the pandemic, with logistics costs in many categories accounting for one-third of the selling price. In this regard, AliExpress emphasized the layout of logistics, and repeatedly mentioned "warehousing", including preferred warehouses and overseas warehouses, focusing on preferred warehouses.

Preferred warehouses are usually built near domestic customs clearance ports in order to speed up the flow of orders and the timeliness of full-link logistics. Some sellers said that if it takes a month to take the postal packet to the United States, and the explosive money is put into the preferred warehouse in Shenzhen in advance, it can allow users on the other side of the ocean to receive the goods in 5-10 days, which can be seen that it is indeed effective. At present, AliExpress increased its investment in the preferred warehouse, on January 12 this year, AliExpress and Cainiao officially opened the largest preferred warehouse in South China in Dongguan, Guangdong Province, the use of the warehouse interview exceeded 10,000 square meters, the maximum expansion to 40,000 square meters, storage capacity of more than 1 million pieces, at that time in the preparatory period there were 300 merchants to join. The current situation is that Shenzhen and Dongguan have taken the lead in having the capacity of preferred warehouses, and the order volume of preferred warehouses has increased by 300% compared with 2020, AliExpress said that this year will be increased and expanded in Cities such as Yiwu Weihai, and it is planned to achieve rapid 24-hour delivery in the future.

In order to let the merchants enter the warehouse, AliExpress will link the warehousing situation with the logistics delivery time, clearly mentioning that the merchants who ship within 48 or 72 hours will give traffic; the goal is proposed to help 90% of the merchants ship within 72 hours; the cost compression, will increase the support of the order. At the same time, AliExpress has also increased the layout of infrastructure construction, the number of self-pick-up points and self-pickup cabinets has doubled to more than 40,000, and together with Cainiao, there are 14 official warehouses and overseas warehouses in eight countries around the world.

To sum up, AliExpress focuses on new labels and logistics in supporting high-quality businesses. However, a certain seller Ah Xin felt very nothing after listening to it, first of all, did not hear specific data such as how much sales rebates, and secondly, has been emphasized that the entry and traffic linkage, let her feel slightly overbearing, because the warehouse is to pay money, to sell the current traffic situation, such terms are difficult for her to accept. Ah Xin also complained that her intuitive feeling at this conference is that AliExpress has further "abandoned" small and medium-sized sellers and thrown itself into the arms of Chinese sellers with category strength.

However, in fact, AliExpress has been emphasizing the quality of the business, from the perspective of the entire industry is still a small and medium-sized cross-border business, compared to other platforms, AliExpress focus on deep ploughing, is still small and medium-sized cross-border business, but the mechanism will be more inclined to serious operation, logistics services good business in the future.

Continue to invest in Brazil and other countries, focusing on attacking South Korea and the United States

At the conference, AliExpress said that in general, it will strengthen the exploration of advantageous supply, and together with the national strategy, it will carry out key upgrades for key markets. In terms of categories, maintain the original advantages, such as wigs, nail art, auto parts, etc., the next platform will tap the opportunity categories, such as tide play, new energy charging piles, home smart devices, etc.; foreign layout, in Russia, Brazil, Spain, France, Europe, etc. to maintain investment, increase investment in North America, South Korea, Central Europe.

Public data shows that AliExpress has doubled its ten-day order volume in Central Europe, Spain and France, tripled the growth of payment buyers in Brazil, and between 30% and 40% for GMV growth in Mexico and Chile. In the South Korean market highlighted, GMV increased by 44% last year and the number of buyers increased by 50%.

Growth looks good, but AliExpress still doesn't give specific data.

Looking at the Brazilian market, AliExpress said that it laid out Brazil in 2014, but it has been a lightweight investment until last year, and it was not until last year that it began to be used as a key regional investment, especially in logistics, and the timeliness was raised from the original 2 months to 10 or 12 days. Operationally, combined with local people's preferences for social networking, the use of shopping guides and other means to promote growth and improve the repurchase rate, AliExpress said that it will upgrade around the differentiated needs of users, and data, sales in Brazil in 2021 increased by 100%.

The European market was the focus of AliExpress last year. In the face of an ever-changing regulatory environment, such as ERP compliance, AliExpress has introduced third-party service providers to help sellers avoid stepping on the pit. AliExpress will continue to layout European investment in countries such as Spain, France and other countries, and there are currently hundreds of teams, which will continue to grow this year.

The United States and South Korea are key areas for AliExpress' future. The U.S. market has relatively high requirements for category qualifications and compliance, such as intellectual property rights, and AliExpress said it will help merchants improve their compliance capabilities and introduce third-party service providers to support merchant compliance operations. In addition to the breakthrough in a number of key categories, the Korean market must also make weihai warehouse bigger, and the timeliness of South Korea should reach the 3-day level of domestic e-commerce.

We found that AliExpress avoided the sharp edge of the emerging battlefield Brazil, and the specific reasons will continue to follow up with Leifeng Network, and everyone is welcome to break the news. At this conference, we can also see that AliExpress has turned its attention back to the Chinese sellers and wants to take the Chinese sellers out again. For the first two years, AliExpress has been supporting local sellers, opening up Russian, Turkish, Italian and Spanish companies in 2019 and Brazil in 2021. The policy is also inclined to local sellers, such as you can do all categories without paying a category deposit, only 8% commission and traffic support, this wave of operations has really hurt the hearts of many small and medium-sized Chinese sellers.

The "turnback" of AliExpress at the conference is also a good signal to Chinese sellers, which may also be related to structural adjustments, and Lazada is currently responsible for localization, and AliExpress is responsible for Chinese sellers. In this regard, Ah Xin said that he did not know how long AliExpress's turnaround could last.

Write at the end

Through this conference, it is not difficult to find aliexpress's obsession with quality.

At first, in order to expand rapidly, the requirements for merchants were very low, free to settle in, and the control was loose, and the development was rapid for a time, with nearly 300,000 active sellers in 2014, 2 million registered unopened store users, and 10 million buyer users. Then, in order to improve the quality of the platform, step by step to tighten the policy, in 2016, the annual fee ranged from 30,000 to 100,000 yuan was fully charged, and individual sellers were kicked out, which attracted 2,000 Tmall merchants to settle in. This series of exercises directly drove away 200,000 sellers and threw themselves into the arms of Wish and Amazon. On Singles' Day in 2016, AliExpress refreshed the single-day sales record with 35.78 million orders, welcomed 100 million users in March 2017, and rose 50 million to 150 million in 2018, and has not mentioned GMV or user data since then.

Ah Xin has experienced the ups and downs of AliExpress for many years, and she believes that AliExpress has begun to be tepid after 2018, and old players have frequently fled to Turn to Amazon. In 2019, AliExpress has introduced a large number of Taozhi "store-type merchants", intending to inject fresh blood into the platform. However, there are very few left now, mainly because the traffic is too low compared to Amazon. For example, it is very difficult for sellers to sell $300,000 a month on AliExpress, and AliExpress has repeatedly emphasized the growth rate of 1 million sellers per month, but these data are commonplace on Amazon. Ah Xin also opened a store on Amazon, she said that the annual sales of more than 50 million US dollars is a big sale, last year, a down jacket store in Wenzhou did 400 million US dollars in Amazon in the last quarter, which makes peers envious, in contrast, the gap between AliExpress is indeed very obvious.

By this year, sellers around AhHin found that the recent aliexpress traffic collapse, such as in Russia, some categories sold only one-tenth of the same period last year.

However, AliExpress is not without chance, the Brazilian market on the Asian e-commerce chain tax increase, so that the average selling price of Shopee increased by 95%, Amazon's overbearing store closure and strict rules make many sellers miserable, coupled with Facebook by Apple's privacy protection policy recommendation is not allowed, many independent site sellers ROI fell below 1, which is a new opportunity for AliExpress, everyone is equal under the overall situation.

Can AliExpress, which is now returning to Chinese sellers, take off with the east wind of the industry? We also expect AliExpress to make some changes that can actually solve the pain points of sellers.

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