The competitive landscape of cross-border e-commerce is undecided
If there are winners, there will be laggards, and cross-border e-commerce is no exception.
In 2022, SHEIN became the most downloaded shopping app of the year with 229 million downloads.
In the last two rankings, SHEIN beat Amazon to the top of the charts, and the momentum is quite rapid.
The data shows that in the fast fashion field in the European and American markets, SHEIN's market share was only 7% in 2020, but climbed to 30% in 2021.
In terms of revenue, SHEIN is also a top seller, achieving more than 100% revenue growth for eight consecutive years.
At present, SHEIN's daily active users have exceeded 22 million, a year-on-year increase of 175%, daily downloads increased by 239.8% year-on-year, and the market share exceeded 50%.
However, it must be noted that in 2022, except for SHEIN, the performance of other e-commerce platforms is not ideal.
The first is Alibaba, in October 2021, Ali launched the cross-border e-commerce independent website allyLikes, which was considered to be benchmarking SHEIN and caused a heated discussion.
A year later, allyLikes has an average of 68,000 monthly downloads on Google Play, which is remarkable as a new platform.
But from the perspective of development trends, the performance of allyLikes is not outstanding.
Data shows that in November 2022, allyLikes' official website received only 24,400 visits, while in May 2022, SHEIN's official website reached 169 million visits.
Obviously, allyLikes is not a match for SHEIN at all.
Some people may say that the poor performance of allyLikes' business does not mean anything.
But in fact, the performance of Alibaba's entire cross-border e-commerce sector is very flat.
According to the financial report, in the first quarter of 2022, the revenue of Alibaba's international commercial retail business (including Lazada, AliExpress, Trendyol and Daraz) was 9.887 billion yuan, a year-on-year increase of 4%; In the second quarter, revenue was 10.524 billion yuan, down 3% year-on-year; In the third quarter, revenue was 15.747 billion yuan, a year-on-year increase of 4%.
It is clear that since 2022, the revenue of this business segment has fluctuated and unstable, and even the growth rate is generally in single digits.
It is worth noting that recently, Ali first launched the e-commerce platform Miravia in Spain, and then invested $1 billion to build logistics hubs and data centers in Turkey.
Obviously, in the e-commerce overseas track, Ali can be said to have made up his mind.
On the other hand, ByteDance is also in frequent action.
In April 2021, TikTok took the lead in launching the TikTok shop function in the UK and launched the live streaming business.
In November of the same year, Dmonstudio cross-border independent station opened to benchmark SHEIN.
Almost at the same time, the Fanno shopping app went online, directly calling Amazon.
However, in February 2022, Dmonstudio suddenly announced its closure after 3 months of launch.
In May, Fanno, which had only been operating for half a year, was exposed to be shut down and the project team was disbanded.
At this time, ByteDance postponed the expansion plan of the live streaming model in Europe and the United States because TikTok's UK business did not meet expectations.
However, in October last year, Byte launched its independent website "Yooou" focusing on the fast fashion category, trying to replicate SHEIN again.
In addition, JD.com, at the end of November 2022, announced the withdrawal of its Southeast Asia business line, and is expected to close its two major sites in Thailand and Indonesia in the first quarter of this year, while Europe may only retain part of its business in the Netherlands.
In addition to Alibaba, ByteDance, and JD.com, the cross-border e-commerce platform Temu launched by Pinduoduo was simultaneously launched in overseas markets such as the United States, Singapore, and Canada, and began to bet on the overseas track.
Since its launch on September 1, Temu has received more than 10,000 downloads on Google Play in 10 days through the "0 yuan entry" policy and ultra-low price.
Overall, the rise of SHEIN has allowed mainland e-commerce giants to see the potential of overseas markets.
At present, the competitive landscape is undecided, and even if the road ahead is difficult, they cannot stop.
Going to sea into the second half, logistics is still the breakthrough
There are more and more entrants in cross-border e-commerce, and market competition is intensifying.
In this context, how should mainland e-commerce platforms break the situation in 2023? Before answering this question, let's first understand the main dilemma of cross-border e-commerce platforms.
When it comes to this, logistics must come to mind, after all, the development of cross-border e-commerce is inseparable from the development of logistics.
Taking SHEIN as an example, its strong supply chain capabilities in China can ensure its new frequency and commodity supply.
However, overseas, SHEIN needs to rely on third-party express services such as UPS, DHL, FedEX, usps, etc., which is difficult to ensure cost and efficiency.
Therefore, end-of-line distribution has also become a hurdle that SHEIN urgently needs to cross.
Taking Amazon as an example, its ability to become the world's largest e-commerce platform is completely inseparable from its powerful logistics system.
In 2013, Amazon began to build its own logistics; In 2014, Amazon improved its transportation network by building warehouses and fleets; In 2020, Amazon entered the air cargo business.
In August 2022, Amazon plans to build a distribution center in western New York to improve delivery timeliness.
As of September 2022, Amazon still operates as many as 1,254 logistics warehouse facilities in the United States, 2,297 worldwide, and expects to exceed 100 air cargo aircraft by the end of 2022.
In order to catch up with the pace of Amazon Fulfillment, SHEIN has also begun to build its own logistics system to improve the consumer experience.
In April 2022, SHEIN opened its first U.S. distribution center and plans to build three large distribution centers in the U.S. to deliver goods to consumers within three to four days.
In August of the same year, China Southern Airlines Logistics signed a cooperation strategy with SHEIN to continuously strengthen the support and collaboration of logistics and supply chain.
Last September, SHEIN announced that it would open a large logistics center in Poland, further strengthening the logistics system in Central and Eastern Europe.
At the same time, SHEIN also began to speed up the construction of overseas warehouses, announcing the opening of a new distribution warehouse in Canada.
At present, SHEIN has more than 200 logistics and supply chain partners around the world, as well as 6 logistics centers in Foshan, Nansha, Belgium, US East, US West and India.
From the perspective of the logistics layout of Amazon and SHEIN, logistics is definitely the key to the current cross-border e-commerce breakthrough.
However, with the intensification of competition in cross-border e-commerce platforms, overseas logistics has gradually become involving, and many requirements have also arisen for delivery timeliness, price and service.
In 2023, logistics must be a highlight of cross-border e-commerce competition.
The sinking market has a lot to offer
In addition to logistics, the sinking market is another breakthrough point for mainland e-commerce platforms to go overseas.
As we all know, Pinduoduo is the "hegemon" of the domestic sinking market.
Overseas, Temu's price is much lower than SHEIN, which focuses on the sinking market.
Since its launch, Termu has launched new purchases, seven-fold coupons for registration, free shipping for new users, and site-wide discounts without thresholds, etc., and has also changed the domestic Pinduoduo's bargaining strategy to "ReferralBonus" to pull new ones.
From its target group, pricing, category, etc., it can also be seen that Temu's main focus is on the sinking market.
It is worth noting that from the perspective of e-commerce penetration, mainland e-commerce has the highest penetration rate, reaching 37%, while the e-commerce penetration rate in the North American market and European market is 11% and 10% respectively.
Obviously, the European and American markets are a must for cross-border e-commerce platforms.
As an overseas e-commerce platform with the largest market share, Amazon focuses on the mid-end market, and the competition in the sinking market in Europe and the United States is not fierce.
In other words, the development space of the sinking market in Europe and the United States is huge, and it is unlimited imagination to choose this direction to attack.
However, with the gradual maturity of the sinking market, consumer behavior has become rational, and the quality of goods has become an important shopping consideration.
This means that e-commerce platforms starting from the sinking market must ensure good product quality, and the requirements of the supply chain will be more stringent.
In addition, traditional offline retailers have begun to make efforts, and the online sales platforms of retailers such as Wal-Mart and Cosco have grown very rapidly.
In the second quarter of 2020, Walmart's e-commerce sales in the United States increased by 97% year-on-year.
In the second quarter of 2022, Walmart's e-commerce sales in the US increased by 12% year-on-year, and although the growth slowed down, consumers' enthusiasm for local e-commerce platforms remained unchanged.
In other words, it is not easy for mainland e-commerce platforms to get a share of overseas markets.
In short, both overseas e-commerce platforms and domestic e-commerce platforms are desperately competing for European and American consumers and accelerating the layout of the global e-commerce market.
In 2023, there may be many cross-border e-commerce platforms that withdraw from this war due to unsatisfactory conditions, but if they grasp the two keys to breakthrough in logistics and sinking market, they may soon usher in the day of blooming.
Author | Pandora