Litigation, warehouse building, expansion, cross-border e-commerce into a full-scale war

Written by | Wu Xianzhi

Edit| Wang Pan

Before and after Black Friday, domestic cross-border e-commerce platforms made frequent moves.

A few days ago, Photon Planet exclusively learned that Tiktok had secretly set up a supply chain management company called GS in Guangzhou earlier, trying to alleviate cross-border fulfillment problems by building its own warehouse. However, due to the hindrance of business progress, thousands of people have suddenly "voluntarily" left recently.

Additionally, market rumors suggest that Tiktok is struck into agreements with logistics providers like ShipBob and Newegg to store inventory as well as pick, pack, and ship online orders. The layout at home and abroad at the same time may be to improve its full custody model.

While Tiktok is quietly developing, a few days ago, Pinduoduo's cross-border e-commerce platform Temu restarted its lawsuit against SHEIN in the United States.

According to Jiemian News, Temu filed a 100-page indictment, saying: "Temu found that SHEIN's anti-competitive behavior not only persisted, but also intensified. SHEIN's persistent and increasingly aggressive use of anti-competitive behavior, coercion, and threats necessitates a lawsuit. ”

The report quoted a Temu representative as saying that the latest move was due to SHEIN's escalating anti-competitive behavior. "Their actions are exaggerated, and we have no choice but to sue them. ”

If Tiktok solves the supply chain problem and tries to get closer to AliExpress and JD.com cross-border, then the entanglement between Temu and SHEIN reflects that domestic e-commerce has entered a new stage - from marketing to supply chain.

Tiktok秘密试水跨境仓

Before the "Black Five", in the Jingdong Creative Park in Huadu District, Guangzhou, a mobilization meeting of thousands of people was in full swing. In order to quickly assemble a team that can play, since October, this rather mysterious team has been recruiting people in Guangzhou.

Photon Planet has learned that the company, called GS, is a supply chain management project incubated within Tiktok. A person familiar with the matter told Photon Planet that Tiktok had a liquidation last year on Black Friday, so the project was formed. As of now, Tiktok has at least two warehouses, one is located in Jingdong Creative Park, Huadu District, Guangzhou, and the other is located in Longdi Guangzhou Airport Logistics Park.

At present, GS is not involved in domestic logistics, but is only responsible for commodity warehousing, warehousing and supply chain management. The domestic logistics part is carried by other logistics companies, while the overseas part is carried by other cross-border logistics providers. A local logistics employee said that he had been involved in recruitment because he had been exposed to GS's business, but he did not negotiate and gave up.

It is worth mentioning that the two warehouses of Jingdong Creative Park and Longdi are located in the industrial belt, of which the warehouse of Longdi Guangzhou Airport Logistics Park is still a production warehouse. The role of GS is obviously to deal with the potential liquidation of "Black Friday".

The reaction of the merchant side can also confirm that Tiktok is establishing its own warehouse in China. A few days ago, some merchants mentioned that their cooperation with the Tiktok Shop platform has generated a service fee related to stocking and returns, and the return service fee policy will be adjusted, which may be caused by the operation of GS.

In order to take advantage of this year's "Black Five" momentum, GS senior management recruited according to the warehouse operation volume of 20,000 people, and "found more than 20 suppliers to help them recruit people, both full-time and outsourced".

Photon Planet learned that a recruitment information called "ByteDance Outsourcing" shows that the salary is 11.5k a month, 14 salaries (performance evaluation is guaranteed for one month, once every six months), 330 yuan per month meal allowance, six insurances and one housing fund, the full salary base, the proportion of five insurances is 14%, the proportion of provident fund is 8%, and family care leave and annual leave are 5 days. The probationary period is 6 months and a 3-year contract is signed. Working hours, 10 in the morning and 7 in the evening, two days off, double pay if there is overtime.

Since only outsourcing pays double salaries, and joining GS does not, some applicants are very hesitant.

Perhaps the business development was not as expected, or the salary was not enough to attract people to change jobs, the former person in charge of "Black Friday" was replaced by a Singaporean Chinese surnamed Zhang, and the recruitment process gradually slowed down. After the "Black Friday", GS may have encountered business problems, and Photon Planet learned that more than 1,000 people left a few days ago, most of whom left voluntarily.

The outside world refers to AliExpress, SHEIN, Tiktok, and Temu as the "Cross-border Four Tigers", but when it comes to fulfillment and supply chain capabilities, the four have their own differences.

AliExpress and Cainiao International's business is almost completely synchronized, Temu's local distribution has J&T, and recently cooperated with Matson, ZIM, CMA CGM, Maersk, COSCO Shipping and other global leading shipping companies to expand shipping express ships to solve cross-border logistics problems. SHEIN's situation is similar to Temu, and among the four tigers, only Tiktok has relatively weak logistics capabilities.

The secret establishment of GS shows that Tiktok is trying to solve the problem of onshore warehousing in cross-border logistics fulfillment, and the reason why it is so low-key may be to avoid attracting the attention of its friends.

According to statistics from October 27th to November 27th, the overall GMV of Tiktok's US market increased by 215%, and GMV soared by 400% on Black Friday. The development process of GS is not considered to be successful, and it seems that this year's "Black Friday" will not hinder.

From marketing to supply chain disputes

During Tiktok's quiet opening of positions, the contradiction between Temu and SHEIN is intensifying.

Temu's feud with SHEIN began in December 2022 when SHEIN filed a lawsuit against Temu in the U.S. District Court for the Northern District of Illinois, accusing Temu of signing social media influencers to make "false and deceptive statements" about SHEIN while promoting Temu.com website. In response to the allegations, Temu said that he "firmly and categorically denies all allegations and actively defends his rights."

Since its launch in September last year, Temu's replication of Pinduoduo's social fission has initially not brought about the high growth expected internally, mainly because the download frequency shared by users in the United States to acquaintances is not as high as in China.

In the cold start stage, Temu mainly obtains streams through advertising and social media (mainly Facebook and Youtube), in which social media leads to the Inflfluencer collaboration entrance on the homepage of its own website, and then invites bloggers, Internet celebrities and other affiliates to promote and assist in payment, and finally achieves conversion in the form of new user rewards.

SHEIN's lawsuit directly pointed to Temu's social media streaming, but Temu found a breakthrough in the public domain and went out of control.

In January of this year, the brainwashing divine comedy of the Shop like a Billionaire commercial (similar to the adaptation of "Miss You" that year), and then sponsored the "Super Bowl" in the United States, provided a tipping point for Temu, and won the download double in the American app market from January 29 to February 4.

Six months later, the fledgling Temu filed a lawsuit in Boston court, accusing SHEIN of using its market power to force apparel manufacturers to sign exclusive agreements with them to prevent them from cooperating with Temu.

In late October, lawyers for the two companies and their subsidiaries filed a joint statement in Chicago and Boston courts seeking the withdrawal of the two lawsuits, which were once considered settlements. This is not the case, and after withdrawing the lawsuit, the two families were silent in the face of outside attention, and the statement did not mention a settlement.

It wasn't until December 13 that Temu reopened the lawsuit, and the two sides were once again on edge.

From the timeline, it is easy to find that the litigation battle between Temu and SHEIN presents two characteristics, one is that the litigation spreads from the marketing level to the supply chain, and the other is that the litigation time nodes of both parties have the characteristics of "taking advantage of your illness and killing you". The increasingly fierce competition comes from the counterpoint game between the two companies - the supply side is a full custody model, and the demand side depends on cost performance and product abundance.

In the fully managed mode, the merchant plays the role of a supplier, which makes the supply chain control determine the commodity power of the platform.

A SHEIN supplier previously said that the rapid development of the factory in recent years is inseparable from SHEIN's "small order quick return" model. "I used to only be able to run 5 kilometers an hour, but SHEIN suddenly told me that I could run 10 kilometers or 20 kilometers, which I thought was impossible at first, but after accepting it, I found that when we served other customers, we were already able to achieve dimensionality reduction. ”

After scale, supply chain enterprises are bound to get rid of the situation of a single large customer in order to continue to grow and get rid of over-dependence.

So, in order to avoid the constraints of targeted supply agreements and to expand its business, the factory registered a new company to expand external cooperation, including Temu and AliExpress. "I believe that every Chinese factory will not refuse branding, and it is dangerous to rely too much on one platform. ”

For SHEIN, there may be only one way to prevent other platforms from "prying" their own supply chains, signing exclusive contracts on the one hand, and regulating the gross profit of the supply chain on the other hand, so as to avoid suppliers being "proud of their wealth". Regardless of whether Temu is willing to get into litigation or not, such a high growth rate is unlikely to prevent supply chain merchants from SHEIN from entering the game.

2024, Total War?

Supply chain, logistics, merchant management, user operation, marketing methods, in the upcoming 2023, the four cross-border tigers are unlocking their respective skills one after another.

The full custody model of Temu and SHEIN is the most complete in the short term, and the two sides will continue to pull in the supply chain. This also reflects that going overseas has become an important means for many domestic industrial belt businesses to release inventory pressure, solve growth bottlenecks, and operate globally.

In the past year, it may not be a bad thing for the two families to come and go on the other side of the ocean. Looking at the overall number of global users in October, Amazon increased by 4% year-on-year, while Temu and SHEIN combined soared to 2.6 times. Although the growth rate of U.S. imports to China, mainly for industrial use, has been poor, consumers are helpless against cost-effective goods from China.

From the perspective of the proportion of U.S. users in the world, Temu is 41% and SHEIN is 18%, both exceeding Amazon's 15%. In terms of subdivided categories, Temu is mainly based on daily necessities, similar to MINISO, while SHEIN is mainly based on clothing, similar to ZARA.

In addition to the two companies that are fighting each other, Tiktok is solving the constraints brought about by the "no-stock model", which may have some kind of disagreement with AliExpress-Cainiao International.

Interestingly, Tiktok and AliExpress have both launched fully managed models this year, which may make the game between Temu and SHEIN more complicated and stalemate.

Not only the supply chain, with the sponsorship of the "Super Bowl" in the new year falling to Temu, the four tigers will focus on the supply chain, fulfillment and marketing and other fields, which may set off a new round of global e-commerce industry integration.