Amazon's position in cross-border e-commerce is like Apple's position in the Chinese market, and it has always felt that it is firmly seated in the Diaoyutai, and now I am afraid that it will not be able to sit still. At the beginning of this year, the global shopping App user penetration ranking showed that Amazon ranked No. 1, and among China's "Four Little Dragons Going to Sea", Shein ranked No. 2, AliExpress ranked No. 8, and Temu ranked No. 10, and the threat to him was not great. Today, the above three platforms have all ranked among the top four, and the ranking is close to Amazon. In other words, China's cross-border e-commerce platforms are already on the move.
Freezing three feet, not a day's cold
Amazon may not understand why China's cross-border e-commerce is developing so fast. Amazon, the world's largest e-commerce platform with the largest number of countries, withdrew from the Chinese market in 2019, but now it is meeting China's "enemies" overseas in another way.
Domestic e-commerce giants have not been "fighting" for a long time. The once popular price war has been extinguished, the battle for the sinking market has died down, the smoke of community group buying has dissipated, and even the Double 11 promotion is no longer announced to the public. The giants have put their guns into storage, and the founders have retreated into the background to recuperate, and the cruel competition of China's Internet giants has changed the way.
According to different backgrounds, the top players of e-commerce going overseas are roughly divided into four categories:
E-commerce giants: Pinduoduo, Alibaba, JD.com
Invisible unicorn: Shein
巨头代理人:Shopee、Lazada
Short video e-commerce: TikTok
Ali started as a foreign trader, and the overseas business layout is also the deepest, the B2B foreign trade wholesale business is even earlier than Taobao, and later did the B2C model of AliExpress, which is very popular in the Russian and Brazilian markets. However, it was not until after 11.11 in 2021 that the overseas business was elevated to the strategic level of the group, and the 2C (consumer-oriented) and 2B (enterprise-oriented) business structures that had been used for many years were broken up and reorganized into two major business segments, domestic and overseas.
Before founding Pinduoduo, Huang Zheng also did cross-border e-commerce projects. But because the domestic market is too big, Huang Zheng put all his energy on the country, so he achieved Pinduoduo. Now that the three-legged pattern of domestic e-commerce has been stabilized, Pinduoduo has freed up its hands to deploy overseas, and there is Temu.
The pace of JD.com's going overseas is smaller, although it has business landing in Southeast Asia and other places, but at present, the main advantages are concentrated in logistics warehousing and after-sales service.
Shein was founded in 2008, the model is not complicated, but the scale is better. It has secured a number of core suppliers in China, obtained extremely low prices, carried out careful planning and packaging, and went overseas through digital marketing and digital supply chains, and now it is about to compete with the fast fashion giant ZARA.
Shopee and Lazada are the two largest e-commerce platforms in Southeast Asia. Although it is not a Chinese company, it has close ties with China. Shopee's founder, Li Xiaodong, graduated from Shanghai Jiaotong University, and Tencent is also Shopee's largest shareholder. Founded in Singapore, Lazada started in the Indonesian market and became the largest e-commerce platform in Southeast Asia in 2015. In 2016, Ali spent $2 billion to control Lazada and became a member of the Ali war group.
The last category of players is TikTok live e-commerce. TikTok is equivalent to the overseas version of Douyin, Douyin e-commerce is in full swing, and TikTok e-commerce is also continuing to make efforts. Live e-commerce is a commercial highland, and the giants want to layout, and TikTok is the opponent that should not be ignored.
Overwhelming
In the United States, Amazon dominates online shopping among the middle class. In order to ensure the delivery timeliness, Amazon has spent more than ten years building warehousing and logistics, and has hired millions of workers for this purpose. These are the moats of the Amazon. However, Amazon's weakness is also here - the price of goods will not be too cheap.
China's e-commerce going overseas has actually been going on for more than ten years, but it is not as urgent and thorough as it is now. Ali went overseas through B2B foreign trade in 1999, Shein relied on the wedding dress category to go overseas in 2008, ByteDance formed its first global team in 2015, Shopee was established in the same year, and Ali controlled Lazada in 2016. Huang Zheng did cross-border e-commerce in his early years, and established the cross-border project VOVA in 2018.
And now, the domestic e-commerce market has reached the ceiling, and after the crazy involution, there is a cruel stock competition. The drive for Chinese companies to go abroad has changed, and overseas business provides the story that the capital markets need to tell. In terms of the way of going overseas, the past investment and commodities have developed to the current model, team, and experience to go overseas in an all-round way. When Shein and Temu attacked the U.S. market, they cleverly chose the low-price route and avoided Amazon's edge.
Moreover, Chinese e-commerce companies have also learned to do business with overseas giants when they go abroad. Google's keyword search, Meta's major social media. Internet companies do online advertising, and the standard configuration is Google search + Meta's social media matrix. In the early days, Shein was very aggressive in spending money on these traffic platforms to promote, and reached cooperation with a group of KOLs and Internet celebrities. Temu may be able to copy SHEIN's model and supply chain, but in terms of traffic marketing, it can only bite the bullet and spend higher costs.
TikTok has grown into one of the most popular short video products in the world, but product selection, logistics, and payment are not its strengths. It is difficult to replicate the successful experience in China overseas for a while. Fortunately, foreign giants have not run through the model of live broadcast e-commerce, and they are far from making money.
There are many opportunities for e-commerce to go overseas, and of course, the challenges are not small. Geopolitics, ideology, cultural conflicts, regulatory policies, any link will have an impact on going to sea. Fortunately, e-commerce is a big track with long slopes and thick snow, and you never know who will come out on top. Shein's experience growing up overseas also tells people that no matter how complex the situation is, no matter how ordinary the business, there are opportunities to overtake in corners.