Text丨Financial Gossip Female Special Author: Yisi
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In the past two years, Internet companies have barely "rolled" in the domestic market, so they have set their sights overseas.
For example, Alibaba's cross-border e-commerce platform, AliExpress, which has been fighting overseas for many years, has significantly accelerated the pace of business expansion in the past two years;
ByteDance's overseas e-commerce platform TikTok Shop is making a global attack, and Pinduoduo's overseas e-commerce platform Temu has also rapidly entered many markets around the world in the past two years.
Last year, the overseas business of domestic e-commerce companies grew by leaps and bounds, and the "Four Little Dragons" composed of AliExpress, TikTok Shop, Temu and SHEIN, which were composed of four platforms, conquered the city and killed all sides on the battlefield of cross-border e-commerce.
In the logistics field with cross-border e-commerce, some companies have even been in the forefront, taking rookies, pole rabbits, and cargo lala as examples, they have already ranked among the first echelon of overseas logistics markets such as Southeast Asia, forming a situation of "three musketeers of logistics going to sea", and have accumulated considerable market size and results.
It is worth noting that most of these Internet companies that attach importance to overseas markets are platform companies, and in the relevant business fields of the domestic market, these platform companies occupy an important share and also have an important industry position, which can undoubtedly provide good support for their overseas business.
However, opportunities and challenges coexist in overseas markets, and for these enterprises, going overseas is both a business opportunity and a risk, and many enterprises have encountered a lot of difficulties in the overseas process.
So, what are the chances of Internet platform enterprises going overseas?
1.
/ Internet companies go overseas,
From the "Four Little Dragons to the Sea" to the "Three Musketeers of Logistics" /
In May last year, Meituan launched KeeTa, a food delivery platform for Hong Kong, to compete with Deliveroo and Foodpanda, two platforms that have long "monopolized" the local food delivery industry.
In November last year, Meituan's overseas expansion accelerated and officially entered the Southeast Asian market, and news spread that Meituan would consider acquiring Foodpanda's Southeast Asian business.
In October 2016, Meituan set up an overseas accommodation project team to cooperate with a number of well-known overseas hotel suppliers to enter the overseas hotel market through agency distribution. In November of the same year, Meituan Travel acquired Shenzhen Airlines to integrate international air ticket resources to improve the air ticket supply chain.
By the time the international sector actually appeared as a new business in Meituan's business framework, it was already 2018, when Meituan was listed on the Hong Kong Stock Exchange and launched a series of new businesses.
However, for a multi-business integrated platform company like Meituan, it is obviously not enough to only do overseas wine and tourism business and invest in overseas life service platforms.
Among the platform-based Internet companies that have accelerated their overseas expansion in the past two years, e-commerce platforms are undoubtedly the main force.
As an early platform to be deeply cultivated in overseas markets, AliExpress will launch a fully managed model at the end of 2023 and launch the Choice channel. Half a year later, in August 2023, the semi-managed model was launched and put into trial operation, and the semi-managed model was fully launched in January this year.
In order to allow more merchants to join semi-custodianship, AliExpress has continuously increased semi-custodian since the beginning of this year, including the introduction of a number of preferential policies such as cash subsidies. Not long ago, AliExpress also held a number of clothing investment promotion conferences intensively, facing cross-border clothing sales and source factories to increase investment.
If AliExpress is a veteran of cross-border e-commerce, then TikTok Shop under ByteDance and Temu under Pinduoduo are rising stars in the cross-border e-commerce market and deep disruptors.
TikTok Shop was officially launched in February 2021, and although it has experienced a lot of difficulties and resistance overseas, it has been actively exploring different markets and has achieved good results in many countries and regions.
Although Temu started relatively late, officially launched in September 2022, it has shown Pinduoduo's unique high efficiency and strong execution rate from the beginning, and it has developed violently in the past two years, which has not only had a huge impact on the original pattern of cross-border e-commerce, but also intensified the competition between e-commerce platforms.
In order to expand the U.S. market as soon as possible, Temu has invested heavily in sponsoring the annual championship game "Super Bowl" of American professional football twice. According to reports, Temu's products are currently sold in 48 countries around the world, and in the third quarter of 2023, its global monthly visitors reached 114 million.
Closely related to the e-commerce business is the logistics business, at the same time as the rapid development of cross-border e-commerce, logistics companies are also doing well overseas, especially the logistics platform enterprises represented by rookies, pole rabbits, and cargo lalala, forming a formation of "logistics to the sea three musketeers", expanding their territory overseas, and developing their international business rapidly.
Since the beginning of this year, Cainiao has not only accelerated its overseas self-built network, but also linked with AliExpress to carry out overseas business, and launched the "Global 5-Day Delivery" international express express product, which has now expanded to 11 countries.
Recently, Cainiao also signed a cooperation agreement with Spotter, a B2B cross-border trade distribution channel, which means that Cainiao has made substantial progress in overseas markets.
J&T originally started from overseas markets, and its business spans the Middle East, North Africa, Latin America and other places, and the data shows that in J&T's operating income in 2023, Southeast Asia and other overseas markets account for 41%.
In the "Three Musketeers of Logistics", Lala is more senior in overseas development, and has begun to lay out overseas markets since its establishment, and in the past ten years, Lala has rapidly promoted the process of internationalization and grown rapidly in overseas markets.
Lalamove is a brand established by Lalamove in overseas markets, the main customer group is small and medium-sized enterprises, mainly providing instant delivery services, and has entered the Southeast Asian market since 2014, and other overseas markets such as Latin America in 2019.
Judging from the latest updated prospectus, Lalala and Lalamove operate in 11 markets around the world, covering more than 400 cities.
2.
/ The domestic market "volume" does not move, then go to the "volume" overseas /
Although the development history of various Internet platform enterprises is not the same, and the establishment time is also different, most of them have experienced rapid development and high growth for many years in the past, and now the high growth has ended, and the traffic and users of each platform are difficult to have a sharp surge in the past.
This also means that the Internet has entered the second half, and all platform-based enterprises are also in a period of deep adjustment, and some major Internet companies have even experienced a decline in business. At present, the focus of the development of the Internet has also changed from the blind pursuit of scale in the past to the pursuit of efficiency and profitability.
"Reducing costs and increasing efficiency" has become a common theme in the development of Internet enterprises, and some large companies are focusing on their main business through continuous "contraction" and "slimming", and even abandon some original businesses with poor profits.
In this context, the Internet giants are aware that it is difficult to make new breakthroughs in the fully competitive domestic market, and the only way to achieve greater development is to increase the layout of overseas markets.
Some companies have taken the lead and have achieved good results in overseas markets, and going overseas has also become an important transformation direction for many platform enterprises.
According to Alibaba's Q3 results for fiscal year 2024 released in February this year, AliExpress orders increased by 60% in the quarter, and Alibaba's international e-commerce revenue increased by 44%, exceeding market expectations for six consecutive quarters. The main driver of this growth is AliExpress Choice, which is based on a fully managed and semi-custodial model.
In March last year, Choice was officially launched overseas, and by January this year, Choice orders accounted for about half of AliExpress's total orders, which shows that the overseas market not only contributes a large amount of revenue to Alibaba, but also brings revenue quickly.
In fact, Cainiao's revenue from international logistics has also been on par with domestic logistics revenue, and the previously disclosed prospectus data shows that in fiscal year 2023, Cainiao's revenue from international logistics will account for about 47.4%, slightly exceeding the 46.2% of domestic logistics.
In the case of fierce competition in the domestic logistics industry and limited growth space, international logistics, which is booming with cross-border e-commerce, has become the core of rookies to further expand their market space.
ByteDance has also achieved significant revenue growth in the past two years by relying on its overseas business. According to data from DataAI, an application analysis agency, TikTok has nearly 1 billion monthly active users worldwide, of which TikTok has more than 150 million monthly active users in the United States, nearly 45% of its total population.
In terms of revenue, according to The Information, ByteDance's revenue in the second quarter of 2023 increased by more than 40% to $29 billion, and revenue from overseas markets accounted for nearly 20% of ByteDance's total revenue.
In April this year, the company updated its prospectus, which showed that the global GTV of the company increased from US$6.763 billion in 2021 to US$9.414 billion in 2023, with a compound annual growth rate of 18%.
According to recent reports, in 2023, Lalamove's performance will increase by about 30% compared to 2022, and in the past five years, Lalamove's overseas market size has increased by nearly 5 times.
It is understood that Lalamove will continue to explore new paths of internationalization in the future, plans to expand to new markets, and further penetrate the existing markets in Southeast Asia and Latin America.
3.
/ Overseas battlefield, a battle between fire and ice /
Although going overseas is a huge market with many potential business opportunities, risks and opportunities coexist.
People in different countries and regions have different consumption habits, different market needs and spending power, and different policies, so there are many uncertainties in overseas markets.
In the process of going global, Internet companies will also face difficulties in many aspects such as market, culture, technology, law and policy. The experience of TikTok Shop proves that risks in overseas markets are everywhere.
After its official launch in 2021, TikTok Shop initially intended to enter the US market, but then-US President Donald Trump announced that he would ban TikTok Shop, and then had to change his original plan and shift the pilot market to the UK and Indonesia.
However, business in the UK did not go well, as European users and merchants did not have the habit of live shopping, and there were not many local merchants willing to settle in the early stage, and in the end, TikTok Shop had to rely on Chinese merchants to sell goods across borders.
Although the market situation in Indonesia is better than that in Europe, the acceptance of live broadcasts by anchors and users is high, and the difficulty of local investment is also small, but due to the Indonesian government's local trade protection, only local merchants can open stores on TikTok Shop, and finally TikTok Shop has to give up cross-border e-commerce and attract local merchants with zero commission.
When TikTok Shop was growing rapidly in the Southeast Asian market and was ready to make a big move, the Indonesian government banned TikTok e-commerce in September 2023 on the grounds of prohibiting social media platforms from conducting direct sales transactions.
In fact, as early as 2020, TikTok Shop was investigated by the United States, the European Union, Australia and other places on the grounds of data security, so that TikTok Shop has successively established data centers in Europe, the United States and other places since 2020 and accepted local supervision.
Even so, the risks don't stop there. In March this year, the U.S. House of Representatives threw out a bill requiring ByteDance to sell its short video app TikTok or face a U.S. ban.
In order to prevent the implementation of this bill, TikTok has given a harsh direct counterattack, but the risk has not yet been lifted.
On the one hand, in terms of dining habits, Hong Kong is densely populated with restaurants and supermarkets, and citizens live at a fast pace, so they are more willing to choose dine-in or pick up food in stores than high delivery fees.
On the other hand, in terms of cost, Hong Kong has high labor costs and certain restrictions on electric vehicle travel, which is different from the situation in the mainland, and for Meituan, it needs to continuously improve its management capacity and maintain extremely high operational efficiency.
Overseas markets are full of risks, and overseas enterprises must not only understand the consumption habits and needs of the target market, but also pay attention to the competition in the local market and formulate effective competition strategies.
At the same time, as an Internet company, it is also necessary to consider how to integrate resources on a global scale, improve efficiency and reduce costs, and also strengthen technology research and development and innovation to improve the technical level and competitiveness of products.
In this regard, we have accumulated more experience in overseas development for many years.
The overseas development of Lala has caught up with the acceleration of the construction of the "Belt and Road", and the cooperation atmosphere and environment between different countries and regions are relatively good. In terms of regional selection, Lala chooses to focus on Southeast Asia.
Southeast Asia has a large population, the economy is in a period of great development, and in recent years it has become the production base of many manufacturing companies around the world, the demand for logistics is great, and the local consumption level is generally low, and the operating costs of enterprises are relatively cheap.
In addition, Lala also attaches great importance to the supporting role of technology in business, and the technical team is very international, including technical talents from more than 20 countries and regions, which is not only conducive to the internationalization of technology development, but also conducive to the localization of technology application.
At the same time, Lalamove places a strong emphasis on localization, and the local management is made up of locals.
In view of the differences between countries and regions in terms of customs, working and living habits, currency, language, etc., Lalamove will fine-tune the internationalization strategy according to the actual situation, such as maps, languages, car models, payment methods, etc., which will be flexible and timely adjusted.
Similar to Lalamove, on the basis of practicing internal skills, adapting measures to local conditions, and formulating corresponding strategies for different regions, these experiences undoubtedly have a certain reference role for overseas enterprises.