If you want to say which domestic companies have avoided the fate of "involution", it is none other than Anker Innovation, which has made a lot of money overseas.
Unexpectedly, it may be that the god of fate feels that it is not enough, and the explosion in Lebanon directly opened a door for Anker Innovation.
In the first half of this year, Anker Innovations' revenue has approached 10 billion, and Amazon's single platform revenue has exceeded 5 billion.
The reason for this achievement is that Anker Innovations has been deeply cultivated in the European and American markets for a long time, focusing on the middle and high price segments, and more than 90% of Anker Innovations' revenue comes from mature consumer markets such as Europe, the United States and Japan.
However, although the "cake" of mature markets is good, there will eventually be a day when the ceiling will be hit, for example, the revenue from the North American market has fallen from 50% to 45% of Anker Innovations.
Although the "first shot" has been fired in developed countries, if Anker Innovations wants to go further, the Middle East market and the markets of emerging countries such as Southeast Asia and South Asia are also worthy of attention.
But coincidentally, drowsiness came to send pillows, and the Lebanon BP machine exploded, which suddenly gave domestic consumer electronics manufacturers a big opportunity to blow up.
01 Difficult scriptures in the European and American markets
More than a month ago, Trump had a virtual conversation with Musk during a live broadcast, and the power bank he used unexpectedly attracted widespread public attention. This power bank is produced by Anker Innovations.
On August 30, Anker Innovations announced its financial report for the first half of 2024, and its performance was the envy of many companies that "rolled up" in China.
In the first half of this year, Anker Innovations achieved a total operating income of 9.648 billion yuan, a year-on-year increase of 36.55%; Net profit reached 872 million yuan, a year-on-year increase of 6.36%. Among them, the North American market accounted for 45.6% of Anker Innovations' performance, of which the sales achieved through the Amazon platform exceeded 5 billion yuan.
At present, 96% of APCO's revenue comes from overseas markets, and in addition to the North American market, Anker Innovations has also sold well in Europe in the past two years. The proportion of revenue has increased from about 25% before 2020 to nearly 35% this year.
In the process of product introduction, Anker Innovations continues to expand its product line. From the initial power bank to the formation of six major brands (including Anker, soundcore, eufy, Nebula, AnkerWork, and AnkerMake) under the three categories of charging and energy storage, intelligent audio-visual, and intelligent innovation, Anker Innovation's "family" has grown day by day.
Judging from the financial report for the first half of 2024, charging and energy storage products are still the pillar business of Anker Innovations, accounting for 51.56%. At the same time, intelligent innovation and intelligent audio-visual products also performed well. For example, the total revenue of eufy smart home and AnkerMake 3D printing reached 2.36 billion yuan, a year-on-year increase of 35.33%.
However, the road to overseas markets such as North America is not all smooth sailing, and in overseas markets such as North America, companies are facing challenges such as reduced rigid demand and lower average customer value. Inflation has also led to the growth rate of e-commerce falling short of expectations.
From the perspective of sales channels, the future of Anker Innovations is still a hidden danger for Amazon.
On the one hand, Amazon is suffering from strong diversion from offline channels such as Walmart, eBay, Shopify, TEMU, TIK TOK and other offline channels and online multi-platforms. GWS data for August 2023 shows that in April 2023, Amazon's daily active users dropped from 54 million to 46 million, and during the same period, TEMU added nearly 10 million new daily active users.
The decrease in traffic on the Amazon platform directly increases the promotion cost of Anker Innovations on the Amazon platform. Anker Innovations' 2023 financial report showed that its selling expenses increased by 32.3%, but only achieved a 14.5% increase in North America.
From the follow-up point of view, Amazon's user growth and user usage time have stagnated, coupled with the acceleration of many domestic brands to go overseas, Anker Innovations' promotion costs on the Amazon platform may continue to rise.
According to the United Kingdom Financial Times, in 2023, Amazon took 274 million "actions" in its EU stores for potential policy violations and other suspicious issues, including removing content and suspending 4.2 million accounts.
However, the United States government report requires sellers to comply with Amazon's "mandatory" arbitration clause, which means that merchants may face the problem of not being able to protect their rights once they are punished by the Amazon platform, which may be the most headache for "Anker Innovations".
Therefore, there is no doubt about the importance of the European and American markets, but there is a strong rise of Transsion in emerging markets, and then there are TEMU, shin and other e-commerce platforms in emerging countries.
02 Free delivery market
In 2023, new markets such as Australia, Southeast Asia and the Middle East contributed 1.4 billion yuan to Anker Innovations, a year-on-year increase of 30%. In the Middle East and Southeast Asian markets, Anker Innovations has begun to emerge and has accumulated many "explosive products" and users, such as Anker charging products and Soundcore speaker headphone products have grown rapidly in the local market.
In the first half of this year, the most notable is the Middle East, which has developed into the fourth largest source of overseas revenue after Europe, the United States and Japan.
After Israel simultaneously detonated 5,000 Lebanon pagers, and further detonated a large number of walkie-talkies, resulting in thousands of casualties and indiscriminate damage to medical personnel, civilians and members of Allah. The consumer electronics market in the Middle East has changed dramatically
After all, the antagonism with Israel is not limited to Lebanon, and the relationship between the entire Arab world and Israel is not very good. This kind of indiscriminate killing, rich and poor, is not avoidable, even if the rich in the Middle East thoroughly inspect their electronics.
On platform X and YouTube, users who own the Middle East are very unanimous: for now, they will definitely not buy Western electronics. This is understandable, after all, we would be extremely disturbed if we were to be attacked like this ourselves.
Subsequently, someone in China shared an email of inquiry from a customer in the Middle East that his factory had received. Different from the previous inquiry email, this email added an additional condition: all parts of the product must be made in China, and the production and assembly must also be completed in China, and must be shipped from China.
Regarding "Made in China", there is now another selling point: Made in China at least represents safety and the promise that it will not explode. Security may not be the same as high-end, but any product that is not safe can never be considered high-end.
At present, the first wave of orders in the Middle East is mainly focused on intimate electronic products, such as Bluetooth devices and wearable devices. These close physical contact electronics are particularly frightening to Middle Easterners.
And this brings opportunities to domestic consumer electronics represented by Anker Innovations, after all, no one wants to carry the power bank, headphones, audio, etc. to become a time bomb around them.
03 The wind is coming
Even without the black swan of BP machine explosion, the Middle East e-commerce market shows strong growth, according to the 2024 Middle East and North Africa E-commerce Report, the market will grow at a compound annual growth rate of 11% between 2024 and 2026, and its market size is expected to climb to $57 billion by 2026.
The Middle East may become the next outlet for e-commerce development.
In the six Middle East countries (U.A.E., Saudi Arabia, Qatar, Oman, Bahrain, Kuwait), for example, the per capita GDP of these countries has exceeded the threshold of $50,000, which is much higher than the global average.
In the Middle East, Saudi Arabia, as the largest e-commerce market, is expected to reach $13.6 billion in 2024 and further grow to $27.4 billion in 2029, with a compound annual growth rate of 15%. In addition, Qatar's e-commerce market is also booming, with a significant increase of 43.5% in e-commerce transaction value in March 2024 compared to the same period last year.
The Middle East has a large young population and strong spending power, and they are increasingly receptive to online shopping. Saudi Arabia and the U.A.E., for example, account for 40 to 50 percent of the population under the age of 30, and the overall population structure is relatively young, with an average age of 25 to 30 years old. The demand of these young consumers for fashion, beauty, electronics, maternal and child products and other categories continues to grow, injecting strong impetus into the development of the cross-border e-commerce market.
The large number of young people also provides a broad space for the development of emerging marketing methods such as live streaming and online celebrity marketing. In particular, the rapid development of social media platforms such as TikTok in the Middle East has brought new opportunities for e-commerce marketing.
At present, the Middle East e-commerce market has formed a three-legged competition pattern.
On the one hand, the global e-commerce giants represented by Amazon have occupied a place in the Middle East market with their strong brand influence and rich product lines.
On the other hand, local e-commerce companies in the Middle East such as noon have won the favor of consumers with their in-depth understanding of the local market and customized services.
In addition, China's cross-border e-commerce represented by shein, AliExpress, and TikTok Shop has also emerged in the Middle East market by virtue of its advantages in supply chain and logistics, and jointly competed for this emerging e-commerce "blue ocean".
Among e-commerce products, consumer electronics products lead the sales in the Middle East, especially wearable devices, e-sports products and multi-functional electronic accessories.
However, compared with markets such as Europe, the United States and Japan, most of the Middle East and European and American markets have objective development gaps, and consumers also have many differences in consumption concepts, habits, and purchase paths.
For Anker Innovations, this trend is both an opportunity and a challenge. The cage replacement of electronic products has begun, but whether it can be quickly followed up in products, channels and marketing depends on Anker Innovation's own "creation"!