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Xinhua News Agency, Beijing, Oct. 18 (Xinhua) -- From 0 to 70, the cross-border e-commerce platform Temu went to sea
Xinhua News Agency reporters Yan Fujing and Hu Linguo
In the wave of China's cross-border e-commerce going overseas, the story of Temu is particularly eye-catching.
In September 2022, Temu, a cross-border e-commerce platform under Pinduoduo Group, made its debut in the United States and has been launched in more than 70 countries and regions so far, attracting more than 100 million overseas consumers to download.
The platform is connected to tens of thousands of small and medium-sized enterprises in the manufacturing belt, as well as hundreds of millions of consumers. Taking advantage of the opportunities brought by Temu's overseas expansion, those once unknown manufacturing companies can directly embrace the vast overseas consumer demand; Global consumers can also enjoy the supply of high-quality and low-cost products made in China through this e-commerce platform.
The road to the sea is never easy.
Policy fluctuations in different overseas regions, competitive pressure in the e-commerce industry, and the balance between suppliers, consumers and platforms...... On the cusp of cross-border sailing, if you want to sail for a long time and healthily, you must explore a path of high-quality development.
What's on the other side of the sea? The answer is still being found.
From thought to action: go to sea to find new growth points
United States consumer Laurie · Silva still remembers her first shopping experience on Temu.
It was September 2022 when she was attracted to an ad, downloaded the shopping app, and purchased a pair of earrings and a wool cardigan for $1.25 and $15. She is satisfied with the quality and price of the goods.
With a wide range of affordable products on the platform, Temu quickly captured the hearts of millions of United States consumers like Silva.
This fledgling e-commerce platform is a bold attempt by Pinduoduo.
This is the user using the Temu mobile client (taken on September 24, mobile phone photo). Xinhua News Agency
At that time, the number of annual active users of Pinduoduo's domestic platform had exceeded 800 million, with an average of more than 100 million parcels per day, and it had grown rapidly in just 7 years.
In the field of cross-border e-commerce, Pinduoduo faces fierce competition: international e-commerce companies such as Amazon and eBay have a huge market share, and other domestic e-commerce platforms have taken the lead in overseas markets.
Many people wonder why Pinduoduo went to sea at this time.
In 2021, the total import and export value of the mainland's trade in goods reached 39.1 trillion yuan, a year-on-year increase of 21.4%, and the scale hit a record high.
In the context of strong domestic export growth momentum and favorable policies for going overseas, Pinduoduo smells business opportunities.
Zhao Jiazhen, executive director and co-CEO of Pinduoduo Group, recalled: "Many Chinese-made goods are of excellent quality, fair prices, and competitive in the international market. ”
The advantages mentioned by Zhao Jiazhen stem from the company's long-term accumulation in the domestic market.
Since its establishment in 2015, Pinduoduo has keenly captured the potential consumption space of the domestic "sinking" market, penetrated into more than 100 manufacturing industrial belts in Zhejiang, Guangdong, Shandong and other places, and built a huge supply chain reaching counties and townships. Once it turns to the global market, this "family foundation" will form a strong competitiveness.
The idea of going to sea has long been known.
The experience of some core team members studying or working abroad has allowed them to witness the surging economic waves after the opening of the country, and have a clear understanding of overseas consumer purchasing power and the retail market.
With the development of the domestic market, the idea of going to sea has become more and more intense.
"We found out early on that overseas Chinese often place orders on Pinduoduo in China, and they even share their buying experience and tips on social media." Chen Lei, chairman and co-CEO of Pinduoduo Group, talked about the reasons for launching Temu.
In the past, Chinese e-commerce companies would avoid the main markets of overseas e-commerce giants, especially the United States market. But Temu did not play cards according to the convention, and the high-level team led the team to discuss after global research, "If you want to go, go to United States!" ”
From the perspective of market conditions, the United States market system is more complete and the language is single, and the entry cost is lower than the Southeast Asian or European markets with complex rules and a wide variety of languages.
From the perspective of infrastructure, the Internet penetration rate of about 90% United States provides a good technical foundation for online shopping, and mature logistics facilities also ensure the delivery timeliness of goods.
From the perspective of price level, United States inflation has continued to rise in recent years, Temu has built a platform for domestic manufacturing products to directly face overseas consumers, eliminating the trade costs caused by multi-layer distribution, and making goods more price advantageous.
Give it a try, break through, and the new growth point may be there.
Just do it!
For platforms, traffic is the difference between survival. Temu is taken from the meaning of "Team up, Price down". When it launched in United States, the team had already figured out how to attract customers and allow users to experience bulk purchases and more affordable consumption models.
Migrate the domestic social fission gameplay to the North American market, attract customers through methods such as newcomer purchases, registration 7% off coupons, and free shipping for new users, and launch "cashback" discounts based on past experience and actual conditions...... The activity of old users on the platform continues to rise, and new users continue to join.
In the past two years, Temu has maintained the first place in the total number of app downloads and the growth rate of new users in the North American market. Today, consumers in more than 70 countries and regions have purchased Chinese goods through Temu.
From 0 to 70, Temu took a solid step.
Platforms and merchants: grasp the advantages of the supply chain in mutual achievement
When I met Lin Hongcan, the owner of the pajama manufacturer was very busy.
At his production plant in Shantou, Guangdong province, he urged designers to step up their efforts to make new pajamas for autumn and winter to meet the upcoming peak consumption season. The nearly 10-year-old company has been in Temu for just over six months. Before that, Lin Hongcan had never set foot in the sea.
Temu has launched a "fully managed model", in which after merchants send goods to the platform, the platform is responsible for subsequent links such as transportation and sales. This "nanny-style" service greatly lowers the threshold for going to sea.
On September 4, Tume merchant Lin Hongcan was introducing products (video screenshot). Photo by Xinhua News Agency reporter Pan Yujie
The manufacturing capacity accumulated in the field of domestic clothing e-commerce has allowed the small company to quickly adapt to the needs of overseas markets. Lin Hongcan said that by compressing the purchase batch, shortening the production cycle, and quickly testing the market response, it only takes 7 days for a product to be designed to be produced at the earliest.
For this year's "Black Friday" shopping festival, Lin Hongcan is full of expectations. At present, the company has 700 to 800 daily orders on Temu.
In the long-term fierce market competition, small and medium-sized enterprises in the domestic manufacturing industry belt have developed the ability of rapid production and flexible adjustment. When platforms provide opportunities to go overseas, their strengths can be fully utilized.
When he first started exporting overseas, Lin Hongcan had a headache about which pajamas to put on the shelves. The buyer of Temu solved his problem.
"Many buyers are 'post-95' or even 'post-00', and they are very sensitive to consumer trends." Temu business director Zhang Chao said.
Different from buyers in the traditional sense, some of these buyers are fashionistas who can capture consumption hotspots, some are college graduates who are good at understanding the frontier of consumption, and even the "second generation of factories" who have opened e-commerce, and they have become a bridge to match supply and demand.
Buyer Liu Fei is one of them.
By investigating the functional and aesthetic needs of United States consumers, he provided market feedback at the first time, making Lin Hongcan's production adjustment more targeted.
Soon, Lin Hongcan's factory began to produce large-size pajama pants suitable for European and American people, opened up a milk silk pajama production line that was popular in the local market, and launched functional pajamas such as anti-mosquito, anti-mite, and antibacterial...... With the help of the platform's research and promotion, the sales of new products in overseas markets have risen rapidly.
"Most small and medium-sized businesses have little experience in going overseas and have little knowledge of overseas markets. From a platform perspective, we try to provide as much convenient access to the sea as possible. Bu Lei, vice president of Pinduoduo Group, said.
The platform provides full-link channel services including one-click translation and intelligent customer service; In order to ensure the timeliness of delivery, different logistics providers covering most of the regions and major population centers in the United States are selected to ensure that the time from domestic warehouses to consumers is only about 10 days......
This is the Temu business office area (photo taken on September 4). Photo by Xinhua News Agency reporter Pan Yujie
As soon as the customs clearance was opened, tens of thousands of Chinese merchants gradually converged on the Temu platform.
Cross-border e-commerce gives traditional foreign trade factories the opportunity to upgrade their brands. The platform and the merchant perform their respective duties, support each other, and achieve each other.
A ceramic production enterprise, after receiving feedback from the platform, produced explosive products that cater to the festive atmosphere and played a brand within two weeks by decorating ceramic tableware, matching flowers and ribbons;
When a hat manufacturer participated in the "Black Friday" promotion, under the guidance of the platform, it stocked 50,000 explosive products within a month, and its production capacity was greatly improved;
A glasses manufacturer, with the help of the platform's services, registered its own trademark, continuously improved the quality and packaging, and increased the price and profit of goods by nearly 50%;
……
Behind these stories is Temu's understanding of the supply capacity of "Made in China", and it is also the transformation and growth of Chinese small and medium-sized enterprises to take advantage of the momentum.
"I rarely take OEM orders now, and I just want to seriously run my own brand." Speaking of future plans, Lin Hongcan proudly introduced his own brand "HNAN" that he is building. He said that with the cross-border wave, he will control the quality of products, increase the repurchase rate of users, and make the brand slowly become louder.
Short-term Profit and Long-termism: "Survival" in "Change"
Recently, Temu has also faced one challenge after another.
Some overseas consumers have reported that the quality of the products on the Temu platform is uneven.
Clicking on domestic social media, merchants are also discussing the pricing strategy and governance model of the Temu platform, hoping to find greater profit margins.
Whether "low price" and "good quality" can be achieved has become a difficult problem that must be solved by platforms that connect suppliers and consumers.
China's platform economy has gone through the stage of embryonic transformation, growth and rapid growth, and is standing at the crossroads of transformation to high-quality development. High quality is a hurdle that all platform companies, including Temu, must overcome.
In the earnings call in May this year, Chen Lei expressed new requirements for product quality: "The company must try its best to keep up with the changes in the market, in addition to saving money, to meet consumer demand for high-quality products." ”
After three months, when disclosing the second quarter financial report, Chen Lei once again emphasized the importance of long-term development: "For the long-term healthy development of the platform, we will continue to improve the ecological construction through the method of 'support and governance'." ”
In the interview, the merchants expressed their most simple wishes: to follow the footsteps of the platform and constantly optimize themselves, hoping to obtain higher profits, so that there is enough space for new product research and development, improve product quality, and take the brand road.
Jinhua Huaye Warp Knitting Co., Ltd. is a scouring pad enterprise that relies on Temu to grow rapidly, and its sales volume ranks in the forefront of the platform. Gong Zhihan, manager of the company's e-commerce department, said that in the past two years, similar merchants have also begun to do cross-border, and the competition is becoming more and more obvious. "If we maintain our price advantage by reducing costs, it is not conducive to ensuring product quality and upgrading brands in the long run. We're also looking for a better model with more pricing freedom and higher margins. ”
The balance between consumers, merchants and platforms is related to the vitality of the platform, which is a big test that Temu has to face.
In the process of "seeking change" and "survival", enterprises are trying to explore more new methods.
This is a Temu merchant storage shelf (taken on September 4). Photo by Xinhua News Agency reporter Pan Yujie
Temu has launched a semi-managed model, giving merchants more flexible pricing power, and merchants need to send goods to the warehouse in the target country in advance and be responsible for their own delivery.
This new model has attracted some merchants on the platform, who feel that they can retain some autonomy and make more profits.
In terms of punishment, the Temu team introduced that the punishment is only for merchants with problems such as inferior goods and false publicity, and this is done to better protect the interests of other businesses that operate in accordance with the law and in compliance.
"We are actively building a healthy and sustainable platform ecology to avoid bad money chasing good money." Bu Lei said.
From the perspective of positive incentives, Temu has actively supported high-quality merchants with strong innovation capabilities, launched technical service fees, and promoted refundable rights and interests of software service fees to reduce operating costs.
In Temu's view, to effectively respond to the current challenges, it is necessary to consolidate its core strengths and establish a relationship of trust with merchants and consumers with a healthy business model. This is not only related to their own survival, but also to accumulate valuable experience for Chinese enterprises in the global competition.
How to move forward in the future is being explored.