Against the backdrop of upgrading third-party platform control, many sellers from Guangzhou and Shenzhen have been affected by account suspensions and suffered heavy losses. On the other hand, the impact on central sellers in the cross-border e-commerce industry is not obvious. They operate in compliance, work diligently, and their performance is steadily improving. They are expected to obtain opportunities for overtaking in the new round of reshuffle.
At the same time, some excellent independent sellers in the central region are also rapidly emerging, actively exploring different business models and stable long-term growth opportunities.
Whether it is a third-party platform or an independent platform, some central sellers represented by Jikeyin, Zhiou, etc. are occupying a pivotal position in the cross-border e-commerce industry.
The pain of being banned by sellers in Guangzhou and Shenzhen, sellers in central ChinaFeelless?
This year is a year that has sparked deep reflection among sellers in the cross-border e-commerce industry. With the upgrading of third-party platform controls, many platform sellers are feeling unprecedented pressure. Especially Amazon's crackdown on false reviews has led to a wave of top sellers falling from the cloud to the bottom.
Since the end of April, top domestic seller accounts have been blocked one after another, with many sellers selling home appliances in Guangzhou and Shenzhen being blocked.Compared to the situation of some Guangzhou and Shenzhen sellers in dire straits, some central sellers are relatively calm.Yi'en.com talked to several cross-border companies in Zhengzhou, Henan, and delved deeper into the true situation of sellers in central China under the background of this year's license ban.
As a well-known blockbuster in the industry, Zhiou Home Furnishing Technology Co., Ltd. (hereinafter referred to as Zhiou) mainly engages in the research and development, design, and sales of its own brand home furnishings, including home furnishings, pets, and garden products. Its three major private brandsSONGMICS, FEANDREA, and VASAGLE are best-selling globally through platforms such as Amazon and eBay, with Amazon accounting for approximately 70% of their sales.
Under the wave of account closures, a large number of sellers howled, but Zhiou expressed welcome for compliance.Zhang Liuming, the company's marketing director, said that this year's platform rectification comments are illegal, which many people may find challenging. However, for Zhiou, this matter is particularly welcome.Because before the lockdown wave, Zhiou had always been very strict in compliance and had never commented on any violations. So now, whether it's titles or EuropeVAT tax, we all believe that this is a positive direction for the industry. To some extent, this is a recognition and support from the platform for compliant enterprises, and the industry will become increasingly sustainable in the future.
Zhengzhou Yilianke E-commerce Co., Ltd. (hereinafter referred to as Yilianke), also located in Henan, only has one set of accounts worldwide,Yilianke specializes in beauty and nail products, and is an enterprise incubated by Henan Postal Industrial ParkSince entering Amazon in 2018, it has achieved an annual sales growth of three times.
Last year's epidemic brought an opportunity to Yilianke, with the beauty and nail category being classified as essential. In addition, a large amount of offline traffic has been transferred to online, bringing a significant increase to Yilianke. This year, the wave of account suspension broke out, and Yilianke still maintained stable growth. When it comes to account suspension, Wang Quan, the Director of Operations at Yilianke, stated:Our company has not been affected because we always adhere to the 'three no's': not providing inferior products, not letting out small cards, and not brushing orders
Not involving platform violations, perhaps this is the biggest advantage of central sellers this year, and in other aspects, the advantages of central sellers are also reflected to some extent.
Under this year's lockdown wave, some cross-border companies in Guangzhou and Shenzhen have reported layoffs, especially some larger companies that have suffered severe losses, resulting in layoffs of up to several hundred people. Some companies have also directly laid off a team.
Recently, an industry insider revealed that a group of personnel from a certain company had been poached by competitors. In this year's environment, this has a significant impact on a company, and it is something that is happening.In the following year, some cross-border companies in Guangzhou and Shenzhen will experience even larger personnel movements.
Wang Xingyu, General Manager of Henan Haiqi Information Technology Co., Ltd. (hereinafter referred to as Haiqi), stated that one of the advantages of central sellers may lie in the company's personnel, mainly manifested in the following aspects:1. The personnel cost is relatively low; 2. To find suitable talents, there are many talents in the cross-border industry of Guangzhou and Shenzhen, but the demand for labor enterprises is also large. On the contrary, there are certain talents in Zhengzhou, Xi'an, Nanjing and other places, but there are not many corresponding enterprises. 3. The personnel are relatively stable, and relatively speaking, the personnel of the central seller company are not easy to change jobs, and stable personnel can form a long-term accumulation.
Stable personnel and compliant operations are the driving force for long-term operations, as well as the advantages of central sellers. Looking at several central sellers, in this special year, they have different operating methods, and one of their core tasks is to maintain profits.
Maintain profits, central sellers continue to maximize flywheel
Wang Quan, Director of Yilianke Operations, mocks himself:Our operating model is the most primitive, without brushing orders or conducting evaluations, which makes our development more stable and continuously accumulates our accounts. Our advantage is also that we are slow birds and fly first, and our overall sales have maintained stable growth this year
Under the combination of factors such as falling exchange rates and shipping costs, Yilianke has minimized the impact of profit decline by taking advantage of its category advantages. Compared to the situation where some Guangzhou and Shenzhen sellers are losing money, some central sellers such as Yilianke have shown strong resistance to competition.
Due to the increase in logistics and raw material prices this year, our profits have been compressed, but the proportion of profit cost in the entire product system is limited because we are producing brands and high premium products. The premium comes from building brand strength. If there is pressure on both logistics and supply chains, the products are likely to have no profit, but it does not have much impact on our products, "Wang Quan said.
In the face of profits, the operation of central sellers is also more practical. Dong Jiaxing, co-founder of Henan Aiyi Electronic Technology Co., Ltd. (hereinafter referred to as Aiyi Electronics), mentioned that in order to survive for a long time, it is necessary to ensure profits.
Dong Jiaxing further introduces:Since I entered the industry, there has been a competition. At least 90% of the sellers we encounter on Amazon are Chinese sellers, and everyone has a common mindset of not competing for product quality and price. This year, there is a particularly popular product promotion method - spiral promotion, which can quickly place orders, but whether we can make money in the future is another matter. Starting from the beginning of this year, many sellers in Europe will face a direct reduction in profits due to the tax reform At that time, I was thinking that the price should have increased, but I didn't expect the price to have been lowered. We cannot force our opponents to do anything, we can only change it ourselves. For example, for similar products, if I compete for price, I will lose money. If I compete for quality, there will be customers who truly care about quality
The price war competition between Amazon sellers this year is somewhat related to the wave of account suspensions. Under normal circumstances, some previous orders cannot continue, and many sellers have to rely on price to maintain their ranking and sales, but this will not be sustainable.
Seeing a lot of category sellers, if they are the first in the category, when the second and third place are under pressure, it will definitely feel uncomfortable to see themselves surpassed. Knowing that their competitors are not as good as themselves, they still insist on competing for prices. One day, there will be a situation where everyone may not be able to continue. Dong Jiaxing said.
The competition among platform sellers is intensifying. Apart from internal reasons among domestic sellers, factors from overseas cannot be ignored.
The changes in the entire industry this year may be greater than we imagined. The reason for such changes is that everyone will see more information about platform consolidation and competition among sellers. In fact, the key point of this issue comes from the decline in the consumption capacity of the United States. "Wang Xingyu introduced.
Wang Xingyu believes that the decline in currency consumption ability directly affects purchasing power. The United States itself is a gyroscopic shape, with a large middle layer. However, under the pandemic, many middle layers may sink to the bottom, causing a decline in consumer power. Our product price positioning for different sellers may have two different paths. To some extent, the sales of products with high customer unit prices have been affected, but in fact, this is a paradox. As a cross-border seller, if you want to do more and more, and want profits to be higher, you must do high customer unit prices.
Third party sellers have reached a certain stage of development, and growth is a necessary stage to go through. Why can Amazon grow bigger because the platform economy is an economy of scale? Because it is an economy of scale, only when it becomes larger can it have a say and use the flywheel to drive many things.
For sellers, it is actually the same. Amazon has leveraged the efficient and low-cost supply chain resources of the entire China with its overseas flywheel, while also driving many resources including manpower, logistics, and so on. As a platform seller, only growth can make their flywheel bigger and bigger. If growth is not achieved, competitors will continue to grow, or sellers with investment backgrounds will continue to grow. Ultimately, what can achieve a company is often not a business model, but rather some ecology. For sellers, it may be the supply chain ecology around them.
On the path of continuous development, we have seen the upgrading of third-party platform control, and some central sellers are also opening up new channels. Wang Xingyu mentioned that both other platforms and independent websites are sellers' business channels. Based on their own situation, considering that multiple platforms and independent websites will be sellers' future development direction.
30% of sellers have already laid out and are starting to stand independently at the right time
Recently, Yibang Think Tank conducted a survey on approximately300 cross-border enterprises have found that independent stations have become one of the main modes of going overseas, with 31% of enterprises having independent stations. Among enterprises that have not established independent stations, 21% are preparing to establish a DTC model, 47% of enterprises say they do not consider building a station, and another 32% are watching.
In enterprises that already have independent stations,31% of the sales of independent websites account for over 30% of the total sales of enterprises, and 3% of the sales of enterprises rely entirely on independent websites. For 46% of enterprises, independent sales account for 10% -30% of their total sales.
Central sellers are also exploring independent station channels, and some have achieved good results.
The company's Amazon and independent website businesses are parallel, and Wang Xingyu highly recognizes the development trend of independent websites. He believes that compared to platforms such as Amazon and AliExpress, sellers have different customer groups and competitors for independent websites. This is a new track.
Henan Langu Technology is one step ahead. Zhao Wenzhong, the project leader of the company's independent station, introduced that considering the decline in third-party platform sales and the increasing popularity of independent stations, Langu TechnologyIn 2018, I embarked on an independent stand and made several explorations, ultimately gaining a foothold in segmented markets such as story accessories, formal children's clothing, and size less underwear.
aboutZhao Wenzhong believes that the clich é d 'whether platform sellers can become independent websites' is still a good time to enter the independent website. One decisive factor in whether the project can be completed is whether the boss has the determination. If the boss decides to do so, it is necessary to provide all support such as recruitment for the operation team, products, and funding; If the boss just wants to give it a try, then it's not recommended.
Transformation is not easy, it is difficult to achieve with just one cavity of passion.Burning money is inevitable. The company needs to support the independent station department to survive for at least 6 months, provide sufficient growth time, and also understand the profit cycle of the independent station. It is difficult to achieve expectations too quickly.
In the water trial army, many people give up one after another because they cannot see hope; And if there is an improvement in the data after the funds are invested, such asThe increase in ROI and effective repurchase can be used by sellers to further determine whether to increase investment or terminate based on data. Whether we can ultimately find a way out is closely related to the team's practical skills, company courage, and luck.
Transforming into a trend, should independent stations profit or let go?
Among independent sellers, it has become common to transition from a popular model to a vertical category.
Zhao Wenzhong introduced,The success rate of mining explosive products is less than0.2%, the testing cost is very high, even if one explosive product is detected and money is made, then throwing this profit into digging for a second explosive product may not be worth the loss.
Due to the lack of user sedimentation and repurchase in the popular model, the company's cash flow is not optimistic. If illegal products are made, payment channels are also prone to problems. Once blocked, the company's business is difficult to sustain. As a result, many sellers are turning to formal operations.
Wu Jiayang, the founder of Chuanliu, believes that,The transformation of popular models into vertical categories is a major trend, and the direct reason is that previous popular products were mostly illegal products, which violated the policies of major traffic channels.
Starting from the first half of the year, a large number of advertising accounts have been reorganized, and a wave of account closures has emerged,It has not stopped since September, especially before and after Black Friday. Wu Jiayang introduced that there are two main types of reasons for account suspension: business account suspension (such as product violations) and technical account suspension (such as frequent IP changes if one does not understand the operation). The former is difficult to appeal, while the latter may be able to retrieve the account by submitting identity information and appeal letters.
The transformation of sellers is accelerating, but Wu Jiayang does not believe that popular sellers can successfully transform,Many of our clients used to be hot sellers, and it's hard for them to give up their original thinking. It takes some time to invest in a vertical independent website for returns, but they may lose patience and determination after two weeks of not seeing the returns. This is the most common problem. Additionally, from a practical perspective, they are accustomed to placing single pages and are not very good at running a complete website
Chen Zhen, Vice General Manager of Facebook's New Business Development, believes that,The difficulty of seller transformation lies in: firstly, the concept. If a seller wants to become an independent website from the platform or switch from a popular model to a brand website, the biggest difference is whether they want to make profits in the short term or let them go. The popular model and platform sales aim to make as much money as possible, but in order to build a brand, only a certain profit may be retained (such as10%), the remaining profits will be given up, and it is difficult to shift to a profit giving mindset. Secondly, sellers are increasingly strict in their control over the supply chain, delivery time, and product quality. Not only good at supply chain or advertising, but sellers balancing supply chain and advertising may be a key factor in successfully building a brand and making profits.
So which sellers are doing better with vertical stations?
Wu Jiayang stated that in several circles in Hangzhou, people have discussed that the first round of cross-border e-commerce is a traffic dividend, and the second round is a product dividend, which is based on the product. Firstly, your product is excellent, and secondly, your product must also come with its own traffic to ensure profits. This wave of independent stations in any niche industry has all made great efforts in product research and development, design, and production. One representative of them is manufacturing sellers.
Unlike popular sellers who have undergone passive transformation, manufacturing sellers possess product research and development capabilities as well as continuous innovation capabilities.We have seen particularly crazy growth among sellers this year. For example, Lego, their independent website has grown very well this year, and next year's financial report will be even more impressive, which should be several times higher than this year
In addition to winning with products as the core competitiveness, Wu Jiayang believes that sellers can also look for dividends in segmented categories, and also consider emerging markets. For example, since the epidemic, sales in Southeast Asia are recovering, and the Japanese and Korean markets are also good. In the short term, advertising policies in regions such as the Middle East, Eastern Europe, and Africa are relatively loose, and there are also some traffic dividends.
Can sellers enter emerging markets? The viewpoint of selling Jikeyin on Southeast Asian independent stations can be referred to in one or two.
It is not advisable to venture into emerging markets recklessly
Recently, Southeast Asian e-commerce platformsZALORA has released the "2021 Southeast Asia Trends Report", which states that according to Google data, Southeast Asia has added 40 million new internet users this year. At present, the internet penetration rate in Southeast Asia has reached 75%, and eight out of ten netizens shop online.
Ji Ke YinVP Guo Xinhua said that, relatively speaking, the development of e-commerce in Southeast Asia is still lagging behind, and whether logistics maturity, payment maturity or online e-commerce penetration rate are all at a low initial stage. With the catalysis of the epidemic in the past two years, users in Southeast Asia have gradually shifted to using e-commerce for shopping. After the epidemic, Southeast Asian e-commerce as a whole will have a very rapid development and great growth space.
Unlike the monopoly of domestic e-commerce platforms, Southeast Asian e-commerce forms are more diverse, with third-party platforms intersecting with independent website users, but there are significant differences in user profiles between the two.
Opening a store on the platform, whether it's for promotional or promotional purposes, is mostly based on low prices for user conversion. Users compare their products to three different stores to see the cost-effectiveness, which is a characteristic of young users; And independent stations have a certain product threshold from product selection, operation and promotion, and then to product delivery.
Guo Xinhua said:Our product threshold is relatively higher, and in this era of finding people, there is also a certain cost to obtain customers through advertising and marketing. Therefore, in terms of categories and products, our entire product is basically in the middle end, and the main users of this type of product are definitely already working people with relatively strong purchasing power
Therefore, the core users of Jikeyin in Southeast Asia are not particularly young (such asPeople under the age of 25, but middle-aged people aged 25 or over. This type of user has stronger economic strength, and in addition to focusing on product cost-effectiveness, they also attach importance to comprehensive dimensions such as product quality. At the level of social e-commerce, the COD model of Jikeyin focuses on promoting individual products, and this strategic positioning clarifies the established differences between its user base and platform users.
When analyzing emerging markets, Southeast Asia is often mentioned as an excellent sample. Is this market suitable for novice sellers?
Guo Xinhua analyzed that with the normalization of the epidemic, the income of local people in Southeast Asia has still been affected to a certain extent. People will be more rational and even control the proportion of daily consumption expenses. At this time, entering Southeast Asia will particularly test the organizational and cost control capabilities of enterprises.
If you don't have your own core competitiveness, I think it's difficult to enter the market and generate profits to some extent. It's still quite challenging. Firstly, the epidemic will affect your signing, and secondly, costs are constantly rising, such as raw materials and shipping costs. If a new seller comes in and the volume is small, such as 5000 or 10000 orders per day, in fact, in the current e-commerce sector, you don't have your own moat.
Can we obtain higher quality procurement, advertising, and logistics costs by collaborating with suppliers, advertisers, and logistics providers when our strength is not strong enough? If you don't have such a core competitiveness, you will lose a lot to others in the cost aspect, coupled with a lack of understanding of the cultural systems and political factors of offline countries. If the signing rate is not guaranteed, I think it's difficult for you to earn much money, let alone stand firm. This is a great challenge.”
Even if you follow the trend and find a popular product that sells three to five hundred or three to five thousand orders a day, sellers still need to consider sustainability, that is, whether they can maintain a scale and volume advantage. In Southeast AsiaIn the field of COD e-commerce, without scale advantage, it is difficult to have a certain core competitiveness, as scale determines cost.
If it's a small enterprise, or if you want to break in and make a little money, and then withdraw, I don't think it's suitable. After entering, I think you need to think more about where your core competitiveness is. If you think you can have a certain advantage in this market, then I think it may also be an opportunity