A new cross-border strategy is here! A group of sellers have achieved breakthrough growth

The operational thinking needs to change!

As a new form of foreign trade, cross-border e-commerce has shown strong development vitality in recent years. According to the data from the Ministry of Commerce, there are now more than 100,000 cross-border e-commerce entities in China, and the scale of cross-border e-commerce goods imports and exports has increased significantly, with the proportion of foreign trade rising from less than 1% five years ago to about 5% now.

The cross-border elimination rate is also rising year by year. As the industry gradually transitions from the wild growth period to the high-quality overseas stage, a large number of sellers are experiencing the pain of transformation. To keep up with the cross-border development and not fall behind, we cannot ignore two important changes: the rise of consumers' "price-performance ratio" shopping mentality, and AI is becoming a "standard" operation...

From "cost-effectiveness" to "price-performance ratio", new development opportunities are coming

Changes in the cross-border landscape have given rise to new opportunities and challenges.

With the advantages of supply chain, many Chinese brands have won global market recognition with excellent cost performance. The traditional advantages of Chinese brands are still crucial, but with the rampant low prices, some people are trapped by malicious low prices. Some sellers follow the principle of strategic loss, first selling products at low prices to gain sales and occupy market share, and then gradually increase the selling price; little do they know that when the sellers deliberately lower the prices, their peers in the same category also follow suit, and the sales of the products remain sluggish.

On the one hand, the low-price track is becoming increasingly crowded, and sellers’ profit margins are being continuously compressed. Many sellers have even become “runners-up” in cross-border markets, and are forced to clear out their goods and leave after losing money.

On the other hand, Google Search trends show that consumers have been pursuing high value for a long time. Taking the UK market as an example, the number of Google Search users searching for the word "best" is consistently higher than the number of searches for "cheap". Even if they are impacted by external uncertainties, many consumers will not give up their pursuit of quality of life.

Global users are showing an open and exploratory attitude towards new brands and are considering more brands. The BrandZ™ China Global Brands 2023 report released by Google and Kantar shows:

73%   of users have tried a new brand in the past 12 months

55%   of users would consider trying more brands

This means that Chinese companies have the opportunity to break out of the competition in terms of price/performance, leverage consumers who pursue value, and usher in a new round of development opportunities based on brand upgrades based on supply chain advantages.

The top five factors that impress consumers to try new brands include, in addition to cost-effectiveness, confidence in product quality, curiosity about the product, the ability to improve quality of life, and expectations for product experience. Therefore, in the process of branding, Chinese brands urgently need to transform from competing on “cost-effectiveness” to providing “value for money”.

But it’s not enough to just make users feel it’s “worth it”; brands need to work hard to make consumers believe in these promises.

Google research shows that consumers trust themselves to know very little, with 76% of consumers suspecting that the information they see may be misleading; but consumers need to know a lot, with four out of five consumers saying they must feel they have done their research before they feel their decision is right. We call this huge gap the "confidence gap."

How can Chinese sellers effectively fill the “confidence gap” among consumers and gain mental benefits?

The first step is to choose a platform that users trust and provide consumers with effective confidence clues.

Consumers’ purchasing decisions are a long journey. At each step, they search and study a lot of information, and then make small decisions one after another. If brands want to give users confidence more effectively, they need to let target users see persuasive information, that is, effective confidence clues, at every critical decision moment on the information platform that users trust.

Effective confidence cues can help brands prove to consumers that they can meet their needs, including certification from industry authorities, recognition from opinion leaders, and even the brand's determination to commit to user experience. Showing these confidence cues can help users increase their trust in the brand, raise their expectations of the brand, effectively fill the confidence gap, and facilitate purchase decisions.

In addition to the information itself, the channel through which the information is transmitted is also crucial . Consumers will trust brand information learned on platforms they trust more and transfer this trust to the brand, thus generating stronger confidence in the brand.

The study found that among different information channels, Google Search can provide the most powerful and reliable information clues. At the same time, many consumers also said that creator videos on YouTube can effectively inspire their confidence, shorten the consideration cycle and accelerate purchase decisions.

For more global consumer trends, please scan the QR code to visit the Think with Google Chinese site to learn about first-hand consumer surveys in 11 markets and 15 overseas product categories, providing brands with more valuable market insights and decision-making basis.

AI is becoming the “standard configuration” for operations

AI-enabled technical means are becoming the "standard configuration" for cross-border operations as another key to effectively fill the "confidence gap" of consumers and gain mental dividends!

Every day, 15% of searches on Google are for new keywords, which means that the needs of global users are becoming more diverse and difficult to predict . For marketers , it is impossible to analyze and predict consumer behavior in real time and design the most effective marketing strategy based on human power alone. The only way to make these predictive decisions is to rely on AI-enabled marketing to ensure that ads convey the right message to the right user at the right time. Let's take a closer look at two main scenarios where AI-enabled marketing solutions help companies achieve their business goals:

First, upgrade marketing strategies to achieve breakthrough growth

According to the changes in the relationship between consumers and brands, the current marketing and media strategies have changed. In addition to the low-price strategy not being a way to find high-value users, as the categories of enterprises going overseas are diversified, the cost of conversion is also increasing. It is difficult to continuously obtain incremental demand by capturing existing demand at a low price. At this time, sellers need to shift from precision marketing to predictive marketing and actively create incremental demand . What should be done specifically?

1. Focus on both short-term sales and long-term branding, and start building connections with users during the user exploration and shopping stage. Sellers cannot only look at the conversion of users at the bottom of the marketing funnel during the conversion stage, as this will only reach a small number of market audiences. Instead, they must start "planting grass" during the user exploration period . This requires sellers to find similar groups based on existing user stratification and brand awareness, and further explore what appeals can be used to impress them. To achieve this goal, in addition to conducting in-depth research on user groups , it is also possible to combine brand data with AI-enabled technology to capture audience groups through signals.

2. Start omni-channel marketing, pay attention to video ads, and impress them with good ideas. The consumer conversion process is becoming more and more complicated. The weight of the video in the "grass planting period" is very heavy, so sellers can use video channels to present suitable creative materials to high-value users. YouTube platform has many users and high stickiness; rich product type resources, diversified media delivery; covering the entire link, meeting the growth needs of each stage and can be measured. At present, a large number of Chinese sellers have skillfully applied the YouTube platform VAC+VRC combination to expand more users who are not in the existing funnel, combining short-term conversion with long-term, and achieving breakthrough growth .

Second, break through the traffic thinking and upgrade the profit model

Due to changes in the external environment, cross-border sellers are facing growth and profitability issues. AI-enabled marketing solutions have three major benefits:

Efficient achievement of goals : Marketing objectives can be directly aligned with business goals, thereby helping companies achieve goals such as launching new products and entering new markets more quickly.

Fair competition : AI's powerful and comprehensive data and operational capabilities can enable companies to reduce their reliance on manual experience, return to the essence of business, and enable small teams and new companies to have considerable competitiveness.

Value orientation : Marketers will transform from executors to core roles participating in corporate profit planning, change traditional marketing ideas, and truly be profit-oriented to create profits for the company.

AI-enabled marketing is an effective growth strategy. How can AI fully exert its potential, understand and serve the business goals of the enterprise, and lock in high-value users? This requires sellers to have a clear breakdown of their own business goals, analyze existing data, and accurately assign values; then use the processed data as a guiding signal and send it back to the AI ​​algorithm for learning, training, and improving the prediction ability for high-value users.

In AI-enabled marketing solutions, sellers can set different conversion goals for their business. The following are the four most common conversion value goals. Overseas companies need to pay attention not only to conversion cost/sales volume, net profit of a single product, and maximizing profit for each product, but also to pay more attention to user lifetime value (LTV) to achieve stable growth in corporate profits.

Building a strong first-party data foundation can prepare data for AI-enabled marketing. With AI empowerment, advertising becomes more automated, and first-party data plays a key role in aligning business goals and optimizing advertising KPIs. When collecting and preparing data, marketers should have a comprehensive plan based on business goals and consider the data usage scenarios and overall marketing KPIs from the beginning.

Google AI-enabled marketing solutions have become a powerful growth engine for companies going global. While enabling companies to break through their circle to find high-value new customers and maximize user value, they also help sellers break through traffic bottlenecks and achieve value-driven profitability and growth.

Summarizing the cross-border development trend, whether it is the continued penetration of AI technology changes into cross-border e-commerce or the changes in global consumer shopping concepts, it means that Chinese global brands are ushering in a new round of growth opportunities. The 2023 Google Marketing Live conference is themed "AI empowers marketing and wins mental dividends" , bringing global consumer insights and product solution updates.

Click on the link:

https://thinkwithgoogle.googlecnapps.cn/event/google-marketing-live-2023/home?utm_source=kol&utm_medium=ye&utm_campaign=gml2023

Visit the event homepage to view more exciting content and obtain the latest " BrandZ China Global Brands 2023" report and complete list .