From 0 to 3.1 billion, it only took one year for the independent station dark horse seller

Previous forecast data showed that the number of independent website sellers in China will exceed 500,000 in the next three years.

Since the Amazon ban in 2021, many cross-border e-commerce sellers have deeply realized that independent sites can save lives at critical moments. Since then, there has been a trend of building independent sites in the cross-border circle. This year, Amazon's delivery fees, storage fees and other costs have risen sharply, which has accelerated this speed. Independent sites have become a new battlefield for cross-border e-commerce sellers to go overseas.

In this process, some companies have achieved billions of revenue in a very short period of time through their own technological advantages. LeXiang Group is one of them. It only started to deploy cross-border e-commerce in the fourth quarter of 2021, but in just one year, its revenue soared from "0" to "3.1 billion", accounting for more than 80% of its total revenue.

Moreover, the market it is targeting is not Europe and the United States, where sellers gather, but Southeast Asia, which is criticized for its low average order value, difficult logistics and high costs. Through TikTok, LeXiang Group has been exporting products crazily in Southeast Asia, selling 2.79 million products last year, equivalent to more than 7,600 products a day.

Southeast Asia has always been known as the “blue ocean”, but unlike Europe and the United States, which have produced many big sellers, apart from Jihong Holdings, it is rare to hear of any cross-border sellers in Southeast Asia achieving good results. At the same time, whenever this market is mentioned, sellers always complain: “It’s too difficult to do.” The success of LeXiang Group at least proves that the market potential in Southeast Asia exists.

In fact, data also shows that the Southeast Asian e-commerce market is experiencing rapid growth. The "2021 Southeast Asia Internet Economy Report" jointly released by Google, Temasek and Bain predicts that by 2025, the scale of Southeast Asia's e-commerce economy is expected to exceed US$230 billion.

In addition to the layout in Lazada and Shopee, TikTok, a "newcomer" in the Southeast Asian e-commerce field, has also provided Chinese sellers with new ideas for going overseas.

From 0 to 3.1 billion in 1 year, dark horse sellers come

According to the financial report released by LeXiang Group in 2022, its overseas e-commerce business achieved revenue of HK$3.105 billion (about RMB 2.724 billion) last year, gross profit of HK$188 million (about RMB 165 million), and sold more than 2.79 million items (more than 7,600 items sold every day).

LeXiang Group has three main businesses: algorithm marketing business, overseas e-commerce business, and cultural business. The financial report shows that LeXiang Group's annual operating income in 2022 was HK$3.725 billion. This means that overseas e-commerce business accounts for as much as 83.34% of LeXiang Group's total revenue.

Last year, due to the impact of inflation, overseas residents' consumption sentiment was not high. Judging from the financial reports released by listed major sellers in recent days, most of them have fallen into the dilemma of increasing revenue but not profits, and some have even suffered losses. On the contrary, LeXiang Group has ushered in a "second spring" due to its overseas e-commerce business. Due to the substantial growth in revenue from overseas e-commerce business, it has achieved the largest annual growth since its listing (a year-on-year increase of 166.84%), and its revenue has been sent from HK$1.396 billion in the previous year to a new high of HK$3.724 billion.

LeXiang Group mainly conducts overseas e-commerce business through its own independent website MARTOP, with TikTok as its marketing channel. Its main sales products are 3C electronic consumer products , and its main customer groups are electronic consumer product sellers ( B-end small and medium-sized customers) and electronic consumer product consumers .  

Surprisingly, this part of its business was only launched in the fourth quarter of 2021, but it took only more than a year to grow from 0 to HK$3.1 billion. The speed of development is amazing, and it is definitely a dark horse for independent stations.

The unstoppable growth of overseas business is closely related to its genes. "Traffic diversion" has always been the number one problem faced by independent website sellers going overseas, but this obstacle that has troubled many independent website sellers is not a problem for LeXiang Group.

LeXiang Group was successfully listed on the Hong Kong Stock Exchange in 2020 and is known as the "first stock in algorithmic marketing". Over the years, it has helped customers accurately reach consumers and facilitate transactions on Internet platforms such as WeChat and Douyin, and has accumulated rich experience in algorithmic models, labels and technologies. In 2022, in the short video e-commerce marketing business, it helped customers sell goods worth HK$721 million on the Douyin platform.

TikTok is the overseas twin brother of Douyin, with more than 1 billion monthly active users. Therefore, when LeXiang Group applied the big data algorithm technology accumulated over many years in China to it, it quickly received a lot of positive feedback.

Unlike the traditional e-commerce model where users search for products on e-commerce platforms based on their own needs, i.e. "people looking for goods", LeXiang Group, which has inherent technical advantages, can accurately match TikTok's traffic by formulating algorithm strategies to achieve "products looking for people", so the conversion rate is very high. Data shows that the proportion of MARTOP purchases converted from TikTok to independent sites can reach up to 10%.

The general conversion rate of independent sites is in the range of 0.3%~0.8%. If you can achieve 1%~3%, you are already considered a relatively successful independent site seller. You can imagine how high its conversion rate is.

MARTOP's target market is Southeast Asia, an incremental track, and the underlying logic is "traffic + supply chain = GMV" . When deploying overseas markets, in addition to having mature and advanced recommendation algorithms as traffic acquisition tools , it also reserves a stable supply chain and integrates a relatively mature supply chain. Therefore, when MARTOP is in Southeast Asia, it is a complete dimensionality reduction attack.

"Different content and products for different people" is a summary of LeXiang Group's algorithm marketing business. The business is supported by its strong technology gene.

70% of LeXiang Group’s employees are technical, R&D and operations personnel. It has developed 190 sets of data models for different products and media, and the number of data labels used in the algorithm models has reached 2,823.

Not only that, it has also invested heavily in research and development to continue to build its own technological barriers. As of 2022, it has invested a total of HK$52.77 million in research and development. Among them, the research and development expenses of overseas e-commerce product sales business are HK$29.65 million, accounting for about 56.19% of the total research and development expenses . These expenses are mainly used for overseas market promotion data procurement and data model establishment.

LeXiang Group said that these data models are expected to play an important role in the market promotion of overseas e-commerce product sales business in the future. As the data models are improved, they will be used in the construction of overseas e-commerce product sales platforms, playing a huge role in product interest recommendations and improving user experience.

Southeast Asia is one of the fastest-growing e-commerce regions in the world. The favorable macroeconomic environment and multiple positive market factors provide a rare historical opportunity for technology companies with data algorithm capabilities to go abroad and expand their overseas business .

Especially since TikTok's commercialization is in its infancy and e-commerce is in the blue ocean market stage, compared with the domestic short video e-commerce market worth trillions of RMB, Southeast Asia has huge room for future growth.

Faced with huge market opportunities, LeXiang Group, which has technological support, has also shown its ambitions: " Focus on the vertical field of electronic consumer goods, deeply cultivate the Southeast Asian market, and strive to become the largest e-commerce platform in the vertical field of electronic consumer goods in Southeast Asia in the next five years . "

In fact, it is not just LeXiang Group. As the cross-border e-commerce industry enters the deep water zone, more and more cross-border e-commerce sellers have begun to deploy independent sites. At the same time, the downward pressure on the economy seems to be urging them to speed up the pace of independent site deployment. Because last year, when the demand for recruitment in the cross-border circle shrank greatly, the demand for independent site operation positions, contrary to the norm, skyrocketed. Even today, the recruitment popularity of this position is still there.

Recruitment returns, demand for operations positions surges 131 times

A seller recently revealed on a forum: "This year, sellers who run independent websites are very active. They have recruited a bunch of new employees and are very busy."

In fact, some data show that the demand for independent website sellers to recruit operators has exploded last year. As we all know, due to the impact of inflation, many sellers did not perform well last year, and this impact was transmitted to the recruitment side, and the number of recruitments for Amazon operations and other positions decreased sharply. But surprisingly, in the cold winter of the recruitment market, the demand for independent website operations has not decreased but increased.

According to Zhiyouji data, in 2022, the market demand for independent station operations has soared by 13,100% compared to 2021. In terms of recruitment demand, Shenzhen, a gathering place for cross-border e-commerce sellers, ranks first, accounting for 15.1%, followed by Guangzhou (7.5%) and Shanghai (4.5%). In addition, the majority of people have a college degree, accounting for 59.0%, and the majority have 1-3 years of experience, accounting for 51.3%.

However, affected by the overall environment, the overall salary and benefits of independent station operations experienced a decline in 2022 (a decrease of 6%). However, the situation in Shenzhen, where the recruitment demand is the largest, is different. Amid a wave of salary cuts, the salary and benefits of independent station operations in the region have increased by 51% compared with the same period in 2021.

The top sellers obviously realize the importance of independent sites more than other sellers. In 2021, the combined annual revenue of the three independent sites of Anker Innovations, Cross-border Communication, and Zebao exceeded 1 billion yuan. Judging from the financial reports recently released, their independent site business has been further developed in 2022 under the continuous strengthening of construction.

Anker Innovations' six independent sites (Anker/ eufy/ soundcore/ Nebula/ AnkerMake/ AnkerWork) alone achieved revenue of 676 million yuan, a year-on-year increase of 71.75%. As its main sales channel, Amazon's revenue in 2022 only increased by 16.01% year-on-year.

The rapid growth means that the layout is deepening. Currently, among the six operation positions posted by Anker Innovations on a recruitment website, two are related to independent websites, one is "Brand Independent Website Operation Manager" and the other is "Brand Independent Website Operation Specialist". Amazon, which brings most of its revenue, also only occupies two seats.

Of course, the salaries offered for these two important positions are not low. The salary for "Brand Independent Station Operation Manager" is 25-35k.14, and requires five years or more of e-commerce operation experience, three years or more of team management experience, etc.; the salary for "Brand Independent Station Operation Specialist" is 15-22k.14, and requires strong communication and coordination skills, and the ability to learn the operation methods of various platforms, etc.

From the above, we can see that although independent sites are quite challenging for many cross-border e-commerce sellers, they still choose to speed up their layout for many reasons. Moreover, SHEIN's success has also given sellers a lot of motivation. Among the independent site sellers following SHEIN, there are many who have been favored by capital, such as Newme, which has received three rounds of financing in less than two years from its establishment in November 2020 to February 2022.

At present, both the personal wishes of cross-border e-commerce sellers and the policy level are inclined towards cross-border e-commerce independent sites. For example, Hunan Province recently issued a document to encourage enterprises to build their own cross-border e-commerce independent sites. For cross-border e-commerce companies whose annual transaction volume reaches 100 million yuan and 1 billion yuan for the first time, they will be given a maximum reward of 200,000 yuan and 1 million yuan respectively.

Under such circumstances, the market size of cross-border e-commerce independent stations has expanded rapidly. The "Research on China's Cross-border E-commerce Independent Stations" report released by the Zhejiang E-commerce Promotion Association shows that the market size of China's cross-border e-commerce independent stations was only 0.2 trillion yuan in 2016, but it rose to 0.8 trillion yuan in 2020, a four-fold increase in four years.

Not only that, according to estimates by TouBao Research Institute, the market size of China's cross-border e-commerce independent stations is expected to reach 5.5 trillion yuan in 2025, and its market share will increase from 25% in 2020 to 41%.

As the market size expands, the number of independent sites has also experienced explosive growth. According to data from the Ministry of Commerce in July 2021, the number of independent cross-border sites in China has exceeded 200,000. Shoplus predicts that the number of independent site sellers in China will exceed 500,000 in the next three years.

Independent sites have obviously become a track that the capital market and cross-border e-commerce sellers focus on. In the future, as the costs of cross-border e-commerce platforms such as Amazon and eBay continue to rise, sellers' profits will be further compressed, the independent site track will become more lively, and more Chinese brands will emerge overseas.

By then, Southeast Asia, which has a "blue ocean" halo and huge potential, will definitely bring more imagination space to cross-border e-commerce independent site sellers.

Young Southeast Asia, few independent websites

The Southeast Asia Internet Economy Report 2021 jointly released by Google, Temasek and Bain shows that the scale of Southeast Asia's e-commerce economy will reach US$120 billion in 2021, with an average annual compound growth rate of more than 60%. It is expected that by 2025, the scale of Southeast Asia's e-commerce economy is expected to exceed US$230 billion.

In 2022, when the global markets are relatively sluggish, the growth rate of Southeast Asian e-commerce GMV can still be as high as 16%. Previously, a forecast data from Facebook and Bain also showed that by the end of 2020, the number of online shoppers in Southeast Asia will exceed 300 million, a full 5 years ahead of the original forecast (end of 2025).

The Southeast Asian e-commerce market is growing strongly and is therefore generally considered to be the next blue ocean market. Some people even compare it to China ten years ago, where the soil is fertile and full of hope.

For many years, this market has been dominated by platforms such as Shopee and Lazada. Shopee, supported by Tencent, and Lazada, supported by Alibaba, are representatives of cross-border e-commerce platforms in Southeast Asia, occupying most of the e-commerce market in Southeast Asia.

Now Alibaba not only let Jiang Fan take over Lazada, but also continued to invest heavily. Last year, it just invested US$1.6 billion in Lazada in three installments (US$378.25 million in May 2022, US$912.5 million in August 2022, and US$342.5 million in December 2022). Recently, there was news that according to the documents submitted by Lazada to the Accounting and Corporate Regulatory Authority (ACRA) of Singapore, it received another US$352.9 million in investment from Alibaba.

The frequent actions of giants once again confirm the development potential of the Southeast Asian market.

Unlike the "lively" third-party cross-border e-commerce platforms , independent websites seem a bit "deserted". Currently, only Jihong Co., Ltd. is famous for its independent website. Its model is similar to that of LeXiang Group. It mainly uses foreign social networking platforms such as Facebook, TikTok, Google, Line, YouTube, Instagram, etc. to accurately push self-built product single-page advertisements for online B2C sales.

Judging from the revenue data, Jihong shares' model is successful. According to its financial report released not long ago, in 2022, the company's cross-border social e-commerce business achieved operating income of 3.106 billion yuan, a year-on-year increase of 10%, and realized a net profit attributable to the parent of 197 million yuan, a year-on-year increase of 14.53% .

In addition, Southeast Asia is also a very important growth market for the unicorn SHEIN. It has opened independent brand websites in Singapore, Thailand, Vietnam and the Philippines. At the same time, it has also moved its headquarters to Singapore, using it as a center to radiate the entire Southeast Asian market and further promote its global layout.

As SHEIN conquers the market, its APP has gradually occupied an important position in the hearts of Southeast Asian consumers. According to statistics from Data.ai, in the first 11 months of 2022, SHEIN's active user volume ranked third and fifth among many shopping apps in the Philippines and Malaysia, respectively. In Thailand, SHEIN's downloads ranked fourth, after Shopee and Lazada.

It is worth noting that SHEIN has also moved its featured offline pop-up stores to Southeast Asia. Last year, it launched several pop-up stores in Bangkok, Thailand, Manila, Philippines and Singapore.

A research report by Ebang Think Tank shows that among cross-border e-commerce companies, 78.87% of cross-border companies in Southeast Asia have opened Shopee stores, and only 3.09% of companies have opened independent websites.

However, as the penetration rate of social media continues to rise, the proportion of Southeast Asian consumers who shop through social media platforms and independent websites is also very large. Data shows that the proportion of Southeast Asian consumers using e-commerce platforms for shopping is only 50%, which is lower than that in the European and American markets.

Therefore, in this young market full of development potential, independent websites still have a lot of room for development. Moreover, TOPMART COO Chen Liang revealed that currently on third-party platforms, nearly half of the people choose to pay on delivery, while on independent websites or social e-commerce, the proportion of cash on delivery is as high as 90%.

For independent website sellers, traffic generation is often the number one problem. Now, TikTok, a traffic treasure trove, is gaining momentum in the southeast, with more than 200 million monthly active users, and more than 100 million monthly active users in Indonesia alone. It may collide with some different sparks when combined with independent websites. It is not necessary to achieve GMV growth through algorithmic marketing like LeXiang Group. Live broadcasting, Internet celebrity marketing, etc. are all ways that can be learned.

Investor Shi Lulei once said: "If a company wants to go overseas, it must go to Southeast Asia. It has nothing to do with whether you are a giant or a small or medium-sized entrepreneur. If you can't take over the Southeast Asian market, it will be difficult for a company to become a large company with a global vision, especially in the field of e-commerce."

When DTC brands go overseas, Southeast Asia is an unavoidable market.

LeXiang Group

TikTok