Earning 2 billion a year! He seizes the first opportunity in emerging markets

In 2022, SHEIN's revenue in Brazil reached 8 billion reais (about 10.8 billion yuan), a year-on-year increase of 300%. Its explosive growth has put more sellers on the agenda to expand into Latin America.

As the saying goes: "Before the troops move, the food and fodder must be sent ahead." Logistics is the "advance food and fodder" for cross-border e-commerce sellers to conquer overseas markets. In the past three years, Anjun Logistics has already solved the logistics problems from China to Latin America and has figured out the consumption habits of local residents.

Latin American market is improving, follow the giants to enter the market early

Latin American e-commerce sales will reach $125 billion in 2022. According to the eMarketer report, Latin America and the Caribbean will be the second most promising region for global e-commerce growth in 2022, with an expected growth of 20.4%, second only to Southeast Asia's 20.6%.

The Latin American e-commerce market is booming. Brazil, as the largest country in Latin America, accounts for more than one-third of the market share. In 2022, the total e-commerce sales reached 169.6 billion reais (about 227 billion yuan), a year-on-year increase of 5%.

In recent years, giants have focused their attention on this blue ocean market. SHEIN, Shopee, TikTok, and Kwai have all gathered in Brazil. In addition, some independent website sellers are also actively making plans, and the Brazilian e-commerce market is showing a flourishing state.

In fact, Chinese products have always been very popular in Brazil, and most of the offline sales products come from China. Fang Ke, CEO of Anjun Logistics, believes that the reason is that Brazil 's industrial product manufacturing capacity is not strong, and its per capita consumption is only at the level of developing countries ( GDP per capita is about US$7,500), so it is easy for Chinese products with good quality and low price to open up the local market.

On the other hand, Brazil is a country with high tax rates, but it does not tax products imported from overseas that are priced below $50. At the same time, the black population and the poor in Brazil account for a large proportion, and these groups have weak purchasing power and are very sensitive to prices, so local residents are more inclined to buy cheap products. For example, the popular clothing and 3C products in the local area are generally priced at $15-25, while the prices of the latter are mostly between $25-35. In addition, locals prefer to buy daily necessities, clothing, daily necessities, etc. through online channels.

However, the popularity of low-priced products does not mean that high-quality products have no market in Brazil. Fang Ke said that Brazil is severely polarized, with the average monthly income of local white people reaching 15,000 to 20,000 reais, which is very different from the 3,000 to 5,000 reais of black people. This high-income group has a demand for high-quality products. Therefore, some brand sellers can find a market here. Not only that, Brazilians have a very high acceptance and recognition of new brands, which is one of the reasons why SHEIN has achieved rapid development in the local area.

From the perspective of the global supply chain, Brazil has a vast territory and rich resources, but its manufacturing industry is very weak, which happens to be highly complementary to China. The only urgent problem for both sides is logistics. Fang Ke saw this and made early arrangements in 2019, starting with Brazil and deeply cultivating this vast and promising Latin American market.

Brazil's revenue in 2022 will be 1.8 billion, firing the first shot in the Latin American campaign

Before entering the Latin American market, Anjun's development focus had always been on Europe and the United States. As competition in the European and American markets has become increasingly fierce in recent years, Anjun has made a bold decision: to withdraw from Europe and the United States and open up new battlefields! Looking at major emerging markets around the world, Brazil, with its huge potential for e-commerce growth and lagging logistics services, has naturally become the next stop for Anjun's transformation.

Before Anjun entered the market, the delivery from China to Brazil mainly relied on the postal products of the Universal Postal Union, which took a very long time, 30 to 90 days. At that time, due to the poor delivery time and high tax rates, few Chinese sellers entered this market, and local consumers were more inclined to buy low-priced products under $10 or even one or two dollars when shopping online across borders.

Now, this situation has been completely reversed.

It usually takes 9-14 days for parcels sent from China to reach Brazilian consumers, and 14-18 days for more remote areas in the central and northern regions. The significant improvement in delivery time is inseparable from a "bilateral agreement". In 2019, Anjun became the first Chinese company to sign a bilateral agreement with the Brazilian Post. By integrating air transport from China to Brazil with local delivery, delivery time has been greatly improved, and the rate of lost goods and returns has also been greatly reduced.

The improvement of logistics efficiency has greatly raised the transaction price of cross-border products. The transaction price of cross-border online shopping in Brazil has risen from less than US$10 to US$20-30, and people are more concerned about brands when shopping. Not only that, the shopping categories have also changed from single to diversified. In the past, Brazilians bought more clothing and daily necessities online, but now the purchase categories have expanded to household tools, toys and accessories, etc., and even some high-quality creative products that cannot be bought offline, their first reaction is to buy online.

As of now, Anjun’s market share in Brazil’s small package dedicated line market has reached 40%. In 2022, its revenue in Latin America will be close to 2 billion yuan, of which Brazil will account for 1.8 billion yuan, or more than 95%.

Continuously increasing investment and deepening local services

Anjun 's achievements today did not happen overnight. In Brazil, Anjun has invested a lot of money, manpower and material resources to carry out a series of localization strategic layouts around cross-border parcels and related businesses. After continuous efforts, Anjun's localization layout in Brazil has achieved a series of results:

1. Expand overseas warehouses and build a solid foundation: Nearly 40,000 square meters of overseas warehouses have been built in Brazil , including storage warehouses, consolidation and transportation warehouses, and return processing warehouses. In 2022 alone, Anjun invested 100 million yuan in warehouse construction.

2. Expand the transport fleet and strengthen local freight capacity: A large transport fleet of more than 100 large, medium and small freight vehicles has been established in Sao Paulo and Victoria, Brazil , for local collection and trunk line transportation. This ensures that in the process of local freight transportation dispatch, reasonable arrangements can be made at any time according to one's own schedule.

3. Create high-throughput freight stations and strengthen efficiency ceilings: Many freight stations with a daily processing capacity of more than 10,000 parcels have been established locally , including four in São Paulo's "25th Street" alone.

4. Adding tail-end customer service centers to improve satisfaction: Establishing "Anjun Huts" in Sao Paulo that can cover most of the local area . After customers deliver goods here, Anjun will send them to the warehouse via the trunk line, and it can also be used as a delivery outlet in the future. Currently, 16 such "Anjun Huts" have been built and are constantly expanding.

5. In terms of ports, Anjun has also established its own ground handling company, customs clearance company and bonded warehouse.

Now, Anjun has gradually covered the entire supply chain of China-Brazil cross-border logistics, including domestic collection, air trunk lines and local customs clearance in Brazil, airport ground handling operations, transshipment and delivery, etc. Fang Ke believes that only in this way can all problems be solved in a centralized manner and service quality be guaranteed as much as possible.

It is not difficult to find from Anjun's series of layouts in Brazil that it is different from many cross-border logistics companies. In fact, Anjun's goal is not just to be a logistics company.

Ambition beyond "cross-border logistics"

Anjun Logistics has a clear self-positioning: to be a cross-border supply chain logistics company focusing on Latin America.

Unlike general cross-border logistics companies, cross-border supply chain logistics companies need to master the entire chain of cross-border logistics, rather than just one link in the chain. In this process, whether the company operates alone or participates in multi-party operations, it must ensure that every link has the ability to reach its goal. At the same time, it also requires cross-border logistics companies to go global, including teams and businesses (overseas warehouses, trunk lines, delivery, etc.).

By observing Anjun’s series of layouts in Latin America, it is not difficult to find that everything it has done over the years is moving closer to this goal.

Anjun Logistics CEO

Speaking of Anjun's vision, Fang Ke said: "I hope Anjun can become a cross-border bridge from China to Latin American countries, connecting platforms and merchants on the one hand, and consumers on the other, bringing Chinese products, concepts and values ​​to Latin America."

According to Fang Ke's plan, Anjun will continue along this path in the future, focusing on cross-border e-commerce, focusing on the multiple demands in the supply chain process, and making layouts of production capacity and operational capabilities. Specifically, it will still focus on local e-commerce logistics in Latin America, from port customs clearance, consolidation and warehousing, cargo collection, to logistics network layout and terminal delivery, etc.

Of course, he also knows that the goal cannot be achieved overnight. From the perspective of short-term goals, Anjun's work focus in 2023 will be on two parts: one is to develop port business. Including air process transportation, customs clearance and customs declaration capabilities for port imports and exports. The second is to build more local offline networks. Including collection points, Anjun hut outlets, and trunk transportation capabilities. Previously, these were only deployed in Sao Paulo, and this year they began to expand to multiple cities in southeastern Brazil.

In fact, while deepening its presence in Brazil, Anjun also did not forget to expand its presence in Chile, Colombia, and Peru. At present, it has deployed an operation team and warehouse in Chile, with a processing capacity of more than 10,000 tickets per year. The Colombian and Peruvian parcel lines have also become leaders in the industry.

postscript:

At present, the cross-border logistics industry is ushering in a qualitative leap. With the reconfiguration of global production capacity, the transformation based on serving the global supply chain will change the new ecology of the cross-border logistics industry. Anjun Logistics has seized this opportunity of the times and has become a pioneer in the overseas expansion of Chinese logistics companies while exporting cross-border products and brands.