The average order value is US$200! Shenzhen sellers have opened up a new platform in half a year

In the cross-border e-commerce industry, multi-channel layout has become the main business strategy for sellers. However, the increase in channels means more personnel and capital investment, and the positioning and target market of each platform are different. Sellers often have to try and error several times before they can determine the right platform.

In the second half of last year, Shenzhen Tugao Intelligent entered the Allegro platform and quickly opened up the market with high-priced products in the 3C category. Observing the considerable sales profits, the platform's consumer-friendly and high natural review rate, the seller decided to take advantage of the situation and increase investment. "The reason why we are confident in cultivating this platform is that its profits are controllable and considerable. In this case, there are many things we can do."

Targeting the leading platforms, HOTWAV opens up new markets

The Pearl River Delta is home to many manufacturing companies, and Shenzhen Tugao Intelligent Technology Co., Ltd. is one of them. Tugao Intelligent Technology is an integrated industrial and trade enterprise with more than ten years of OEM/ODM business experience. Its products are mainly rugged smartphones, fashion smartphones, tablets and rugged tablets. For development considerations, the company created its own brand HOTWAV and made it a focus of long-term strategic planning.

In 2018, Tugao Intelligence began to get involved in cross-border e-commerce. Two years ago, the company acquired a cross-border team to operate HOTWAV. After that, the brand was deployed online and focused on the European and American markets. Currently, HOTWAV has entered multiple e-commerce platforms such as Amazon, and the company's own brand business accounts for 40%.

As high-priced electronic products, mobile phones and tablets have certain sales thresholds. The optional platform channels are not as many as those for standard products, and the requirements for triple-proof products are even higher.

Morris, sales director of HOTWAV, said: "The three-proof mobile phone is a sub-category of mobile phones. Its features are drop-proof, dust-proof and waterproof. The users are mainly outdoor enthusiasts or people who work in relatively harsh environments such as agriculture, forestry, animal husbandry and fishery. In the global market, Europe and the United States have the largest number of such people, so our three-proof mobile phones and tablets are relatively popular in the entire European and American markets."

In Europe, HOTWAV's strategy is to deepen its presence in key markets and deploy local leading e-commerce platforms. The population and consumption habits of the Polish market are highly compatible with its brands and products, and Allegro is the largest local shopping platform, so it naturally became the first choice for entry.

HOTWAV began preparations in May 2022 and officially entered Allegro in August. The product price is about 1,000 zlotys (about 225 US dollars). As a high-value brand, HOTWAV started from scratch and gradually exposed its brand penetration on Allegro. Its sales have reached 500,000 US dollars, and the growth trend is optimistic. "We are very confident that HOTWAV will achieve certain results on this platform." Morris said.

The profit is considerable, sellers should cultivate Allegro

Previously, HOTWAV was sold on multiple e-commerce platforms, but after operating in Allegro for half a year, it decided to increase investment in this channel. Morris mentioned three reasons:

"First of all, in terms of profit, the platform has considerable profits, at least in the mobile phone category. Second, the platform's advertising formats are rich and intelligent. We like this model and use almost all of the platform's advertising formats. Third, the platform is very consumer-friendly. When we first started operating, I was worried about how to get reviews because we were new to this market, and good reviews have a great impact on store and product sales. In fact, we received a lot of organic reviews a month after the launch. These consumers are more willing to leave reviews as long as your products are good enough."

Consumer friendliness is not only reflected in the high rate of natural reviews. Compared with other platforms, the return rate of this platform is also much lower, which makes Morris very pleased.

"We are more confident in Allegro because its profits are controllable and considerable. For example, the return rate is not too high, and the customers are friendly and communicative. With all these factors added up, the profit margin we initially subjectively determined and the final result will not be too different. But like some other platforms, the return rate is relatively high, and most of the profits are eaten up by returns."

Platform support is also a plus. Morris said frankly that the staff who work with him are professional and responsible. They hold meetings every week to analyze and solve problems encountered and communicate the operation plan for the next cycle. "At least among the many platforms I have come into contact with, the service of the platform's docking staff ranks first."

HOTWAV has also accumulated a lot of experience in quickly opening up the market for high-priced products. For example, high-priced products need to have high exposure and cover enough people to build a basic data model. This part of the investment in the early stage can be magnified, and then the model can be continuously optimized to find the target customer group.

In 2023, HOTWAV will increase its investment in the Allegro platform, increase advertising budget on the site to enrich advertising formats, and do more marketing promotion outside the site. Based on previous performance, it has set the annual single-store sales target at US$1.5 million.

Last year, high inflation hit the European and American markets. HOTWAV responded by increasing product added value, adjusting prices, optimizing costs, etc. One of these measures was to "reduce" logistics costs.

Logistics costs dropped by 20%, and sellers reused official warehouses

In the sales of high-priced products, delivery experience is a very important part. When HOTWAV first joined Allegro, it shipped goods through third-party warehouses and logistics, which led to three problems: poor timeliness, more manual operations, and poor customer experience, which significantly affected brand sales. Therefore, when it was learned that the platform had an official warehouse, HOTWAV decisively gave up its own delivery account and switched to an official warehouse account.

Morris said that the company's team has many years of experience in cross-border e-commerce and is very clear that using official warehouses is a more cost-effective option in terms of efficiency, labor costs and platform support, especially for their team that pursues efficiency.

The official warehouse service has effectively improved its operating conditions. HOTWAV has saved manpower and the delivery time is much faster. Compared with one or two channels for self-delivery, the official warehouse provides consumers with more logistics channels to choose from, which significantly improves the shopping experience. In addition, the platform also supports official warehouse sellers in two ways. First, if there are logistics problems in the conversation between consumers and sellers, the platform will intervene to communicate and solve them; second, the official warehouse manager will handle the delivery, warehousing, shipment, return and other issues throughout the process, and the seller's logistics and cargo status are visible and controllable.

Morris highly approves of the complete supporting services of the official warehouse . Currently, all HOTWAV orders are shipped from the official warehouse, which has optimized its logistics costs by 20%-30%.

It is understood that Allegro's official warehouse One Fulfillment can provide sellers with services such as cargo storage, sorting and packaging, delivery, answering customers' order fulfillment-related questions, and return processing. Sellers only need to focus on sales, product selection and other operational links, and can also obtain the Smart! Free Shipping Program badge to improve conversion rates.

Allegro recently launched a promotion. Before March 31, 2023, sellers who register for an account with the official warehouse One Fulfillment can enjoy 30 days of free service fees, 1,000 ranking promotions and a 25% commission discount.

The official warehouse also launched a plan for small and low-priced products. Before April 30, 2023, sellers can participate in the promotional price. Products with low unit prices (total price not exceeding 25 zlotys) and small products (not exceeding 15 liters) can enjoy a discount of up to 50% when using the official warehouse.

Click "Read Original Text" to apply to join Allegro, and registering for the official warehouse can also help sales!

Cross-border