European station becomes "abandoned child"? Sellers repeatedly cut product lines to "save their lives"

VAT, EPR, UKCA , tariffs, shipping costs, and rising delivery fees ... If we were to talk about where the most difficult times for cross-border sellers have been in the past year, we would have to mention the European site.

——"We will no longer have a European site."

——"Use the money earned in the United States to fill the gap in Europe."

——"The glory of the European station is gone forever."

——"What? Is there anyone who hasn't escaped yet?"

…

In the past year, almost every time I mentioned the European site, there were sellers complaining. But just two years ago, the European e-commerce market was still a "hot commodity", and cross-border sellers not only expanded into the North American market, but also set foot on this fertile e-commerce land. But not long after, this fertile land became "barren", and many sellers left and moved to other places.

To protect profits on the European site, sellers keep cutting product lines

It’s the end of the year, and it’s time to show off your year-end bonus and make others drool. However, the editor found that fewer cross-border people showed off their year-end bonuses this year, especially those who run European sites. Could it be that they are making a fortune in silence? The truth may be the opposite.

Last week, an Amazon European site operator posted his year-end report card on a social platform and said: I really tried my best .

The operator said that after working in this position for 3 years, his income in 2022 has returned directly to when he first entered the industry. From the year-end summary he posted, it can be seen that in the past year, his commission was almost 0, while in the first two years, the commission increased month by month, and the highest monthly profit of the store he managed reached 3 million pounds. However, in the whole year of 2022, although sales increased, the overall income did not increase significantly. Coupled with the increase in various costs, the profit plummeted every month, and some months were even in a loss state.

In the past year, many sellers have complained to Yien.com about their problems in the European market.

Some sellers said that the most common thing their European stores do in 2022 is to cut products . A lot of products can be cut almost every month.

One seller said that too many products were eliminated in the European market last year, not because of a change in trends, but simply because some categories really had no customers. In order to reduce unnecessary losses and maintain profits, some products with average revenue could only be cut after weighing various considerations.

As far as the European e-commerce market in 2022 is concerned, many products are forced to go downhill. Products that had been selling very well in the past few years are now declining this year.

Another seller who sells in multiple categories said that after years of operation, the various supply links of some products have gradually matured, but because demand began to be limited, they had to give up the products. And from many cooperating factories, it is also known that sellers of similar products are also reducing the order volume. As far as this seller is concerned, many of the cooperating factories in 2022 are suffering. The lucky ones can reduce the scale and continue to operate, while the unlucky ones will directly go bankrupt and close down, and have to take out loans to pay employees' wages .

When we interviewed some sellers who have both North American and European sites, they said that they were using the money earned from the North American market to maintain operations on the European site, and some sellers even directly closed their European stores.

UK and Germany's e-commerce retail sales plummet, and a wave of bankruptcies breaks out

As the largest e-commerce market in Europe, cross-border sellers who have focused on the UK and German markets must have had an hard time in the past year.

In 2022, affected by crises such as inflation and soaring energy prices, the UK consumer market has been unprecedentedly sluggish. Cross-border sellers have suffered various difficulties :

Inflation remains high . According to the UK Office for National Statistics, the UK inflation rate fell from a 41-year high to 10.7% in November. Although lower than 11.1% in October, the inflation level is still at a high level. For the British, high prices have suppressed their desire to consume, and sellers' sales have also suffered a heavy blow.

Frequent strikes affect consumer sentiment . Inflation is still the main reason why British people are dissatisfied with their wages. The frequent strikes in the past year have had a negative impact on consumer morale.

Strikes and extreme weather lead to delays in product delivery . Tens of thousands of employees in the UK's railway, maritime and transportation systems went on strike, and coupled with the impact of snow and freezing weather, UK e-commerce deliveries faced large-scale delays. Due to concerns about delivery timeliness, consumers turned to physical stores for consumption, and even online purchases were returned due to delays.

Soaring interest rates and slowing demand have hit the market hard . According to the UK Insolvency Service , about 17,145 stores closed in the UK offline retail market in 2022 , making it the year with the most closures in the past five years . In November alone , the number of bankrupt companies in the UK reached 2,029, an increase of 21% over the same period in 2021. Online furniture retailer Made.com and fashion brands Joules and M&Co were among the many companies that registered for bankruptcy in November.

In fact, it's not just the UK. Germany, another major e-commerce market in Europe , has also been hit hard in the past year.

According to estimates by the German Federal Statistical Office ( Destatis), German retail sales in 2022 will be 0.3% lower than in 2021. Among them , online retail sales fell sharply in 2022, down 8.1% from 2021 .

Even Black Friday couldn't save the German e-commerce market. In October and November last year, sales of German online retailers fell by 16.8% compared with the same period in 2021 , marking the first decline since the same period in 2014 .

September is traditionally the peak holiday season in Europe and the United States , and e-commerce sellers’ sales will soar, but sales are continuing to decline . Obviously, the peak season is really not "booming".

Inflationary pressures continue, but a large number of blue ocean markets in Europe are waiting to explode

In the past year, the UK and German markets performed poorly, but as for the overall European market, is 2023 still worth looking forward to?

New research from KPMG suggests that 61% of Brits plan to cut back on their non-essential spending by 2023 .

Currently, across markets across Europe, high basic living costs (food, energy, fuel, mortgage or rent) and concerns that these costs will continue to rise will lead consumers to continue to cut spending.

Under such realistic concerns , people 's spending power and desire on commodities have become limited. However, " low price " and "cost-effectiveness" are still their primary considerations when shopping in 2023.

However, Europe's e-commerce market still has huge development potential.

As markets such as North America are becoming saturated, the second stop for overseas expansion - Europe is bound to become the next red ocean market. In addition to the UK and Germany, the cross-border e-commerce potential in markets such as Italy, Spain, and Switzerland is also being slowly released, and is expected to bring more incremental possibilities for cross-border sellers.

Even e-commerce giants are betting on this red ocean market. In the past year, Amazon has increased its investment in the European market, AliExpress has expanded its European business territory, and even local e-commerce companies in European countries are expanding their markets to other European countries.

For Spain, the 13th largest e-commerce market in the world , Statista data shows that in 2022 , Spain's Internet penetration rate is 93%, and the proportion of online shopping among netizens is 68%. Last November, Alibaba launched the e-commerce platform Miravia in Spain , and TikTok Shop, which just launched in the United States, is also planning a Spanish site.

In Europe, although the UK and German markets performed slightly worse last year, due to the high penetration rate of online shopping, the overall data of this market is still very strong.

Data shows that in Europe, Germany ranks first in terms of the number of online shoppers, with 64.6 million users and a penetration rate of 81% . The number of online shoppers in the UK and France is 55.2 million and 48.5 million respectively , followed by Italy , with 37 million online shoppers .

In addition to the relatively mature markets mentioned above, emerging markets such as Belgium, Czech Republic, Hungary, Switzerland, Poland, etc. are also making efforts. This is also the reason why some sellers expressed confidence in the European consumer market when asked by En.com "Why not just abandon the European site?"

Although various crises have put sellers in Europe under great pressure in the past year and various data have performed poorly, Europe, as a place where cross-border red ocean and blue ocean markets are concentrated, is still fertile ground for sellers to cultivate.

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