Sellers become drivers! 4,600 cross-border companies in Shenzhen "disappeared"

There are less than 60 days left until the end of 2022. This year has been an extremely difficult year for cross-border e-commerce sellers. Compared with the beginning of the year, the industry has undergone many changes. The market environment has quickly turned "cold" from being in full swing, and the scale of enterprises has shrunk sharply. Many big sellers that were once out of reach for other sellers are also in turmoil. Looking back, many companies have disappeared in this cold winter.

As a large number of companies went bankrupt, the demand for related job recruitment also shrank significantly, and wages fell significantly. In order to avoid the cold, some people chose to change jobs or careers. The sellers who stayed at the table were struggling to move forward and hoped to turn the tide this quarter. However, according to the forecast data disclosed by Amazon recently, sales in the fourth quarter were weak and revenue did not meet expectations, so many sellers' hopes may be dashed.

However, unlike the sharp contraction of sellers, some Internet giants are accelerating their layout in the field of cross-border e-commerce. For example, Microsoft's cross-border e-commerce project, which was still in internal testing in early April, has recently been recruiting investors. While ByteDance continues to increase its investment in TikTok e-commerce, it also launched the fast fashion cross-border independent station IfYooou at the end of September. Temu, which has been widely discussed recently, comes from Pinduoduo. At the same time, it has also launched the "2022 Duoduo Overseas Support Plan" to stir up the cross-border e-commerce market.

Too Cold, 4,600 Shenzhen cross-border e-commerce companies "disappeared"

Not long ago, the topic #Company closed down and colleagues moved chairs and computers home# became a hot search on Weibo. A woman filmed herself and her colleagues moving chairs and computers home after her company closed down, sparking heated discussions among netizens.

After watching this video, many people found it both funny and sad. While netizens lamented the boss's "generous" behavior of giving away chairs and computers for free after settling wages, they also said that it was not easy for anyone during the epidemic, and many companies around them had gone bankrupt.

In the more than two years since the outbreak of the epidemic, many companies in the cross-border e-commerce industry have gone bankrupt. This year has been especially difficult. Under the impact of the cold, many companies have been listed on the "death" list.

Shenzhen, as the base of cross-border e-commerce, reacted to this chill even more obviously. Earlier reports said that before the New Year, there were still 7,185 existing companies in Shenzhen with the word "cross-border e-commerce" in Tianyancha , but in early April, only 6,255 companies were left. Everyone was very sad that nearly 1,000 cross-border e-commerce companies "disappeared" in just three months .

On October 30, the editor used the same conditions to search on Tianyancha and found that there were only 2,585 relevant results. In other words, from April to now, another 3,670 cross-border e-commerce companies have disappeared. Compared with the search results before the New Year, the number of cross-border e-commerce companies that have "disappeared" this year has reached 4,600, disappearing at a rate of 15 per day (of course, the reasons for disappearance are not necessarily bankruptcy, and relocation, name change, etc. will not be found under this condition).

Compared with cold data, cases happening around us often give people deeper feelings and touches. An industry insider said that many cross-border e-commerce bosses around him had a hard time this year, especially Amazon sellers.

Feedback from an Amazon seller confirmed his statement: "This year, many Amazon sellers around me have switched to B2B or are looking for new jobs."

Some of the people who have rejoined the job search team have had very wide career spans. A screenshot of a resume circulated in a cross-border e-commerce exchange group not long ago showed that a job seeker who used to be the "general manager" of a cross-border e-commerce company is now a Huolala driver.

The resume information shows that the job applicant has worked in a cross-border e-commerce company for more than three years (from November 2018 to July 2022), and in August this year he transformed himself into a Huolala driver.

"Lead the Amazon operations team to carry out operations at various sites", "Be familiar with Amazon's policies and regulations, and be able to apply them to daily store operations to properly resolve various problems that may arise."... From his past work content, it can be seen that this is definitely a company that uses Amazon as its main operating platform.

As we all know, the main operating platform for domestic cross-border e-commerce sellers is mostly Amazon, and many even suffer from serious "Amazon addiction". Therefore, it is not surprising that under the impact of the cold weather, Amazon sellers have become the "hardest hit area" for career change.

Business closures mean fewer job opportunities, and with more people than jobs, salaries for some positions have shrunk, including Amazon operations.

In 2021, Amazon's operating salaries were once the focus of discussion, but that was because of the rapid surge. Now, as the industry cools down, their salaries are also declining.

According to Zhiyouji data, corporate demand for Amazon operations positions fell by 73% in the first nine months of this year, and wages and benefits fell by 6% compared to 2021.

At the beginning of 2021, it was a job seeker's market, with multiple companies competing for one operation, but now it has obviously become a job seeker's market, with multiple operations competing for one position.

In this situation, some people began to wonder whether they could switch to other positions, such as "overseas social media operations" and other positions that are not separated from the cross-border e-commerce industry, where their professional knowledge, as well as some of the experience and resources they have accumulated in the past can continue to play a role.

In fact, it is not only operational positions that are experiencing a contraction in demand. A recent survey by seller "跨跨慕" shows that this year most sellers are maintaining their original scale and are no longer hiring. A considerable number of them are even laying off employees and reducing their scale. Those who have posted recruitment information are just posting it and are not actually hiring. Very few of them are continuing to recruit and expand their team size.

However, data from some recruitment websites also show that the demand for employment is indeed tightening. According to the financial report of BOSS Zhipin, the number of new recruiting companies/new recruitment posts in Q2 2022 decreased by 26% and 34% year-on-year, and decreased by 11.9% and 15.2% year-on-year respectively compared with 2019.

Therefore, changing jobs or changing industries cannot solve the fundamental problem. We still have to hope for industry recovery. However, judging from the third-quarter financial reports released by the big sellers, hope is far from coming.

Amazon predicts weak Q4 sales as consumers run out of money

Many sellers’ annual performance is driven by the fourth quarter, because the three major holidays of Halloween, Thanksgiving and Christmas are concentrated in these three months, as well as the large-scale shopping promotion festivals “Black Friday” and “Cyber ​​Monday”.

However, this year's peak season is disappointing for sellers and platforms. A few days ago, Yien.com reported that at a time when orders should have exploded, the number of orders did not even ripple. It is already the end of October and Q4 has already passed one-third, but many sellers have not yet waited for their "peak season".

Amazon on Friday also gave a bleak outlook for the holiday quarter ending in December, forecasting fourth-quarter revenue of between $140 billion and $148 billion, $15 billion less than the $155 billion analysts were expecting.

After the data came out, its stock price plummeted 17% after the opening , and its market value was directly wiped out by $190 billion. Amazon's stock price has fallen 35% this year. Amazon, the e-commerce giant, has become a weathervane of the current US economy, and its fourth-quarter forecast data also indicates that the economic situation in the future is not optimistic.

Indeed, Amazon's new CEO Andy Jassy has been working to control costs across Amazon's many businesses in the face of high inflation and declining consumer demand .

“Clearly, a lot has changed in the macroeconomic environment, and we will balance our investments to be leaner without compromising our key long-term strategic bets,” Jassy said in a statement.

For months, the online retailer slowed warehouse openings and refrained from filling some open positions, while announcing it would shut down its virtual health-care service by the end of the year and scaling back a program to make deliveries via small, automated sidewalk vehicles.

In addition to cutting costs, Amazon is also trying to open up new sources of revenue. This quarter, it increased the annual fee for its European delivery club Prime by 43%, imposed fuel and inflation surcharges on some merchants, and for the first time held two major promotions in one year: Prime Day in July and Prime Early Access Sale in October.

But all these efforts are no match for a reality: "Consumers have no money." Amazon Chief Financial Officer Brian Olsavsky told analysts on a conference call to discuss earnings: "We are very optimistic about the holiday season, but we are also realistic that people's wallets are affected by a variety of factors."

Guru Hariharan, CEO of e-commerce management platform CommerceIQ, echoed the sentiment: “Consumers have burned through their savings.”

At the beginning of the epidemic, many Americans began to save money due to government money and to deal with future uncertainties. However, this year, inflation has caused prices to soar, and many people have begun to use these savings to buy daily necessities. As prices continue to rise, savings are also shrinking. According to the U.S. Bureau of Economic Analysis, one-third ( 31%) of Americans' savings have been spent.

In order to attract consumers who gave up shopping due to soaring prices, retailers such as Walmart and Target announced as early as September that their holiday promotions would begin in early October. Amazon also held its first autumn promotion from October 11 to 12 to compete with its physical counterparts.

But despite the early discounts, Americans' enthusiasm for peak-season spending remains limited. Deloitte said in a September report that it expects retail sales to grow by only 4% to 6% between November 2022 and January 2023. That's down from the 15.1% gain reported in the same period last year.

However, even with the sluggish consumer enthusiasm, some products still stand out due to their "urgent need" attributes. A related report from Mastercard predicts that clothing will grow the strongest as people returning to the office choose better clothing. Sales of luxury goods are also expected to be relatively strong.

Internet giants compete for e-commerce market share

Unlike the sharp contraction of sellers, Internet giants such as Microsoft, Pinduoduo, and ByteDance are accelerating their layout in the field of cross-border e-commerce, which seems to be a case of "others are fearful, but I am greedy".

Pinduoduo: Temu was launched in early September to test the waters of cross-border e-commerce

On October 17, Temu became the most downloaded shopping app in the United States . Since its launch in the United States in early September, Temu's downloads have been rising.

Temu's emergence marks another high-profile attempt by another Chinese technology giant in the cross-border e-commerce market, following Alibaba, SHEIN and ByteDance. So far, the results seem to be good. In addition to the continuous increase in downloads, the average daily GMV in the United States has exceeded US$1.5 million in two months since its launch, and the 30-day repurchase rate has reached about 10%, slightly higher than similar platforms.

Of course, Temu's rapid success is inseparable from its investment in advertising. Meta data shows that Temu has posted more than 1,000 ads on its platform since September , including posts in English and Chinese. In contrast, SHEIN and AliExpress have only run dozens. App Growing, an app store advertising database, shows that Temu's iOS ads are mainly targeted at consumers in the United States and Canada, while its Android ads have also appeared in seven other countries.

It is worth mentioning that in order to expand Temu's user base, Pinduoduo also adopted a very familiar "playing method". Semafor News found that people who already use Temu will receive a small cash reward if they persuade their friends and family to download it as well.

Currently, 80% of Temu's orders can be delivered within 10 days, which is slower than Amazon but comparable to SHEIN. Although it is the first time to try cross-border e-commerce, Pinduoduo has big ambitions. Less than two months after launching in the United States, there are reports that Temu has plans to expand its site to Africa and Canada.

At the same time, it has also launched the "2022 Duoduo Overseas Support Plan" , which will invest tens of billions of resources to create 100 overseas brands in the first phase and support 10,000 manufacturing companies to directly connect to overseas markets.

Now the attention of both inside and outside the industry is focused on this "cross-border newcomer", to see how this giant, which has fought for a place in the already saturated e-commerce market with a low-price strategy, is stirring up the cross-border e-commerce market.

ByteDance: Launching an independent website and accelerating TikTok's e-commerce layout

ByteDance has made quite a few investments in cross-border e-commerce, and it has become more and more courageous with each setback. ByteDance has a special obsession with independent websites, and has made three attempts in succession since November last year.

Among them, the fast fashion brand Dmonstudio survived for only three months and closed in February this year. Soon after, it launched the full-category independent e-commerce platform Fanno. In May, it was reported that the traffic declined, the team was disbanded, and it would be shut down (before posting this article, the editor checked the website and found that it was still available). ByteDance’s most recent attempt was the fast fashion independent station IfYooou launched at the end of September . Its main categories include women’s clothing, mainly covering mainstream European markets such as the UK, France, Italy, and Spain.

Although it has made frequent moves in the independent website, it is still in a tepid state. In comparison, ByteDance has been much more stable in TikTok e-commerce. Currently, TikTok Shop has opened local and cross-border merchants in Indonesia, Thailand, Vietnam, Malaysia, the Philippines, Singapore and the United Kingdom.

Recent news indicates that the United States, the main target market for cross-border e-commerce sellers, is also being planned. Although the time is not yet determined, the pace of planning is already accelerating. On the one hand, TikTok has been exposed to be seeking to establish an "international e-commerce fulfillment system" in the United States. On the other hand, LinkedIn recruitment information shows that TikTok is recruiting for multiple positions in Seattle.

In addition, while TikTok Shop is expanding in the mainstream markets of Europe and the United States, it is also rushing to seize market share in emerging markets. Recently, TikTok Shop announced that it will advance its entry into the Brazilian market from the second half of 2023 to the first half of 2023.

According to LatePost , TikTok's e-commerce gross merchandise volume (GMV) exceeded US$1 billion in the first half of 2022. At the same time, Bloomberg News quoted a person close to ByteDance as saying that TikTok plans to increase its e-commerce gross merchandise volume (GMV) to US$2 billion this year and to US$23 billion in 2023.

LatePost reported that TikTok's e-commerce team also set a goal this year to achieve a GMV of US$470 billion within five years.

While other Internet giants are still fighting for market share in e-commerce platforms, ByteDance has taken a unique approach and achieved success in social e-commerce. McKinsey & Company said that by 2025, the global social commerce market is expected to reach more than 2 trillion US dollars. I believe that by then, ByteDance will definitely occupy an important position.

Microsoft: Buy Direct US site is recruiting investors, no commission at this stage

As early as early April this year, there was news that Microsoft was about to launch its first cross-border e-commerce platform, but at that time it was still called "Buy with Microsoft" and the launch time was set for April or May. However, there was no new news about this platform for a long time afterwards.

Recently, Yien.com noticed that the cross-border e-commerce project launched by Microsoft is now recruiting investors, but the name has changed to "Buy Direct".

High-quality Chinese sellers are the target of Buy Direct. A small number of sellers have joined the internal test. The public test of Buy Direct started in May this year. Currently, the purchase rights are only open to US consumers.

The categories of products that consumers can buy on the platform include: home furnishings, 3C electronics, clothing/shoes/accessories, pet supplies, health and beauty, office supplies, sporting goods, toys, auto parts, and art and entertainment. The categories are mainly centered around three dimensions: cost-effectiveness, differentiation, quality, and brand.

When facing a new platform, "traffic" is often the biggest concern of sellers. Buy Direct has multiple channels of Microsoft ecosystem traffic entrances, including Bing shopping channel, Edge browser, MSN news website, Windows news column, etc. At the same time, it can also use Microsoft's powerful cloud computing capabilities and artificial intelligence technology to push new and personalized information flows to Microsoft users around the world.

It is worth noting that the platform is currently in the commission-free stage. However, according to Microsoft's official introduction, merchants need to meet certain requirements, including: online /offline sales of more than 1 million US dollars in the previous year; high-quality products with a return rate of less than 5% for non-clothing and footwear products and less than 15% for clothing and footwear products; trademark registration certificate or brand/IP authorization certificate (if it involves brand products); local certificates of overseas physical companies or individuals in Hong Kong, China, the United States, etc. that can register Stripe payment accounts, and have overseas physical or virtual bank accounts, etc.

In addition, Buy Direct does not support communication between buyers and sellers. The delivery method is for the seller to ship the goods themselves, directly ship domestically or ship from overseas warehouses.

Judging from the feedback from sellers, they are still relatively optimistic about Buy Direct. They generally believe that with the support of Microsoft, there is no need to worry about the traffic of Buy Direct. Moreover, there are few Chinese sellers on the platform, and the platform is still in its bonus period, so they can consider joining.

In fact, before ByteDance and Pinduoduo entered the cross-border e-commerce market, Alibaba and JD.com had also been expanding overseas in the past few years. For example, in addition to the well-known AliExpress and Lazada, Alibaba also launched the fashion shopping app "allyLikes" in late October last year. JD.com launched the joybuy website as early as 2020 (which was shut down two years after its launch). Last year, there was news that it was acquiring Amazon stores and was suspected of becoming an Amazon seller.

In summary, when it comes to cross-border e-commerce, we often mention "long-term value". In such a reshuffle process, if you are tired, you can squat down and take a break. Excellent companies will eventually pass through the cycle and the "survivors" will be the kings.

Cross-border e-commerce companies