A hot-selling product sold 5,000 pieces, and cross-border e-commerce "new brands" have great opportunities

In recent years, more companies with supply chain genes have emerged in the cross-border e-commerce market. Different from traditional foreign trade that does OEM and earns low profits, these "new brands" use cross-border e-commerce platforms to directly target overseas consumers, open up the market with differentiation, and make their mark overseas with their flagship products.

"Differentiation" debuts, domestic "new brands" break into a new blue ocean

According to Frost & Sullivan data, the contribution value of Chinese sellers on major overseas e-commerce platforms such as Amazon has increased year by year. Last year, domestic sellers contributed US$239.1 billion in revenue, and GMV accounted for a new high of 44%, nearly half of the total.

At the end of August, AliExpress announced six major trends in the overseas export of domestic products in the second half of 2022: overseas demand for Chinese products in the fields of domestic tablet computers, garage economy and household new energy has soared; shipments of smart small appliances that have set off the "lazy economy" increased by 150%, and domestic smart pet products increased by 8 times overseas, among which pet cooling ice pads grew by 200%, and outdoor camping supplies have grown by more than 50% for three consecutive years.

Some new brands seized the business opportunities in the market and hit the jackpot.

HiBREW, a coffee machine brand , found that overseas big-name coffee machines have a drawback: their own coffee machines can only use capsules of the same brand, which is inconvenient for consumers. So they pioneered a universal multi-capsule system that can adapt to capsules of multiple brands and can also use coffee powder. This machine meets the needs of different types of coffee users and has become a hot seller after breaking through market barriers.

Hangzhou Chongheng designed a creative pet pool for pet lovers. After paying close attention to European climate and carbon neutrality policies, Chongheng believes that Europe will usher in hot weather this year, so it has placed pet pools in a very high strategic position and increased its stock. Sure enough, this summer, the hot weather swept across Europe, and pet pools sold out.

"We stocked more than 5,000 units this year, but they were all sold out in one go!" said Qiu Kaikai, its operations director. Foreign media posted this swimming pool on Tik Tok, and the number of views reached more than 2 million.

Chongheng aims to be a leader in the pet supplies market. In 2020, when cat climbing frames across the Internet were priced at around $50, Chongheng launched its independently designed "Castle in the Sky", which combines European castle elements and fun, priced at $150.

( “Sky Castle” cat climbing frame)

This "newcomer" received rave reviews after its overseas launch. Chongheng also launched the SpaceX rocket tower in conjunction with current events. Currently, these two products have become the signature of the company's high-end brand positioning.

After the outbreak, online sales of household tools have grown rapidly around the world. Tools are a traditional category, and there seems to be limited room for optimization, but smart technology household tools are still vacant overseas, which is where HOTO comes in. One of its smart rangefinders uses an OLED screen, and the data is intuitive. The product can be connected to a mobile phone APP for intelligent data collection and drawing, which is very suitable for interior design and decoration needs.

During the 2021 AliExpress 328 promotion, this smart rangefinder had an initial sales volume of over 10,000 units, and the annual single product sales amount exceeded US$600,000, making it the number one best-selling smart tool product.

With its technological attributes and simple and smooth appearance, HOTO has a strong market among young users. Compared with other traditional tool brands, its users are younger, with a large number of users aged 25 or above.

Supply chain advantage

Among the "new brands" currently going overseas , many are integrated industrial and trade enterprises, and some even have their own factories. This not only ensures their own stable supply, but also gives them a clear advantage in product research and development and iteration.

Chongheng has transformed from traditional foreign trade, and its products can be sold at high prices, firstly because of its brand power, and secondly because it has its own supply chain and huge advantages in research and development.

"For example, if I have an idea today, I can go to the factory to communicate with a dedicated partner tomorrow, and they can make samples the next day." Qiu Kaikai said, "Our factory is only a dozen minutes away from the company. If the product sells well, we can place an order today and make it in a few days, whether it is 50 or 200. But if it is connected with traditional foreign trade, they will not even pay attention to 50 or 100."

Companies without a factory background do have some difficulties.

In the early days of HiBREW, it encountered a bottleneck in the minimum order quantity. For example, small customers placed orders for three or four hundred units at a time, but this was far from the factory's order requirement of at least 1,000 units. HiBREW solved this problem by persuading customers to use its own brand for all production.

SeaKnight, a top fishing gear brand on AliExpress, also had a similar situation. A few years ago, SeaKnight discovered a serious problem: the factory was unable to meet some of its product customization requirements or product quality requirements in real time, resulting in unstable market performance of the brand.

Products require technical barriers and stable output. Since 2019, SeaKnight has invested millions to build a factory in Shandong to consolidate its supply chain. The factory has brought benefits to the company, with an annual turnover of 70 to 80 million yuan. Fishing gear is exported to more than 200 countries and regions around the world. The fishing line alone has achieved a turnover of more than 10 million yuan, and has gained a good reputation in many countries such as Russia.

（ SeaKnight fishing line products）

The fact that the factory is familiar with the product categories is a resource blessing. However, in the early stage of cross-border e-commerce business development, the factory provides a large number of products for sale, which will hinder the company from seeing the future direction of e-commerce business. Only by breaking this deadlock and determining the specific product track can it avoid becoming a bloated SKU distribution company.

Emphasis on social media marketing to increase brand awareness

As the COVID-19 pandemic continues to this day, the home furnishing, outdoor and other categories have seen their ups and downs.

HOTO has two lines: household tools and outdoor tools. There are suitable products for people whether they are at home or outdoors, and the overall product is still growing steadily.

Pet products are still a popular category. The main markets of Petheng are Russia, Spain and France. Affected by the conflict between Russia and Ukraine, the order performance in the first half of 2021 was not as good as last year. With the support of the AliExpress platform and strategic adjustments, the Russian market has recovered to 70% to 80% of its normal level.

In terms of performance growth, a major challenge facing overseas companies is brand promotion. Xu Jialin, head of overseas brand marketing at HOTO , said: "The basic challenge faced by many Chinese sellers is language and cultural differences, which is related to brand marketing. How to do some localized marketing and operations? This is a challenge."

In order to let more overseas users know their brands, companies have put a lot of effort into marketing.

Last year, Chongheng spent 20,000 US dollars to cooperate with several popular bloggers to shoot four videos for four products including "Castle in the Sky" and promote them on Youtube , Instagram and Tiktok . " The effect is very good. Because our products have a certain fan-attracting ability, this product is seen on social media, plus the blogger has a certain degree of fame and her cat is very cute, so the video will also be popular, which will bring a certain conversion rate to the product. " Qiu Kaikai said.

SeaKnight has more than 1 million fans on AliExpress and more than 60,000 fans on Facebook, VK, Youtube and other platforms. The company attaches great importance to social media operations. Fishing and hunting are relatively vertical and professional fields. SeaKnight goes to social media to find high-quality bloggers with many fans, professional video shooting, and clear and fluent explanations to discuss cooperation, and then decides whether to cooperate deeply based on the communication effect. In this regard, the company spends about 400,000 to 500,000 yuan a year.

Its director Shi Hongxiang said that fishing gear has become a red ocean category, but the company can still maintain its leading position. In addition to professional operations and high-quality products, another factor is its insistence on cooperating with Internet celebrities or segmented markets to continuously promote the brand and products, forming a cumulative effect after years of layout.

With the development of cross-border e-commerce, more and more Chinese products are going overseas. Tang Song, head of industry operations at AliExpress, believes that the role played by Chinese companies in the overseas market will undergo a major change, from the initial low-profit and low-value-added simple processing and OEM to the design and brand development at both ends of the "smile curve".

Research data shows that in the next three years, the number of overseas e-commerce consumers will increase by nearly 1 billion; in the ten years from 2021 to 2030, the overseas e-commerce market will grow by 3-5.7 trillion US dollars, which is more than double the current market size. Cross-border e-commerce is still in a relatively early stage. "I think we have a lot to do and a lot of opportunities," said Tang Song.

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