Net profit of 400 million, made a fortune from the huge sales in this fertile land!

The online shopping craze triggered by the epidemic has made the cross-border e-commerce industry the talk of the town. As one "wealth-making myth" after another emerges, new sellers continue to enter this track, eager to make a fortune in this industry.

However, as the world enters the post-epidemic era, the industry's dividends are fading, and sellers are also complaining. Market saturation, platform blocking, rising costs, and falling traffic ... The living environment of cross-border sellers is full of challenges.

In the past two years, finding emerging platforms and emerging markets for layout has become a consensus among many cross-border sellers.

Cross-border business is difficult? How to break the deadlock?

"Cross-border e-commerce is too difficult now!" Many sellers will have such a feeling. Indeed, compared with the past, the living environment of cross-border sellers has changed a lot in the past two years.

First, the control policies of mainstream cross-border e-commerce platforms have become increasingly stringent, and the rectification of illegal sellers has intensified. Coupled with factors such as soaring freight costs, advertising costs, and rising raw material prices, the profit margins of sellers have been greatly squeezed, and many sellers are even in a loss-making state.

Most cross-border sellers prefer the European and American markets, but the overall market is not optimistic. Affected by the epidemic and the "high fever" of inflation, online consumer demand in Europe and the United States has tightened. According to the eMarketer report, the growth rate of US e-commerce sales is expected to slow to 9.4% in 2022, the lowest level since 2009.

Since the EU implemented the new VAT policy last year, the VAT exemption policy for products below 22 euros has been cancelled. Products below 150 euros will have VAT withheld and paid by e-commerce platforms. Products above 150 euros will also be subject to different tariffs based on the customs code of the product. The resulting impact is a sharp increase in operating costs for European sellers.

Consumer demand is falling, but operating costs are rising. Some European and American sellers said: "Life is really hard, the number of orders is constantly declining, and I really can't make any money." This phenomenon seems to be foreseeable: with the entry of new sellers, the European and American e-commerce market has gradually become saturated, and with more people sharing the pie, traffic and profits will naturally decrease accordingly.

The decline of the European and American markets did not affect the enthusiasm of sellers. They began to actively seek new opportunities to break out of the circle. Many sellers set their sights on emerging markets such as Latin America and Asia Pacific. This trend can also be seen in the financial reports released by many listed sellers in the industry: the proportion of revenue in North America and Europe decreased, while the proportion of other emerging markets gradually increased.

Which markets to enter and which platforms to deploy are direct factors that affect sellers’ profitability, and have also become issues that sellers need to carefully consider before breaking through.

The prospects are endless, with some sellers making a net profit of 400 million in this market !

According to statistics from eMarketer , the growth rate of global e-commerce sales in 2022 has dropped from 26.4% two years ago to 12.2%, and the annual growth rate is expected to continue to decline in the next few years. However, the Latin American market has bucked the trend of slowing global e-commerce growth.

In the ranking of retail e-commerce sales in various regions around the world, the Latin American market ranked first with a relatively high growth rate in both 2020 and 2021. In 2020, its growth rate was as high as 63.3%, far exceeding North America and Europe. Even with the slowdown in demand in 2021, Latin America ranked first in the world with a growth rate of 25.6%.

There are signs that Latin America is becoming the next blue ocean market for cross-border e-commerce. In addition to the rapid growth of e-commerce, the Latin American market also has a huge demographic dividend. The population of Latin America is about twice that of the United States. This is a huge, underdeveloped market.

As the Internet becomes more popular in Latin America, online shopping has become the choice of most consumers. In 2021, the number of online shoppers in Latin America increased by 6.9%. It is estimated that by 2024, the number of online shoppers in Latin America will exceed 350 million , and the total e-commerce market will exceed US$130 billion .

(Image source: eMarketer)

According to a survey by Adjust, a global mobile marketing platform , the installation rate of e-commerce applications in Latin America increased by 14% year-on-year in 2021, and the time spent on interaction in e-commerce applications also increased significantly by 32%. On average, each user spends more than 10 minutes on e-commerce applications every day.

In addition, there are few local brands in Latin America, which provides ample opportunities for Chinese brands to export to the Latin American market. The full-year import and export data released by China's General Administration of Customs also confirms this. The data shows that from January to December 2021, China's exports to Latin America reached 1,479.68 billion yuan, a year-on-year increase of 41.8%.

In the Latin American e-commerce market, due to the need for epidemic prevention and control, masks have become the most popular product among consumers. In addition, electronic products, stress-relieving toys, kitchen utensils, household products, etc. have maintained a high popularity in Latin America.

Facing the fertile land of Latin America, the top Chinese cross-border e-commerce sellers with a keen sense of smell have already laid out their businesses here. According to the BTG Pactual report, the Chinese fast fashion brand SHEIN has earned 2 billion reais in Brazil, which is about 400 million US dollars.

For small and medium-sized sellers, there is still a lot of homework to do to enter this blue ocean market. Although the current e-commerce market in Latin America is growing rapidly, it is still in its early stages of development and inevitably has problems such as slow logistics, complex tariffs, and difficulty in collecting payments. In this case, it is even more important to choose a reliable platform to "borrow a boat to go to sea".

Linio (Falabella) platform helps sellers make money

Linio (Falabella) is a B2C cross-border e-commerce platform owned by Falabella, the largest retailer in Latin America. Its business has covered four of the six largest countries in Latin America's online markets: Chile, Peru, Mexico and Colombia (currently excluding Brazil and Argentina), covering a high-potential population of 230 million. It has now become one of the largest e-commerce companies in Western South America.

The advantages of the Linio (Falabella) platform are as follows:

①Strong traffic support

The Falabella&Sodimac&Linio platforms are about to merge. The new official website of Falabella, Sodimac (Falabella's home improvement supermarket) and Linio will be integrated into one, and the multi-channel traffic will be expanded by more than 10 times, helping sellers increase sales.

②Reliable and flexible logistics

The platform supports both self-delivery and overseas warehouse modes. 1) The self-delivery mode is simple to operate, the platform's official logistics providers are safe and reliable, the delivery rate is as high as 98%, and the return rate is low.

2) Overseas warehouse models are divided into FBL (official overseas warehouse model) and SOF (third-party overseas warehouse model). Both can get priority access to traffic and activity support provided by the platform to increase sales and popularity.

③ Safe and fast payment

The platform supports the collection of US dollar payments for corporate Anying ( P card). Settlement is based on the exchange rate of the week of shipment, with minimal exchange losses; the bills are clear, safe and fast.

④Free entry and common growth

Linio (Falabella) platform is currently free to join, with 0 deposit and annual and monthly rent, and no fees are charged before the first order is placed.

To help sellers tap into the Latin American market, the Linio (Falabella) platform will also host the Linio Seller Day live broadcast conference on August 24. The super official lineup will help Chinese sellers understand the dry goods content such as joining the Linio (Falabella) platform and hot-selling products, and restore the most authentic Latin American market!

It’s better to plan early! Sellers who are interested in the Latin American market can scan the QR code below to sign up and start their Latin American sales journey!

Cross-border e-commerce

Blue Ocean Market