End of "Shenzhen Drift"! A group of cross-border sellers moved out of Shenzhen

At present, China's cross-border e-commerce has formed a development pattern of linkage between land and sea, domestic and foreign, and mutual assistance between the east and the west. As the market scale gradually expands and the experience that can be replicated and promoted continues to increase, cross-border e-commerce has become a new driving force for foreign trade development, a new channel for transformation and upgrading, and a new starting point for high-quality development.

Cross-border e-commerce is flourishing everywhere!

Look to Guangdong for China's cross-border e-commerce, and look to Shenzhen for Guangdong's cross-border e-commerce! As the "base camp" of cross-border export sellers, Shenzhen has already produced many well-known big sellers, including the famous Bantian Five Tigers and the South China Four Young Masters, as well as countless small and medium-sized sellers who have taken advantage of the situation in Shenzhen and are seeking a bright future in the vast world of cross-border e-commerce!

Shenzhen's cross-border business is "still booming" at the moment , and related companies in the central and western regions are also catching up. Looking at the development trend of cross-border e-commerce in recent years, cross-border e-commerce is the fastest growing, most potential, and most powerful new foreign trade format, and it is still in a period of rapid development. More companies in Henan, Shanxi, Fujian and other places have seen the broad opportunities that cross-border e-commerce can bring and are eager to try!

At the same time, cross-border companies that started out in Shenzhen have also seen the advantages of cross-border e-commerce development outside of Shenzhen, and the trend of companies relocating or setting up offices outside of Shenzhen is becoming increasingly obvious.

Moving out of Shenzhen: the cross-border migration history of a 13-year Amazon veteran

Zhang Li (pseudonym at the request of the interviewee) is one of the cross-border sellers who moved out of Shenzhen.

Zhang Lijia is in Zhengzhou and has 13 years of experience in cross-border e-commerce with Amazon. At the beginning, like many people, he chose to work in Shenzhen, the "cross-border capital". Since 2019, he has gradually moved his business from Shenzhen back to his hometown of Zhengzhou. As of the end of 2021, all the business has been transferred here. He said that there are multiple factors to consider for this approach.

"First of all, I am from Henan, and I want to return to my roots. Considering my family, I will definitely go back to my hometown." Zhang Li said that work is also for life, and moving the company back to Zhengzhou can better balance family. At the same time, the changes in Zhengzhou's cross-border e-commerce environment have also made him determined to return to Zhengzhou.

"Zhengzhou's cross-border e-commerce ecosystem is getting better and better. After landing in Zhengzhou, many service providers can directly provide localized services. The supporting facilities for cross-border e-commerce such as logistics, payment, and intellectual property rights are becoming more and more complete. In this way, cross-border sellers will spend less time and energy on related matters when doing many things, and the chance of stepping on landmines will be greatly reduced." Zhang Li said that around 2015, "cross-border e-commerce" was still an unfamiliar term for people in Zhengzhou. At that time, when he mentioned the technical terms such as VPN and ERP, many people were confused, and even did not know about cross-border e-commerce platforms such as AliExpress and Amazon. Under this background, there were naturally not many sellers engaged in cross-border e-commerce, and the service provider group was even smaller. This led to the fact that it was difficult for export sellers to find a suitable cross-border logistics company when they wanted to ship their goods.

In just a few years, the cross-border e-commerce business environment in my hometown has undergone tremendous changes.

Zhang Li is just one of many cross-border sellers who left Shenzhen and returned to his hometown to do cross-border e-commerce. At the same time, many "Shenzhen Drifters" are considering the possibility of leaving Shenzhen. In addition to considerations based on family and other factors, they also see the cost advantages of returning to their hometown to do cross-border e-commerce.

Many cross-border sellers said that leaving Shenzhen can effectively solve two "cai" problems - talent and money.

In terms of talent , "In cities like Zhengzhou, there are many universities and convenient transportation, so there is no need to worry about recruiting people," said Zhang Li.

Xiao Li also feels the same way. After moving back to his hometown Qingdao from Shenzhen, the talent problem was solved. It is understood that Qingdao has very rich university resources and a rich language, among which talents in German, Korean, Italian, French and other minority languages ​​are very concentrated. Based on the talent advantage, cross-border e-commerce platform sellers such as eBay in Qingdao have grown significantly in markets such as Germany, South Korea, Italy and France in recent years.

Apart from Shenzhen, not all cities have advantages in cross-border e-commerce talent. Many sellers have also reported that after moving back to their hometowns, they are unable to recruit suitable employees, and team building is a difficult problem.

In order to cultivate more cross-border e-commerce talents, many universities have opened related majors with the support of national policies.

In March 2022, the Ministry of Education announced the registration and approval results of undergraduate majors in ordinary higher education institutions in 2021. Cross-border e-commerce became one of the popular majors for colleges and universities to apply for new majors . A total of 29 colleges and universities across the country were approved to open cross-border e-commerce majors.

In recent years, various colleges and universities have built cross-border e-commerce training bases and off-campus internship bases in line with the development needs of the cross-border e-commerce industry, and have carried out in-depth cooperation with cross-border e-commerce industry associations and enterprises, including cooperative education, co-construction of majors or courses, and school-enterprise exchange meetings. They have also organized students to participate in cross-border e-commerce entrepreneurship competitions, e-commerce skills competitions and other competitions, and strengthened e-commerce talent training through various forms of learning and practical courses.

In terms of money , costs in other regions will be lower than in Shenzhen.

“First of all, cross-border e-commerce does not require a high level of cities. It can be done in first-tier cities, second-tier cities, and third-tier cities. Anyway, most of the time, work is done online. If you stay in Shenzhen, the rental and warehouse costs are much higher than in other cities, so it is not worth it.

"Secondly, labor costs will also drop significantly. Our cross-border e-commerce team of about 20 people can save a lot of money every month." A cross-border seller told the editor that after moving back to his hometown from Shenzhen, he clearly felt that the basic salary expenses of employees had been greatly reduced. In addition, the company's expenses for organizing team building have also decreased a lot. It can be said that the cost of team building in Shenzhen for a quarter is almost equivalent to the cost of a year in his hometown.

Putting aside the phenomenon of "Shenzhen Drifting" sellers returning to their hometowns to develop, we can also find that many cross-border sellers who made their fortunes in Shenzhen or are local to Shenzhen have already established branches in various places. In addition to business development considerations, they are also driven by the overall environment.

"In recent years, many factories in Shenzhen have relocated, and the original factories have become office buildings. Shenzhen's talent-intensive trend has become increasingly obvious." An industry insider said that under this background, many cross-border sellers have also adjusted their teams, leaving the company's management or marketing department in Shenzhen, and moving the truly practical departments, or departments that do not require high-tech operations, to other places.

Outside of Shenzhen, cross-border e-commerce is rising strongly in various places!

Where will they relocate to? They have many considerations when choosing a city to settle down.

Many founders of big sellers are not native Shenzhen people, so after making their fortunes in Shenzhen, while retaining some core departments, they try to move as many departments as possible to their hometowns; some other sellers choose better cities or regions based on factors such as the advantages of product industrial belts.

For different regions, due to different inherent soils, the advantages of developing cross-border e-commerce are also different.

Shandong: As a traditional foreign trade and manufacturing province, Shandong has a rich variety of industrial clusters, such as auto parts in Yantai and Weihai, home appliances in Qingdao and Linyi, industrial products in Jinan, and musical instruments in Weifang . It has inherent advantages in developing cross-border e-commerce. At present , auto parts, home appliances, industrial products, musical instruments, and sports and fitness equipment are also popular categories for Shandong sellers to export across borders . Among them, since Qingdao was approved by the State Council to establish the China (Qingdao) Cross-border E-commerce Comprehensive Pilot Zone in 2016, Qingdao has focused on promoting the cross-border e-commerce comprehensive pilot zone, focusing on building a cross-border e-commerce industry chain and ecosystem, and making every effort to promote the Internetization of foreign trade and cultivate a new business model of "Internet + large foreign trade". The cross-border e-commerce business has shown a trend of rapid start and rapid growth. Qingdao has good export advantages in furniture, home appliances, auto parts, wigs, home textiles, clothing and other industries.

Fujian: Fujian is also a traditional foreign trade province with a good cross-border e-commerce ecosystem. According to information disclosed by the Fujian Provincial Department of Commerce, the number of cross-border e-commerce sellers and seller sales in Fujian Province ranked third in the country in 2021. E-commerce industry clusters with Fujian characteristics such as shoes, clothing, luggage, home building materials, and auto parts have been formed, becoming popular categories for cross-border exports by Fujian sellers.

Shanghai : As the earliest modern city to complete industrialization in modern China, Shanghai has a strong industrial heritage and complete supporting facilities, and has brought together many excellent manufacturing companies, foreign trade companies, commercial and distribution companies, and a large number of small and medium-sized enterprises. Benefiting from industrial clusters and talent aggregation, a developed and convenient logistics system, and policy dividends, Shanghai's cross-border e-commerce companies have been able to demonstrate their prowess on cross-border e-commerce platforms such as eBay in recent years, and have shown a trend of branding and specialization.

Henan: "For every 10 wigs sold in the world, at least 6 come from Xuchang, Henan." When it comes to Henan, many people's first impression is the Xuchang wig industry belt. In fact, in addition to wigs, Henan also has many advantageous products exported to overseas markets and has formed unique industrial groups, such as Luyi makeup brush industry belt, Yanshi shoes and boots industry belt, Luoyang steel furniture industry belt, Zhengzhou amusement facilities industry belt, Henan machinery and equipment industry belt, Xinxiang lithium battery industry belt, Henan wire and cable industry belt, Henan aluminum products industry belt, Kaifeng flow meter industry belt.

…

Cross-border e-commerce is a new form of foreign trade that is currently developing rapidly, has great potential, and has a strong driving force. Under the influence of the global COVID-19 pandemic, cross-border e-commerce has broken through the limitations of time and space and reduced the intermediate links of trade. It has not only expanded the space for foreign trade development, but also become a new driving force for the stable development of China's foreign trade. Data show that the proportion of China's cross-border e-commerce exports in foreign trade exports has increased from less than 1% in 2015 to 4.6% in the first quarter of this year.

At present, although Shenzhen's cross-border e-commerce is still in a "monopoly" situation, with the strong rise of cross-border e-commerce in various places, cross-border e-commerce is becoming the "code for wealth" for more and more people across the country. This can also be seen from the relevant survey data of Qichacha.

Qichacha released several sets of statistics on cross-border e-commerce companies in March this year. The data showed that there are 33,900 cross-border e-commerce related companies in China.

In terms of regional distribution, Guangdong ranks first with 9,291 cross-border e-commerce related enterprises, followed by Zhejiang and Shandong with 3,836 and 3,207 respectively, followed by Anhui, Fujian, Henan and other provinces.

In terms of city distribution, Shenzhen has 3,300 cross-border e-commerce related companies, ranking first. Guangzhou and Haikou have 849 and 376 companies respectively, ranking the top three. Then there are Qingdao, Hangzhou, Weihai and other cities.

From the above data, it can be seen that the cross-border e-commerce development data in Fujian, Anhui, Henan and other provinces are impressive. At the same time, the cross-border sellers data in Qingdao, Haikou, Hangzhou and other cities rank high.

Can other regions compete with Shenzhen in developing cross-border e-commerce?

It is undeniable that compared with Shenzhen, cross-border e-commerce in other regions still has a lot of room for development.

Although overall, the supporting service facilities for the development of cross-border e-commerce in Henan, Shandong and other regions are constantly improving, they are still far from being comparable to Shenzhen.

"Zhengzhou's cross-border e-commerce now is equivalent to Fuzhou's cross-border e-commerce in 2017. If we want to compare it with Shenzhen, we may have to push it forward in time." After returning to Zhengzhou, Zhang Li found that Zhengzhou still has a lot of room for development in product creation.

"In cross-border e-commerce, the ultimate goal is to solve the problem of demand. An important manifestation of solving demand is products. Whoever can solve product problems for consumers and bring customers a good shopping experience can create a hit product. In terms of product supply chain, cities such as Shenzhen are indeed much superior, which means that market demand is more sensitive. When developing a product, many local companies in Zhengzhou still tend to purchase goods from 1688. Even if some of them go to factories to purchase, there will be differences in the time it takes to get the goods. If a product is to be formed, it sometimes takes about two to three weeks in Zhengzhou, but in Shenzhen, samples can be obtained in as fast as four days. In other words, in terms of supply chain resource integration, Shenzhen is more efficient than the mainland."

Zhang Li also said that there will be an information gap and time difference between Shenzhen and Zhengzhou in terms of platform dynamics. Many times, a piece of news has been circulated in Shenzhen for several rounds, but may not have reached Zhengzhou yet.

In addition, there are also differences in logistics. Zhengzhou's logistics efficiency is not as good as Shenzhen's, and the resources are not as abundant as Shenzhen's. Shenzhen's logistics resources have formed their own system. For example, Shenzhen has a special channel for shipping sensitive goods, but it is difficult for sellers in Zhengzhou to ship sensitive goods.

In summary, whether it is information, logistics, or supply chain integration capabilities, Zhengzhou still has a certain gap with Shenzhen. In other words, not only Zhengzhou, but other regions are also facing the same problem.

In the short term, the situation where Shenzhen's cross-border e-commerce leads China will continue to exist. It is not ruled out that there are excellent large sellers in every region, but due to various constraints, cross-border sellers outside Shenzhen need more exploration before they can make further progress in their business. In the process of development of cross-border e-commerce in the mainland, some training institutions have harvested players under the banner of "new trend in cross-border e-commerce", which has also added obstacles to the development of cross-border e-commerce in inland cities.

"As far as I know, the number of sellers doing cross-border e-commerce in Zhengzhou has dropped by about 30% this year. The overall bad environment is one aspect, and the chaos in cross-border e-commerce is also a big factor." An insider said that according to his observation, although the chaos in Shenzhen's training institutions is also endless, relatively speaking, the damage caused to the entire industry is not as great as that in mainland cities. Cross-border e-commerce in mainland cities can be said to be still in its infancy. The original intention of many people to join the market is the beautiful propaganda of training institutions: "As long as you do Amazon and other platforms, you can make a lot of money", "A product worth about 20 yuan can be sold for 20 to 30 US dollars or pounds and euros when it is sent to the United States or Europe"... Is there really such a good thing in the world? Unfortunately, ideals are full, and reality is very skinny. Everything requires effort to get rewards. How much money you make will have to bear how much pressure you have to bear. The original intention of some people to join the market is no longer pure. They have not seen the difficult side of cross-border e-commerce at all. There must be a psychological gap. After doing cross-border e-commerce, they found that not only did they not make money, but also caused hundreds of thousands or even millions of dollars in their pockets to go down the drain.

From around 2018 to the present, some training institutions have taken turns to reap profits in Zhengzhou, Shanxi and other places. After receiving money, they taught novice sellers how to "follow sales and engage in malicious competition". This practice is bound to harm cross-border sellers. In serious cases, both money and goods will be lost. They will inevitably complain to the outside world that this industry is not easy to do, and then successfully persuade a group of onlookers who are ready to make a move to withdraw.

Of course, there are also some cross-border sellers who were deceived by unscrupulous training institutions. In order to recover their financial losses, they began to deceive other people into joining the market. "Usually they will sell ERP at a high price to newbies who want to join the market, and then they will peel off the money layer by layer as long as they can make money."

All these chaos indicate that the entire cross-border e-commerce environment needs to evolve and grow, but it is undeniable that cross-border e-commerce is still the trend of future development.

The development space of cross-border e-commerce

Cross-border e-commerce is a new form of foreign trade that is currently developing rapidly, has great potential, and has a strong driving force. Under the influence of the global COVID-19 pandemic, cross-border e-commerce has broken through the limitations of time and space and reduced the intermediate links of trade, which has not only expanded the space for foreign trade development, but also become a new driving force for the stable development of my country's foreign trade.

From the perspective of commodities, China's export commodities are more diverse, and are gradually upgrading from labor-intensive products such as clothing and accessories to technology-intensive products such as digital and smart home products, with significantly increased product added value. In the first quarter of this year, cross-border e-commerce exports of semiconductors and integrated circuits increased by 95.4% and 1.8 times year-on-year respectively .

From the perspective of the main body, private enterprises in cross-border e-commerce play an outstanding role, accounting for as high as 97.5%. Some traditional manufacturing enterprises also use cross-border e-commerce to accelerate digital transformation, reduce costs and increase efficiency, and actively expand overseas markets.

In recent years, the country has vigorously supported the development of cross-border e-commerce. The State Council has established 132 cross-border e-commerce comprehensive pilot zones across the country in six batches. In the first quarter of this year, our country's cross-border e-commerce imports and exports were 434.5 billion yuan, a year-on-year increase of 0.5%. From January to April, the export of market procurement trade exceeded 260 billion yuan, a year-on-year increase of 5.7%.

The number and scale of overseas warehouses are also growing continuously. Now the area of ​​overseas warehouses has exceeded 16 million square meters, of which 90% are distributed in North America, Europe and Asia. We have more than 2,000 comprehensive foreign trade service companies.

Overall, new business forms such as cross-border e-commerce are showing the phased characteristics of steady improvement in quality and gradual optimization of structure and layout.