Anxiety may be the word most mentioned by cross-border sellers recently. Since 2022, the traffic and sales of the Amazon platform seem to have been less optimistic. Many sellers reported that their sales have plummeted and halved, and some categories on the Amazon platform have even experienced a cliff-like decline.
The return of physical stores and inflation have not only hit the industry's sellers hard, but also affected many cross-border e-commerce platforms, with their stock prices plummeting. However, under such circumstances, some big sellers are still seeing their profits grow.
The stock prices of Amazon and other e-commerce platforms have plummeted!
According to the data on June 16, Amazon's closing price was $103.66, and its market value was basically close to half of its highest value in 2021 ; Wayfair closed at $44.18, and its market value shrunk to 10% of its peak in 2020, and its stock price has basically been in a declining state since the beginning of 2021; Shopify closed at $305.23, and its market value was about 20% of its peak; Etsy closed at $69.00, and its market value was 20% of its peak.
In comparison, Amazon's market value has shrunk by 50%, while the market values of other platforms have basically remained at around 10%-20%. From another perspective, under the influence of the overall environment, Amazon still occupies the leading position in the e-commerce platform.
Many people regard the stock market as a barometer of the economy, and believe that its reaction is usually earlier than that of the real economy. In the view of some sellers: " The collective plunge of US e-commerce stocks means that US investors are not optimistic about the e-commerce sector , which is not good news for sellers. "
However, many sellers believe that it is not reasonable to measure the rise and fall of the cross-border e-commerce industry solely by the rise and fall of stocks .
With the epidemic under control, physical stores in the United States have gradually returned, and inflation has caused the collapse of the global supply chain, resulting in a surge in the prices of commodities, raw materials and energy. Consumers tend to buy more necessities, but most of the goods sold on cross-border e-commerce platforms are non-essentials, which is one of the reasons why most sellers mentioned shrinking sales.
In order to reduce inflation, the United States is maintaining the path of raising interest rates. According to the data, the U.S. Consumer Price Index (CPI) in May increased by 8.6% year-on-year, which has set a new record in more than 40 years. An industry insider predicted: "In the Fed's June meeting, the interest rate will be raised. It is likely that the interest rate will be raised by about 50 basis points in June. At the same time, the United States will continue to reduce the size of its balance sheet."
Based on this situation, while the United States is reducing the circulation of US dollars and suppressing consumption, it is also causing the US consumer market to weaken to a certain extent.
In addition, the shrinking sales of sellers is also closely related to the decline in traffic on e-commerce platforms. According to data from Similarweb, Amazon's US site has seen a decline in traffic in the first few months of 2022, with traffic in February having dropped to 2.2 billion . The same is true for other cross-border e-commerce platforms, such as eBay, which saw traffic drop to 729.2 million in February, and Walmart, which saw traffic drop to 384.3 million in February.
Under the influence of multiple factors, the sales of sellers are not optimistic. Some sellers reported that their orders were reduced by half, and they thought that their accounts were abnormal, but when they opened the backend, they found that these were indeed the only orders. In fact, there are many sellers who have the same experience, and some categories on the Amazon platform have even experienced a cliff-like decline.
Amazon sales in multiple categories have plummeted!
As for the category of charcuterie boards, the peak sales volume was about 300,000 in December 2021, but the sales volume in May this year was only 26,000, showing a cliff-like decline; the monthly sales volume of the key holder category was 100,000 at its peak, and the sales volume in May was 18,000. In addition, the monthly sales volume of categories such as picnic baskets, wall decor, and corner shelves also fell to varying degrees.
According to the curve chart provided by the sellers, the monthly sales of these categories remained stable before May this year, and began to show a significant downward trend in May, but in May last year, their monthly sales were on the rise. This data coincides with the complaints of most sellers that their sales have plummeted.
The editor learned that many of the products in the above categories are on discount promotion, and some products are even given a 50% discount. For this reason, a seller of similar products said: "Sales are not good to begin with, and promotion is also to increase sales. It doesn't matter if the profit is a little less, but the products must be sold . "
The serious decline in traffic, high advertising costs, and pitifully low profits have become the problems faced by some sellers. Under such circumstances, the cross-border e-commerce market has become generally pessimistic. Some are considering changing careers, some are starting side businesses in Jinjiang, and some are moving their offices inland to cut costs.
Some industry insiders even predicted: "The peak season in the second half of this year may not be as busy as it used to be. Sellers are advised to be cautious in developing new products and preparing inventory . "
According to data released by the US government, the US inflation rate accelerated in May, jumping to 8.6% , the largest increase in 41 years since 1981. The current US inflation is in a stage of continuous white-hot, and family budgets across the country are under pressure. After the Federal Reserve's fastest rate hike, Wall Street is increasingly betting that the US economy will remain in a recession next year.
From another perspective, under the dual pressure of the return of physical stores and inflation, the cross-border e-commerce industry is also facing a round of reshuffle . Sellers with extremely low profit margins, poor quality, and poor products will be gradually cleared out . If sellers still analyze links from the perspective of stable growth, it will be difficult for them to survive.
Unlike the rapid development of cross-border e-commerce during the epidemic, the current cross-border e-commerce market is returning to a stable state. Under such circumstances, sellers should not be pessimistic, but should calm down and concentrate on researching products, polishing links, integrating brand and supply chain advantages, and preparing for the next peak season while improving their soft power and risk resistance .
If the decline in orders has spread sellers' pessimism, then the high profits of big sellers have undoubtedly given many sellers a shot in the arm. In the semi-annual report released by East China's big seller Giant Star Technology, its net profit attributable to shareholders of listed companies in the first half of 2022 was 650 million yuan to 800 million yuan, an increase of -10% to 10% compared with the same period last year.
Excluding the net profit of 182 million yuan attributable to the listed company in the first quarter, Giant Star Technology's net profit in the second quarter was between 468 million and 618 million yuan, and its net profit after deducting non-operating items was between 580 million and 784 million yuan. Although its performance did not increase as much as during the epidemic, it is already impressive to achieve such results when both cross-border e-commerce traffic and orders have declined.
The performance report of Giant Star Technology has undoubtedly boosted the confidence of industry insiders in conquering the cross-border e-commerce circle. As for small and medium-sized sellers, they should learn from the layout of market selection, product creation, marketing and supply chain of the big sellers in the circle, and develop steadily while making good products. Amazon Seller Sales |
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