After 10 years of cross-border business trials and tribulations, how will service providers continue to write stories at the brand inflection point?

Since last year, the cross-border e-commerce industry has undergone frequent changes, and the accumulation of several black swan events has all indicated that the period of fierce competition in this industry is coming to an end.

When the gap between supply and demand is no longer widening, it becomes more difficult to make money in cross-border e-commerce, which also means that the traditional way of playing in this industry is no longer applicable. Therefore, branding and refined operations have become the consensus of the industry. The change in sellers' needs has also changed the service providers of the cross-border industry.

Sellers need to spend every penny wisely, which requires service providers to provide more refined services with high added value. Therefore, at this point in time, the competition between service providers has returned to the service itself. If a company can provide a complete set of solutions for the entire overseas chain, including layout planning, global logistics, overseas warehouse operations, overseas risk protection, global intellectual property and tax compliance, and digital empowerment, it will surely be favored by customers.

In fact, more forward-looking companies have started to deploy full-link services earlier, and Haipai International is a typical representative of them.

Seize the opportunity of the market

HiPai International's full-link service ecosystem layout relies on the changes and development of the cross-border e-commerce industry.

Since entering the overseas warehouse market in 2015, Haipai has started to deploy full-link services in the overseas field, and this approach is inseparable from the market structure at the time.

With the introduction of various policies to support cross-border e-commerce at the national level, cross-border e-commerce import and export pilot projects and comprehensive test zones have been established one after another. Under favorable policies, the industry has ushered in a golden age of vigorous development. In 2015, the cross-border e-commerce sector appeared in the A-share market, and the capital searchlight also fell on this industry.

It was in such a favorable market opportunity that Haipai International was established. However, the entry point chosen by Haipai was the overseas warehouse on the other side of the ocean. This choice was not a sudden whim, but actually had traces to follow. In fact, before the establishment of Haipai, the founder started eBay business in the UK, and began to lay out overseas warehouses in 2009. It is one of the earliest companies in China to have independent overseas warehouses.

After Haipai International was officially established in 2015, it also provided customs clearance and transshipment services based on its overseas warehouses. In the words of the founder, Haipai's business expansion was based on market demand. At that time, cross-border e-commerce had just started, and most of the organizations that emerged were mainly engaged in training and agency operations. On the contrary, in the sub-sectors of logistics and warehousing, there was a lack of professional services and information transparency.

According to the founder's recollection, international logistics at that time was more based on the iteration of products of the four traditional express companies, and the market lacked uniformity and standardization, which also gave Haipai an opportunity to enter the market.

  (Shanghai European radiation map)

As Brexit was put on the agenda, Haipai also realized that the market opportunity in continental Europe had arrived. Therefore, in 2017, Haipai expanded its territory, starting from Belgium, extending to Spain, Germany, Italy and other places, radiating the entire European continent.

Due to the complicated tax system abroad, there are many mixed methods in customs clearance and transshipment in order to reduce the declared tax. Therefore, professional services reflect their own value. Different from the mechanical and repetitive work in customs clearance and transshipment before, Haipai has already established a professional team in China. Relying on the data and resources accumulated before, it can realize the system early warning in customs clearance. And strictly control the customs code and declared value, reducing the customs clearance detention rate.

At the same time, by integrating the first leg and signing long-term agreements with many airlines and shipping companies, we provide customers with booking, customs clearance, last leg delivery and other services. The basis of these services is more based on the accumulation of data and resources, including the time, efficiency, and performance of each service provider. It is equivalent to a resource integrator and matches the best solution for both parties.

At the same time, cross-border e-commerce in 2017 ushered in a wave of IPOs. Major sellers such as Tongtuo, Jiazhilian, and Youkeshu entered the capital market one after another, and the game between sellers and capital began.

However, with all the favorable factors, the continued upward development seemed to mask the uneasiness on the eve of the turmoil. In the following year, Amazon began to close its stores, the EU launched a VAT review, and Sino-US trade frictions intensified. The sequelae of the brutal tactics began to gradually emerge, and the financial and tax issues of sellers became a constraint on the road to progress.

In fact, in 2016, some cross-border sellers were closed down by the European tax authorities due to tax compliance issues. At that time, Haipai had already realized the necessity of financial and tax compliance. Therefore, in 2017, Haipai established a sub-brand for intellectual property financial and tax compliance-related businesses - Stonebury, a global one-stop overseas compliance platform, mainly covering financial and tax compliance, industrial and commercial compliance, intellectual property compliance, product compliance, tax compliance and other sectors.

(Stonebury area distribution map)

At that time, the entry threshold for trademark registration and financial and tax compliance was not high, and many middlemen got involved. Due to their unprofessional methods, this also led to mismatched subsequent services and decisions. The consequences of lack of professionalism, from the closure of stores last year to the cancellation of a large number of trademarks, have proved that Haipai's sense of crisis is not unprovoked.

Therefore, at the beginning, Haipai introduced a number of senior VAT experts, intellectual property lawyers, senior certified public accountants, tax accountants and brand lawyer consultants, etc. The benefits brought by such a professional team, in addition to improving the pass rate of brand registration, are also reflected in the added value of services, including subsequent declaration, tax refund, tax payment, as well as manual services, customized solutions, etc.

At the same time, in addition to mainstream markets such as Europe and the United States, Haipai also has registration resources for trademarks and patents in Africa, South America, Russia and other places, and therefore the high added value of its services is reflected here.

The story of cross-border e-commerce is still going on, and the turning point came with the start of the COVID-19 pandemic. The myth of making money filled the entire industry overnight, and everyone was jealous and wanted to rush in. It has become normal for any activity involving the word cross-border e-commerce to gather hundreds or thousands of people overnight. Players are jealous, and so is capital.

However, this hot market has once again exposed the irregularities of this wildly growing industry. Insurance is a key link. Since international logistics involves a long process, when problems arise with goods, the most difficult issue is determining responsibility.

Previously, since the service providers did not have professional capabilities and lacked knowledge of the cross-border industry, most insurance companies were unable to identify the responsible party, and therefore found it difficult to decide whether claims were required.

Seeing this problem, Haipai decided to officially start the Wuyoubao business in 2020. It focuses on customized insurance services for overseas companies, and in the form of "Internet + Insurance", covers the fields of first-leg insurance (shelf insurance), cargo insurance, product liability insurance and employer liability insurance.

Different from traditional international logistics insurance, cross-border e-commerce insurance faces risks with high frequency and small losses due to the dispersed packages and longer chains. This requires the insurance industry to have a deep understanding of the cross-border chain and be familiar with every handover node.

Obviously, as a company with the full-link gene of cross-border e-commerce, Haipai undoubtedly has a deeper understanding of cross-border. After gathering professionals in the insurance field, it launched standard insurance products, which not only standardized customer behavior, but also redefined insurance products in the cross-border field.

This point played its due role when Amazon launched its comprehensive commercial liability insurance last year. When Amazon Insurance was launched, many sellers did not understand the demand for this product. When the market was still in a wait-and-see period, Haipai responded promptly and provided sellers with a set of solutions based on Amazon's requirements.

Internet penetration

The ups and downs of the cross-border industry have become more and more obvious as various players and capital have entered the market at an accelerated pace. One of the most obvious variables is the penetration of the Internet. There is no doubt that whenever the Internet begins to enter traditional industries, it will have a subversive impact on the original industries. And the players who can laugh to the end under the impact of the Internet wave must be the foresighted ones who seize the beachhead layout.

This time, cross-border e-commerce is no exception. Whether it is the operation and delivery of sellers, or the logistics and warehousing fields, the penetration of the Internet has accelerated the changes in the industry.

Take overseas warehouses as an example. In fact, overseas warehouses are a concept that has only appeared in recent years, but the service process is not complicated. Simply put, from the moment the goods are transported into the warehouse to the moment they are picked up by third-party delivery companies when they leave the warehouse, the links in the warehouse are the services provided by overseas warehouses.

(Operation diagram of Haipai overseas warehouse)

In the early days of the cross-border market, the management of overseas warehouses was very chaotic. The sellers’ various non-standard demands also made the operation instructions in the warehouse cumbersome, increased the communication cost, and reduced the operation efficiency. Therefore, setting a standard for inbound and outbound warehousing has become an effective means to reduce costs and increase efficiency.

Realizing this, Haipai began to create rules since 2020. The first and foremost is the warehousing standards, including quantity, cycle, category, etc., and there are also standard processes for services within the warehouse, turning the original service into a product.

When the Internet began to penetrate into the lengthy cross-border logistics chain, the impact on overseas warehouses was more reflected in intelligent operations, including the services provided by Haipai, such as order process visualization, order progress tracking, and one-stop ordering.

With the transformation of digitalization and intelligence, software systems have also penetrated into every link of cross-border enterprises going overseas. Since the establishment of the company, Haipai has attached great importance to the construction of the system, and has continuously updated and iterated functions based on the actual business process and the development of various business sections such as logistics and overseas warehouses.

In the second half of 2020, based on market demand, Haipai established Zimi Technology, an independent sub-brand, to better empower different links in the entire chain of enterprises going overseas, and realized the dataization and visualization of service operation processes. For example, when the goods are in overseas warehouses, users can track order information and follow up on the dynamics of the goods in real time; during customs clearance and transshipment, they can improve the efficiency of handling goods through automatic identification of order numbers and automatic sorting; in the process of financial and tax declaration, users can also track the progress of the declaration process through Zimi.

The data accumulated from this information provides more decision-making basis for enterprises to go overseas. In this way, by connecting the information and data of various business sectors, a complete service chain closed loop is formed , which enables Haipai to perceive market dynamics in real time and has a more forward-looking perspective to open up new markets.

A typical representative project is Haipai Juhehui, formerly known as Haichuang Incubator. When Haipai started this project in early 2017, its judgment was based on its perception of the market. At that time, the market structure of cross-border e-commerce was beginning to take shape, and traditional export companies began to try to go overseas with the help of e-commerce. However, due to the lack of e-commerce operation experience and professional talents, a large number of companies chose to go overseas with the help of agency operators.

However, the agency operation model is not a long-term solution. Therefore, Haipai chose to provide practical training and talent incubation in the direction of cross-border e-commerce for local traditional enterprises in the form of an incubator.

As more and more players enter the cross-border e-commerce market, simple agent operation and training can no longer satisfy the market. JuHui’s goal has shifted to gathering enterprises going overseas, that is, forming a club for Chinese enterprises going overseas, and realizing deeper services through integrating resources.

Haipai has also set the goal of Juhehui as: to provide complete planning and resource allocation in all dimensions for Chinese companies going overseas. This is a brand new opportunity point for the market, and it is also the tone set by Haipai in 2022 and the future development direction.

No matter how the market changes, one thing that is worth affirming is that the trend of going overseas is definitely positive. The cross-border market has been very hot in recent years, but there is still a long way to go before a large number of Chinese companies go overseas in the true sense. The market space is still very broad, and the trend of cross-border e-commerce still exists.

However, the future wave may be more turbulent, and those who can laugh last are undoubtedly those companies with forward-looking strategic vision. After several years of development, Haipai International has accumulated relatively rich resources of all kinds and has stood firm in the whole wave of going overseas. Faced with the increasingly obvious good situation of going overseas and the increasingly diversified business models of going overseas, Haipai is ready to solve the pain points for Chinese companies to go overseas, break through the difficulties, and win at the end.

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