Many products are hot-selling on Amazon, and the suppliers behind the hot sales are "out of the circle"

When people talk about the cross-border e-commerce unicorn SHEIN, its flexible supply chain capabilities are definitely the most mentioned. SHEIN relies on the supply chain to stand out, which means that the quality of suppliers is closely related to the development of cross-border e-commerce sellers.

However, due to the particularity of cross-border e-commerce, sellers often do not want the products they sell to be known to others, and the suppliers behind them are naturally shrouded in mystery.

However, in recent years, cross-border e-commerce has continued to develop, and the COVID-19 pandemic has stimulated the rapid growth of online shopping. Driven by the dividends, a number of cross-border e-commerce sellers have rushed to go public. At the same time, suppliers in the cross-border e-commerce chain have also been quickly "taken away". When capital has set its sights on this track, some high-quality suppliers have also obtained large amounts of financing, or directly embarked on the IPO road. In this process, the supplier relationship between these companies and major sellers has also been further disclosed.

If a supplier can enter the supply chain of a big seller, it usually means that the company is at the forefront of similar companies and its technology is mature enough in the industry. For sellers, having supply chain advantages will provide another underlying support for product strength. Today's cross-border e-commerce has shifted from an era where "channels are king" to an era where "products are king". Sellers with advantages in the supply chain will be more likely to build strong barriers in the competition and will become the winners of this era.

However, it should be noted that these companies that have gone beyond the circle, in addition to being "suppliers", are also "big sellers". Therefore, in this article, in addition to introducing the relationship between these suppliers and big cross-border sellers, the editor will also explain in detail the strong categories of these suppliers and the layout of their own brands on cross-border e-commerce platforms. At the end of the article, the distribution of the supply chain of Chinese products will also be introduced.

Supply chain "internal strength" adds "confidence" to sellers

Statistics from the General Administration of Customs show that China's cross-border e-commerce imports and exports reached 1.98 trillion yuan in 2021, up 15%, of which exports reached 1.44 trillion yuan, up 24.5%. The government work report has emphasized the development of cross-border e-commerce for nine consecutive years.

Guangdong is the place to look for cross-border e-commerce in China. Relevant data show that there are more than 100,000 companies engaged in cross-border e-commerce business in Guangdong Province, and more than 57,000 market procurement trade registration entities. Market procurement exports jumped from 81.5 billion yuan in 2017 to 315.9 billion yuan in 2021, with an average annual growth of 40.3%.

What supports cross-border e-commerce sellers in the overseas market is the suppliers behind them. It can be said that the suppliers in hand are the confidence of sellers to overcome difficulties. Previously, we often saw people asking sellers "Is it too late to enter Amazon now?" and they often got a negative answer, but there is one exception: having supply chain resources. This can also prove from the side the importance of suppliers to sellers.

Last year, Youkeshu's parent company Tianze Information disclosed the number of its active suppliers in the past three years in its reply to the Shenzhen Stock Exchange's inquiry letter. From 2018 to 2020, the number of Youkeshu's active suppliers showed an upward trend. In 2020, the number of active suppliers reached 23,729, and the cumulative purchases of goods exceeded 160 million.

For sellers, multiple suppliers not only allow them to select the best and find the most economical and affordable products through peer competition, but also help to spread risks due to diversified channels. In the event that a problem occurs with a supplier, a backup supplier can be used immediately to supply.

A few days ago, a seller said in an industry forum that he encountered such a problem: the seller opened a private model from a cooperative supplier and requested exclusive supply, but they soon found that the same product was being sold on the platform. He was troubled about how to protect his own rights and interests and how to cooperate well with suppliers in the future.

In fact, in the process of cooperating with suppliers, sellers face more problems than this. One seller said in distress: "A small batch of new product packaging is made by the supplier, and the packaging has the supplier's brand, and the other party does not want their own brand to be covered or replaced by the label. I don't know how to build a listing without infringement." Another seller complained that when he got a new product, the supplier quoted a high price, and another supplier delayed delivery, resulting in the product not being able to enter the warehouse.

As the saying goes: "It is better to be prepared than to be unprepared." If the seller has sufficient supplier resources, he can avoid dependence on a single outsourced processing supplier and find alternative solutions in time when problems arise.

Zhiou Technology, a home furnishing giant in the IPO process, is well aware of this. Its prospectus shows that from 2019 to 2021, the company's purchases from the top five suppliers were RMB 245 million, RMB 484 million, and RMB 520 million, respectively, accounting for 25.46%, 24.30%, and 20.88% of the total purchases during the period, respectively. The supplier concentration is relatively low, and there is no situation of heavy reliance on a few suppliers.

Not only that, Zhiou Technology has also established a supply chain collaboration platform and has currently completed cooperation with more than 120 suppliers.

Among cross-border e-commerce sellers, SHEIN is second to none in terms of supply chain capabilities. Marketplace data shows that SHEIN has become the most downloaded mobile app in the United States. Behind SHEIN's success is a strong supply chain.

According to "LatePost", within the "2-hour circle" of its headquarters in Panyu, Guangzhou alone, SHEIN has developed more than 300 core clothing factory suppliers, with a total of more than 2,000 suppliers.

Relying on its strong supply chain capabilities, SHEIN's speed in launching new products far exceeds that of other fast fashion brands. It is reported that it now launches about 3,000 new styles every day and nearly 20,000 new styles every week.

Since the supply chain is so important to sellers, what are the main aspects to evaluate when choosing a supplier? The editor believes that quality is definitely the first factor, and the other factors are service capabilities, product delivery time, infringement issues, and modification capabilities. In general, the quality should be excellent, the service awareness should be strong, the delivery time should be guaranteed, and the supplier can actively cooperate in improving products or updating and iterating.

The cross-border e-commerce industry began to develop in 2010 and has been in operation for 12 years. However, compared with other industries, it is still very young, so the maturity of suppliers is still relatively lacking. However, in the process of development, some excellent companies have emerged.

A group of outstanding representatives came out, and news of supplier financing and listing continued

As the old saying goes: "A good student will become an official". For some high-quality suppliers, they not only supply products to some listed big sellers, but also embark on the IPO road with their own strength. The following is a compilation of some suppliers who have obtained financing or listed, introducing their main products and the current layout of their own brands on cross-border e-commerce platforms such as Amazon, eBay, and Lazada.

Haun Acoustics:

Supplier of Anker Innovations. As early as 2017, Haun Acoustics began to deliver TWS Bluetooth headsets to Anker in batches. The prospectus released by Haun Acoustics in 2019 showed that Anker ranked fourth among its major customers in 2018, with sales of 44.7781 million yuan, accounting for 4.94% of operating income.

On September 29, 2020, Haun Acoustics filed for guidance with the Shenzhen Securities Regulatory Bureau. This is its second attempt at an IPO. It started its first listing guidance in 2017 and issued a prospectus on May 10, 2019.

The prospectus disclosed that the main business of Haun Acoustics is the design, development, production and sales of electroacoustic products, including headphones, speakers, microphones, loudspeakers, etc. Among them, the headphone business accounts for the vast majority, followed by the microphone business, and the third is the speaker business.

The prospectus shows that headphones are the company's main source of revenue, accounting for 83.60% of the company's main business revenue from 2016 to 2018. In 2018, the sales volume of Haun Acoustics headphones reached 4.08 million, a year-on-year increase of 124%, driving Haun Acoustics' revenue to grow by 94% to 906 million yuan.

Haun Acoustics has been ranked among the top 100 electronic parts companies for four consecutive years. Last year, its chairman Wang Li said at a potential supplier conference in Hunan that in the past two years, Haun Acoustics has grown at an annual rate of more than 60%.

Aohai Technology:

Supplier of UGREEN and Apeman Innovation. Aokai Technology was successfully listed on the Shenzhen Stock Exchange in 2020. Since its establishment, the company has always taken chargers as its core products, among which mobile phone chargers are the main ones. With the rise of the global IoT market such as smart wearable devices, smart speakers, and smart homes in recent years, the scope of application of the company's charger products has also been continuously broadened, gradually expanding to TV sticks, tablets, smart speakers, smart cameras, home routers, smart power strips and other fields.

In addition to OEM business, Aohai Technology also has its own brands: "AOHI" and "MOVE SPEED". Products of these two brands are sold on multiple platforms such as Amazon, eBay, and Lazada. On Amazon, a mini fast charger of AOHI has also won the Amazon's Choice logo. A seller from the United States said that he liked this product very much and bought 2 at a time.

In 2021, Aohai Technology's independent brand sales revenue exceeded 40 million yuan.

In the same year, Aokai Technology achieved breakthrough progress in new business areas: power adapters used in IoT fields such as security and small appliances grew significantly, with sales revenue reaching 567 million yuan, a year-on-year increase of 69.8%.

On April 20, Aokai Technology simultaneously released its 2021 annual report and the first quarter report of 2022. At a time when cross-border e-commerce sales revenue and net profit performed poorly, Aokai Technology's performance was unexpectedly good.

In 2021, the company achieved operating income of 4.245 billion yuan, a year-on-year increase of 44.14%; net profit attributable to shareholders of listed companies was 344 million yuan, a year-on-year increase of 4.40%. In the first quarter of 2022, the company achieved total operating income of 1.107 billion yuan, a year-on-year increase of 29.78%; net profit attributable to the parent company was 105 million yuan, a year-on-year increase of 26.99%; non-net profit was 97.2583 million yuan, a year-on-year increase of 23.18%.

At present, Aohai Technology has established four major production and manufacturing bases in Dongguan Aohai, Jiangxi Aohai, Xihai in India, and Aohai in Indonesia. The production capacity in 2021 has exceeded 220 million units.

Aoni Electronics:

Supplier of Zebao Technology. Zebao's subsidiary Linyoutong was the largest customer of Aoni Electronics in 2019 and the second largest customer in 2020. In 2020, Aoni Electronics supplied 100 million yuan to Zebao's subsidiary Linyoutong , accounting for 9.61% of the revenue of the year. Linyoutong's purchases from Aoni Electronics are mainly driving recorders and earphones . Linyoutong's brands "Uspicy", "Anjou" and "TaoTronics" are all from Aoni Electronics.

In 2021, Aoni Electronics was successfully listed on the Shenzhen Stock Exchange's ChiNext. It is mainly engaged in the research and development, production and sales of IoT audio-visual terminals. Its main products are PC/TV external cameras, driving recorders, network cameras, Bluetooth headsets and other smart audio-visual hardware. It has its own brands such as Aoni, aoni, ANC, BaiNaotong, AUSDOM, papalook, etc., and has currently been deployed on platforms such as Amazon and AliExpress.

On Amazon, AUSDOM brand's computer webcam with microphone also received the Amazon's Choice logo. The product was launched in May 2020 and has accumulated nearly 300 reviews so far. Buyers rated it 4.2 stars. Buyers rated it as clear, good value for money.

In 2020, the market demand for remote office and remote conferencing surged, prompting a surge in sales of smart cameras from Aoni Electronics. However, after the epidemic was brought under control and social life returned to normal, demand for this product also dropped sharply. This change also directly affected the revenue for the whole year of 2021 and the first quarter of 2022.

The 2021 financial report shows that the company achieved total operating revenue of 958 million yuan, a year-on-year decrease of 11.66%, total profit of 137 million yuan, and net profit attributable to shareholders of listed companies of 124 million yuan. During the first quarter of 2022, the company achieved operating revenue of 135 million yuan, a year-on-year decrease of 46.60%, and net profit attributable to shareholders of listed companies of 12.88 million yuan, a year-on-year decrease of 72.90%.

However, Aoni Electronics has made a forward-looking and in-depth layout in the field of in-vehicle cameras and has achieved good results. According to the annual report, the sales revenue of Aoni Electronics' intelligent in-vehicle camera products increased by 45.49% year-on-year last year.

Shenzhen Xianying Technology:

Supplier of UGREEN and Anker Innovations. Xianying Technology started cooperating with Anker Innovations in 2018, and exported and sold signal converters to its overseas entities in 2018 and 2019.

Signal converters are the products that Xianying Technology invested in research and development as soon as it was established, and are also its main source of revenue. From 2018 to 2020, the company's signal converter revenue was RMB 252 million, RMB 234 million and RMB 253 million, respectively, accounting for 63.23%, 56.20% and 47.93% of the main business revenue, respectively.

It is reported that Xianying Technology is a professional ODM supplier of computer, communication and consumer electronics (3C) peripheral products and components, mainly engaged in the research and development, production and sales of signal conversion expansion products, including DisplayPort adapter series, Mini DisplayPort adapter series, HDMI adapter series, USB2.0/3.0/3.1 Type-C adapter series, wireless charging adapter series, etc. Moreover, as early as 2015, it proactively launched Type-C signal conversion expansion products.

Compared with the above-mentioned old suppliers, Xianying Technology, founded in 2011, is slightly younger. However, even so, it has officially been listed on the GEM IPO in 2021.

However, judging from its 2021 financial report and the first quarter report of 2022, it has a clear situation of "increased revenue but not increased profits".

The 2021 annual report shows that the company achieved total operating revenue of 569 million yuan, a year-on-year increase of 7.31%, and net profit attributable to shareholders of 53.5007 million yuan, a year-on-year decrease of 19.43%. In the first quarter of 2022, operating revenue was 132 million yuan, a year-on-year increase of 20.07%, and net profit attributable to shareholders of listed companies was 10.87 million yuan, a year-on-year decrease of 13.88%.

Xiamen Weike Technology:

Supplier of Chenbei Technology and Aoji. The terminal brand that Weike Technology cooperates with Chenbei Technology is " Levoit ", and the terminal brand that it cooperates with Aoji is " PARTU ", and the cooperative products are both air purifiers.

Weike Technology mainly supplies health products such as air purifiers to Chenbei Technology. The cooperation began in 2017 through the VK-6011 air purifier, which became a hot-selling single product on Amazon.

Chenbei Technology is the largest customer of Weike Technology. From 2018 to 2020, Chenbei Technology has always ranked first in the sales revenue of Weike Technology's main customers, which were 68.7085 million yuan , 48.3825 million yuan, and 121 million yuan, respectively, accounting for 64.77%, 39.95%, and 49.48% of the ODM model amount. In the first half of 2021, Chenbei Technology purchased more than 68 million yuan of air purifiers from Weike Technology, accounting for 17.27% of Weike Technology's export revenue.

Auke is also on the list of top five customers of Weike Technology, and the cooperation began in 2018.

Weike Technology was successfully listed on the Shenzhen Stock Exchange at the beginning of this year. It is a company engaged in the research and development, design, manufacturing and sales of precision injection molds.

Since its establishment in 2005, Weike Technology has focused on the development of precision injection mold products. Currently, these precision injection molds and injection molded parts have a wide range of terminal applications, including but not limited to: automotive fields (such as central control housings, air intake grilles, engine connectors, etc.), electronics fields (such as e-cigarette housings, hearing aid products, 5G communication base station cooling fans, etc.), home fields (cosmetic molds, children's car decorative housings, etc.) and broader medical fields (oxygen masks, breathing balls, bed drives, etc.).

In terms of downstream products, Weike Technology focuses on the research and development and design of health products. Its main products include air purifiers, glass cleaners, instant hot water dispensers, coffee machines, etc. Air purifiers and instant hot water dispensers are Amazon's best-selling products.

Ubtech:

Supplier of Starlink, Cider and Shenyi. And Ubtech is the core supplier of the new unicorn Cider .

Founded in 2020, Ubu Technology announced in October 2021 that it had received tens of millions of yuan in angel round financing, and recently announced that it had completed a pre-A round of financing of tens of millions of yuan.

It is reported that Ubu Technology is a standard supply chain enterprise for digital printing and a flexible production and supply enterprise for clothing fabrics. Its subsidiaries include Ubu (Guangzhou) Information Technology Co., Ltd. and Ubu (Guangzhou) Textile Co., Ltd.

This is how China's product supply chain is distributed

Products are the core of sellers' cross-border business, and competition among sellers is often ultimately focused on products. Understanding the distribution of China's product supply chain can help them have a clear idea when selecting products, and being close to the supply chain can make it easier for them to "get the moon first because they are close to the water", and obtain news and trends about new products earlier.

The 14 suppliers disclosed by Zhiou Technology in its prospectus are mostly located in Guangdong Province, followed by Zhejiang Province, which is consistent with the regional distribution of China's industrial clusters.

At present, domestic cross-border e-commerce companies are mainly concentrated in Shenzhen and Guangzhou in Guangdong, Hangzhou and Yiwu in Zhejiang, relying on the supply chain advantages of these places. Taking Shenzhen as an example, Shenzhen is the most concentrated, complete and rich production and sales place for 3C in China . According to Alibaba 's previous data, 3C is the largest industry in terms of international site traffic purchase orders. Currently, 90% of consumer electronics companies in the country are concentrated in Shenzhen .

Regarding the geographical distribution of China's industrial clusters, a non-profit organization previously drew a "Distribution Map of China's Top 100 Industrial Clusters", which detailed the supply chain situation in many regions of China.

For example, in Guangdong: electronic products in Shenzhen, clothing and auto parts in Guangzhou, machinery, electronics, packaging, lamps and casual wear in Zhongshan, underwear and toys in Shantou, stone and kitchen supplies in Yunfu, shoes in Huizhou, and electronic products in Dongguan.

Zhejiang: Steel structures and cardboards in Hangzhou, ignition devices, locks, low-voltage electrical appliances, valves, and plastics in Wenzhou, plastic shoes and solid waste recycling in Taizhou, small commodities, hardware, electronic equipment, and tools in Jinhua, leather, warp knitting, and optomechanical products in Wenzhou, molds, household appliances, and stationery in Ningbo, etc.

Fujian also has several major industrial clusters, such as casual sportswear in Shishi , display imaging products in Fuzhou , commercial electronic products in Xiamen , and casual sports shoes in Jinjiang .

Sourcing has compiled this map in detail and provided a complete guide. Interested sellers can check it out through the link (https://www.bsasourcing.com/best-100-china-industrial-clusters-map-complete-guide-tips).

Amazon

Haun Acoustics

Aohai Technology

Anker Innovations

Aoji