Are independent sites the future development trend and the future mainstream?
On the surface, independent sites are enjoying great success.
Amazon's ban on accounts in 2021 has made more companies realize the drawbacks of over-reliance on third-party platforms and turn to building their own independent websites. In addition, the maturity of independent website building SaaS system technologies such as Shopify in recent years has continuously reduced the cost of building websites. The rise of social media such as Facebook, TikTok, and Instagram has brought traffic dividends, and independent websites have become an important trend in the development of cross-border e-commerce.
Well-known platform sellers in the industry such as Anker Innovations, ZEBO, and Savi have all set up independent stations, and a large number of small and medium-sized sellers have also stepped into the independent station wave to make money ... Whether it is the growing calls for the layout of independent stations, or the frequent good results of independent station giants such as SHEIN, no matter how you look at it, the independent station track presents a promising future, which also makes the voice of "de-Amazonization" even louder!
However, if we peel off the surface of the prosperity of independent stations, we will find that countless sellers have fallen on the road to progress. Independent stations, which are considered by the industry to be the future development trend, have not become the top stream at the moment. Although the revenue of independent station business sold well by platforms such as Anker Innovations, Zebao, and Savi has exceeded 100 million yuan, compared with the nearly 10 billion yuan in revenue of third-party platforms, it is ultimately a very small proportion.
The next SHEIN has not yet appeared in the cross-border circle, and the long-standing independent station seems to be on the eve of a big explosion!
Revenue analysis of the best-selling independent station business
2021 has passed, and well-known cross-border sellers have handed in their report cards. The editor has extracted the independent station business revenue from the financial reports of five major sellers, including Anker Innovations, Cross-border Communication, Levo, Zebao and Suntech, and attempted to explore the overall development status of independent stations from the development of the independent stations of major sellers.
First, let’s take a look at the revenue of the independent sites of Anker Innovations, Zebo and Suntech . They are all veritable Amazon super sellers, but their independent site business is also developing rapidly.
1. Anker Innovations: Independent site revenue of nearly 400 million, a year-on-year increase of 83.57%
Anker Innovations has now become the largest global consumer electronics brand in China in terms of revenue. In 2021, Anker Innovations' independent station business revenue was nearly 400 million. In 2020, this figure was just over 200 million, with a year-on-year revenue growth of 83.57%. Taken alone, this result can be said to be very good, but from the perspective of Anker Innovations' overall revenue, the independent station business can be said to be just a small supplement to its performance. Anker Innovations' revenue mainly comes from third-party platforms and offline income.
In 2021, Anker Innovations' revenue successfully exceeded 10 billion yuan, of which the revenue from the third-party platform Amazon reached 6.8 billion yuan, and the revenue from other platforms was only 700 million yuan, accounting for 5.83% of the total operating income; the revenue from offline channels ( product sales through cooperation with global retail stores, regional large retail stores, independent 3C stores, and professional channel sellers ) was 4.5 billion yuan.
Judging from the current situation, even an excellent cross-border seller like Anker cannot get rid of its dependence on Amazon. However, judging from Anker Innovations' recent crazy recruitment in the independent station channel, it is continuously reducing its channel dependence on Amazon . In other words, Anker Innovations wants to find a new revenue growth point through the independent station channel.
2. Zebao: The number of registered users of the independent site reached 870,000
In 2021, ZEBO achieved operating income of 2.577 billion yuan, a year-on-year decrease of 46.02%. Like Anker Innovations, ZEBO's main source of revenue is also from the Amazon platform. However, since the Amazon account blocking incident in 2021, ZEBO has accelerated the promotion of the "multi-platform, multi-channel" business strategy, expanding online sales on third-party platforms such as Walmart, eBay, Rakuten, Newegg and self-operated website sales, while increasing offline channel promotion efforts.
In 2021, Zebao achieved operating revenue of RMB 605 million through non-Amazon channels such as self-operated platforms (independent sites), Walmart platforms, and offline channels, a year-on-year increase of 92.06% from RMB 315 million in 2020; its share of total cross-border e-commerce revenue was 23.47%, an increase of 16.87 percentage points year-on-year from 2020.
Among them, the revenue of Zebao's self-operated platform successfully exceeded 100 million yuan. In 2020, Zebao's self-operated platform revenue was less than 60 million yuan, and the growth rate was rapid. It is reported that in 2021, the number of registered users of Zebao's independent station reached 870,000, and the average order consumption amount was approximately RMB 596.37.
In the future, Zebao will further get rid of its dependence on Amazon, strengthen the construction of new brands , expand independent sites and non-Amazon third-party platform channels , adopt a "multi-platform, multi-channel" business strategy, and rely on the product reputation, own brand and intellectual property rights accumulated through long-term online operations to reshape the online sales system.
The independent website has become the key carrier for Zebao's transformation and rebirth.
3. Saiwei: The independent website revenue also exceeds 100 million yuan, mainly engaged in fashion clothing, 3D printers and consumables, cosmetic contact lenses and other categories
Savi's self-operated website is mainly built based on Shopify, and relies on precise marketing through channels such as Facebook and Google to carry out B2C cross-border retail business with vertical category boutique operations. The categories it operates mainly include fashion clothing, 3D printers and consumables, cosmetic contact lenses, etc.
First, let's take a look at the revenue of Savi's independent website in the past two years. In the first half of 2021, Savi's self-operated website revenue was 180 million. In 2020, Savi's self-operated website revenue was nearly 800 million, which is the second largest source of revenue after the Amazon platform. Since 2018, Savi's self-operated website revenue has maintained a growing trend, and the revenue share has steadily increased from 4.3% in 2018 to 15.21% in 2020.
It is reported that Savi has increased its investment in the construction of self-operated websites since the second half of 2018, and established a new fashion project department in addition to the original independent mall department, focusing on the operation of self-built websites for clothing brands. In 2019, the fashion project department rapidly increased the sales of self-built websites through various forms such as boutique development and channel traffic promotion. The sales of the main site Sheshow.com increased significantly , and the fashion project department achieved revenue of 54.5399 million yuan in 2019. In addition, the independent mall department also maintained a growth trend in 2019, with strong sales of products such as retro skirts and fashionable women's clothing.
Next, let’s take a look at the independent site revenue of Leckey and Cross-border E-commerce. Unlike the more “prosperous” platform business of major cross-border e-commerce companies such as Anker Innovations, the independent site business of these two major cross-border e-commerce companies is likely to be on par with or even exceed the platform business.
4. Cross-border e-commerce: ZAFUL and Gearbest are listed in the "BrandZ™ Top 50 Chinese Global Brands 2021"
As one of the earliest companies to enter the capital market in the domestic cross-border e-commerce industry, Cross-Border Link established its own website platform many years ago. Judging from the revenue in the past two years, Cross-Border Link's self-operated website (including mobile terminal) achieved operating income of 600 million yuan in 2021 , compared with 4 billion yuan in the same period last year , a year-on-year decrease of 84.99%.
Judging from the operating data of Cross-Border Link’s own websites, the average monthly visits and number of online skus of ZAFUL and Gearbest in 2021 showed a downward trend, but compared with their peers, the data can still beat a number of independent site sellers. It is reported that in 2021, the subsidiary of Cross-Border Communication, Saten, will focus on building a clothing brand matrix centered on ZAFUL, with an independent fast-fashion quality women's clothing website as the core, focusing on the company's original fast-fashion categories, and continuing to build a diversified fashion e-commerce complex.
Judging from the investment made by Cross-Border Link in independent sites, he has high hopes for independent sites. In 2021, ZAFUL and Gearbest, both under Cross-Border Link, also achieved remarkable results.
In the "BrandZ™ Top 50 Chinese Global Brands 2021" report officially released by WPP, the world's largest communications group, and Google, ZAFUL and Gearbest, subsidiaries of Cross-border E-commerce, were listed again, ranking 43rd and 44th respectively. Among them, ZAFUL ranked second in the field of online fast fashion, second only to SHEIN; Gearbest ranked second in the field of e-commerce, second only to Alibaba, surpassing JD.com . ZAFUL and Gearbest have been on the list for four and five consecutive years respectively.
5. Lege: Independent website revenue exceeded 500 million yuan, and per capita consumption exceeded 2,000 yuan
Lechuang's business covers online platforms, independent sites and offline channels. Its independent sites, Amazon, Tmall flagship store, JD flagship store, Xiaomi Youpin, Amazon and eBay platforms mainly adopt the M2C direct sales model. Lechuang insists on developing independent channels, and the advantages of independent website layout are highlighted. In recent years, its Google search ranking and Alexa global ranking have continued to improve.
In 2021, Lechuang's cross-border e-commerce sales revenue increased by 38.76% year-on-year, of which independent site sales increased by 89.19% year-on-year, with revenue reaching 500 million yuan, the number of buyers reaching 240,000, and the average consumption per person reaching 2,356 yuan.
According to the statistics of Google Analytics, the monthly visit volume of Lechuang is as low as 580,000 and as high as over 1.3 million. It is worth noting that Lechuang's self-built platform Flexispot is an important sales channel for independent sites. Building an independent site platform is both time-consuming and financially intensive, which is a great test for the company as a whole. However, Lechuang can endure the loneliness and stick to this path, which also shows that Lechuang firmly believes in the development potential of independent sites, is determined to sell products well, and also has greater ambitions and pursuits.
Compared with third-party platforms, independent sites have higher per capita consumption and faster sales growth
Independent sites have become an important part of cross-border sales revenue. Compared with platforms, independent sites have obvious advantages in pricing and other aspects.
The editor compared the number of buyers and per capita consumption data of Leckey products on Amazon and the independent site, and found that although the number of buyers of Leckey on the independent site in 2021 was only 240,000, far lower than Amazon's 620,000, the per capita consumption amount was as high as 2,356 yuan, which was nearly 1,000 yuan higher than the price of 1,521 yuan on the Amazon platform.
This also shows that public domain third-party platforms can sell high-cost-effective standard products in large quantities, while private domain independent sites can better meet consumers' customized needs and sell high-end products; compared with third-party platforms, independent sites have higher per capita consumption and faster sales growth.
The gross profit margin data of Savi’s independent stations in the past two years can also prove the development advantages of independent stations.
As can be seen from the figure, the gross profit margin of Savi's self-operated website has remained basically stable, and has always ranked first among all channels, reaching as high as 74.55% in 2019.
It is reported that Savi's self-operated website mainly sells clothing accessories and home furnishing products. In 2020, the sales revenue of digital automobile and motorcycle products on the self-operated website has increased significantly. Compared with similar products on third-party platforms, the products on the self-operated website are more personalized and differentiated due to the diversified display methods. Relying on the continuous strengthening of the company's supply chain management and product development capabilities , as well as the improvement of the accuracy of advertising on promotion channels such as Facebook and Google, Savi's pricing advantage in the self-operated website business has gradually become prominent.
Most Chinese companies that went overseas in the early days chose third-party e-commerce platforms, but in the process of development they increasingly felt the following three challenges: first, the cost of traffic on the platform became increasingly high; second, it was difficult to obtain multi-dimensional data on users from the platform, to gain insights into consumer trends or to delve deeper into user needs; and finally, the lack of a certain degree of autonomy was not conducive to brand marketing.
Faced with such challenges, more and more Chinese companies are trying to build independent brand websites, that is, to go global through the DTC model. At the same time, the development of social network advertising precision marketing promotion models and the rise of self-operated website service providers have also promoted the development of independent brand websites. Since 2018, self-built website tools, mainly Shopify, have become more and more mature, reducing the cost and difficulty of operating independent websites for sellers, creating a new outlet for independent websites.
For cross-border e-commerce companies, adopting the DTC model can help brand independent sites establish more direct and continuous connections with consumers and maximize the lifetime value of consumers. By controlling channels and building a membership management system, brands can establish direct connections with consumers and deliver information such as brand value and product updates to customers as soon as possible; through interactions at all touchpoints, repurchases can be increased and the value of consumers' lifetime value can be maximized.
The real situation and future development trend of independent station sellers
Can independent websites, which have obvious development advantages, defeat Amazon and become the top cross-border website in the future? Many industry insiders think: It is very uncertain !
If independent websites are about laying out a long line to catch big fish, then third-party platforms such as Amazon can be described as "quick output". It is reported that a certain company started to promote Amazon and independent website businesses simultaneously in mid-2021. In half a year, the Amazon team has achieved results, while the independent website team has just completed the construction of various channels and has not yet started to place orders, but has already spent a lot of money and human resources. This shows the effort that independent websites require from sellers. Below, the editor will combine the opinions of many industry insiders and briefly analyze the complexity of independent websites:
First of all, it is more difficult to set up an independent website. Almost every step, such as attracting new customers, converting, retaining customers, promoting activation, and repeat purchases, is very difficult. In addition to an extremely professional marketing team, the company itself also needs to provide a very sufficient promotion budget.
Secondly, there are no fewer pitfalls than Amazon. How much of a pitfall is there? "The traffic channel is set up today, but the account may be blocked tomorrow, the advertising account may die while running, and the payment channel may be blocked while using it..."
Finally, the issue that sellers complain about most is traffic. Unlike third-party platforms that have their own traffic, self-operated websites mainly tap into users through channels such as Facebook and Google, and only traffic can be obtained by spending money.
Take Savi as an example. From 2018 to 2020, the revenue of Savi's self-operated website reached 96.39 million, 330 million, and 790 million respectively. The total amount of advertising on Facebook and Google platforms was 22.4241 million, 130 million, and 240 million respectively. It is not difficult to see that Savi's independent station advertising has achieved such high sales, and this is the case that advertising investment has output. Many sellers cannot attract traffic even if they spend money like water.
Judging from the above feedback, independent websites are definitely slow and meticulous work. Not only does it require a high amount of capital investment, but it also requires sellers to have strong stress resistance and research capabilities. In real life, few sellers can actually endure the torment of spending money in the early stages, whether small or large. " When independent websites are used to sell hot products , advertising accounts and payment accounts have problems every few days. Traffic is expensive and the review is strict, and there is no effect from spending money . It is a paradox to make high-quality products on independent websites . The team can't wait, and few people are willing to receive a two-year basic salary . It tests product strength and supply chain, and goes against the ideal of most people who want to make money quickly . " An industry insider concluded.
When checking the revenue of independent sites of well-known cross-border sellers, the editor found that although Anker Innovations, Sevi and other big sellers have already set up independent sites, there are still many listed big sellers that do not have any news about independent sites in their financial reports. This may indirectly indicate that even today when cross-border e-commerce has entered the stage of intensive cultivation, they still cannot accept independent sites that focus more on refined operations and long-termism.
Of course, in the independent station track, there are still many people who can make money quickly even if they deviate from the principle of "slow work and fine work". This group generally sells counterfeit brands, or runs away with the money without shipping the goods, or sells goods that are not what they described.
This not only brings greater hidden dangers to store operations, but also forces the independent station's payment collection process to be more stringent, prompting the independent station track to be updated and iterated. In the industry shock, those sellers who still have the mentality of making quick money are destined to have a short road to independent stations.
The history of the shrinkage of the independent station of Youkeshu, a well-known big seller in the industry, may be an example. From 2019 to 2020, Youkeshu's independent station business developed rapidly, with operating income increasing from 338 million yuan to 846 million yuan, and the proportion of cross-border e-commerce business revenue also increased from 8.55% to 17.78%. It once became the second largest source of revenue after Amazon. However, in 2021, Youkeshu's independent station business began to shrink beyond expectations, and monthly operating income quickly dropped from approximately 45 million yuan in January 2021 to nearly 1 million yuan in May.
Youkeshu’s explanation for this is that the company is adjusting the direction of its business development and has correspondingly reduced the size of its independent site business and team.
However, in the eyes of outsiders, Youkeshu's independent station business was forced to stagnate because it could no longer proceed, and the mismatch of goods was an important reason for the shrinkage of the independent station.
In addition to Youkeshu, there are many sellers who have failed in the independent station track. This may once again illustrate from the side that independent stations are very difficult and are not suitable for people who want to make quick money. However, we must also know that although independent stations cannot be done blindly, they are very necessary.
Currently, traffic entrances are occupied by third-party platforms such as Amazon, and the cost of attracting traffic and acquiring customers for small and medium-sized platforms and independent websites will continue to rise, and this trend will continue to strengthen in the future. In the long run, the overseas e-commerce market will further concentrate on boutique e-commerce platforms represented by Amazon, and more cross-border sellers will choose to achieve overseas sales by settling in the top e-commerce platforms.
As the application of information technology such as big data in the cross-border e-commerce industry gradually deepens, export cross-border e-commerce companies with digital and systematic characteristics will have more and more competitive advantages in terms of operational efficiency, business control, resource integration, etc., and thus obtain more business opportunities and greater economic benefits, further squeezing the market space of small and medium-sized cross-border e-commerce companies. In addition, since building an information platform and improving algorithm operation efficiency require companies to make large R&D investments, certain requirements are also placed on the capital strength of companies. It is expected that in the future, the market concentration of the self-operated cross-border e-commerce retail industry will increase to a certain extent.
Independent sites are the future development trend. Sellers can only gain a firm foothold in the ever-changing cross-border environment by taking a two-pronged approach in the public and private domains and empowering each other.
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