Rationality returns, some categories of Amazon are no longer competitive

Some people say that this year's Amazon sellers seem to have returned to rationality.

Last year, they were fighting tooth and nail for all kinds of spiral flooring. This year, they looked around and found that they were the only one left in the entire category. Many sellers lamented that the competition on Amazon this year was not as fierce as last year. They said that after getting out of the internal competition, they also had more time to think about the future development direction, polish the products, and study the market.

At any time, for sellers, products are the core competitiveness. Opportunities are reserved for those who are prepared. At this time, it is particularly important for sellers to find products that are suitable for themselves, competitive, and have market potential. At the same time, only by holding advantageous products can you have more advantages and initiative in the next confrontation.

Nowadays, in Europe and the United States, the market for shoes, clothing and accessories is growing rapidly under the stimulation of the epidemic. In the United States, these three categories of products will still be the three carriages driving the development of the cross-border e-commerce industry in the next five years, so there will be some product opportunities. In the short term, relevant data show that with the relaxation of epidemic restrictions in Europe and the United States, there will be a wave of travel fever in the summer, and sellers of outdoor or travel products can be prepared.

I draw my sword and look around, there is no competition. I am not so competitive this year.

It is said that laymen watch the excitement, while experts watch the door. Many people who want to enter the door of cross-border e-commerce simply see that it is a business of selling goods online, which is not difficult to operate. Coupled with the propaganda of some leeks-cutting agencies, they all think that they can earn US dollars and reach the peak of their lives. Without real thinking, perhaps what you see is what others want you to see, or it is survivor bias.

This rush to get in reached its peak at the beginning of last year. From bank executives, 985 top students, returnees, to the aunt selling noodles downstairs, everyone was scrambling to get on this high ground.

But before they could gain a firm foothold, the platform was suddenly rectified, and many sellers suffered losses. In addition, with more people, competition is inevitable, so the surviving sellers fell into a crazy internal competition, and everyone spiraled into low prices.

However, everything has two sides. On the other hand, after last year's turmoil, as some sellers were struck out, the fierce competition on the platform has tended to slow down and competition has returned to rationality.

Not long ago, more than one seller reported that there is less involution this year, and the rationality of leaving is returning. As some people leave the market in awe, the market environment has been purified, and there are fewer "Wu Sangui" operations such as extreme spirals, one cabinet swiping, one cabinet giving away, and one cabinet doing flash sales .

The sellers who survived that difficult period also received a surprise: many of their competitors were outlasted. One seller who is still in the game even said that he was the only one left in the entire category, which, compared with the fierce competition before, suddenly made him feel like he was about to draw his sword.

Natural competition is not completely absent, but according to feedback from other sellers, it is generally much better than last year. In this process, some sellers have given up low-price competition and have increased their prices to make profits.

Industry insiders know that in addition to the floor-low prices, the soaring advertising costs also hit sellers hard last year, but recently some sellers have said that the bidding for advertising words has also dropped. In addition, the activity of users who are closely related to the order volume is also recovering.

Therefore, judging from the current attitude of sellers, many people have expressed that they are more confident this year compared to last year.

Of course, the phenomenon of gradually returning to rationality and weakening internal circulation does not exist in all categories. As far as we know, this phenomenon is more concentrated in the 3C, home, and office supplies categories, which is basically consistent with the categories hit by the account suspension wave. In other categories, sellers have reported that many people are now offering 90% off. But even so, the competition in these categories is not as fierce as last year.

All of the above undoubtedly provide a signal to sellers: the opportunity has come, so hurry up and take advantage of it to improve yourself and occupy the market. If you want to take the lead and gain a favorable position in the market, it is an essential task for sellers to understand people's consumption habits and market trends.

Shoes, clothing and accessories will dominate the US online market in the next five years

Judging from the current trend, the import policies of overseas countries will continue to tighten, and the platform will gradually move towards standardization. Now that cross-border e-commerce has passed the period of huge profits, it is inevitable that the competition between sellers will become more and more fierce in the future.

Fortunately, purchases from offline stores have shifted online, the online shopping group has expanded, and the pie has become bigger.

According to a report from yStats.com , under the influence of the COVID-19 pandemic, e-commerce sales revenue of Europe's top online retailers increased by nearly 40% year-on-year in 2020. Among them, the UK maintained its leading position in the entire European e-commerce market, with a year-on-year growth of more than 30%. It is expected that by 2021, its B2C e-commerce market share will reach nearly one-third of retail sales, and sales are expected to rank third in the world, second only to China and the United States.

After the outbreak, consumer behavior changed rapidly, and consumers in different countries had different purchasing preferences. However, a survey report cited by yStats.com found that in most European markets, clothing, shoes and accessories, and electronic products were usually the preferred categories for online shopping in 2020. Taking the UK as an example, in 2020, on average, more than half of the respondents bought clothing, shoes and accessories online.

This feature is also reflected in the US market. According to Technavio's latest market analysis report, from 2021 to 2026, the US online retail market share is expected to grow by US$460.13 billion , and the market's growth momentum will accelerate at a compound annual growth rate of 11.64%. Among them, growing seasonal and holiday sales are one of the key drivers of its online retail market growth. It is worth noting that clothing, footwear and accessories, consumer electronics, computer hardware and toys are the product categories with the largest growth during the holiday season.

When it comes to the cross-border e-commerce clothing industry, the first thing that comes to mind is SHEIN. In fact, not only SHEIN, but also PatPat, Quanliang Quansu, and other brands that have emerged in recent years are basically concentrated in the clothing field. Some of them have entered the clothing market from fast fashion and women's clothing, while others have entered the clothing market from different categories such as children's clothing and sports and outdoor.

Their achievements are also obvious to all. For example, SHEIN, the pride of China's cross-border e-commerce , Reuters once said that SHEIN's sales in 2021 reached 15.7 billion US dollars. This group of dark horses that suddenly emerged even shook the status of European and American fashion giants such as ZARA and H&M.

In addition, the shoe and apparel seller Zibuyu had a revenue of 2.3 billion yuan last year and launched its IPO plan in June of the same year. If the IPO is successful, it will become the first cross-border shoe and apparel stock. According to the GMV generated in North America in 2020, Zibuyu ranked first among all platform sellers in China's cross-border export B2C e-commerce apparel and footwear market, accounting for 0.5% of the overall market (232.4 billion).

In fact, clothing, shoes and accessories have low product value and low delivery and return risks, so they have always been the categories that many sellers choose to sell when they start. In particular, clothing is the leader in cross-border e-commerce retail. Today, clothing is one of the top categories on some platforms. For example, in October last year, an Amazon seller revealed that clothing has taken over home furnishings and become Amazon's largest category.

In this case, many sellers will think that these three categories have become a red ocean with fierce competition, and entering the market is tantamount to suicide.

In fact, the footwear, clothing and accessories market is huge, and it continues to grow. In the United States, the e-commerce GMV of the footwear, clothing and accessories industry alone exceeded $100 billion in 2019, and it is expected to double by 2024. From a global market perspective, this figure is expected to reach $756 billion by 2022. Looking at clothing alone, in 2021, Kantar Consulting stated that the global clothing market will grow at an annual rate of 3.9%, and the market value will increase by $64 billion in five years.

Moreover, the epidemic has increased the penetration rate of e-commerce in the international market, so there are still significant opportunities for footwear, clothing and accessories in the future, and sellers can seize business opportunities in the clothing, footwear and accessories market segments. However, it is not easy to do business in a category like clothing, which is not so standard. If sellers are just starting to layout, they can choose relatively standard styles to test the waters, such as shirts and T-shirts. For footwear, you can pay attention to the direction of sports trends. Nowadays, thin and simple sports shoes are very popular among consumers. The competition for accessories is much more intense than the first two categories, but in many markets it is the fastest growing of the three. For example, in the United States, between 2016 and 2020, the compound annual growth rate of accessories exceeded 21%, but that of footwear and clothing was only 15~17%.

The clothing market has always had a tradition of selling spring clothes in winter and summer clothes in spring. Although it is still spring in the northern hemisphere, Google Trends data shows that the popularity of summer clothes is rising.

Summer products are gaining popularity, and demand for travel products is strong

In fact, it's not just clothing. According to feedback from sellers, other summer products are also becoming increasingly popular.

Speaking of summer, portable swimming pools and fans are evergreen summer products over the years, but this year's summer travel products will be even more surprising.

As we all know, Europeans and Americans like to travel and bask in the sun. After experiencing long-term restrictions due to the new coronavirus, summer is coming again, and their hearts yearning for freedom can no longer be trapped.

At the end of last year, Jungle Scout data showed that 46% of Americans said travel would be a top priority in 2022, and many had already made travel plans.

Recently, American ticket booking websites including Vrbo, Hopper and KAYAK have reported that as the restrictions on the new crown epidemic have been relaxed, the demand for leisure travel in spring and summer has increased.

"The rush to book summer homes has further accelerated in 2022," Vrbo said in a statement earlier this month. The vacation rental booking platform reported that demand for properties had exceeded 15% last summer.

“We’re seeing very active bookings for spring break and a very strong start to summer,” said Jamie Lane, vice president of AirDNA, which analyzes the short-term rental market and tracks the daily performance of tens of thousands of properties at vacation rental companies Airbnb and Vrbo.

We know that the conflict between Russia and Ukraine has caused global oil prices to soar, and airlines have passed on this part of the cost to customers, but from the current feedback, people seem to be completely ignoring the cost of travel. U.S. airlines, including Delta Air Lines, United Airlines Holdings and American Airlines, reported this week that travel demand has rebounded strongly after a brief fluctuation caused by the Omicron coronavirus variant.

It can be seen that for European and American people, the desire to escape is stronger than the concerns about rising costs and the surge in new coronavirus cases. In fact, the popularity of Google Trends searches for "travel" in the United States has been high for the past 12 months. This also indirectly proves that during the epidemic, they always want to go out and take a look. Among related topics, searches related to travel bans in India and the United States have increased by 4850%, indicating that they are very sensitive to news related to obstacles to travel.

However, it is worth noting that compared with previous years, there have been some changes in the travel destinations of American people this year. The flow of people to European countries has decreased, and more people have turned to Mexico, Central America and the Caribbean.

Today, destinations that have long been closed to most travelers, including Australia, the Philippines and Bali, have begun to reopen. Airlines have been gradually adding old routes and expanding new ones. It is foreseeable that more people will travel this year. Official data from IATA (International Air Transport Association), which consists of nearly 300 airlines, shows that the number of passengers this year is expected to be 150% of last year.

Of course, in order to avoid congested air routes, some people will choose to travel by car or take a short trip in an RV.

This travel craze will definitely drive up sales of some products. The first is packing. No matter where you go, you need to pack some necessities, so you need to use suitcases, toiletries bags, and cosmetic bags. The second is electronic appliances, including hair dryers, mobile power supplies, electric shavers, international travel adapters, and luggage scales. The third is RV and camping, including waterproof cloth, RV shower heads, sleeping bags, folding chairs, tents, outdoor dining tables, beach chairs, etc. The fifth is car supplies, including car mobile phone chargers, car mobile phone holders, and first aid kits containing tools such as flashlights and signal guns. The sixth is others, including passport covers, towels, luggage tags, etc. Of course, you must dress exquisitely when traveling, and good-looking and handsome summer clothes are essential.

Google Trends data shows that the search popularity of "Beach chair" in the United States has gradually increased since mid-February this year, after being silent for nearly four months since the end of October last year. At the same time, the search volume for related topics such as "beach chair rental" has increased by 4,300%.

With social media as the entry point, sales are gradually increasing, and TiTok, the hit-making machine, cannot be ignored

Data released by eMarketer shows that in the US e-commerce market in 2021, sales using social media as the entry point are expected to grow by 35.8% to US$36.62 billion.

Today, the overseas expansion pattern of independent websites, platforms, and social media has basically taken shape, and the emerging TiTok is destined to become a leader among them. Google Trends data shows that since 2019, the global search popularity of "TiTok" has risen rapidly, and related topics are also soaring.

If sellers simply viewed it as an ordinary social media when it was first launched, then after several products became popular on it, they should realize that it should not be underestimated.

TiTok short video seeding is developing very rapidly. If you pay attention, you can easily find that on TiTok, the views of two topic tags have remained high and are still accumulating rapidly. One is #amazonfinds ( finds on Amazon ), and the other is #tiktokmademebuyit (I bought it because of TikTok). According to the query before the release, the two tags have generated 17.8 billion and 10 billion views respectively.

As the name suggests, "tiktokmademebuyit" refers to videos posted by users who were inspired to buy something on TikTok. Under this topic, there are videos about everything from light bulbs, kettles, and dolls to mobile phones and watches. A recently released unboxing video about a floating light bulb received 5.6 million likes. Don't underestimate these videos, because they are likely to make your product "inadvertently" popular and significantly increase sales.

Even though strangers post these videos, people still have a high degree of trust in such recommendations. According to a survey, in 2020, more than 21% of the 1,068 Germans surveyed said that they had purchased a product recommended above. In addition, social media makes people more "FOMO" (fear of missing out). When we see videos of many other people buying the same product and recommending it, we will soon be afraid that if we don't own the product, we will miss the opportunity.

Now some sellers who attract traffic from TikTok are taking advantage of this phenomenon. On the one hand, they collect the known products in the video in one place. On the other hand, they awaken the buyers' FOMO through stores and discounts.

I believe that sellers now have full confidence in TiTok’s ability to promote products. After all, since yoga pants, many products on Amazon have been made popular by TikTok, and the sales of some related sellers have also soared rapidly.

The most popular posts for the #amazonfinds hashtag include pet grooming devices (5.1 million views), keyboards without physical keys (7.2 million views), and pet light bulbs (13.2 million views). Currently , chateaublanche's video about pet light bulbs is one of the last popular posts under the hashtag.

According to the data from Qihang Chuhai 2021, the current global scale of pet food is US$91.1 billion, and the sales of pet products in the US market are as high as US$4.54 billion. According to statistics from Common Thread Collective, pet food has the largest share of the pet market in the United States, reaching 36%.

If sellers want to capture TikTok's traffic, they need to understand this platform and its user characteristics. Overall, compared with social media such as Twitter and Instagram, young users currently spend the most time on TikTok, and user stickiness is high. From February 19 to March 24, 2021, Piper Sandler's survey of 7,000 teenagers showed that TikTok is now ranked second among the most commonly used social media applications for teenagers. In addition, TikTok gathers a large number of Generation Z, has a unique user base, has low overlap with other social media, and they are more keen on shopping and sharing.

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Cross-border e-commerce