Internal competition has intensified, a large number of sellers are busy transforming, and the wind direction in the cross-border circle has changed!

The cross-border industry has been very turbulent this year, with account bans, tight supply chains, and rising logistics, coupled with unsatisfactory sales during the peak season, causing many sellers to complain. After the storm, sellers said that their previous methods were no longer suitable for the current development of e-commerce, and compliance operations have attracted more attention. Many sellers are considering transformation amid the turmoil.

However, how to occupy their own space on this complex and ever-changing chessboard has become the most difficult problem for sellers. Yien.com interviewed Chen Xianting, vice president of Yicang Technology and founder of Cross-border Eye, who analyzed the problems that trouble cross-border sellers .

The industry's internal competition intensified, and sellers' profits plummeted

2020 was a hot year for cross-border e-commerce, and as a result, jokes like "Last year, all the houses in Shenzhen Bay No. 1 were bought by Amazon" have been circulating. Amazon has become synonymous with making money, attracting more new sellers to join the market. Last year, there were 1.3 million new sellers.

Competition is happening all the time, and price wars have been going on from the beginning of the year to the end of the year. Some sellers have seen a sharp drop in profits, while also facing pressure from soaring costs such as advertising fees and storage fees.

Chen Xianting believes that this situation is related to the good market expectations that the industry development brought to sellers last year. " Under high expectations, if you do not have good management and organizational capabilities, once the industry bubble is punctured, weak companies will be greatly impacted. This is a crisis that has always been hidden under the rapid development of the industry. This is why there are so many unsalable inventories, layoffs and optimization, and performance declines this year, because too many people's management levels do not match the speed of industry development and the speed of fluctuations and changes . "

Many sellers, especially high-quality sellers, have large quantities of goods in their overseas warehouses. However, the actual situation this year has not been as expected. Platform adjustments, declining consumer expectations, and fierce competition have led to a backlog of goods, forcing them to clear their inventory at low prices .

This transformation of boutique sellers directly affects general merchandise sellers. General merchandise sellers focus on cost-effectiveness, but when boutique sellers start to engage in price wars , this advantage pales in comparison, which naturally leads to a decline in orders. In addition, boutique sellers are relatively good at cost control and supply chain. Even if they have less or no profit, boutique sellers are more resistant than general merchandise sellers in specific categories, and have more room for competition . General merchandise sellers will be in a very passive competitive state, or the group will fall into "involution".

Recently, in addition to the good sales, there are also news about service providers' financing and listing. When asked about the situation of service providers this year and whether there is internal competition, Chen Xianting said that this kind of competition has always existed in the logistics field, especially for freight forwarding logistics companies. Since they do not have core competitiveness such as products and organizations, it is difficult to develop in the long run by relying on resource advantages alone. As for the bayonet competition of ERP , it is still necessary to clarify the differentiated positioning of each ERP . Only with positioning , strategy, talents, funds and reputation can there be long-term development .

As all parties are scrambling for internal strife, cross-border sellers are also complaining about this year's logistics situation. A series of problems such as delays and price increases have occurred. Sellers are now looking for new logistics solutions.

Struggling to find a new way out, the demand for overseas warehouses has reached 80.82%

Against the backdrop of Amazon's warehouse restrictions, the demand for third-party overseas warehouses has grown, and with the demand for warehouse relocation by sellers whose accounts have been suspended, third-party overseas warehouses have become even more popular. Coupled with unstable factors such as the epidemic and logistics, overseas warehouses have increasingly attracted the attention of sellers.

According to data from Yicang Technology and Cross-border Eye, in 2018, FBA's demand accounted for the largest proportion, far exceeding that of third-party overseas warehouses; and this year, the demand for third-party overseas warehouses has reached 80.82%, ahead of FBA's 62.79% demand.

In this regard, Chen Xianting said that the current overseas warehouse market is in a situation where supply exceeds demand. As for how to choose a reliable overseas warehouse, Mr. Chen also gave some reference suggestions:

Look at the management and control capabilities of overseas warehouses : whether they are self-operated overseas warehouses, whether warehouse operations are standardized, whether the processes are efficient and standard, and whether professional capabilities are sufficient.

Look at the service level of overseas warehouses : timely response to time difference issues, and truly provide advice and cooperation from the seller's perspective, such as quickly resolving problems encountered during customs clearance.

Look at everyone's information technology capabilities : Overseas warehouses involve multiple links, the smoothness of each node and the timeliness of information are also critical, which will directly affect the seller's supply chain decisions .

However, sellers must also consider their own actual situation and always think about how to ensure a continuous supply of goods at the lowest cost. They should adhere to the logic of a flexible supply chain to optimize their overseas warehouse stocking plans and guard against the risk of inventory backlogs.

As for the future development of overseas warehouses, Chen Xianting said that emerging markets such as Southeast Asia and South America will be on the rise in the future, and European and American overseas warehouses may also undergo certain adjustments due to changes in market conditions next year . Chen Xianting also said that the current development of overseas warehouses has not yet reached the mid-term level and there are still long-term development advantages.

All these indicate that the cross-border e-commerce industry is moving forward. Under this circumstance, enhancing long-term competitiveness is valued by more and more sellers.

How can sellers enhance their long-term competitiveness?

Chen Xianting believes that " growth is the general trend of the cross-border e-commerce industry, but the proportion of the total performance of sellers with different models will change, and the logic of grabbing dividends in each track is also changing. " However, as the industry continues to deepen, everyone is becoming more and more similar in the essence of e-commerce, so the boundaries between stratification will become blurred. For example, the distribution of high-quality goods, high-quality branding, and brand diversification.

At this stage, how can each type of seller group maintain its advantages and increase its long-term competitiveness? Regarding the theme of " How can cross-border sellers enhance their long-term competitiveness ", Chen Xianting also shared his views in advance . The essence of e-commerce competition is not a competition of models, but only a competition of products, traffic, and the costs and efficiency behind them . To break this dilemma, sellers need to make breakthroughs in products, organizational construction, informatization, and supply chain .

Regarding this point, we can look at it from three aspects: distribution sellers, boutique sellers, and independent site sellers.

Sellers who distribute goods: The key is to establish the ability to obtain large-scale orders in the long-tail traffic desert area, and to take advantage of efficiency and supply chain volume to seize the dividends of emerging markets. Supply chain and system capabilities are a basic guarantee for sustainability. At the same time, multi-platform, multi-market layout, a large number of logistics docking, and professional information platforms are also very necessary.

Boutique sellers: The key lies in supply chain construction and product improvement, from product selection to branding. This includes product iteration capabilities, and the core is the accurate grasp of consumer demand. At the same time, they must also have the ability to have an in-depth understanding of the platform, users, and product cycles.

Independent website sellers: It mainly depends on the ability to attract traffic and technical capabilities. Go back to the product itself, create a brand story, seek stability rather than speed, and accumulate your own user power.

Chen Xianting said that the scale of each model will become larger and larger, but the growth is in waves, and new cycle turning points will continue to appear . Each turning point brings pain to old things and opportunities to new things.

How to continuously enhance your competitiveness? Want to know more about this? On December 13, at the 2021 First China (Zhengzhou) Central Cross-border E-commerce Seller Brand Overseas Summit, Chen Xianting, Vice President of Yicang Technology and Founder of Cross-border Eye, will bring you more exclusive sharing. Click the QR code below or read the original text to sign up!

Cross-border

Seller

Transformation