Annual sales of 2.1 billion! Big sellers saw orders increase by more than 60% in the first half of the year

According to the "2020 Southeast Asian Internet Economy Development Report" jointly released by Google, Temasek and others, Southeast Asia is currently the fastest growing region in the world for Internet development. The total value of goods traded in the local e-commerce sector is also growing rapidly, reaching US$62 billion in 2021, a year-on-year increase of 63%.

The Southeast Asian e-commerce market has huge potential, and domestic merchants have also entered the market one after another. With their keen sense of smell, Jikeyin, which is sold on independent websites, has already taken the lead in the local market.

Entering Southeast Asia, Jikeyin locks on target market

Jikeyin is an international B2C mobile social e-commerce company wholly owned by Jihong Holdings . The company operates a wide range of products, with a focus on Southeast Asia, where revenue accounts for more than 30%.

Unlike other cross-border sellers who focus on the European and American markets, when Jikeyin entered the cross-border e-commerce market in 2017, it set its sights on Southeast Asia.

According to Mr. Guo from Jikeyin, Southeast Asia was a niche market that was easily overlooked by cross-border e-commerce sellers in the early days, because the consumption capacity was not as good as that of developed countries, and the geographical environment, language and religious culture were complex. In order to cater to the aesthetic tastes of local people in different countries, completely different products and marketing plans needed to be designed. At the same time, the development of local e-commerce lagged behind, and the proportion of mobile payment was low. It was difficult for large-scale e-commerce platforms such as Amazon to develop rapidly in the local area.

While the above disadvantages exist, we also see potential opportunities. Southeast Asia's economy has been growing rapidly since 2015. In addition, it has a huge population dividend and traffic dividend (little competition), which has created a development space with unlimited growth potential. Combined with China's own full-category supply chain and cost-effective products, entering Southeast Asia may have huge opportunities.

After determining the target market, Jikeyin analyzed local consumers. Mr. Guo introduced that compared with European and American regions, local consumers have the following characteristics: 1. Large population; 2. Diverse languages; 3. Complex cultural and religious beliefs; 4. Pursuit of cost-effectiveness; 5. Weak awareness of e-commerce; 6. High penetration rate of social media.

According to local consumption conditions, Jikeyin conducts precise marketing positioning based on each product, and accumulates a large amount of data information such as multi-dimensional products and user tags in subdivided categories. Relying on its own advantages, Jikeyin has developed rapidly in Southeast Asia.

With sales of 2.1 billion in one year , Jikeyin has become a giant in Southeast Asia's independent website

According to the financial report released by its parent company, Jihong Holdings, its revenue in 2019 was 3.01 billion yuan, a year-on-year increase of 32.62%; its net profit was 346 million yuan , a year-on-year increase of 51.65% . The e-commerce revenue in that year was 887 million yuan.

In 2020, Jihong Co., Ltd.'s revenue was 4.4102 billion yuan, a year-on-year increase of 46.56%, and its net profit was 560 million yuan, a year-on-year increase of 71.3%. The e-commerce sector's revenue was 2.156 billion yuan.

In the first half of 2021, Jihong's revenue was 2.491 billion yuan, a year-on-year increase of 29.97%. The company actively expanded the market by timely adjusting product categories, sales prices and key sales areas, and adopting marketing strategies including gift package promotions and buy-one-get-one-free activities. Although the normalization of the overseas epidemic and the tightening of local residents' income have had an impact on the company's performance, the scale of its cross-border e-commerce business orders increased by more than 60% in the first half of the year , maintaining its leading position in Southeast Asian independent e-commerce.

Jihong Co., Ltd. was listed in 2016. Its revenue scale soared from nearly 570 million yuan in that year to 4.41 billion yuan in 2020, an increase of nearly 8 times, showing a strong development momentum . Behind this, Jikeyin e-commerce has huge development potential.

The support that Jikeyin provides to its parent company in terms of revenue may be precisely its differentiated positioning .

Unlike independent sites in Europe and the United States, Jikeyin uses foreign social networking platforms such as Facebook, Google, TikTok, Line, YouTube, and Instagram to accurately push advertisements and conduct online B2C sales. Its business does not rely on a single platform or platform policy control.

The precision marketing model has effectively promoted the company's business growth. Using the large amount of product and user data accumulated by precision marketing, Jikeyin has iteratively developed its own "automatic product selection and advertising delivery system". Jikeyin currently has more than 1,600 people. It originally relied on human input to achieve order growth and revenue. If it wants to maintain growth, it needs to use digital, automated, and intelligent light human capital technologies to promote business transformation. Therefore, in the past two years, the company has increased its investment and attention to R&D. "Smart product selection", "automatic advertising delivery", "automatic procurement order review and order distribution" are all "technological products" iterated under digital drive.

In the future, Jikeyin also hopes to use the power of technology to break free from the limitations of number of people and achieve higher-dimensional business upgrades.

As the business continues to move forward, Jikeyin is also facing new challenges.

In dealing with declining profits, Jikeyin’s experience is a textbook example

After the outbreak, online sales soared, but cross-border logistics also came under tremendous pressure, with delays, rising freight rates and other contradictions becoming more prominent. Most Southeast Asian consumers are used to the buy now, pay later model, so for cross-border sellers, the signing rate is crucial.

Facing the sudden surge in orders and logistics pressure, Jikeyin fought a good battle. Mr. Guo said that the company used the following practices to overcome logistics difficulties and achieved a breakthrough against the trend.

1) With fewer flights, the company integrated resources to ease the order backlog through charter flights ;

2) Due to the lockdown of cities, land transportation was hindered. Thanks to the full cooperation of the logistics company, the goods were transported to the destination normally by changing people but not vehicles ;

3) Organizing the supply of goods and preparing stocks in overseas warehouses in advance can alleviate the pressure of logistics to a certain extent .

In addition, as the company has established a certain moat advantage in Southeast Asia, in the face of external epidemics and resource shortages, long-term cooperative logistics service providers also give priority to resources and work with them to overcome difficulties. On the basis of stabilizing logistics channels, the issue of rising freight rates has once again been put before us.

Like other cross-border e-commerce companies, Jikeyin has also faced rising freight costs and lower profits.

Mr. Guo, the company's general manager, said that for cross-border sellers , there are three factors that determine profits : acceptance rate, order cost, and operating cost. If you want to maintain profits, you must work hard in all three aspects at the same time.

First, improve the signing rate . From the delivery time, customer service is highly involved to reduce returns, cooperate with category optimization, system real-time automated procurement, logistics status monitoring and early warning, delivery time, customs clearance time, overseas warehouse inventory monitoring and reassignment, and many other node optimizations, adhering to the cultural concept of "simple, extreme, efficient collaboration" to further improve the signing rate . Through the highly open, transparent, and real-time information flow and transmission of the system, the collaboration between positions and the efficient circulation of goods are greatly improved, and the signing rate can now be a benchmark in the industry and market.

Secondly, reduce order costs or operating costs . The specific subdivision includes three dimensions: 1. Advertising : By connecting to the automated advertising delivery system, cost flow can be monitored and regulated in real time, and testing and conversion costs can be further reduced ; 2. Logistics : Refine product dimensions and set a better order splitting mechanism and transportation method ; 3. Product : Adjust and optimize category structure and promotion mechanism, establish a mature stocking mechanism, and conduct secondary sales of overseas warehouse goods .

Finally, reduce operating costs . Through digital upgrades and changes, realize system automation and intelligence, further improve labor efficiency (order output) and achieve greater scale of orders .

The independent website giant Jikeyin's approach to dealing with rising freight costs and reduced profits is textbook-level. This year, third-party platforms have been severely regulated, and many domestic top-selling stores and brands have been closed, causing heavy losses. Against this backdrop, Jikeyin's differentiated positioning has brought it new growth opportunities.

As a cross-border seller, do you want to learn more about Jikeyin's operating experience? On December 13, at the 2021 First China (Zhengzhou) Central Cross-border E-commerce Seller Brand Overseas Summit , Jikeyin VP Guo Xinhua will share the survival secrets of Southeast Asian independent sites based on years of experience, and bring more exclusive dry goods to the participants on site. Hurry up and click the QR code below or read the original text to sign up!

Jikeyin

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