Yiwu's post-95 e-commerce entrepreneurs rush into a new blue ocean market

Four years ago, Xiao Li, a boy born after 1995, graduated from Henan and followed his cousin to Yiwu to learn how to do business.

The childish Xiao Li loves to laugh and play, pays attention to fashion, and is not too serious about doing business. Until last year, when he saw his cousin's growing cross-border e-commerce orders, Xiao Li finally decided to put down the game and start his own cross-border e-commerce business.

Initially, Xiao Li's business was not very successful and he could not see the hope of a business explosion. Until one thing changed his attitude.

On March 12, Alibaba's Southeast Asia flagship e-commerce platform Lazada 's investment promotion conference came to Yiwu for the first time, attracting thousands of merchants from Yiwu and surrounding areas to sign up for the conference. Xiao Li also went.

On the same day , Yi Qian, general manager of Lazada Group's cross-border business, announced that the company would provide Yiwu merchants with services such as free cross-border shipping, free collection with low thresholds, as well as a systematic new merchant incubation and support mechanism such as 90-day commission exemption for new merchants and additional exclusive traffic support to dispel merchants' concerns about logistics, payment and other aspects.

As soon as the meeting ended, Xiao Li submitted an application to Lazada staff to open a store. In just two months, Xiao Li's cross-border e-commerce business had undergone a transformation that he could not have imagined.

Yiwu merchants rush to Southeast Asia's e-commerce blue ocean

Since the beginning of reform and opening up, when chicken feathers were traded for sugar, Yiwu has become a famous "global small commodity city", continuously providing the world with high-quality, low-priced and unlimited variety of goods.

Lazada , the leading e-commerce platform in Southeast Asia, also saw the potential of Yiwu products. In March this year, Lazada came to Yiwu to attract investment and tell the e-commerce story of Southeast Asia to the merchants here.

Compared with China, Southeast Asian countries generally have weak manufacturing industries and incomplete industrial categories. However, Yiwu's clothing accessories, home and office supplies have obvious competitive advantages in terms of variety, product quality and price.

Since the outbreak of the COVID-19 pandemic, the "stay-at-home economy" has become popular in Southeast Asia, and related products such as kitchen supplies, cleaning and storage, fitness, life and entertainment have shown a rapid growth trend, among which the sales of kitchen supplies have increased more than ten times.

Some Yiwu merchants with a keen sense of smell were the first to seize the dividends of Southeast Asian e-commerce.

At the Yiwu Investment Conference, a Yiwu merchant who sells outdoor products shared his experience of opening a store on Lazada. His store's sales soared 200% last year, with a repurchase rate of 12%, and became the leader in the cross-border cycling category on Double 11 in two years. Such achievements opened Li's eyes.

After understanding the real situation of the market and combining it with the characteristics of its own products, Xiao Li believes that now is still a bonus period for seizing the Southeast Asian market.

According to an e-commerce report released by Google, Temasek and Bain, the GMV growth rate of Southeast Asian e-commerce reached 63% from 2019 to 2020, and will remain at around 23% in the next five years. Currently, e-commerce channels only account for 5% of the Southeast Asian retail market. The e-commerce market is still in its infancy and is still a "blue ocean" market.

One-stop solution fully implemented

Xiao Li's office is in Beiyuan, less than five kilometers away from the railway station and the airport. This is where Yiwu's cross-border e-commerce merchants gather the most. This small area is connected to the global market. Now, Xiao Li also wants to further expand the cross-border e-commerce territory through Lazada.

Xiao Li's Lazada store opened soon, mainly selling various party balloons. At first, the store had only a dozen SKUs and no promotions, but unexpectedly, the store received orders very quickly. Even without special operations, the number of orders from the first one or two gradually increased to more than ten or twenty times per day.

Some time ago, Lazada opened a collection point in Beiyuan. Xiao Li said, "I am so lucky. The collection point is only 800 meters away from me. It takes less than 5 minutes to drive there."

Now, with more orders, Xiao Li's life has become busy. Every morning, he goes to a nearby factory to pick up goods according to the orders he received the day before, and then returns to the company to pack the orders with his cousin and deliver them to the collection point.

After successful collection and delivery, Lazada's logistics system will use this delivery time as the fulfillment of the small package merchant's delivery time limit (SLA), saving 24-48 hours compared to not assembling the package.

At 4 p.m. , Xiao Zhang, a collection worker at the collection point, was staring at his computer while eating instant noodles. A little later, a truck from the Lazada Cainiao distribution center would come to the collection point to pick up the goods and deliver them to the distribution center 16 kilometers away.

At the distribution center, the reporter saw that the highly intelligent distribution system was working efficiently and quickly, with 2-3 staff members monitoring and coordinating the operation. It is reported that the distribution center's large-scale storage capacity and technological distribution system can complete sorting more quickly and deliver parcels to Southeast Asia through a variety of transportation methods.

In addition to collecting and counting goods, Xiao Zhang also has to receive merchants who come to consult on site every day, and help them solve various problems encountered during their entry and operation face to face.

He told reporters that not all goods have to be delivered to collection points. Lazada Logistics collection trucks are running all over the city, providing free door-to-door collection for a minimum of 50 pieces.

In less than two months, Lazada fulfilled the promise Yi Qian made at the investment conference.

"The only thing we help Yiwu merchants with is that after receiving the order, the merchants just need to pack the package and hand it over to us, and all subsequent matters will be completed by Lazada." Yi Qian once said.

On May 31, Lazada announced that following the Yiwu Industrial Belt, it will launch collection points in six cities, including Quanzhou, Shenzhen, Shanghai, Wenzhou, Xiamen and Fuzhou. Merchants can deliver the goods to the collection points nearby, and there is a special benefit that the operation fees of the Yiwu, Quanzhou and Shenzhen collection points are free!

With the support of various new policies and benefits, overseas warehouses are the future

Since Lazada was fully launched in Yiwu on March 12, many policies favorable to merchants have been announced one after another. Lazada's central warehouse, overseas warehouse, and bonded warehouse are all open, and the good news of the reduction in central warehouse order handling fees has helped merchants save costs and improve logistics experience.

A few days ago, Xiao Li just moved to a bigger office, and several friends were busy preparing goods for the warehouse. During the "5.5 Big Sale" a month ago, the number of orders for Xiao Li's store increased 10 times. "After the order volume increased, there were still so many orders every day after the event ended. So I also signed up for this 6.6 Big Sale."

As the number of orders increases, logistics quality becomes more important. At present, the average delivery time for orders from Yiwu to Southeast Asian countries is about one week. "But if we want to shorten the time and reduce logistics costs, the next step is to enter overseas warehouses. I have already applied for it."

Steven, who joined Lazada more than a year earlier than Xiao Li, has already tasted the benefits of overseas warehouses.

Steven sells household items such as kitchen accessories. He told reporters: "If you want to do long-term cross-border business, you must deploy overseas warehouses, and the proportion must be high. Otherwise, your logistics costs will not be reduced, so how can you compare with others?"

An outdoor fishing gear merchant who shared his experience at the investment conference also said: "The significance of overseas warehouses to merchants is not the difference between 20% and 30%, but the difference between 0 and 1."

Overseas warehouses are another logistics service provided by Lazada in addition to direct mail small parcel collection. Merchants can ship products to overseas warehouses in Malaysia, the Philippines and other countries in advance. After receiving the order, the overseas warehouse is directly responsible for the one-stop management of packaging, shipping and delivery, and the delivery time can be within 24-48 hours.

Recently, Lazada upgraded its warehouse network and launched an intelligent replenishment system for overseas warehouses. Through the smart supply chain management system, it has created a new digital operation model for merchants. The system replaces manual work and Excel spreadsheets, provides replenishment suggestions with big data algorithms, and makes precise product recommendations with simple operations, thereby reducing costs and improving efficiency.

"During last year's Double 11, I prepared thousands of items in advance in our overseas warehouse in Malaysia, and they were all sold out in one or two days. Basically, orders placed on that day would arrive the next day," said Steven.

Currently, 40% of Steven's store orders are shipped from overseas warehouses, and he plans to increase the proportion to 70% before Double 11 this year. "Otherwise, when the orders explode, it will be too late to pack and ship from Yiwu."

Seizing the opportunity to expand into Southeast Asia, merchants born in the 1990s earn 40,000 to 50,000 yuan a month

During the Double 11 shopping festival last year, Steven's store sales surged, and his colleagues were busy packing for several days. After his colleagues got off work in the evening, Steven worked all night to pack all the orders for the day.

Steven was exhausted after not sleeping for two days , but he was happy. The order revenue during the Double 11 promotion accounted for 40% of the annual revenue.

Half a year ago, Steven was considering giving up. "The store wasn't doing well, and I didn't know what to do, so I had a deep conversation with my account manager."

The account manager suggested that the products be segmented according to different usage scenarios to avoid operating in a general store style. At first, Steven was worried that this would disperse the traffic, but after he opened several new stores in categories such as kitchen and bathroom, the overall sales and user feedback were significantly improved.

Steven came to Yiwu to work after graduating from high school. He has been working in the cross-border e-commerce field for 10 years and finally earned enough money to buy a house last year.

"I have finally established myself in Yiwu and provided a stable home for my wife and children." Steven said with a smile as he sat in the basement office surrounded by piles of cargo packages.

Steven is very grateful to his account manager for giving him advice when he was confused last year. Starting from May 12 this year, Lazada launched a three-month service plan to help new Yiwu merchants develop exclusive growth camps.

Lazada also plans to open more collection points in Yiwu and arrange more official incubation teams to be stationed in Yiwu to guide merchants to settle in and answer questions. In terms of logistics, Lazada and Cainiao will increase collection vehicles and upgrade support and incubation services for new merchants.

Steven said sourly: "Recently, I can clearly feel that there are more people around me doing Lazada, and the competition will definitely become more intense."

Steven now earns 40,000 to 50,000 yuan a month, but he doesn't think he is that successful. "There are many businesses in Yiwu that started Lazada earlier than me and are bigger than me. Last time, I heard a colleague share his experience. I really admire his vision and ideas. No wonder he has tens of millions of yuan in revenue a year."

After years of accumulation, Yiwu has attracted a large number of cross-border e-commerce entrepreneurs. They are not necessarily born and raised in Yiwu. Many of them come from different parts of the country, but in the end they all realized their entrepreneurial dreams in Yiwu.

The entrepreneurial experience of Xiao Li and Steven sounds simple, and success seems to come easily, but in their opinion, they are just ordinary members of Yiwu's many cross-border e-commerce companies. The secret to doing a good business is just as Steven said: "Do complicated things simply, and do simple things repeatedly."

Yi Qian once said, "Many young people are optimistic about the blue ocean market of cross-border trade, and they have a greater chance of success if they come to Yiwu. Because Yiwu's small commodities are not only popular in China, but also in Southeast Asia. The whole world is watching Yiwu."

Lazada

Southeast Asia

Yiwu