Store capitalization becomes the new favorite way to make money, PingPong opens a new channel for cross-border sellers and global capital

1. The booming global cross-border e-commerce world is brewing a huge change.

Many overseas consortiums with huge amounts of capital have emerged, like falcons, searching for high-quality third-party stores on cross-border e-commerce platforms.

They are financially strong and have unique vision: once a high-quality target appears, they never drag their feet and act steadily, ruthlessly and accurately.

It is difficult to say "no" to the high-quality stores they have chosen . The price they offer is extremely tempting: the purchase price is often 4-5 times the annual profit of the store.

According to statistics, in this capital-driven "acquisition wave" targeting Amazon's third-party premium stores that is currently taking place overseas, more than 40 overseas companies, with a combined capital of over 3 billion US dollars, are keeping a close eye on third-party sellers on the Amazon platform, and are coming in with great momentum.

"This wave of acquisitions will continue for several years," said Mark Daoust, founder of an overseas capital intermediary agency.

Analysts believe that the rush of global capital into the market is a landmark event, which means that cross-border e-commerce has been recognized by the world's mainstream capital and has become the new favorite of capital giants in their "land grabbing" strategy.

As the "capital influx" is inevitable, PingPong is becoming the throat channel connecting Chinese cross-border e-commerce sellers with global capital.

2. Under this great change, China's cross-border e-commerce sellers are at the crest of the wave.

According to Business Insider, as of March this year, Amazon has added 3,700 new sellers every day, which is equivalent to two sellers joining Amazon every minute! Chinese sellers account for 42% of Amazon's top sellers (as of the end of 2020).

Although it is still a novel concept for capital to seize Amazon's third-party sellers, the meaning of sales is changing for cross-border e-commerce sellers - from selling products to selling stores. The deeper impact is that the familiar survival and competition landscape will be reconstructed.

This leaves Chinese cross-border e-commerce sellers with a new question: should they continue to do the business or sell it at a high price!
But in the tide of the times, there seems to be not much time left for Chinese cross-border sellers to hesitate.

Now, they are here!

3. Perch, one of the leading capital players in the capital influx.

You may not have heard of it. But what I am going to say next is relevant to every cross-border seller.   Recently , Perch announced that it will join hands with PingPong to carry out in-depth cooperation in many aspects such as selection, operation and promotion of global growth of acquired brands. This cooperation between the two parties has attracted great attention overseas, and hundreds of media such as Yahoo Finance have reported on it.

It is worth mentioning that the payment partner chosen by mainstream capital representatives in the world is only PingPong, and there is only one in the world!

Why PingPong?

“The three factors that have contributed to our success include access to capital, access to quality stores and, by far, the most challenging factor – managing operational complexity and cash flow,” said Nate Jackson, Perch’s vice president of acquisitions .

As Jackson said, PingPong helps them solve a big part of the above problem.

First of all, PingPong is one of the world's largest cross-border e-commerce basic service providers and the Chinese company with the largest payment collection scale on platforms such as Amazon and Wish. It serves nearly one million global sellers and has a complete global payment network and a rich product and service system.  

Secondly, PingPong provides Perch with a variety of solutions through highly secure accounts to help the brand achieve more efficient and rapid growth in the future.  

Furthermore, and this is extremely important, PingPong is very familiar with Chinese cross-border sellers and can help Perch discover and find the sellers they want.  

To put it bluntly, PingPong is a "scout" who finds the next Champion.

In the view of Chu Zihang, founder of Muxin Capital, the cooperation between two representative companies in different fields on both sides of the ocean is more like the flapping of the wings of a butterfly in the tropical rainforest of South America, bringing a new business model and huge room for imagination and development to the cross-border industry, and opening up a channel between China's millions of cross-border sellers and the world's top capital operators.

4. Should I continue doing it or sell it? This seemingly simple question is actually not that simple .
 

In the past, for domestic cross-border e-commerce sellers, the road to financing and listing was long and difficult, either through hard work or by fighting through the crowd.   Now there is a new path that is more direct and can get higher returns in a shorter period of time.

Barzilai (an Israeli) is a seller on the Amazon platform. He mainly operates a VR headset brand. He has been doing this for more than two years and his annual turnover exceeds US$1 million.

Years ago, he sold the store to Perch. "Tired of the fierce competition among peers, and the growth has reached a bottleneck." This is one of the reasons why Barzilai chose to sell. Another reason is naturally the extremely tempting purchase price, but Barzilai just smiled and did not disclose it to the public.

Compared to selling, the first option is relatively more complicated.

  According to statistics, the third-party stores acquired by the capital giants on platforms such as Amazon cover a wide range of categories, including kitchenware, pets, clothing, fitness, etc. They have also established global professional teams for brand management, business strategy, image/video production, supply chain management, market growth, etc. After acquiring the target stores, they have achieved rapid growth.

This means that for fast-growing sellers, either they will be targeted by capital or their competitors will be targeted by capital. The latter means that their living space will be further squeezed.  

How to deal with it next is something we must think about seriously.

If you already have a certain brand, then you should cultivate your brand, expand and strengthen your business, and sort out your finances and taxes. After all, having more choices is the best way.

It's time to prepare for bigger storms ...