The best sellers on the niche platform soared, earning 570 million yuan in two and a half years

Not long ago, when many sellers were browsing the semi-annual report of Zhiou Technology, they all focused on the e-commerce platform OTTO. They were all shocked that Zhiou Technology had achieved a GMV of 180 million yuan on such a niche e-commerce platform in just 6 months.

As we all know, after the Amazon account ban, cross-border e-commerce sellers have accelerated their layout on niche e-commerce platforms, including Germany's OTTO, Poland's Allegro, France's Cdiscount, Japan's Rakuten, Russia's Ozon, and so on.

Many people may not have thought that the first company to announce the good news was Germany's OTTO. This also gave sellers a new understanding of Germany, or the entire European e-commerce market.

In fact, in addition to targeting local niche e-commerce platforms in various countries, sellers have a deeper layout and a more positive attitude towards emerging domestic cross-border e-commerce platforms. Currently, they are mainly concentrated on three platforms: SHEIN, Temu, and TikTok. On these platforms, sellers are actively exploring various marketing strategies.

Overall, the former has a small number of Chinese sellers and less intense competition, but entry is more difficult. For example, some platforms are only open to entry by invitation. This means that Chinese sellers need to have higher qualifications and strength to have a chance to enter. The latter has a large number of Chinese sellers and extremely fierce competition.

But it is relatively easy to settle in, and because it is a Chinese e-commerce platform, most of the team members are Chinese, so communication will be much smoother. In this way, in dealing with various matters, such as platform rule interpretation, problem consultation, cooperation negotiation, etc., it can be more efficient and convenient, reducing misunderstandings and obstacles caused by language and cultural differences, and providing sellers with a relatively friendly settlement and operation environment.

The best seller soared on a niche platform in Germany, earning 570 million yuan in two and a half years

Zhiou Technology is developing very rapidly on the OTTO platform. According to the financial report, in 2022 and 2023, Zhiou Technology's revenue on the platform was 138 million yuan and 250 million yuan respectively, a year-on-year increase of 80.99%.

This year, the company has maintained this strong growth momentum, achieving revenue of 185 million yuan in just six months, which is 74% of last year's revenue, a year-on-year increase of 97.11%.

As revenue increases, the status of the platform also rises. Currently, revenue from OTTO accounts for 5.04% of the main business. Although the proportion is not large, it is enough to make it surpass the independent website and become the second largest channel of Zhiou Technology's revenue, second only to Amazon. Moreover, this platform is the fastest growing channel among all B2C platforms deployed by Zhiou Technology.

Overall, in two and a half years, Zhiou Technology's total revenue from OTTO reached 573 million yuan. Many people were shocked that such a niche platform could achieve such an outstanding performance.

However, if you know something about OTTO, you will know that its performance in the European e-commerce market is very significant, especially in the German market where it occupies a leading position.

Founded in 1949, OTTO is the core e-commerce platform of the OTTO Group. Initially starting out as a mail-order retail business, it launched its e-commerce model in the mid-1990s. Today, it has grown into the largest online retail e-commerce platform in Germany, and ranks second in market share among German e-commerce companies, second only to Amazon.

In 2023, OTTO's gross merchandise volume ( GMV ) will reach 6.5 billion euros. As of April 2024, it has 11.7 million active users, equivalent to 13.85% of Germany's total population (84.482 million in 2023). Similarweb data shows that its total global visits in August were 50.32 million, with daily visits exceeding 1.62 million.

Among all traffic channels, direct visits and natural searches account for as much as 87%, and paid search traffic is very small. This traffic structure fully demonstrates that OTTO has formed a good brand effect in Germany/Europe and is highly recognized by local people, without the need for large-scale advertising investment.

The "2023 Cross-border E-commerce Development Report" jointly released by the Shanghai Academy of Social Sciences, Standard Chartered Bank, "Financial Weekly" and Dun & Bradstreet shows that OTTO Group ranks ninth among the top 50 global cross-border e-commerce companies and is the only European platform to enter the top 10.

In 2019, OTTO began to open up its third-party seller market, and in the second year (2020), it started its investment promotion journey in China. However, it adopted a limited invitation review system to strictly control the number and quality of sellers to ensure a healthy competition environment on the platform. For example, in 2023, the OTTO platform only opened 75 places to Chinese sellers. Earlier this year, OTTO China CEO Xu Beixi said that in 2024, the number of invited sellers might be controlled at around 50.

Therefore, over the years, not many Chinese sellers have successfully settled in OTTO. In May this year, German media reported that the total number of sellers on the platform was 6,500. According to other news, in 2023, there will be about 300 Chinese sellers on the platform.

As one of the first Chinese brands to enter the platform, Zhiou Technology has gained more exposure and sales opportunities and has developed rapidly in recent years. Those who follow Zhiou Technology know that its main battlefield is in Europe. Financial report data shows that in 2023, Zhiou Technology's revenue in Europe was 3.729 billion yuan, accounting for 56.18% of its operating income. OTTO has played a significant role in promoting its expansion in the European market.

Currently, the three major product brands of Zhiou Technology all have products on sale on the platform, including home brand SONGMICS, stylish furniture brand VASAGLE and pet home brand Feandrea.

In addition to Zhiou Technology, Roborock Technology, a 3C product seller, has also entered OTTO. Its products have performed well on the platform, and many of its smart sweeping robots have been labeled "Sehr beliebt (very popular)". Overall, its products have a high rate of positive reviews on the platform. For example, a sweeping robot with dual roller brushes and 3D obstacle avoidance has nearly 80% of people giving it five-star reviews.

One consumer said that he was attracted by the product after watching YouTube, and he was not disappointed after buying it. "I let it run on the first floor at night. It was very quiet, and when I got up, I found that the carpet and floor were cleaned very well. It is really a good helper in life. I really regret not buying it earlier."

European e-commerce market is not just about Amazon

In Europe, Amazon's business covers many countries, including the United Kingdom, Germany, France, Italy, Spain, the Netherlands and Sweden. In 2023, its revenue in Europe exceeded 53 billion euros.

In Europe as a whole, Amazon is the most visited e-commerce platform. According to similarweb data, in August 2023, Amazon was far ahead of eBay and other platforms with 1.3 billion monthly visits.

But in fact, Amazon is not the only player in the European e-commerce market. Many local e-commerce platforms together form another diverse world. With their in-depth understanding and precise grasp of the local market, they have established closer ties with local consumers.

These platforms have large traffic and few Chinese sellers, which is a good opportunity for many domestic cross-border e-commerce sellers. They can be called the "new oasis" of the European market. Although some of these platforms have high entry requirements, the rewards in the later stage are also quite fruitful. The following are several European local e-commerce platforms that sellers should pay attention to:

Allegro

In Poland, Allegro is the largest e-commerce platform with a high market share and brand awareness, and is known as the "Taobao" of Poland. According to the financial report data released not long ago, in the first quarter of 2024, Allegro's total merchandise sales (GMV) was 13.57 billion zlotys (about 3.37 billion US dollars), and the number of commodity transactions reached 305.2 million. In addition, the number of active buyers on the platform increased from 14.2 million last year to 14.8 million.

Similarweb data shows that Allegro's monthly visits in August this year were nearly 200 million, with an average daily visit of more than 6 million. This number of visits is quite impressive in the world. Compared with such a huge traffic, there are not many sellers on the platform (only 150,000), and even fewer sellers from China (accounting for only a single digit).

In the past two years, Allegro has accelerated its pace of attracting investment in China. Interested sellers can try to settle in.

Fruugo

The largest local e-commerce platform in the UK that supports global sales just restarted its investment promotion in China on September 12 this year. Fruugo was founded in 2008 and originated in Finland, and later became a British company. Its business covers 46 countries in Europe, Asia, Australia and New Zealand. Among them, in 2023, the top ten countries in terms of sales on the platform are Switzerland, Sweden, Germany, the United Kingdom, Norway, the Netherlands, Denmark, Australia, Belgium and Finland. Nordic countries account for four-tenths.

The hot-selling categories on the Fruugo platform include clothing, electronics, household goods, garden supplies, auto parts, etc., as well as sports, pets, maternity and baby, beauty and other products. The main source of traffic for the platform is Google Shopping. Its fee model is "no sales, no fees", and it only charges 15% of the transaction amount as a service fee (excluding VAT) and 2.35% of the total transaction amount (including tax) as a fund processing fee.

The company was named by the Financial Times as one of the 1,000 fastest growing companies in Europe in 2021. Sales in 2022 reached £65 million.

In 2019, Fruugo began to attract investors in China, and at that time many sellers made considerable profits by distributing goods in large quantities.

eMAG

As the largest online shopping platform in Romania, eMAG occupies an important position in the e-commerce market in Southeast Europe. Founded in 2001, eMAG has a history of more than 20 years. In the early days, it mainly focused on the Romanian market, and then continued to expand its business scope, and now covers Bulgaria, Hungary, Poland, Italy and other countries.

Similarweb data shows that in August this year, eMAG's global monthly visits reached 31.63 million, with an average daily visit volume of over one million, of which 90% came from Romania.

Currently, eMAG has more than 9 million active users and about 60,000 active sellers. The number of Chinese sellers is very small, about 1,200. Obviously, for Chinese sellers, eMAG is a cross-border e-commerce platform with potential.

According to reports, some of the sellers who joined earlier have already delivered good results. A Shenzhen seller who focuses on the Western European market said that after successfully joining eMAG, he gradually synchronized Amazon's products and newly developed products to the platform. In just ten months, his sales increased 15 times.

Data from the eMAG platform shows that in 2023, the total GMV of Chinese sellers on the platform increased by more than 300% year-on-year, among which 10 brands achieved monthly sales exceeding 1 million euros.

Cdiscount

It is a highly influential full-category e-commerce platform in France and one of the earliest cross-border e-commerce platforms in Europe. Its business not only covers France, but also extends to Belgium, Germany, Italy, Luxembourg, Spain and other European countries.

Similarweb data shows that in August this year, Cdiscount's global monthly visits reached 28.74 million, with an average daily visit volume of over 920,000. Among them, 91% of the traffic came from France, with a small amount coming from countries such as Belgium and Morocco. According to the head of the platform's China region, Cdiscount has over 17 million active users and nearly 10,000 third-party sellers.

Cdiscount started recruiting merchants in China as early as 2015. Compared with other European local platforms, it was earlier in contact with Chinese sellers. Therefore, the number of Chinese sellers now accounts for a large proportion of third-party sellers, about one-third.

According to a report by Fevad, the French e-commerce sales federation , the scale of e-commerce in France increased by 10.5% in 2023 to 159.9 billion euros. E-commerce accounts for 10% of total retail trade. As the scale of e-commerce in France continues to grow, Cdiscount is expected to develop further.

Zalando

In addition to OTTO, Zalando is also developing well in Germany. Zalando initially focused on footwear sales, and as its business continued to expand, it gradually covered a wider range of fashion categories such as clothing and accessories. Zalando is the third largest e-commerce platform in Germany, with Amazon and OTTO being the top two.

Zalando ranks fifth in Digital Commerce 360’s European database, which ranks the region’s 500 largest online retailers based on annual web sales.

Similarweb data shows that in August this year, Zalando's global monthly visits reached 27.38 million, with an average daily visit of nearly 900,000. Among them, 92% of the traffic came from France, and the rest came from Switzerland, Turkey, the Netherlands and Austria. The financial report shows that as of the second quarter of 2024, Zalando has 49.8 million active users.

A report released by RetailX in 2023 showed that more than 10% of the top 1,000 retailers and brands in Europe sell on Zalando, with 18% of the top 1,000 actively selling products on the site.

Zalando is open to Chinese sellers, but the entry requirements are relatively strict, for example, sellers must have opened an independent online store.

Pccomponents

Founded in 2005, it is the largest electronics platform in Spain, with a product range covering TVs, mobile phones, games, cameras, large and small appliances, smart homes, etc., with more than 100,000 product categories. In 2021, Pccomponentes has 45 million independent users and more than 2.9 million subscribers.

Similarweb data shows that in August this year, Pccomponentes had 12.57 million global monthly visits, with an average daily visit of over 400,000. 70% of the audience are male, and the largest audience is in the 25-34 age range, accounting for 31.36%. Earlier news showed that the platform had an annual visit volume of 910 million.

Unlike other European local e-commerce platforms, Pccomponentes has been very restrained in its expansion. It has been established for nearly 20 years and has always been firmly in its base camp, without setting up independent sites in other countries. Moreover, it was relatively late in contacting Chinese sellers, and only started to attract investment in China at the end of last year. This is a good opportunity for 3C sellers.

It is reported that Chinese electronic products are still quite popular in Spain, among which smartphones are particularly popular, and Xiaomi, Huawei and other companies have a large number of local users. In addition, Chinese electronic products such as tablet computers, smart watches, wireless headphones, etc. are also competitive in the Spanish market due to their price advantages and good performance.

In this context, sellers who join platforms like Pccomponentes that have not yet been widely "involved" are likely to have new opportunities.

Domestic emerging cross-border platforms are rising overseas, and the layout of big sellers is gradually deepening

Not long ago, people found a "surprise" in the semi-annual report released by Savitech . The company not only laid out the emerging platforms TikTok and Temu at the same time, but also achieved good results.

According to the financial report, in the first half of this year, Savitech's revenue from Temu and TikTok was 60.6 million yuan and 23.7 million yuan respectively. Moreover, compared with the same period last year, the revenue of the TikTok platform increased by an astonishing 10,700.2%.

With this revenue, Temu and TikTok have become the third and fourth largest platforms for generating revenue in the Savi era.

Many industry insiders believe that based on the current development trend, Savitech’s revenue from Temu this year is very likely to exceed 100 million yuan. Therefore, although the total revenue of the two platforms in half a year is less than 100 million yuan, accounting for only 2.03% of the total revenue, as time goes by, the contribution rate of Temu and TikTok in the total revenue will definitely increase.

In recent years, TikTok, Temu, and SHEIN have opened up a new world in the overseas market with their unique advantages and strategies, and shaped a new pattern of going overseas. In order to seize this wave of new opportunities, many sellers have jumped on board. In addition to Savi Times, big sellers such as Huakai Yibai and Youkeshu have stated in their financial reports that they have paid attention to or deployed these platforms.

Youkeshu said that while the company is deepening its presence on mainstream third-party platforms such as Amazon and AliExpress, it is also actively developing emerging platforms such as Shopee and Lazada, and is trying to expand into new platforms such as Temu, the overseas version of Pinduoduo.

Huakai Yibai has also made different sales plans for TikTok and Temu based on business characteristics.

It is reported that the TikTok platform has become a key channel for the growth of Huakai Yibai's boutique business. The boutique business team actively adapts to the platform policies and grasps the platform dividends, mainly through cooperation with KOLs and advertising, to continuously break through its own boundaries and embrace new growth opportunities.

The pan-catere business fully leverages the high cost-effectiveness of Chinese products, actively expands the emerging Temu platform, achieves efficient and accurate distribution through data-based management and self-developed information systems, creates the ultimate cost-effectiveness for the pan-catere business, adapts to the global trend of consumption downgrade, and realizes the growth flywheel of the pan-catere business.

TikTok, Temu, and SHEIN, as emerging platforms, have expanded traffic entrances for many domestic sellers. Moreover, in this process, TikTok is not only a sales platform for sellers, but also a propaganda platform. Saiwei Times said that in addition to normal product sales, the TikTok platform is also an important channel for the company to promote its brand and enhance its brand influence.

Today, Amazon's dominance in the e-commerce market is still unshakable, but it is undeniable that with the development and evolution of the global e-commerce market, cross-border e-commerce is showing a diversified pattern. In the future, cross-border e-commerce will have both opportunities and challenges. While sellers are planning on Amazon, they can also pay more attention to and plan for some emerging and niche platforms to cope with market changes.

Zhiou Technology