We have achieved the first place in market share in 5 years and become a strong seller in the industry!

Traditional manufacturing companies are breaking through the "shackles" and going abroad.

Traditional manufacturing has always been a pillar industry of China's national economy, and its industrial scale has long been among the top in the world. However, as China's economy enters a new era of high-quality development, traditional manufacturing is also facing new demands for economic transformation and upgrading.

Going overseas is no longer a choice for a single enterprise, but has become an inevitable trend of the times. As the "fourth city" of foreign trade, Suzhou is the habitat of home textiles, power tools, and labor protection products companies, and has nurtured a number of traditional manufacturing companies, which are now going abroad in the form of cross-border e-commerce.

"More and more manufacturing companies in the industrial belt are actively developing cross-border e-commerce," said Yang Jun, vice president of Amazon China and head of Amazon Global Selling Asia Pacific. In addition, a very obvious trend is that Chinese sellers are embracing opportunities on both the B-end and C-end.

Representative local industrial product companies in Suzhou, such as Tineco and Precision Electronics, not only occupy a considerable market share overseas, but also make it onto the Amazon BSR list, becoming the envy of their peers.

A group of industrial belt sellers took advantage of the opportunity to transform

I believe that people in the industry are well aware of the current economic environment. Under the influence of factors such as intensified market competition and upgraded consumption structure, many traditional manufacturing companies have been put under the " curse " of survival pressure.

Since last year, many old foreign trade giants have been disbanded one after another. In the first half of this year, dozens of large and small factories of considerable size have collapsed, covering categories such as toys, hardware, and home appliances.

Many industry insiders believe that the collapse of traditional manufacturing industries is due to multiple factors. On the one hand, most of these companies export in the OEM mode, which is restricted by middlemen and distributors and unable to reach end customers. On the other hand, they have not accelerated transformation and upgrading, which has led to difficulties.

In sharp contrast, the performance of traditional manufacturing companies that have already begun to seek transformation has been rising.

Tineco, a big seller in Suzhou , started to go overseas at the end of 2018, and in 5 years it ranked first in market share in important sites in the North American and European markets; Puyuan Jingdian, a well-established enterprise in Suzhou, entered Amazon in 2021, and quickly expanded to 11 sites in just 3 years; Xiyu Company, which specializes in labor protection products, went online on Amazon in 2023 and made millions of US dollars in one year.

It is undeniable that the transformation of industrial enterprises and going abroad is imminent. At the "2024 Amazon Enterprise Procurement Annual Forum" on September 4, Yang Jun, Vice President of Amazon China and Head of Amazon Global Selling Asia Pacific Enterprise Procurement, also mentioned that more and more Chinese sellers are embracing opportunities on both the B-end and the C-end.

The latest data from Amazon shows that in the past three years, the number of Chinese sellers who are engaged in both B-end and C-end businesses on Amazon has nearly tripled, which shows that Chinese sellers are operating on both the B and C tracks.

It is not that they choose to transform because of challenges, but more and more traditional manufacturing companies are actively developing cross-border e-commerce, and they are expanding the product categories and scenarios of B-side sellers. Not only traditional B2B overseas categories such as industrial products, office supplies, and commercial IT, but also companies in energy storage, laboratory supplies, garden tools and other categories are actively seeking transformation, which also makes B-side overseas expansion more vibrant.

It is worth noting that the sales performance of Chinese sellers on the B-end is growing very fast. Amazon data shows that in the past three years, the annual sales of Chinese sellers on Amazon Business Purchase has increased by more than 400% . In addition, the number of Chinese sellers with large base orders is growing. Taking 2023 as an example , the number of Chinese sellers with business purchase orders greater than US$1 million has more than tripled compared to three years ago.

Luoyang Pangcun Home Furnishing Industry Belt is a typical example of another growth point in performance relying on Amazon Business Purchasing. The prototype of Pangcun Home Furnishing Industry Belt was in the 1980s, when a small workshop made a safe, which gradually developed into a small factory. After more than 40 years of development, it has become the largest steel home furnishing production and sales base in the country, with more than 1,000 types of products and more than 100 national invention patents.

However, like many foreign trade companies, Pangcun's home furnishing industry belt initially conducted its business overseas in an OEM mode. It was restricted by overseas buyers, lacked space for independent innovation, was unable to control price competition, and had difficulty in cultivating its own brand. This is also a microcosm of the current status of China's manufacturing industry.

However, Amazon's entry into the Pangcun Industrial Belt has broken this situation. The successful cooperation between the two parties has enabled these sellers to bypass overseas middlemen and directly connect with end users in the Direct To Buyer model. Pangcun home furnishing companies that reach end customers focus more on consumer feedback. They constantly update and iterate their products, change product sizes, develop different products for different consumers, and even launch brands for the B-side.

As a result, Pangcun's products have entered overseas markets such as the European Union, North America and Japan through Amazon. The upgrade and innovation of Pangcun steel furniture has transformed the company's single manufacturing into design and manufacturing, truly realizing the intelligent and mature production. It has also allowed a number of local traditional manufacturing companies to go abroad and successfully "bear fruit" in overseas channels such as Amazon.

The person in charge of Luoyang Shuangbin Office Furniture said, "After three years of doing e-commerce on Amazon, the scale of the factory has increased more than 10 times, which is unimaginable." When we first entered Amazon in 2020, we sent the goods to overseas warehouses and never thought that we would have such a result. After a year of volume growth, we naturally ushered in an era of stable order volume. At that time, Shuangbin Office Furniture also began to build its own brand on Amazon Enterprise Purchase and successfully won the BSR label in 2023.

On the B-side of Amazon, furniture is not the only category with great potential. "From the perspective of platform categories, the potential of the new three B2B categories is particularly large," Yang Jun mentioned, including advanced manufacturing categories represented by 3D printing and 3D scanners, which have a good development trend overseas. Another category is the service robot category represented by swimming pool robots and lawn mowing robots, which are now emerging overseas; the third category is the new energy category represented by electric vehicle charging piles, new energy, and generators.

500,000 buyers placed orders, will industrial products become the focus of the future?

At the "2024 Amazon Enterprise Procurement Annual Forum", Yang Jun said: "The rise of digital procurement has brought a structural opportunity to cross-border e-commerce exports, and industrial products are one of the most explosive tracks."

Industrial products refer to industrial and scientific research supplies, which can be divided into many categories. Amazon focuses on the potential category of "MRO industrial products" in industrial products. This type of product includes "all other auxiliary materials, tools and services" required for the production and operation of enterprises. Most of them are in high demand and have a high repurchase rate. They occupy a prominent position in the export of industrial products, and their share continues to expand.

However, most Chinese sellers operate these products by distributing them, which means that the core capabilities of product development are mainly in the hands of factories, not sellers, and they do not have their own brands. According to relevant data, the global industrial products field has not been deeply penetrated by Chinese sellers, and the penetration rate and concentration are relatively low. Yang Jun pointed out: Since industrial products cover many categories, it is possible to have a brand like Anker in each line , which also means endless opportunities.

Relevant data show that in 2023, the global MRO market size is 421.37 billion US dollars, and it is expected to grow to 471.65 billion US dollars by 2028. Among them, the compound annual growth rate from 2023 to 2028 is 2.28%. The growing market size and high annual compound growth rate are undoubtedly another opportunity for sellers in the industrial belt.

As a key category for corporate purchasing this year, the editor learned that MRO industrial products cover the world's top ten sites, with more than 8 million related products, covering pneumatic hydraulics, fasteners, instruments and meters, generators, personal protective equipment, building materials, car maintenance, lighting and other subcategories.

"MRO industrial products have a huge demand on Amazon Business, with more than 500,000 buyers placing orders every day," said Amazon Business. These daily-use industrial products with relatively fast turnover and low technical barriers have brought a very high annual growth rate.

And the current market for this type of product is relatively good. On Amazon US, 40% of the bulk purchase demand belongs to the MRO category. Chinese sellers' MRO industrial products also have a considerable market overseas.

Due to the wide range of industrial product categories, many sellers have found their own opportunities.

The more typical local enterprises in Suzhou, namely the sellers mentioned in the first part, Puyuan Precision and Xiyu Group, are typical MRO industrial products. Puyuan Precision was established in the 1990s, mainly engaged in oscilloscopes and power supply devices, established subsidiaries in North America, Japan and other places, and won multiple patents and orders; Xiyu mainly engaged in labor protection products, such as nitrile gloves, and its product sales ranked among the top on Amazon.

Suzhou Yieryi is also a representative of Suzhou's industrial category. The company's main products are leakage protectors, wiring devices, smart homes, wires and cables, and household water pumps. After only two years on Amazon, its monthly sales have reached 2.8 million US dollars. In addition, many of the company's products are also on the best seller list of the Electrical Outlet category on Amazon's US site, and its sales on the B-side are also increasing.

"The company has achieved business breakthroughs on both the B-end and C-end through Amazon." Yuan Xiaoning, Vice President of Marketing of Yieryi, said. It is understood that Yieryi regards cross-border e-commerce as an important channel for overseas expansion and is making every effort to upgrade from the initial "product export" to "brand export".

A large number of companies have achieved remarkable results in corporate purchasing, benefiting from the growing number of corporate buyers. Currently, more than 6 million corporate and institutional buyers around the world are purchasing through Amazon Business Purchasing. Among them, 96 of the Fortune 100 are included. In 2023, Amazon Business Purchasing's annual sales worldwide reached US$35 billion.

This time, Amazon announced the launch of the "Amazon Enterprise Purchasing Industrial Products Overseas Incubator" in Suzhou, which is a natural move. It is understood that each county and district in Suzhou has its own 1 to 2 cross-border e-commerce characteristic industrial belts, including silk fabrics in Wujiang District, smart home appliances in Wuzhong District, and photovoltaic new energy in the High-tech Zone. Suzhou's industrial system covers 35 major categories, 172 medium categories, and 513 minor categories. It is one of the cities with the largest manufacturing scale, the most complete categories, and the most complete supporting facilities in China.

This time, Amazon mainly supports and cultivates industrial products, plans to go deep into 60 industrial product belts in China, focus on 100 core industrial product categories, and incubate 500 high-value industrial product overseas brands. In order to better meet the overseas needs of industrial product sellers in various industrial belts, the "Amazon Enterprise Purchasing Industrial Product Overseas Incubator" will launch corresponding new initiatives to help sellers improve their "four major overseas capabilities" of cognition, product strength, operation strength and brand strength .

Based on last year's "Amazon Enterprise Procurement Industry Belt Accelerator", this year, it was refined and extended to launch the Enterprise Procurement Industrial Products Overseas Incubator. It combines "cross-border e-commerce + industry belt" to specifically help industrial product companies to give full play to their advantages in production and research such as supply chain and manufacturing, add wings of "sales", and run faster in product innovation, flexible production, digital operations, brand building, etc., to achieve "production, research and sales" integration.

China's industrial belts are setting sail overseas, each with its own advantages

China's industrial belts are widely distributed. In the past few years, Amazon's corporate purchasing team has gone deep into major industrial belts to help local companies set sail overseas, including Suzhou tools and measuring instruments, Ningbo lamps and tools, Zhongshan lamps, Xiamen plumbing and sanitary ware, Anping County, Hebei wire mesh, Jinan laser engraving machine, Jinhua hardware manufacturing, Taizhou molding, Shanghai light industrial products and Chongqing general machinery.

By the first half of 2024, the number of new factory-type sellers in the industrial belts covered by Amazon Business Purchase was five times that of the same period last year, and the combined sales of these sellers were more than 10 times that of the same period last year . It is not difficult to see why a number of industrial belt companies began to move overseas.

Looking specifically at each industry, a group of excellent sellers have emerged. Take the Xiamen plumbing and sanitary ware industry belt as an example, it can be traced back to before the reform and opening up. At that time, Taiwanese businessmen came across the sea, bringing production equipment and raw materials, starting from the most basic accessories, successfully turning nothing into something, and cultivating an industrial belt cluster. Today, Xiamen is a world-renowned high-end plumbing and kitchen product production base. With its superior geographical location, its products are exported to more than 180 countries and regions around the world, and its local export share ranks first in the country, and it has also created a group of world-class single product champions.

Jianlin Group , a manufacturing company with traditional offline B-end business as its core, has always been a long-term supplier of international top brands. In 2021, in pursuit of a broader market, it officially entered Amazon. Soon after entering, many of its products won Amazon's Choice, and its products won the top sales in the kitchen category, demonstrating its profound product development capabilities and market insight. Later, the company began to expand its product line, from the initial bathroom products to diversified fields such as water purification, air purification, and health care.

Xiamen Huituyu Technology Co., Ltd. is a local emerging force, and it also mainly deals in bathroom products. In 2020, it was launched on multiple Amazon sites such as North America and Japan through Amazon Business Purchasing. As the saying goes, debut is the peak, and this is the case with Huituyu. Soon after the brand went online, sales began to soar, with annual revenue exceeding 10 million US dollars, and the annual order growth rate from Europe and the United States remained at 100%.

"Going global with your brand is the only way to promote the transformation and upgrading of foreign trade and high-quality opening up to the outside world." Qiu Biaolun, executive director of the Xiamen Chamber of Import and Export, said that independent brands are a powerful tool for companies to occupy the market and the key to quickly enhancing corporate value and forming new competitive advantages. The same is true for the branded gray rabbit fish .

As Amazon mentioned, B2B will be one of the biggest growth points in the cross-border e-commerce industry in the future, and it is also a structural solution for the transformation of traditional foreign trade. Behind this growing momentum is the continuous and irreversible shift of global business procurement to online.

Amazon data shows that 91% of overseas corporate customers said they prefer to purchase online, and 50% of overseas corporate users prefer to search and complete orders directly on Amazon Business. In addition, as the proportion of direct purchases from terminals continues to increase, more and more companies are starting to build their own brands to enhance their image and reputation.

Yang Jun mentioned that many high-quality suppliers choose to walk on two legs, on the one hand, continue to develop their own OEM business, on the other hand, they plan to develop their own brand global business. In the future, I believe that more traditional manufacturing companies will go abroad and occupy a place in the cross-border e-commerce market.

Amazon

Industrial belt

Tineco