In 2018, China's cross-border e-commerce industry is in full swing. On the one hand, the state continues to release policy dividends, and 22 new cross-border e-commerce comprehensive pilot zones have been added. The first session of the Expo and the introduction of the E-Commerce Law are all promoting the development of the industry towards compliance; The tightening of platform policies, the gradual increase in traffic costs, and the tumultuous global trading environment have made it difficult for Chinese companies to go to sea.
Based on the current situation in 2018, what trends will China's cross-border e-commerce show in 2019, and how should Chinese sellers avoid disadvantages?
From the perspective of industry development, there will be three major trends in 2019:
The first trend, the industry-wide seller structure, will gradually change from the original "pyramid type" to "barbell type" in 2019.
If the sellers of the whole industry are divided into the third gear, the first gear is the seller group with a turnover of more than 100 million yuan; the second gear is the seller group between 10 million and 100 million yuan; the third gear is the seller group of less than 10 million. In the past few years, the entire seller structure has presented a “pyramid type”. There are fewer “head sellers” with more than 100 million yuan at the top, and not many sellers at the middle level. A large number of small sellers of less than 10 million. Beginning in 2019, this "pyramid" seller structure will become a "barbell-type" structure - that is, "two big, small middle."
Head sellers of more than 100 million yuan will start to increase from 2019, and there are still many sellers at the bottom of 10 million. There will be fewer and fewer sellers in the middle. So, where are the sellers in the middle? Our investigation found that after the development of this wave in 2014-2018, by 2019, more and more sellers in the middle level will break through the bottleneck of 100 million yuan, and they will enter the club of 100 million yuan and continue to go up;
However, another part of the middle-tier sellers fell into the bottom layer due to inventory, cash flow and other reasons, and even eliminated. Therefore, starting from 2019, the entire seller group will gradually appear "barbell type" structure.
Currently, the vast majority of sellers in the industry are operating third-party platforms. From the current business situation, the seller's "competitive elements" have evolved from the original "excellent advantages" to "excellent advantages, no obvious shortcomings". In the past, the seller group can basically be split into three types: one is the back-end supply chain; the second is marketing; the third is technical. If the score is 100 points, the back-end supply chain accounts for 50 points, marketing accounts for 30 points, and technology accounts for 20 points.
In the cross-border e-commerce environment of 2018, the three companies that scored well are not bad, and by 2019, among these three factors, as long as one of them is weak, it may Falling behind. This is a trend that is difficult for everyone to avoid on third-party platforms such as Amazon.
For example, in the past year, we found that sellers without quality products went up in the early stage, but they will fall behind. Even if your technology and marketing are more powerful, the high cost of high return rate will continue to make you lose money; and the company with weak marketing, despite the strong supply chain, the good things are afraid of the deep alley, will always be In the "product is not high quality" sellers press; in terms of technology, if your company wants to be bigger, there is no certain data processing ability and it is difficult to get up. As far as the current industry is concerned, there is very little seller who has made a billion-dollar turnover without an ERP system.
In addition, in the middle-level seller group, they basically focus on a certain category, deep-rooted for many years, healthy cash flow, and outstanding performance in the back-end supply chain, marketing, technology and team management. After entering the club of 100 million yuan, they will become the main force of cross-border branding in the future. Because of focusing on vertical categories and promoting their own brands, it is relatively easy to form an online “small brand”.
In addition, we can also see from the fact that the structure of the seller has changed. In the current environment, profitability and healthy cash flow are more important than large-scale expansion.
For the future, we believe that sellers who can clearly understand the opportunities brought about by the changes in the industry and can grasp the pace of industry iterations relatively accurately have a chance to win in the future competition.
The second trend, sellers who are good at multi-channel layout will be able to break through, especially the sellers who walk on the two platforms of “platform + self-built station” have the opportunity to get a new bonus.
On the one hand, for existing platform sellers, self-built stations have the opportunity to become a new breakthrough; on the other hand, for sellers who originally specialize in self-built stations, they can also rely on the relatively low threshold of the platform and high market share. Maximize the advantages.
For platform sellers, the threshold for self-built stations has been reduced a lot. The first is the technical aspect, there are many saas platforms like shopify, shopyy, shopsmiths, etc., which can quickly build stations. Secondly, in terms of traffic, Google, Facebook and other platforms will increase the traffic to self-built stations, and the acquisition cost of self-built stations will be lower than the platform.
Many sellers have found that in 2018, the proportion of paid advertising on third-party platforms to the total cost of sellers has increased significantly, but the conversion rate is not as good as before. At the same time, Google, Facebook and other platforms have gradually weakened the diversion of third-party platforms, and increased the inclination of self-built station traffic. In other words, the cost of acquiring new traffic from a third-party platform may be more expensive than self-built station drainage. Therefore, for platform sellers, the cost of acquiring new customers on the platform will become higher and higher in the future. This kind of change has a lot to do with the strategic adjustment of google, facebook and other traffic platforms. Therefore, the platform seller can realize the multi-channel layout by combining the self-built stations, and gradually realize the maintenance of the old customers on the third-party platform, and obtain the “new pattern” of the new customers through the self-built stations.
So, what kind of platform sellers are suitable for self-built stations?
We believe that non-standard products sold on third-party platforms, as well as standards with personalized features, are suitable for self-built stations. For most of the standards, it may not be suitable for the self-built channel, because foreign consumers should either recognize the brand or recognize the platform when purchasing the standard. However, non-standard products and personalized standard products, the consumer groups facing them are relatively small, the exposure rate on the third-party platform is more difficult to match the standard, basically depends on factors such as advertising display and listing ranking.
As mentioned earlier, in 2019, the trend of “branding” of cross-border export e-commerce will be very obvious. Self-built stations are a very favorable way for sellers to create “niche brands”, so platform sellers can build their own “self-built stations”. The niche brand, and the original self-built station sellers can also combine the low threshold and large traffic of the third-party platform to expose and sell the existing “niche brand” to achieve multi-channel layout.
In addition, I would like to remind everyone that in the future, the proposition of “how to get low-cost new traffic” will become one of the core elements of your success in the fierce competition in the industry. Therefore, whether it is a platform or a self-built station, whether a seller has a strong MARKETING ability will become extremely important, which may also be a magic weapon to solve "low-cost traffic."
The third trend, the domestic traditional consumer brands, will enter the cross-border e-commerce market based on international pressure.
If we say that in 2017-2018, the “regular army” with traditional exporters with strong supply chain advantages will flood into the cross-border e-commerce market. From 2019, we will have strong brand strength and brand operation capabilities in China. The traditional consumer brands will begin to conduct their international operations through cross-border e-commerce channels.
In fact, this phenomenon has begun to appear in 2018. Whether it is "Fang Tai", "Three Guns", "Aucma", and "Zhangqiu Iron Pot" and "Zhang Xiaoquan" and other domestic brands, they have all gone out through cross-border e-commerce. It is not difficult to see that China's traditional consumer brands have been reluctant to go to the domestic market, and they have “shocked” across borders to seek new international breakthroughs.
The above three trends are highlighting a key word, that is, "branding." The brand of cross-border e-commerce will go out to sea, and a new situation will emerge in 2019. It is conceivable that in the next 10 or 20 years, there will be a lot of Chinese brands in the global market, whether it is a world big brand like Huawei, or a personalized “niche brand” that only certain consumer groups like, cross-border electricity. Businesses are helping Chinese companies achieve “brand globalization”.
Of course, the industry trends in 2019 are not limited to the above three points. For example, cross-border retail in emerging markets is still full of vitality; for example, foreign-owned e-commerce platforms will continue to enter China.
