Internet giants are making new bets on the new battlefield of 'overseas'

> > This year, cross-border e-commerce has suddenly become hot, and major Internet giants have pressed the fast-forward button to compete for overseas markets. This article will take stock of the current development of major domestic Internet companies in cross-border e-commerce business. Interested friends come and take a look. > > >

This year, cross-border e-commerce has suddenly become hot, and major Internet giants have pressed the fast-forward button to compete for overseas markets. This article will take stock of the current development of major domestic Internet companies in cross-border e-commerce business. Interested friends come and take a look.

This year, cross-border e-commerce has suddenly become popular. According to the incomplete statistics of Moose's new consumption, from January to August, more than 10 cross-border e-commerce startups in China received financing. In August, it ushered in a small outbreak. Five cross-border e-commerce platforms received financing, three of which received billion-dollar financing.

Not only that, the major Internet giants pressed the fast-forward button to compete for overseas markets this year.

In early September, Pinduoduo’s cross-border e-commerce platform Temu was launched in the United States. On Alibaba's side, Jiang Fan is in charge of the "Overseas Digital Business" sector, which is in charge of AliExpress and International Trade (ICBU) two overseas businesses, as well as Lazada and other subsidiaries facing overseas markets; JD.com has also deployed overseas early. In mid-June, JD.com’s B2B platform “JD.com Global Trade” was officially opened for operation, focusing on Southeast Asia and the US market. In addition, Internet companies such as ByteDance and Tencent also entered the game early.

In this issue, Moose New Consumption will take stock of the current development of cross-border e-commerce business of major domestic Internet companies.

1. Ali: The earliest layout but still far from the goal

Ali's overseas layout can be traced back more than ten years ago. When it went public in 2014, globalization was listed as one of Alibaba's strategies for the next 10 years. Since 2010, Ali's globalization has changed from initial investment to "personal exit" holding. In 2010, Ali founded AliExpress, an online wholesale trading platform for the global market, and then wholly acquired Vendio Services, an American e-commerce SaaS provider, to realize the connection with AliExpress.

According to the fashion life official, since 2013, Ali has invested intensively in Southeast Asia e-commerce platform Lazada, Indonesian e-commerce platform Tokopedia, Bukalapak, Thai logistics company Flash Express, Indian logistics company XpressBees, Vietnam payment application eMonkey, Thailand payment company TureMoney , and payment applications in Malaysia, the Philippines, Myanmar, Indonesia and other places. Through these investment activities, Ali's e-commerce map in Southeast Asia has taken shape.

After Jiang Fan was transferred to Alibaba's overseas digital business sector, he began a series of adjustments. It is reported that Jiang Fan's series of measures include unifying all teams of Taobao Tmall overseas, Lazada's cross-border business and AliExpress cross-border business to AliExpress, and handed over to Zhang Kaifu, the former head of Taobao industry, for unified management. At the same time, Jiang Fan put more of the responsibility of localized operation on Lazada, and Lazada uniformly leads the localized e-commerce operation in various markets around the world.

However, judging from the performance data, Alibaba's international business revenue has not changed much year-on-year.

According to Alibaba's performance report, from April to June 2022, Alibaba's revenue was 205.555 billion yuan, with no overall year-on-year growth. Among them, international business income increased by 2% year-on-year to 15.451 billion yuan. However, this increase is not obvious, with international business revenue accounting for 7% of total revenue and 7% of total revenue in fiscal 2022.

In 2016, Jack Ma put forward the goal of "hoping that Alibaba can obtain more than half of its revenue from overseas markets within 10 years". At present, the realization of this goal may be delayed for several years.

In the latest quarterly financial report, Ali said, “In the first quarter ended in June, the overall order volume from Lazada, AliExpress, Trendyol and Daraz decreased by 4% year-on-year, mainly due to the revision of EU VAT regulations and the depreciation of the euro against the US dollar. , as well as the ongoing impact of supply chain and logistics disruptions caused by the conflict in Russia and Ukraine, reducing AliExpress orders.”

2. JD.com: Supply chain and logistics are still the focus of the layout

JD.com started its globalization layout in 2015, and first launched the cross-border B2C platform JOYBUY. At the same time, multiple platforms have been launched in Southeast Asia, such as JD.ID Indonesia (JD.ID) and JD Central in Thailand; in Vietnam, JD has also invested in the local e-commerce platform Tiki.vn.

At JD. Export technology, international logistics and intelligent warehousing, providing enterprises with one-stop logistics logistics services. It can be seen that JD's international business is one of JD's important strategies.

At the end of 2021, JD.com said that due to the company's strategic development needs, JOYBUY will stop the operation of its existing business on December 9, 2021. It is replaced by "JD.com Global Trade", which will officially open for operation on June 18, 2022, focusing on the North American and Southeast Asian markets, and has opened to 110 countries and regions around the world.

After the upgrade, "JD Global Trade" is mainly based on JD's supply chain infrastructure, and helps overseas factories and merchants quickly enter foreign markets by opening up the entire link of trunk transportation, overseas warehousing, terminal distribution, and after-sales service.

In the transition from cross-border B2C to B2B, JD.com has begun to focus on its own advantages - supply chain and logistics. Globalization has also opened a new turning point and began to accelerate its layout.

At the recent ASEAN Expo, Li Sirui, general manager of JD.com's international supply chain business department, attended the China-ASEAN Silk Road E-commerce Forum. Li Sirui revealed that in recent years, JD.com has continued to deploy e-commerce retail and logistics infrastructure in the ASEAN region, launched local e-commerce platforms in Indonesia and Thailand, and deployed online and offline omni-channel retail, as well as technology empowerment solutions.

3. Pinduoduo: Send low-cost “rolls” abroad

With the official launch of the cross-border e-commerce platform TEMU in North America in early September, Pinduoduo seems to have recently shifted its business focus to overseas markets. TEMU also continues the low-price model of Pinduoduo in China. At present, Pinduoduo has not yet launched the sales model of Pinduoduo overseas. A few days ago, TEMU's APP homepage discount area has been upgraded from "20% off" to "30% off" and "$0.01" areas, and all products have no threshold and free postage.

On September 19, Pinduoduo also announced the official launch of the “2022 Duoduo Overseas Support Plan” to provide integrated service solutions for manufacturing businesses to go overseas. The plan will invest 10 billion resource packages, build 100 overseas brands in the first phase, and support 10,000 manufacturing companies to directly connect to overseas markets.

As of now, Temu is ranked 14th in the shopping category of the Apple Store.

Pinduoduo's departure to the sea may seem sudden, but it is actually a general trend. With domestic traffic peaking, new users growing slowly, and consumption sluggish, it is inevitable for Internet giants to turn overseas.

It is reported that the Pinduoduo Temu platform clearly requires that “the supply price is lower than the market wholesale price”, and through the supplier’s limit compression of profits and the platform’s discounts, Temu’s “lowest price on the entire network” has been promoted. In other words, there is undoubtedly another platform for low-cost promotions.

It is worth noting that, unlike other platforms that took the lead in choosing Southeast Asia as the first stop, Pinduoduo directly chose the North American market where the e-commerce platform is mature and competitive. Whether Pinduoduo Temu can succeed is still difficult to comment. After all, in overseas markets, supply chain and logistics are not Pinduoduo's strengths. In addition to the early traffic dividends after the merchants settle in, whether they can ensure sufficient profit margins in the later stage is also the key to the success of Temu.

4. ByteDance: TikTok needs to keep up to speed up the supply chain

ByteDance's going overseas is not only the success of TikTok, but also the support of many cross-border business lines behind it.

In 2021, ByteDance will lay out many overseas business lines in a low-key manner. At the beginning of 2021, it invested in Shenzhen Starlink, a big cross-border e-commerce seller; in March, ByteDance acquired a 100% stake sold by “Patosun” for 2.02 billion yuan; Global merchants push free door-to-door collection function. In August, Byte acquired a stake in the cross-border e-commerce Zongteng Group. Zongteng Group is a global cross-border infrastructure service provider and one of the first companies to do cross-border e-commerce. As early as 2018, it also acquired a cross-border dedicated line. Logistics company "Cloud Logistics". Soon after, ByteDance invested $10 million in iMile, a Middle East e-commerce logistics company.

According to a LatePost report, in 2021, TikTok will expand its advertising, overseas e-commerce and live broadcast teams on a large scale, and the total number of employees will increase from less than 4,000 in early 2020 to nearly 20,000. At the end of the same year, Fanno, an independent e-commerce app, was also launched.

However, Fanno's operation does not seem to be going smoothly. In August 2022, there were rumors that "ByteDance plans to shut down its independent e-commerce platform Fanno, the project has been eliminated by ByteDance internally, and the project team has been disbanded in April" .

In this regard, the relevant person in charge of Fanno's business said to the public: Fanno can still be used normally and will continue to support users and merchants. Although rumors have been refuted and shut down, Fanno has been questioned by many consumers in terms of user experience, which is basically reflected in logistics and distribution efficiency, returns and exchanges, and platform services.

Compared with other domestic Internet giants, ByteDance started late in cross-border e-commerce, and its experience in supply chain, logistics, e-commerce operations, etc. needs to be improved, but TikTok's popularity overseas has given ByteDance cross-border e-commerce. Better development soil for e-commerce business.

5. SHEIN: It will be imitated and may be surpassed

After Pinduoduo launched the cross-border e-commerce platform TEMU, many people compared Temu and SHEIN together. Similarly, SHEIN has taken root in the North American market for many years, and Temu has also entered the North American market. At the same time, many of Temu's sales categories overlap with SHEIN, and the prices of products on SHEIN are also called "Pinduoduo in the clothing industry" by many people. Many consumers carefully compared Temu and SHEIN products, the same product Temu is about 20% cheaper than SHEIN.

But the actual situation is that SHEIN is already one of the giants of cross-border e-commerce in China, while Pinduoduo Temu has just entered the game.

In 2020, Shein's revenue reached about 70 billion yuan, and it has grown at an average annual rate of more than 100% in the past 8 years; in the US fast fashion market, Shein's market share jumped from 7% in January 2020 to June 2021. nearly 30% of the month. It is reported that in the first half of 2022, the sales of SHEIN exceeded 16 billion US dollars (about 110.7 billion yuan).

Under the situation of the gradual decline of domestic fast fashion brands, the fast fashion e-commerce platform, which is the mainstay of SHEIN, is doing more and more business in foreign countries.

Recently, George Chiao, president of SHEIN's US business, said in an interview that the company plans to build three large distribution centers in the United States to shorten logistics delivery time by 3-4 days. Just in April of this year, SHEIN just opened its first distribution center in the United States in Indiana. Previously, it mainly carried parcels through cross-border direct mail.

In the second quarter of this year, the SHEIN app was installed 6.8 million times on mobile in the US, surpassing Amazon again. In the battle of Internet e-commerce platforms, the sooner you win users and traffic, the sooner you can occupy the minds of users and build a strong moat. The influx of more and more cross-border e-commerce is bound to seize SHEIN's territory. In addition, the influx of many new cross-border e-commerce platforms and service providers is also related to the rapid development of SHEIN. Learn how SHEIN is used overseas. Road play will also become one of the important strategies of major companies.

6. Conclusion

In fact, cross-border e-commerce is not a new outlet, and domestic Internet giants have been involved for a long time. However, whether it is Ali's Lazada's momentum in the Southeast Asian market that is always lower than Singapore's Shopee, or JD.com's trial and error and transformation in cross-border e-commerce layout, it proves that the road to cross-border e-commerce is not easy.

However, after the domestic traffic dividend disappeared and the business encountered a ceiling, the attraction of overseas markets was indeed huge. The success of SHEIN not only gave many companies the confidence to go overseas, but also provided many giants with new ideas for the development of overseas battlefields. The cross-border e-commerce investment boom that suddenly became popular in August is not a "flash in the pan", but is likely to be a turning point in the long-term development of the cross-border e-commerce market.

Author: Xiuzhen; Public Account: Moose New Consumption (ID: tuolu360)

https://mp.weixin.qq.com/s/wi6eI79FF5o1Frx5-tVm7g

This article was published by @MooseNewConsumer with permission, and reprinting is prohibited without the author's permission.

The title image is from Unsplash and is based on the CC0 protocol.