More than a decade ago, the entry of eBay and Amazon into China ushered in a platform era of "rivals of power", playing the accompaniment of a hundred schools of thought contending - leading players such as Anker competed for the big stage of cross-border e-commerce. In the past decade, from white-label sales to brand upgrades, from the pirate strategy of selling goods in large quantities to the intensive and meticulous boutique route, the era of traffic being king is becoming a thing of the past, and cross-border merchants have ushered in a turning point in their destiny - a wave of account bans . The platform bonus period is gone, and the era of getting rich quickly will never return, but danger and opportunity always coexist in the transformation. The account suspension wave made Amazon players deeply realize that eggs should not be put in one basket, so new protagonists began to appear: overseas e-commerce platforms "broke into China" and opened a new era of cross-border e-commerce. In 2023, Chinese e-commerce platforms went overseas in groups and conquered Amazon's shield with the spear of full hosting. If we extract the annual keywords for cross-border e-commerce in 2023, they will undoubtedly be "Four Little Dragons Going Global" and "Full Trusteeship". Therefore, following the rapid growth trajectory of the Four Little Dragons Going Global this year, looking back at the cross-border e-commerce industry in 2023 may provide a deeper insight into the rise and fall of the industry.
In 2023, the global economic environment is full of opportunities and the export and foreign trade market is also in chaos: it is facing an unprecedentedly complex ecology, but also a rare opportunity to go overseas. In this era, the four little dragons have stepped into the spotlight of the cross-border e-commerce stage. According to data.ai's research, in the first three quarters of this year, the four small dragons that went global took the fastest-growing shopping apps in terms of download volume in the global market, with SHEIN and Temu still surpassing Amazon in terms of download volume, taking the top two spots. In the iOS global shopping app usage penetration rate list, Amazon continued to take the top spot, followed by SHEIN, Temu and AliExpress. The data don’t lie: the “one superpower and many strong powers” pattern under Amazon’s monopoly is gradually being broken. Overseas platforms may have no chance of winning alone, but if they work together and combine the strengths of each company, they will have the strength to fight - in a fully managed manner. On September 1, 2022, Temu was launched in the US market and has grown wildly overseas at an almost crazy speed. In just one year, Temu has accumulated more than 100 million users and 250 million downloads, expanding to 47 countries and markets around the world. From its stunning Super Bowl debut at the beginning of the year to its global success in many countries, Temu has opened up overseas lower-tier markets with its absolute cost-effectiveness advantage. According to industry reports, Temu's Q3 sales exceeded US$5 billion. With the expectation of exceeding annual sales expectations, it has boldly set a GMV target of US$30 billion for 2024. Compared to Temu, which has been going smoothly, TikTok has had a lot of bad luck in the past year: it faced a ban in the United States in March and was forced to withdraw from the Indonesian social e-commerce market in October. TikTok, which has faced life-and-death crises several times, chose to increase its e-commerce business: fully opening small stores in the United States, testing cross-border full trusteeship, and focusing on shelf e-commerce. "A desperate struggle to survive" is the best explanation for TikTok 2023. Under the heavy pressure of supervision, TikTok has seen a turnaround after several changes: the Southeast Asian market continues to sing, with e-commerce GMV exceeding 13 billion US dollars; the US market has grown rapidly, and the cumulative GMV of the full-hosting business has exceeded 100 million US dollars since its launch; the Indonesian crisis has also turned around, and it has merged with the Indonesian platform Tokopedia to return to the local market. Compared with the younger Temu and TikTok Shop, SHEIN and AliExpress are both cross-border veterans with more than ten years of experience. However, in an environment full of uncertainty in the consumer market, they have both embarked on the path of daring to change this year. In 2023, SHEIN is determined not to keep a low profile. At the beginning of the year, it disclosed its 2022 financial data: annual revenue of US$22.7 billion and net profit of RMB 4.8 billion. Although it has been profitable for four consecutive years, the slowdown in growth and heavy cost pressure have sent it a dangerous signal. Faced with the front and back attacks of its strong competitors, SHEIN began to actively transform: becoming a third-party platform. After testing the waters in the Brazilian market, SHEIN announced in May this year that it would launch a platform model in the global market . While accelerating its third-party platform business, SHEIN has also started a global shopping model, acquiring a large number of fast fashion brands. It can be said that the main theme of SHEIN in 2023 is to continuously enrich its product line and complete the transformation from an independent fast fashion brand to a global, comprehensive platform. Compared with the other three major online shopping platforms that are concentrated in North America, AliExpress is keenly eyeing the vacancy in the Korean market. After announcing its embrace of the full-hosting model at the end of last year, AliExpress has accelerated its development in Korea since this year: the Choice service was launched in March, the huge sales in May paralyzed the Pyeongtaek Customs, the Shandong warehouse was expanded in June, and in September, it joined hands with Cainiao to launch the "Global 5-Day Delivery", and the year-end Double Eleven sales again achieved great results... After a year of rapid growth, AliExpress has successfully become the third largest e-commerce platform in South Korea: According to statistics from Wiseapp Retail Goods, the number of AliExpress users in South Korea has reached 6.13 million, surpassing the local giant GMarket in one fell swoop, and is expected to surpass the second-ranked 11Street.
2023 is a year of change and restructuring. Those stories of getting rich quickly whitewashed by the pandemic have been lost in the surging tide of account bans. Cross-border merchants have never been so deeply aware that they cannot put all their eggs in one basket. For this reason, the four little dragons that have gone overseas have appeared appropriately, opening the diamond door of destiny of full trusteeship under the witness of the world. One of Michael Porter's three major competitive strategies is total cost leadership , which simply means producing cheaper products at a lower cost than competitors. The competitive logic of the four little dragons to encircle Amazon is based on this. No consumer can resist the temptation of cost-effectiveness, especially in Europe and the United States, which are in a consumption downgrade environment with high inflation. In the global e-commerce arena, Amazon is both the highest mountain and the longest river. Facing such a behemoth, the four little dragons can only use their supply chain advantages to the fullest extent to snatch food from the tiger's mouth. The four little dragons either rely on the domestic e-commerce giants or have accumulated deep supply chain resources over the years, which also laid the foundation for full trusteeship. Under the full trusteeship model, the platform has absolute control over pricing, operation, and sales. Therefore, the platform can shorten the supply chain links, directly connect to the source manufacturers, and minimize costs to establish the ultimate price advantage. Facts have proved that the strategy of occupying the high ground of the supply chain with the weapon of low prices has indeed played a miraculous effect in this siege of Amazon. Mobile analytics company GWS found that during the second quarter of this year, the number of Amazon users in the United States dropped sharply, from 54 million daily active users to 46 million daily active users. According to a survey by Apptopia, American consumers spend an average of 18 minutes a day on Temu, while Amazon users spend an average of 10 minutes a day . This means that Temu's user engagement is almost twice that of Amazon. It can be seen that under the joint siege of the Four Little Dragons, Amazon has passively fallen into the dilemma of user loss, traffic growth reaching its peak, and market share being snatched away. And on this year's Black Friday, the four little dragons that went global launched the ultimate battle and confronted Amazon head-on. Temu took the lead in late October, with a promotion period of up to 42 days, showing its killer weapon of up to 90% discount ; TikTok Shop joined the market soon after, and achieved an order growth of over 145% by relying on rich product discounts and traffic advantages; SHEIN's promotion covered more than 20 categories, including nearly one million products from self-operated brands and platform sellers; AliExpress cleverly combined Black Friday and Double 11 into one, and seized the traffic high ground with a time-efficiency revolution. With cheaper prices and longer promotion cycles, the four little dragons have successfully intercepted a portion of Amazon's traffic. The sales performance of sellers is the most direct evidence: the survey found that 38% of sellers' Black Friday sales fell compared with the same period last year, 36% of sellers' orders remained the same as usual, and only 24% of the respondents saw an increase in sales. A very important reason behind the "coldest Black Friday in Amazon's history" is that the four little dragons quickly and accurately strangled Amazon's lifeline. In the flywheel system on which its growth depends, low prices are a crucial link. For many years, the price comparison strategy implemented by Amazon has enabled it to enjoy lower pricing than other platforms, but the full-hosting sword of the four little dragons going overseas has achieved a precise strike: the platform directly reaches the huge industrial chain clusters in the Pearl River Delta and the Yangtze River Delta, and creates cost advantages through the deep coupling of full-hosting and flexible supply chains. The four little dragons cannot compete with Amazon in terms of volume, and their roll services cannot break through the logistics moat that they have cultivated for many years. However, the Chinese roll kings are best at competing in cost performance. In 2023, when the market traffic is saturated, this low-price strong attack method attached to the full hosting model has given more imagination and successfully helped the four little dragons to rejuvenate the new year. 2023 is a year of escalating challenges and a year of hope for recovery. The overseas surge of the four little dragons and the surge of the full-hosting wave have both accelerated the elimination of the industry and bred new opportunities. From the beginning of the year, when they all joined forces to expand overseas, sweeping the shopping app charts of various countries, to grabbing users' minds with low prices and dividing the sinking market, to the final battle of the year-end promotion, they joined forces to intercept the Black Friday traffic. Under the continuous attack of the four little dragons going overseas, Amazon's monopoly is gradually disintegrating. As the four little dragons accelerate their overseas expansion, cross-border merchants are able to glimpse more opportunities: get rid of Amazon dependence and embrace more diversified e-commerce platforms; emerging markets emerge in large numbers, providing more imaginative incremental space; the release of full-hosting dividends helps more factories and traditional traders to achieve low-threshold overseas expansion and grab orders. However, danger and opportunity always complement each other. Although the four little dragons have been singing all the way in 2023, it is still full of variables how long the rising momentum can be maintained. Full trusteeship is not without disadvantages. When the dividends ebb, it is still unknown how far this routine of sacrificing the seller ecosystem to achieve extreme cost control and using scale effects in exchange for growth can go. Low prices may be able to boost growth temporarily, but only by adhering to the long-term user principle can sustainable and healthy development be achieved. Foreign research shows that although Temu and Shein attracted millions of consumers to visit their websites during the holiday sales season, the actual order conversion rate is still far behind Amazon. For example, Temu's UMV in October this year reached 42 million, of which only 4.5% of the visits resulted in actual transactions. Low prices are certainly attractive, but how to retain customers and convert them into loyal audiences is a problem that the four little dragons urgently need to solve in the context of full hosting. In contrast, Amazon's advantages lie in user experience, a solid logistics moat, and brand reputation accumulated over the years, which together constitute the powerful Amazon e-commerce empire. Of course, judging the four little dragons and the full-hosting model from the perspective of cross-border merchants is more subtle. Some people believe that full trusteeship is both salvation and an abyss. The innovation of the full trusteeship model gives export enterprises more diversified choices, and also provides an effective transformation path for traditional foreign trade factories and integrated industrial and trade merchants who are trapped in a shortage of orders. However, under the full hosting model, the platform controls the "power of life and death". Not only does the lack of pricing autonomy squeeze the profit margins of merchants, but the traffic end is also absolutely controlled by the platform. Although merchants can focus on polishing their products, they lose the opportunity to get close to consumers and understand the market up close. In the long run, such a relationship is not sound and lacks equality. Some sellers also said that once the full trusteeship rises, the first thing that will be affected is the trading sellers. The platform cuts off the middlemen and goes deep into the source industry belt, connecting with high-quality supply chain resources to avoid the middlemen making a profit from the price difference. Unlike third-party platforms, the platform under full trusteeship is like a super seller. It does not need to snatch all the sellers, but selects suppliers who can guarantee the "lowest price on the entire network". Therefore, in the eyes of many cross-border sellers, if full-service hosting rises fully, it will inevitably squeeze out the living space of a large number of middlemen. In addition, the full-hosting trend led by the four Asian Tigers has also brought some indirect impacts, intensifying the competition in the industry. Amazon sellers are deeply touched by this: from the beginning of the year to now, the wave of policy rectification and account suspensions have all shown Amazon's determination to reshape the platform ecological order and select high-quality sellers needed by the platform. The era of getting rich quickly with gold digging everywhere is a thing of the past. In 2023, with the four little dragons going global fully embracing full trusteeship as the intersection of fate, a life-and-death elimination match of cross-border e-commerce has already begun silently. In the new year, who will be the winner, and who will be swept out by the tide of the times?
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