|
With the rapid development of Temu and SHEIN as a call, from AliExpress, Lazada to TikTok Shop and Shopee, the cross-border e-commerce industry seems to have launched a revolution called "full hosting model". Recently, news from the industry revealed that this change seems to have swept Amazon, the leading e-commerce platform. Amazon is rumored to be launching a fully managed model It is learned that recently, rumors have appeared on various social platforms that Amazon is about to launch a fully managed model. One of the sellers who broke the news claimed that many big sellers have received invitations from Amazon and the full hosting model is expected to be launched by the end of the year. ▲ The picture comes from Zhiwubuyan As soon as the news was leaked, it caused an uproar in the cross-border circle. ▲ The picture comes from the seller communication group The so-called full-hosting model actually means that the e-commerce platform is fully responsible for complex links such as store operations, logistics fulfillment, and after-sales service, and merchants only need to be responsible for product creation and supply. At first glance, for inexperienced overseas sellers and factory-type sellers who have just started, handing over the operational burden to the platform's fully managed model seems to have many benefits, saving a lot of costs such as traffic marketing and logistics fulfillment. However, judging from the feedback from many sellers, this model also makes sellers lose more operational freedom, increases pricing pressure, and reduces profit margins. Based on this, the discussion in the cross-border circle about the rumor that Amazon is about to launch a fully managed model is polarized. Guess 1: Low price pressure from Temu
Some sellers believe that the rumor is true and that Amazon may adopt a full-hosting and dual-platform parallel model in the future. The inspiration for this speculation comes from: Temu's unstoppable development momentum has become a very threatening new e-commerce force, causing Amazon to feel a sense of crisis. It is learned that after its launch in September 2022, with the low-price subsidy policy paving the way, social media fission marketing driven, and the "American Spring Festival Gala" promotion, TEMU's traffic has increased sharply. It has topped the shopping APP download list in just over a month after its launch, and daily active users and their usage time often set new highs.
At the same time, in the context of high inflation, Temu's low-price strategy fits the mainstream of consumption downgrade in overseas markets. With a wide variety of products and frequent orders from sellers on the platform, it has indeed had a significant impact on the standardized product categories on Amazon that lack premium capabilities. Under this circumstance, although Amazon is unwilling to engage in a head-on collision on the surface, it has ignited a price war among sellers internally: whether it is the transparent front-end sales data (number of orders sold and number of views) or the Taobao-style "More Like This" label, all of these further escalate the price war among sellers while improving the consumer experience. The data clearly show that the most direct impact of the full-hosting model on the cross-border e-commerce industry is the price involution of commodities. Based on the above content, some sellers speculate that Amazon will also move towards Temu like other platforms and start the full-hosting model. But if we look closely at Amazon's flywheel system, like Temu, low prices are also the core of Amazon's flywheel system's growth: it starts with customer experience and attracts consumers through lower prices, thereby bringing more product selections and lower costs, driving traffic through word of mouth, and ultimately achieving a virtuous circle.
Rather than being closer to Temu, the above series of adjustments by Amazon are more like efforts made by Amazon to maintain the core of the low-price flywheel system. Amid the rumors that Amazon is about to launch a fully managed model, there are many doubts. Guess 2: Amazon’s e-commerce position is difficult to shake
The vast majority of sellers said that Amazon would not be able to launch a fully managed model for the following four reasons: First, various data show that the rapidly growing Temu is still unable to shake Amazon. Taking the first quarter financial report of 2023 as an example, during the reporting period, Temu’s parent company Pinduoduo’s revenue was 37.637 billion yuan, while Amazon’s revenue was as high as 127.358 billion US dollars. The gap in size between the two is like heaven and earth. Taking the big promotion as an example, Temu launched a promotion campaign on the eve of Prime Day that overwhelmed consumers. Most sellers received a large number of orders, but Amazon's Prime Day also achieved record growth again, exceeding industry expectations. Some sellers said that the full-hosting model aims at large-scale, low-priced category products. It may snatch a certain amount of sales from Amazon in the short term, but in the long run, it will hardly cause an impact on Amazon by taking the extreme path of low-price internal circulation. Second, “full hosting” is not a new concept for Amazon. As we all know, there are two types of seller accounts on Amazon, namely VE (third-party seller account) and VC. VC, the full name of which is Vendor Central, is a platform launched by Amazon for suppliers. Through a VC account, suppliers can sell their products directly to Amazon, which will sell and ship them. This concept has a high overlap rate with the popular "full trusteeship" model. Third, overseas antitrust regulators frequently file lawsuits against Amazon. It is understood that overseas antitrust agencies such as the U.S. Federal Trade Commission (FTC) and the UK Competition and Markets Authority (CMA) have filed lawsuits against Amazon on suspicion that Amazon manipulates the prices of products sold by merchants on the platform. According to industry insiders, the underlying logic of the full-hosting model is actually a kind of "monopoly". After being repeatedly targeted by antitrust agencies, Amazon would actually be taking a step backwards if it continues to go down this path. Fourth, third-party sellers are extremely important to Amazon, and the full-hosting model may force sellers to flee. Amazon's "2022 Small Business Empowerment" report shows that in 2022, more than 60% of sales on the Amazon platform will come from third-party sellers, most of which are small and medium-sized enterprises. This diverse group of sellers provides a large number of excellent products, competitive prices and unparalleled convenience, creating a high-quality shopping experience for consumers.
According to an analysis by a seller, the so-called full-hosting model, on the surface, is about attracting investment from sellers, but in reality it is more like cutting out the seller as the middleman in the chain of "platform-seller-supplier". When profits are drastically reduced, third-party sellers are likely to choose to flee the platform, ultimately leading to a reduction in product variety and consumer loss. Compared with Temu, which relies on low prices to grab traffic and users, Amazon has already accumulated incomparable capital in the global market. Therefore, most sellers believe that in this increasingly competitive environment, the most important thing for Amazon is not to imitate, but to prevent traffic loss. However, as of now, Amazon has not responded to this rumor. It is difficult to say whether it will launch "full hosting" in the future. The answer can only be left to time and officials. What do you think of this rumor? Welcome to discuss in the comments section~
|
