Another hit! Export sales exceeded 500 million, and the demand for heating in Europe continues to be crazy!

It is learned that last week, Amazon released its third-quarter 2022 financial report and made a relatively pessimistic forecast for sales in the fourth quarter, including the holiday shopping season.

Looking ahead to the fourth quarter, Amazon expects net sales to be in the range of $140 billion to $148 billion, up 2% to 8% year-on-year , significantly lower than the market expectation of $156 billion and the lowest growth rate since 2001.

As for the reason for the predicted sharp drop in Q4 growth, Amazon's chief financial officer mentioned that Amazon's sales in North America and international markets are slowing down, especially in the European market . Affected by the Russia-Ukraine conflict, energy prices and inflation are unprecedentedly high, and European consumers are cutting their budgets.

Unilever Chief Financial Officer Graeme Pitkethly pointed out that consumer sentiment in Europe is at an all-time low.

According to Amazon's chief financial officer, rising fuel costs amid inflation are hitting Europe's economy harder than the U.S. European consumer spending saw an unprecedented plunge in the third quarter, which has become a focus for Amazon.

In addition, due to the continuous and substantial interest rate hikes by the Federal Reserve, the exchange rate of the US dollar against the euro continued to rise, causing Amazon to have a foreign exchange deficit of US$900 million . In addition, due to the increase in transportation costs in Europe, the operating loss of Amazon's international department swelled from US$900 million a year ago to US$2.5 billion in the third quarter .

This series of unfavorable factors is not only one of the main reasons why Amazon predicts a sharp drop in Q4 sales growth , but also an important reason why European sellers are pessimistic about Q4 peak season sales .

Affected by the worsening consumption downgrade in Europe, the European site not only performed significantly worse than other sites in the two major promotions held by Amazon this year, but also saw a "visible" decline in profits in daily sales. VAT, Amazon's increased FBA fees and continuous strikes have all made the already tight profits of European site sellers even worse.

One seller said that not only could the European site only receive a few orders per day this year, but the goods that were shipped at extremely high prices before the New Year had to be sold at low prices after the New Year. Coupled with the plummeting exchange rate, profits were lost like water.

Some sellers even said frankly that the current European market compliance and various costs are high, and there is also the risk of exchange rate instability, so it is no longer worth it for sellers to focus on maintaining it.

▲ The picture comes from Zhiwubuyan

At a time when the international political and economic situation is turbulent, insisting on operating a European site is undoubtedly a difficult and long-term battle for cross-border sellers.

However, it is also known that the European cross-border e-commerce market is still huge. The latest report on European cross-border e-commerce shows that the turnover of the European cross-border e-commerce market in 2021 reached 141 billion euros, a year-on-year increase of 18%.

At the same time, new e-commerce platforms are still emerging rapidly in the European market, and the number will even increase by 126% in 2022. In the future, the European e-commerce market will continue to expand, and its compound annual growth rate is predicted to be 11% in the next four years.

And this year, despite weak consumption and plummeting exchange rates, many Chinese cross-border sellers are still making a lot of money in the European market.

As the cold wave approaches, natural gas supply shortages and inflation continue, Europeans are increasingly demanding Chinese heating products that are both good quality and inexpensive. Recently, after domestic winter products such as electric blankets, hot water bottles and thermal underwear were sold out by European consumers, domestic thermal gloves have also become popular in Europe due to the growing demand for outdoor travel.

It is learned that according to CCTV Finance, from January to September 2022, the glove products of Jiaxiang County, Jining, Shandong, known as the "Hometown of Chinese Gloves", were exported for a total of 520 million yuan , a year-on-year increase of 60% .

▲ The picture comes from CCTV Finance

Previously, it was mentioned in the article that "as the European energy crisis intensifies, China's other heating devices may also have the opportunity to show their strength in the European market" , and the hot sales of domestically produced gloves have undoubtedly once again confirmed this argument.

However, it is worth noting that compared with other heating products, thermal gloves also meet the current needs of overseas consumers for increased outdoor travel. It can be seen that for cross-border sellers, exporting to the European market has a high cost-effectiveness and meets the additional needs of consumers . Domestic heating artifacts are still a hot spot for explosive sales.

However, judging from the current situation, if cross-border sellers want to grab a share of the seasonal heating product category, they need to have a keen sense of market demand and a forward-looking vision for product layout.

We would like to remind you that the risks of exchange rate fluctuations and continued weak consumption in the European market still exist. Cross-border sellers who are not deeply engaged in related categories and are not in the relevant industrial chain or supply chain that reacts quickly need to view this frenzy with caution to avoid falling into the dilemma of clearing out goods at low prices when the enthusiasm is not as expected or fades away in vain.

What do you think about this? Welcome to discuss in the comment area~