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▶ Video account attention cross-border navigation In recent years, driven by national policies and market demand, China's cross-border e-commerce has maintained a high growth momentum and has become a new driving force for foreign trade development and a new tool for high-quality development. Data shows that in 2021, China's cross-border e-commerce exports reached 1.44 trillion yuan, an increase of 24.5%. Since the beginning of 2022, the cross-border e-commerce market has been active, demonstrating the booming popularity of this new foreign trade format. It is learned that at this year's two sessions, the government work report has emphasized the development of cross-border e-commerce for eight consecutive years, and regarded cross-border e-commerce as an important force for the country to stabilize foreign trade. So far, China has established cross-border e-commerce comprehensive pilot zones in 132 cities and regions, forming a development pattern of linkage between land and sea, domestic and foreign, and mutual assistance between the east and the west. There is no doubt that the tide of cross-border e-commerce is driving the transformation of "Made in China" to "Chinese brands". Among them, cross-border clothing brands such as SHEIN and Zibuyu are particularly outstanding. It is learned that after Jizi Buyu, Savi Times and others submitted their listing applications again, there was news recently that SHEIN is planning a new round of financing with a target valuation of approximately US$100 billion. How did these cross-border apparel giants achieve such impressive performance today? Is there still potential for sellers to enter the cross-border e-commerce apparel market? This article will take Shein, Sevi Times, and Zibuyu as examples to analyze the rise of the cross-border e-commerce apparel industry from three aspects: opportunities, brands, and current situation, hoping to provide some ideas and inspiration for sellers. Supply advantage, traffic bonus As Su Shi said, what comes and cannot be missed is time, and what is stepped on and cannot be missed is opportunity. In the ever-changing cross-border e-commerce market, only sellers who are good at seizing opportunities can stay one step ahead and become the best in the industry. The success of sellers such as SHEIN, Zibuyu, and Saiwei Times is closely related to their ability to seize market opportunities. 1. China’s supply chain advantages
The so-called supply chain is defined by experts as a functional network chain that "executes the procurement of raw materials", converts raw materials into intermediate products and finished products, and sells the finished products to users. China started with low value-added raw materials and took nearly 40 years to become the world's largest manufacturing value-added country in 2010. Therefore, the strength of China's supply chain network lies not only in its large scale, wide variety, and fast logistics, but also in the fact that many supplier companies can produce high-quality parts and semi-finished products at a relatively low cost. Among the more than 500 major industrial products announced by the United Nations, China has the most complete manufacturing system in the world, with the output of more than 220 types ranking first in the world . It is the center of the global supply chain of many manufacturing industries. Among them, SHEIN made full use of the advantages of the domestic supply chain and targeted the overseas market from the beginning, which had relatively high barriers to entry and less competitive pressure at the time. It kept a low profile for many years and made a big splash in 2021 with the help of the epidemic. Zi Buyu and Saiwei Times also achieved rapid development in the early stage by relying on China's supply chain resources to meet the product needs of overseas consumers. 2. Category bonus: the scale of the clothing industry continues to grow The global apparel industry is huge and its growth momentum remains strong. Data shows that in 2021, the apparel market reached $ 1.5 trillion and is expected to grow to $ 2.3 trillion in 2025 . In recent years, due to the impact of the epidemic and changes in consumer habits, the apparel industry has accelerated the expansion of the online market, and the e-commerce penetration rate and market size have achieved counter-cyclical growth. According to Euromonitor statistics, the global apparel e-commerce industry market size in 2020 was US$411.697 billion, and the global apparel e-commerce penetration rate in 2020 reached 28.7%. The fashion industry to which it belongs is one of the largest industries in the world and a powerful engine for global economic growth and development. In 2021, the global online market size for clothing, footwear and accessories was US$759.5 billion, ranking first in the online transaction volume of various industries worldwide. It is expected that by 2024, the overall penetration rate of fashion e-commerce will rise to 60.32% . Currently, cross-border e-commerce clothing brands are still in their golden age of going overseas. 3. Traffic dividend: from public domain to private domain
With the advent of the Internet era, the business logic of "Internet traffic-monetization" has emerged, and businessmen who can grasp the traffic dividend have almost all become unicorns in the industry. As early as ten years ago, SHEIN caught up with the marketing opportunity before the commercialization of Internet celebrities and chose to cooperate with overseas Internet celebrities. At a low cost, it won an astonishing traffic dividend at that time. At the same time, SHEIN is also very good at using social media to attract traffic. The company opened official accounts on overseas social media such as Instagram, Facebook, and Youtube very early, and the number of fans has become very large. Taking Instagram as an example, SHEIN currently has more than 24 million fans on the platform. Regarding the present, although some sellers mentioned that the penetration rate of independent stations in the cross-border industry has been getting higher and higher, and the current traffic dividend has begun to fade, it is believed that in the current mobile Internet era, supported by digitalization and big data technology, communication channels and methods are more abundant, and can reach the target population more accurately, and the marketing boundaries of e-commerce are still expanding. As competition intensifies, the current traffic environment is entering the "private domain traffic dividend period" after the public domain traffic dividend period. Brand sellers who can first complete private domain infrastructure and develop on a large scale will have the opportunity to take the lead. There is a saying in the cross-border e-commerce circle: "70% depends on product selection, 30% depends on operation" . This shows the importance of products to cross-border e-commerce. Products that can avoid homogeneity and have a sustainable life cycle are almost every seller's "dream product". However, for clothing categories with obvious seasonality and relatively short life cycles, it is obviously impossible to stand out with just a few excellent items, so more effective measures need to be taken. 1. Based on the needs of overseas buyers, open the way with low prices
According to market research, most overseas consumers are price-sensitive customers who are keen to buy cost-effective products. Therefore, many cross-border sellers will sell products at lower prices in the early stages of their brand establishment and obtain excess profits by pursuing low costs. China's powerful supply chain system has greatly shortened the production cycle of products, enabling China's clothing industry to meet the needs of overseas consumers for cost-effective products. From the development history, from 2012 to 2016, Savi Times, which was founded in 2012, met the low-price product demands of overseas consumers by relying on China's supply chain resources and achieved rapid development. SHEIN also benefited from the advantages of China's supply chain and realized its "small order and fast response" concept, making "fast fashion" flourish. However, the low-price positioning also determines the limitations of product quality to a certain extent. In order to seek longer-term development and gain higher brand loyalty, SHEIN and Zibuyu, which initially won by low prices, began to look for points to break through the limitations of low prices and build a brand matrix. 2. Feedback data to R&D and build a brand matrix
Through digital technology, SHEIN has connected consumer demand, supply chain system and communication chain system. Through Google's search algorithm, SHEIN can quickly track clothing-related content in real time around the world, find the most searched fashion items, and consumers' reactions to competitor websites. The searched data is then provided to the large internal design team for new product development, greatly improving brand design efficiency. It is worth noting that SHEIN currently accounts for half of the daily active users of global fast fashion brands on mobile devices , and can use these big data for trend analysis and product order scheduling. Savi Times has always attached great importance to product research and development, and has always focused on market orientation, combining digital analysis to accurately explore consumer needs. In the stage of focusing on the branding strategy, based on the independent system R&D capabilities and market research data accumulated in the early stage, Savi Times also conducted data surveys on cross-border e-commerce platforms such as Amazon and eBay , comprehensively considered the market and prices, and quickly launched new products, arranged factories to produce samples, and screened suitable suppliers. As of the first half of 2021, Suntech Power has incubated 43 proprietary brands with revenue exceeding 10 million yuan. (3) The Master does not speak Zi Buyu has always believed that products are the core elements driving the company's development. Therefore, it adopted the "independent design + factory OEM" model to operate and established a huge database. As of the end of 2020, the product design database has accumulated approximately 41,796 clothing and footwear models and 51,801 fabric and auxiliary material samples. More than 90% of the products are independently designed by the company. Through this design database , Zibuyu has successfully built its own brand matrix. Dellytop, a women's clothing brand launched in 2015, ranked in the top two of Amazon's best-selling products in the same category in 2020; Runcati, a casual men's clothing brand launched in 2017, ranked in the top three of Amazon's best-selling products in the same category as of December 2021... As of the end of 2021, Zibuyu has cultivated 64 popular brands with annual sales exceeding RMB 10 million. About the current situation: Financing and listing, ups and downs It is understood that statistics from the General Administration of Customs show that the current growth in overseas demand is continuing to drive the export of China's clothing products. In the first two months of 2022, China's clothing exports continued to maintain positive growth since the fourth quarter of 2021, with exports reaching US$ 25.461 billion , a year-on-year increase of 6.1% . In this golden age of Chinese brands going overseas, cross-border clothing giants have never stopped moving forward, but the results have been very different. 1. SHEIN: Striving for a $100 billion valuation According to foreign media reports, SHEIN, which mainly operates fast fashion independent websites, is currently negotiating with some potential investors including General Atlantic, and the new round of financing has raised about US$1 billion. After this round of fundraising, its valuation may reach US$ 100 billion , which will exceed the combined valuation of famous European and American fast fashion brands H&M and Zara, becoming the world's third largest unicorn company. It is also understood that since the transaction has not yet been completed, SHEIN's valuation scale may still change. But if the valuation of $100 billion can be finalized, SHEIN will become the most valuable startup in the world after TikTok and Space X. 2. Zibuyu and Savitech: Striving for IPO Zibuyu and Savi Times, which rely on third-party e-commerce platforms such as Amazon, are also seeking to go public recently. On March 7, according to the Hong Kong Stock Exchange, after the prospectus submitted in 2021 expired, the cross-border e-commerce Zibuyu Group once again submitted a listing application to the Hong Kong Stock Exchange, intending to be listed on the main board of Hong Kong, with Huatai Hong Kong and ABC International Financing as joint sponsors. On the other hand, Suntech Power also formally submitted its listing application to the Shenzhen Stock Exchange again, but its listing was suspended on March 31 because "the financial information recorded in the IPO application documents has expired and needs to be supplemented and submitted." Looking at the revenue reports and prospectuses of Savitech and Zibuyu, it can be seen that both of them have a certain degree of "dependency" on third-party e-commerce platforms (especially Amazon) . Affected by Amazon's account ban wave, Savi Times' revenue in the third and fourth quarters of 2021 showed a year-on-year decline, and its net profit attributable to shareholders of the parent company in the third quarter plummeted 80.63% year-on-year. The situation is not optimistic. Zibuyu also mentioned that in the foreseeable future, the company's sales through Amazon will continue to account for the vast majority of the company's total revenue. Therefore, the company's profitability, financial performance and financial condition will rely on the solid business relationship between the third-party e-commerce platform and the company. However, if the third-party e-commerce platform modifies the terms of the agreement to the company's disadvantage, the profitability of the company's products may be significantly adversely affected. In this regard, in order to speed up the cure of "Amazon addiction", Zibuyu is also working hard to establish a large independent self-operated website. But in general, from the perspective of revenue: in the cross-border e-commerce industry, third-party sellers account for the highest proportion, and self-operated independent sites grow slightly faster than third-party sellers. Data shows that in 2020, the market size of Chinese cross-border e-commerce platform sellers was 1.72 trillion yuan, while that of self-operated independent sites was 570 billion yuan. It is predicted that cross-border clothing e-commerce is expected to maintain rapid growth in the future, whether it is third-party platform sellers or independent sites. Different paths lead to the same destination: brand operation becomes inevitable On April 26, 2022 , the 22nd World Intellectual Property Day, Amazon released the latest trends in cross-border intellectual property protection for Chinese sellers' exports, and found that Chinese sellers' brand awareness has significantly increased. Data showed that in the past four years, the number of Chinese sellers who have completed brand registration on Amazon has increased 40 times .In recent years, my country has attached great importance to the development of new trade formats such as cross-border e-commerce, and regarded new formats such as cross-border e-commerce as the vital force for the development of my country's foreign trade. It has introduced a number of support policies, creating a golden age for cross-border sellers to go overseas. However, as cross-border expansion becomes an increasing trend, competition in the cross-border e-commerce industry is becoming increasingly fierce. From cost-effectiveness to the pursuit of personalization, consumers' growing demand for brands is also driving the cross-border industry to shift from white-label expansion to brand expansion. For sellers in the cross-border apparel industry, building brand barriers is of paramount importance. In the new consumption era, consumers ' demands have gradually changed from rational consumption focusing on price to emotional consumption focusing on service. The main consumers of cross-border fashion apparel exports are the new generation of Generation Z, who have a strong sense of Internet consumption. They will pursue a higher level of brand experience and pay more attention to brand awareness and product quality. In addition, from the perspective of the company's long-term strategic development, when the consumer group reaches a certain size, it is necessary to explore the two indicators of consecutive orders and average customer spending . Brand operation is the most effective way to improve these two indicators. Therefore, whether it is a third-party e-commerce platform or an independent website in the cross-border apparel industry, sellers must prioritize the creation of brand barriers. After all, low prices cannot be used as a trump card to retain users, and only brand building can have premium capabilities. In 2022, the international situation is changing rapidly, and China's clothing foreign trade is facing more uncertainties. However, as a major clothing exporter, China not only has a complete supply chain, but also still has strong international cooperation advantages. From the perspective of market demand, affected by the resurgence of the epidemic, the dependence of key markets on Chinese products has also increased. It is expected that China's clothing exports will maintain steady growth in 2022, and the potential of the cross-border apparel industry will continue to rise. Those who observe the situation are wise, and those who follow the trend are smart. It is the right time for Chinese brands to go overseas and seize the new trend of digital trade. |
