FBA shipping costs rise again! The European cross-border e-commerce market may face a reshuffle

It is learned that the Russia-Ukraine war has entered its 48th day. As global inflation continues to intensify, cross-border sellers are continuing to face many difficulties such as rising inflationary pressure, changes in foreign trade settlements, and exchange rate fluctuation risks.

Cross-border sellers in the European market are even more troubled.

As of now, many airlines including AirBridgeCargo and Aeroflot have stopped flights to Europe.

We will provide sellers with an in-depth analysis on how to sell products well in Europe.

0 1

European e-commerce market is in a swamp

There are three reasons!

It is learned that recently on the forum, many sellers have reported that sales in the European market have dropped significantly and the data is very bleak.

  ▲ The picture comes from Zhiwubuyan

The main reason is that the closure of Russia and Europe's airspace, the suspension of merchant ship traffic in the Sea of ​​​​Azov, and the epidemic lockdown have had a huge impact on the logistics of European cross-border sellers.

Recently, many sellers in the seller communication group have expressed:

"The European shipping order sent before the New Year has not yet arrived."

"European air transport is also very slow right now."

"There are always all kinds of things going on. Can't people just make money quietly?"

It is speculated that the slow logistics and transportation has led to a decline in consumer satisfaction among buyers in the European market, making them tend to choose other purchasing methods with faster logistics and transportation.

Second, the changes in Amazon’s European logistics and delivery fees will officially take effect on March 31, 2022, further exacerbating the already tight logistics costs of cross-border sellers.

   ▲ The picture comes from Amazon announcement

Many European sellers have reported that it is becoming increasingly difficult to do business on Amazon Europe. In addition to the 20% VAT and the increasing number of regulations, European FBA shipping costs are also becoming more and more expensive.

  ▲ The picture comes from Zhiwubuyan

Third, the inflation caused by the war and the epidemic cannot be alleviated in the short term. The European cross-border e-commerce market seems to have fallen into a swamp.

It is believed that after the Russia-Ukraine war situation eases, along with the temporary withdrawal of some cross-border e-commerce forces, the European cross-border e-commerce market will face a reshuffle and once again become a potential player in the cross-border e-commerce track.

02

The market size cannot be underestimated

Cross-border e-commerce market faces reshuffle

It is learned that according to SimilarWeb data, the European Union (excluding the United Kingdom) is the world's third largest e-commerce market, with annual online sales of US$498 billion, and still has immeasurable growth potential.

01

Europe's consumer demographic dividend is considerable

Affected by the epidemic, the stay-at-home economy has risen. According to data, the penetration rate of European e-commerce is expected to reach 67.1% by 2025, and more than 500 million Europeans will shop online, equivalent to the combined population of the United States and Japan. Among them, the French e-commerce market has also accelerated its growth during the COVID-19 crisis, with 34% of French consumers discovering new products through e-commerce platforms, making it the second largest discovery channel after social media (37%).

In addition, it is expected that by 2025, the overall revenue of European e-commerce will reach US$569.2 billion, exceeding the US e-commerce revenue forecast of US$563.4 billion in 2025.

02

“One Belt, One Road” policy support

It is understood that China and Europe completed negotiations on a comprehensive investment agreement at the end of 2020, and some European countries plan to join the "Belt and Road" initiative.

As one of the largest economies in the European Union, France also signed a third-party market cooperation agreement worth US$1.7 billion with China in February this year, cooperating on a number of projects including infrastructure, environmental protection, and new energy in Africa, Central and Eastern Europe and other regions.

All this indicates very broad prospects for cooperation between China and Europe.

03

Consumption drives European economic growth

It is learned that data from the European Statistical Office shows that the savings rate of European residents has continued to rise since the outbreak of the epidemic in 2020. It is expected that in 2022, Europe's economic growth will shift from being driven by public demand to being driven by private demand, and consumption will become an important pillar of the economy, which may drive GDP growth by 6 percentage points.

To sum up, although the development of the European cross-border e-commerce market is currently facing a crisis, it has broad prospects. After the Russia-Ukraine war situation eases, it may once again become a blue ocean for cross-border sellers to make money.

It is also recommended that sellers who are preparing to enter the European market should be fully prepared at this time! Understand the markets of various European countries, choose the right platform, and make a good strategic layout.

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Entering Europe

Choosing the right country to settle down is important

In the past two months, in addition to the continued escalation of the situation between Russia and Ukraine, the resurgence of the COVID-19 pandemic and frequent accidents involving container ships have exacerbated the difficulties of cross-border logistics and transportation and the high costs of sea and air transportation.

The VAT that Europe began to increase in 2021 will continue to affect European sellers. If sellers want to expand in the European e-commerce market, they must understand all the available measures for EU operations.

Here are three suggestions for cross-border sellers in the European market:

01

Register an EU company to reduce platform constraints

By registering a company in the EU, sellers can enjoy the protection and support policies of EU countries and are not subject to the withholding policy restrictions of platforms such as Amazon. Sellers can have a certain degree of autonomy in tax compliance.

For buyers who shop on online e-commerce platforms, EU local companies are also more likely to gain consumer recognition and trust.

For sellers who want to increase revenue and reduce costs, sellers can choose Rakuten Borderless Commerce , which means that sellers who cooperate with Rakuten in France can enjoy partner benefits when opening a company in the EU, which is 15% lower than the normal cost of opening a company, and can choose the EU country to open a company according to the company's situation.

02

Optimize overseas warehouse solutions

 

The traditional overseas warehouse model is already well known to sellers. It is understood that the logistics management service recently launched by Lotte France in France will subvert the overseas warehouse industry in Europe. Lotte's "logistics management" service is expected to have multiple overseas warehouse partners in France suitable for warehousing of different categories.

We believe that for European sellers, choosing the Rakuten Fulfillment Network service in France is not only your entry point into France, but also the key point for your layout in Europe.

03

Smart layout of multi-channel operations

The increase in Amazon Europe FBA storage fees and the shadow of Amazon's account suspension have caused many Amazon Europe sellers to consider opening other platforms. The one-stop store opening on the French Rakuten cross-border e-commerce platform will be an optional solution for European sellers to optimize their layout.

As of March 2022, the number of Club R loyal members of Rakuten France has reached 11 million , and the Club R Everywhere project has achieved a year- on-year turnover growth of 149% . This is not only a local platform with a high buyer repurchase rate, but also covers sales in France, as well as other European countries such as Switzerland, Belgium, the Netherlands, Spain, and French overseas islands.

In addition, as a pure e-commerce platform, Rakuten France is committed to considering issues from the perspective of sellers and providing Rakuten France with a one-stop solution:

- Rakuten Borderless Commerce France

- Rakuten Fulfillment Network France

- Rakuten France offers free monthly store opening fees, up to 10 months of Extend, and new store support worth 2,000 Euros.

From starting a company, warehousing and distribution to opening a store on the platform, all-in-one solution!

Summit Highlights:

1. 2022 Lotte One-Stop Solution;

2. Insights into European cross-border markets;

3. Product selection trends + hot-selling creation;

4. Share your experience in making your brand a big seller.

At that time, the summit will also provide sellers with detailed introductions to the two services mentioned above, namely, Rakuten Borderless Commerce in France and Rakuten Fulfillment Network in France. New and old sellers will have the opportunity to receive a store opening opportunity worth nearly 10,000 Euros.

For more exciting content, on April 14, the French Rakuten Seller Summit "National Trends and Craftsmanship Meet France" is waiting for you.