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Time flies, and in the blink of an eye, the first quarter of 2022 is about to come to an end. Looking back at the past three months, the journey of cross-border sellers can be described as magical. On the one hand, the international situation is changing rapidly. The sudden outbreak of the Russian-Ukrainian war triggered a series of chain reactions. Some people rushed to BS because of this, and some people were tragically banned by the platform; on the other hand, the repeated epidemics have greatly affected many sellers. They work from home and cannot ship goods. Sellers are anxiously waiting for the arrival of spring. In this era of sailing abroad, people across borders have to face many unknown changes. Logistics, epidemic, exchange rate, cost, profit, these simple nouns touch the hearts of countless people across borders. Unlike the booming cross-border e-commerce in the past, this year the industry has also ushered in new changes and trends, such as the transformation of large sellers and the departure of small and medium-sized sellers, and the intensification of internal competition among service providers. This article will explore some changes and trends that have occurred in the cross-border circle this year, hoping to provide some ideas and inspiration for sellers. Cross-border trends change: Amazon's Chinese seller share declines According to the latest research from Marketplace Pulse, American sellers have been increasing their market share on Amazon for more than a year, reversing the trend of being dominated by Chinese sellers for many years. Currently on Amazon’s US marketplace, 55% of the top third-party sellers are US-based businesses, a strong increase from the all-time low of 48% in November 2020. This trend isn’t limited to top sellers; U.S. sellers have been increasing their market share on Amazon over the past sixteen months, after having been steadily declining over the past few years. ▲ The proportion of top US sellers on Amazon It is learned that in the five years before 2021, the market share of Chinese sellers on Amazon increased year by year. In 2017, it increased from 16% to 22%; in 2018, it increased from 23% to 26%; in 2019, it increased from 26% to 33%; in 2020, it increased from 35% to 42%. As of September last year, the market share of China’s top sellers on Amazon was 38% , down from 40% at the beginning of last year. It can be seen that the market share of China’s top sellers has changed the trend of increasing year by year in the past five years and has begun to decline gradually. In addition, Chinese sellers are losing market share in the UK, Germany, Japan, and other Amazon sites. At the same time, the number of new seller registrations from China has also declined, recently accounting for only 75% of all new sellers. In addition, it is learned that since the investment promotion began in the second half of 2021, the craze for entering Amazon seems to be no longer as hot as before. Compared with the influx of countless sellers in previous years, the enthusiasm of sellers to open new accounts has greatly cooled down. At the same time, some sellers have reported that since this year, the investment managers who have always been "aloof" have also taken the initiative to send messages or advertise to sellers, just to attract more sellers to join Amazon, which indirectly reflects that the enthusiasm of sellers to join has decreased. Moreover, since the outbreak of the large-scale account blocking wave last year, the confidence of industry insiders in Amazon has generally weakened, and a number of companies and sellers have chosen to leave and no longer engage in Amazon-related work. There are signs that Amazon’s position in the hearts of Chinese sellers is gradually declining, and the market share of Chinese sellers is also gradually decreasing. The main reasons for this phenomenon are epidemic blockades, supply chain problems, seller closures and Amazon FBA inventory restrictions. Although it is not clear whether this situation can be reversed, it seems that Amazon will leave less and less market space for Chinese sellers in the future. At the same time, Chinese sellers who are still working hard in the cross-border e-commerce industry seem to be struggling and are in several different states. The current situation of cross-border e-commerce: sellers’ joys and sorrows are not shared It is learned that although there are numerous cross-border e-commerce companies in my country, only a very small number of them can reach a certain scale, and most companies are still mainly in the scale of 10-200 people. The industry's top sellers are often the main focus of the industry, and their dynamics and news will become the topic of conversation among cross-border people. However, even if they are all cross-border sellers, the situations of these companies are not the same. Some are quietly striving to go public, while others are gradually disappearing from the public eye. It is understood that in 2022, many cross-border sellers are preparing for listing in full swing. The previously delayed IPO plans of the sellers have also had the latest news recently: It is learned that on March 7, according to the Hong Kong Stock Exchange, 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. Data from the prospectus shows that from 2019 to 2021, Zi Buyu's revenue reached 1.429 billion yuan, 1.898 billion yuan, and 2.347 billion yuan, respectively, and its net profit was as high as 81.109 million yuan, 114 million yuan, and 201 million yuan, respectively. 2. Huabao New Energy is about to IPO It is learned that the Shenzhen Stock Exchange's ChiNext Listing Committee is scheduled to hold a listing committee review meeting on March 29, 2022, at which time the ChiNext IPOs of companies such as Shenzhen Huabao New Energy Co., Ltd. will be reviewed. According to the prospectus it released, Huabao New Energy achieved revenue of approximately 970 million yuan in the first half of 2021, and net profit attributable to the parent company's owners was approximately 161 million yuan, a significant increase compared with previous years. 3. IPO review inquiry of SDIC On February 27, 2022, LDK responded to the first round of review inquiries from the Growth Enterprise Market. Through the IPO, LDK plans to publicly issue no more than 40.1 million A-share common shares, and is expected to raise 622 million yuan. It is learned that in 2020, Suntech Power's operating income has exceeded 5 billion yuan, reaching 5.253 billion yuan, and its net profit is 451 million yuan. Its performance in the first half of 2021 has maintained sustained growth, with a year-on-year increase of 26.80%. In addition to the above-mentioned cross-border companies, there are also many big sellers who have been working hard to rush for listing, such as Santai Holdings and Zhiou Home Furnishing. However, sellers do not share the same joys and sorrows. For some other big sellers, the company's development was not so smooth. On the one hand, after suffering heavy losses from the account blocking wave, the performance of many cross-border sellers also declined, with sales and net profits falling sharply, and even suffering huge losses, which is regrettable.
- According to Tianze Information's 2021 annual performance forecast, the company is expected to have a net loss of 1.8 billion yuan to 2.5 billion yuan, a year-on-year decrease of 107% to 187%. The loss in the same period last year was 870 million yuan;
- According to Huading Shares' announcement, it is expected that the net profit for 2021 will increase compared with the same period last year, and the net profit attributable to shareholders of the listed company will be between -520 million yuan and -780 million yuan;
- According to the 2021 annual performance forecast of Xinghui Precision, due to the impact of the "Amazon account blocking" incident, the company's performance in the second half of 2021 was hit, and the net profit attributable to shareholders of the listed company in 2021 is expected to be a loss of 1.24 billion yuan to 1.42 billion yuan;
- According to ST Cross-border's 2021 annual performance forecast, the company's non-recurring gains and losses are expected to have an impact of 2.8-3.1 billion yuan on net profit during the reporting period, mainly due to the excess losses incurred before Shenzhen Global's bankruptcy.
On the other hand, under the shadow of poor performance, the big sellers have been involved in lawsuits and disputes. For example, the sale of Paton, a subsidiary of Cross-border Communication, caused a series of equity disputes; a subsidiary of Zebao Technology was sued for related overseas taxes and fines; and the actual controller of Huading Shares was taken coercive measures. In addition to focusing on cross-border big sellers, small and medium-sized sellers also play an important role in the cross-border e-commerce circle. Unlike the multi-business model of big sellers, the development direction of small and medium-sized sellers is more single-minded. They often focus on a certain cross-border platform, and their worries are concentrated on high logistics and freight costs, erratic daily average sales, Amazon's policy updates and rising advertising costs . Recently, we interviewed several sellers and learned from our investigation that the business of cross-border sellers has not improved much since 2022. Under the influence of multiple factors, the already thin profits have become even worse. Some operators even jokingly call themselves "three-no sellers" - no orders, no conversions, and no reviews. Many sellers have stopped aggressively expanding their business and have chosen a relatively conservative operating model. Overall, the cross-border e-commerce industry in 2022 is still full of changes and challenges. On the thorny journey overseas, sellers have to move forward amidst difficulties, but this does not mean that there are no opportunities. On the contrary, only when sellers can embrace market changes and adapt to e-commerce trends can they deeply feel the updates and changes in the industry and make decisions that are in line with the mainstream. Embracing market changes: Cross-border e-commerce welcomes development opportunities It is learned that statistics from the General Administration of Customs show that China's cross-border e-commerce imports and exports in 2021 were 1.98 trillion yuan, an increase of 15%; of which exports were 1.44 trillion yuan, an increase of 24.5%. It is observed that at present, the industry landscape has shown various changes, and the cross-border e-commerce industry will usher in new development opportunities. 1. Multi-platform layout is the way out Whether it was last year’s Amazon account ban or this year’s collapse of major e-commerce platforms, they all taught cross-border sellers a profound lesson: when doing cross-border e-commerce, you must not rely too much on a certain platform. Therefore, actively seeking new ways out and deploying multiple platforms and channels seems to have become the main theme of cross-border e-commerce . Not only have large cross-border sellers increased their investment and share in other platforms, but small and medium-sized sellers have also tried to deploy third-party platforms and independent sites. The global cross-border e-commerce landscape has also been profoundly rewritten, presenting a "one superpower and many strong" scene. In addition to the super overlord Amazon, the rise of emerging forces such as Shopify, TikTok, Walmart, and Shein has also provided more choices for cross-border sellers. In the future, the "self-operated + platform" combination model may become the mainstream of the market. 2. The rise of brand overseas expansion At present, brands going overseas are in the ascendant, and the cross-border e-commerce industry has also set off a wave of DTC going overseas, with more and more local and overseas brands joining this track, and Chinese sellers are no exception. (For more brand going overseas dynamics, please follow the official account: Brand Going Overseas Observation) Brand Overseas Observation focuses on all changes in brand overseas expansion and conducts in-depth research on overseas development trends. 10 original content Public Account Dai Xuefei, Executive President of Amazon Global Selling in Asia Pacific, said: " Cross-border e-commerce is a trend of the times, driving the transformation of 'Made in China' to 'Chinese brands'. China has continuous policy and technological innovation, and has comparative advantages such as strong supply chain and manufacturing capabilities." Faced with this trend, some professionals have put forward suggestions: overseas companies should transform to a new business route that focuses on building brands and constructing independent sites, and step up the localization, digitalization, standardization and diversification of marketing and traffic generation methods. 3. Small and beautiful enterprises will become the mainstream As the clarion call of internal circulation is sounded in the cross-border industry, cross-border e-commerce is gradually developing into a red ocean industry. Many sellers lament that the competitive pressure is increasing. From product comparison to operation method PK, what kind of store can be sought after by the market? At present, cross-border e-commerce platforms have achieved a full-category layout, and the degree of competition among many products is evident, but there is still room for improvement. The boutique + branding route is the answer. At the same time, market rules over the years have shown that some "high-tech" products are more likely to be favored by consumers. At present, "small and beautiful" enterprises are accelerating their rise, and the rapid expansion of small and medium-sized boutique companies is breaking the monopoly of big sellers. If these companies want to gain dividends in the fierce market, they must focus on niche areas, increase product added value and technical barriers, and enhance their core competitiveness. I hope the above trends and interpretations can inspire and help sellers.
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