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In 2021, one email after another about Amazon’s account suspension changed the fate of many cross-border sellers. As the main overseas platform for Chinese cross-border sellers, Amazon launched an unprecedented "account purge", causing losses estimated to exceed 100 billion yuan and affecting thousands of cross-border companies in China. It is precisely because of this wave of account closures that many cross-border sellers began to think about the direction of their future layout and drew bitter lessons from it: all eggs should not be put in one basket, and cross-border businesses must learn to layout in multiple directions to diversify risks. In contrast to the situation of sellers on third-party platforms such as Amazon and Shopee, some emerging forces have begun to explode against the trend. For example, the strong growth of independent sites shein and shopify are catching up with Amazon's e-commerce dominance. A new chapter has been opened in the global e-commerce landscape. For a time, independent sites and multi-platform layout became hot words. In addition, with the sudden popularity of some independent site e-commerce companies overseas, the trend of deploying independent sites has gradually heated up. Many sellers have started a parallel model of third-party platforms and independent sites. In this regard, some well-known domestic cross-border sellers are also at the forefront of the industry, gradually increasing the proportion of independent site business and reducing dependence on third-party platforms. Independent websites become a trend for going overseas? Cross-border sellers compete to establish their presence Let’s first take a look at which domestic sellers are setting up independent sites and their latest progress. After experiencing the wave of account bans on Amazon, the cross-border e-commerce giant Aoqi was in a somewhat awkward situation. Not only were the large amounts of funds in its accounts frozen, but it was also difficult to digest its accumulated inventory overseas. Therefore, Aoji has also started its transformation journey, diversifying its business focus and reducing its reliance on the Amazon platform. Currently, Aoji is actively promoting its business on other platforms, increasing investment in independent sites, exploring multiple emerging market platforms, and increasing its offline channel layout. Another company that was also hit hard by Amazon’s account ban was Zebao Technology. This incident also exposed Zebao’s fatal flaw, which is its over-reliance on Amazon. It is understood that in the first half of 2021, Zebao Technology's online sales revenue was 1.756 billion yuan, of which 1.705 billion yuan was sales through the Amazon platform, accounting for 97.13%. Obviously, Zebao's sales channels are very single, and when the platform is cleaned up, its ability to resist risks will be greatly reduced. Therefore, Zebao said that it will actively expand third-party sales platforms, official websites and offline channels outside of Amazon, increase sales share, and gradually reduce its dependence on the Amazon platform. Data shows that from July to September 2021, Zebao's independent website achieved sales revenue of approximately 39.23 million yuan, an increase of 152% over the same period last year. During this period, Zebao continued to expand offline markets in other regions, and offline channel revenue reached approximately 112 million yuan. In July 2021, Tongtuo Technology stated that the company was banned from selling and closing 54 stores, and was suspected of freezing funds of 41.43 million yuan. It is reported that Amazon is Tongtuo's largest third-party sales platform, and this ban is undoubtedly a fatal blow to it. In response to this heavy loss, Tongtuo stated that it will increase the sales share of other e-commerce platforms such as eBay, Walmart, AliExpress, Lazada, etc., increase investment in Tongtuo Technology's self-operated website, and expand offline physical store channels in Europe and the United States. In addition, Tongtuo Technology also mentioned that while planning sales channels on third-party e-commerce platforms, it is also actively building its own e-commerce platform. Tongtuo Technology sells products directly to overseas consumers through its own e-commerce platforms such as TOMTOP, further improving the company's sales channels. Lechuang is one of the cross-border sellers that was one of the first to deploy independent sites in the cross-border circle. As early as 2016, Lechuang began to prepare for attracting traffic to its independent sites, and it produced a qualitative change in 2020. According to Google Analytics data, the traffic of Leckey's independent website has been rising steadily, stabilizing at 600,000 visits per month in the first half of 2021. In addition, Leckey's overseas independent brand Flexispot is very popular on both Amazon and the independent website. In addition to the well-known big sellers mentioned above who are accelerating their transformation and increasing the proportion of independent station business, some early independent station players have also enjoyed the dividends of brand going overseas. For example, the independent station business of e-commerce big sellers such as Bangu and shein is booming. In addition, many domestic Internet giants are also accelerating their pace of going overseas and have launched independent e-commerce sites. For example, ByteDance launched the independent e-commerce platform FANNO and the independent women's clothing site Dmonstudio; Alibaba launched the online shopping platform allyLikes to increase its cross-border e-commerce; JD.com and Shopify have formed an alliance to help Chinese brands go overseas. It can be seen that the track for independent station going overseas is becoming more and more lively, and brand going overseas has become a market trend, but not all independent station players can accurately grasp this trend. When the tide recedes, we will know who is swimming naked. As the market becomes more and more stringent, some independent website sellers are being eliminated. Are there no risks with independent websites? Some platforms have suspended their business 1. The fall of independent website GearBest Global Easy Shopping was once very popular in the cross-border circle. However, times have changed. Under the test of the market, it is now difficult for it to continue its past glory, and its independent station brands have also declined. It is learned that since September 2021, GearBest, the largest 3C independent site under Global Easy Shopping, has disappeared for more than 10 days. The website suddenly became inaccessible, and many people speculated that it may have been closed. However, not long after, GearBest came back online. Strangely, although the website could be accessed normally, its product inventory had not been updated for several months, which made people doubt whether it could still operate normally. As an early independent website pioneer, Gearbest also had its peak moments, even surpassing the independent website giant shein. However, various abnormalities in recent years show that Gearbest may have become a "discarded child" of Global Easy Shopping. It is reported that from the end of 2018 to the middle of 2021, Gearbest's core operating data have declined to varying degrees. In the first half of 2021, Gearbest's monthly active users plummeted to 61,400 , less than 1/400 of the end of last year; the average monthly visits were 1.4301 million, far lower than the 174.82 million at the end of last year. As for why Gearbest suddenly declined rapidly, the industry believes that this is closely related to its previous distribution model and cash flow pressure. According to the latest news, some media reported that Gearbest seems to have returned. Some suppliers said they received an invitation from Gearbest's investment manager to join the platform. Their social accounts have also been updated to promote Gearbest's eighth anniversary. However, it is still difficult to draw a conclusion about the future development of Gearbest. 2. Youkeshu’s independent website business is shrinking Youkeshu is a cross-border retailer that started out in Shenzhen with a wholesale model, but with the development of the cross-border market, it is also transforming towards a boutique route. However, this high-profile transformation directly led to a serious shrinkage of the independent station business. It is understood that Youkeshu's parent company Tianze Information stated that the independent station business requires a large amount of advertising and marketing expenses in the early stage. Under the unoptimistic financing situation of listed companies, Youkeshu does not have all the conditions to continue to carry out independent station business in the short term. It is reported that due to Youkeshu's transformation to a boutique route, it adjusted its business development direction and correspondingly reduced the business and team size of the independent site, resulting in an unexpected shrinkage of the independent site business. Monthly revenue has dropped from approximately 45 million yuan in January 2021 to nearly 1 million yuan in May. Affected by changes in the policy environment of the Amazon platform and the substantial shrinkage of the independent station business, Youkeshu's operating income in the first half of 2021 fell by 51.12% year-on-year. The financial report shows that in the first half of 2021 alone, Youkeshu lost about 742 million yuan and had a backlog of about 855 million yuan in inventory. 3. ByteDance women's clothing independent website offline Not long ago, ByteDance's newly launched independent site Dmonstudio became the focus of public opinion, and many sellers predicted that Dmonstudio will compete with the fast fashion unicorn SHEIN. However, not long after, Dmonstudio announced on its official website that the website operation would be shut down from February 11. However, the announcement did not explain the reason for the shutdown, and the relevant social platform accounts have been cancelled or stopped updating. It is understood that the domain name of Dmonstudio was registered in November 2021 and was quietly launched not long ago. However, it was suddenly closed after only less than 4 months of operation. Previous relevant information shows that Dmonstud io puts more than 500 products on the shelves every day, with delivery covering more than 100 countries. Its users come from Europe, America, the Middle East and other regions, and it has a relatively mature business model. At present, ByteDance has not responded to this matter, which makes the reason for the shutdown of Dmonstudio even more confusing. From the above cases, we can see that although independent websites are a popular track, they also have certain risks. Not all sellers can operate them, and the choice of model and product is also very important. This makes people wonder whether the independent website craze is a false proposition? What kind of sellers are suitable for independent websites? Independent website or third-party platform? How should sellers choose? Against the backdrop of the cooling of third-party cross-border e-commerce platforms and the rise of the DTC model, many cross-border sellers are eager to try. In addition to the top sellers competing to make their presence felt, there are also many small and medium-sized sellers who are beginning to prepare for independent sites and brand expansion overseas. But judging from past cases, independent sites are not a perfect choice. For different types of sellers, blindly following the trend will only backfire. How should sellers choose between independent websites and third-party platforms? Let’s first analyze the advantages and disadvantages of independent websites. The advantages of independent stations can be seen everywhere on the Internet, so I won’t go into details. The main points are as follows: 1. Improve profit margins. 2. Reduce operational risks. 3. Create private domain traffic to enhance customer stickiness and brand power. 4. Improve its own data-based operation capabilities. However, few people mention the risks and difficulties of independent websites. Let's analyze what problems an ordinary seller will encounter when building an independent website: 1. High requirements for operational capabilities It is understood that compared with third-party platforms, independent site sellers need to have higher operational capabilities. Unlike e-commerce platforms that focus on traffic acquisition, independent sites focus on balancing the relationship between brands and consumers and advertising. To operate an independent website, one must not only develop one’s own brand and website, but also attract customers through advertising and social media marketing, which is a big test of the seller’s technical and operational capabilities. 2. High customer acquisition costs A report pointed out that the biggest challenge facing independent brand sellers in the future will be customer acquisition. With the intensified competition among DTC brands and the increase in advertising costs, the cost of acquiring customers will continue to rise. In addition, the return on investment for advertising is falling. As privacy laws limit marketers’ ability to target ads and consumers become more adept at blocking out ads, it’s becoming harder to get a higher return on ad spending. 3. Long-term brand building is difficult To combat rising customer acquisition costs, Shopify recommends that brand sellers focus less on short-term returns and more on long-term brand building, a strategy that will help combat the decreasing return on advertising investment. In general, competition in the global e-commerce market has become fierce, and sellers should focus more on channel layout, while giving priority to sellers who have established brands with a larger audience. 4. Large investment and tight cash flow For example, Youkeshu mentioned in an announcement that third-party payment platforms such as PayPal, which are tied to independent sites, have increased their review of fund lending, resulting in an increase in the phenomenon of withholding funds. This has led to a significant slowdown in the sales collection speed of Youkeshu's independent site business and an increase in the cost of capital occupation. In addition, the independent station business requires a large amount of advertising and marketing expenses in the early stage. In the short term, Youkeshu does not have all the conditions to continue to carry out the independent station business. In the early stages of independent site operation, sellers need to invest a lot of manpower, material resources, and financial resources to support store exposure and sales through continuous "burning money for promotion". Therefore, there are still certain risks for ordinary sellers. In summary, it is believed that cross-border sellers must decide whether to develop independent station channels based on their own strength. In addition, the layout of independent stations does not conflict with the operation of third-party platforms, and sellers can also reasonably balance the relationship between the two; when building independent stations, they should also focus on product innovation and brand building. Improving brand premium and technical barriers is the key to obtaining long-term returns.
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