The global outbreak of the COVID-19 pandemic has had a huge impact on all walks of life. However, the pandemic has also stimulated the transformation of consumption patterns, and online shopping has gradually become an important consumption channel in the era of the "stay-at-home economy". Taking advantage of this trend, the field of cross-border e-commerce has emerged, attracting countless Chinese people to go overseas and tap into overseas markets.
It is learned that according to statistics from China's customs, in the first half of 2021, China's cross-border e-commerce trade volume increased by 28.6% year-on-year, of which export trade increased by 44.1%, significantly higher than the overall growth rate of foreign trade; as of July, China's export scale reached 11.7 trillion yuan, and the growth rate hit a 10-year high. Nowadays, China's cross-border e-commerce industry is in a stage of rapid development, and has become the core driving force of export trade. Therefore, more and more well-known domestic brands and enterprises are competing to enter the market, relying on third-party platforms, independent stations and other development models. Among them, there are e-commerce giants JD.com and social media giant ByteDance. However, this sea glacier, which has countless gold on the surface, also hides many risks and challenges underwater. The risk factor of third-party platforms that rely on Amazon is increasing day by day, and the operating difficulties behind the new trend of independent stations, as well as the constraints of external factors such as logistics and policies. The current cross-border e-commerce is experiencing a turbulence, and a new pattern is also taking shape. For sellers, should they be swept along by the tide of the times, or stop losses in time and get ashore decisively, or wait for the next outbreak in the tempering? ByteDance’s ambition to enter the cross-border market is obvious. Can it impact Amazon? Looking at the cross-border e-commerce ecosystem, Amazon is undoubtedly the current leader. However, third-party platforms such as Walmart and WISH are eyeing it, and the rise of independent websites such as SHEIN and Shopify are increasingly shaking its position. And the entry of ByteDance has even caused voices that Amazon may suffer a shock.
ByteDance’s ambition to develop cross-border e-commerce has actually been laid out for a long time. Since the end of last year, TikTok, a social media giant under its umbrella, has established cooperation with Shopify, Walmart and others to develop e-commerce modules. At the beginning of this year, its TikTok Shop was tested in Indonesia, and in April it entered the UK and gradually opened to global sellers. Today, TikTok Shop is becoming more and more mature, and the effect of its live streaming sales model is also very significant. The founder of ByteDance said that cross-border e-commerce will be a key support area in 2021, which is also the ultimate goal of TikTok's development - monetizing traffic. Some time ago, ByteDance also announced plans to launch a cross-border export e-commerce platform, which will be distinguished from the e-commerce cooperation with TikTok, Shopify, Walmart and other companies. TikTok's e-commerce partnerships with companies such as Shopify and Walmart enable sellers to reach more buyers through TikTok, but sellers cannot open stores directly on the app. New job postings indicate that ByteDance is seeking to allow independent merchants to sell through its newly launched platform, which will focus on cross-border retail, mainly shipping Chinese goods to other markets such as the United States. With the number of active users worldwide exceeding one billion, TikTok undoubtedly occupies the current social media traffic high ground, which also helps to reach more customers and provides huge traffic support for the layout of the cross-border e-commerce market. Of course, social e-commerce is still in its infancy abroad. It remains to be seen whether TikTok can lead the social e-commerce wave or even broaden its horizons and compete with large e-commerce platforms such as Amazon and Alibaba. However, the infusion of fresh blood has, to a certain extent, accelerated changes in the cross-border e-commerce landscape, bringing more vitality. For sellers, the choices are also tending to be diversified. To seize the Amazon market, is it becoming a trend to flock to independent websites? The entry of ByteDance is also sending a signal that the cross-border e-commerce ecosystem is becoming turbulent. The most powerful one at the moment is the independent website represented by Shopify .
According to Similarweb data, Shopify's average monthly unique visitors exceeded Amazon for the first time in the second quarter of this year, and the gap is expected to continue to widen. Shopify reportedly averaged 1.16 billion unique visitors per month in the three months ending in June, compared to Amazon's 1.10 billion. That gap is expected to widen this quarter, with Shopify-powered sites expected to attract 1.22 billion visitors, compared to Amazon's 1.13 billion, Business Insider reported. In addition, Shopify's second quarter 2021 financial report showed revenue of $1.12 billion and net profit of $879.1 million, a year-on-year increase of 57%. This is the fifth consecutive quarter of rising profit curve, a significant increase compared to last year during the epidemic. In contrast, Amazon's second quarter revenue did not meet expectations. Currently, the competition between Shopify and Amazon continues to heat up. According to Marketplace Pulse, the overlap between Amazon and Shopify sellers is gradually increasing, and cross-border sellers are entering the 3.0 stage. Although Amazon has a huge traffic base, after passing the early bonus period and the stable development stage, the operating risks are now expanding. Under the pressure of account blocking, policy changes, and profit reduction, more and more sellers are beginning to look for other markets to diversify their businesses, and the DTC model has become this market. Shopify has reportedly grown almost out of thin air to 40% of the size of Amazon’s market, a figure that represents the acceptance and evolution of the DTC business model, with more sellers starting to sell using this model and more consumers starting to buy DTC brand products. Marketplace Pulse points out that Amazon sellers are entering the 3.0 stage, building Amazon-native brands and multi-channel operating models, driving traffic from outside Amazon, and investing in social e-commerce sellers. Amazon and Shopify have completely different business models, but the boundaries between their seller groups are blurring. Shopify merchants are expanding their market space, Amazon is one of them, and Amazon sellers are considering going beyond the market platform and opening up Shopify independent stations. The rise of Shopify also shows that Amazon is no longer the only and best choice for sellers, and the trend of turning to independent websites seems to be getting stronger and stronger. What are the underlying reasons behind sellers abandoning Amazon? Facing the pain of transformation: Where should Amazon sellers go? Only when the dividend tide recedes can we know who is swimming naked. At this stage, the regulatory risk curve of third-party platforms continues to rise, profits are gradually squeezed, and the challenges faced by sellers are becoming increasingly difficult.
This year has been the most turbulent for Amazon sellers. The fierce wave of account bans has ruthlessly swept away many top sellers, and small and medium-sized sellers are also helpless. The constant changes in policies such as returns and storage capacity, the strict crackdown on fake orders and reviews, and the sudden large-scale cleanup that is hard to prevent have put many sellers in a desperate situation. At the same time, under the catalysis of the internal circulation trend, a large number of cross-border philanthropists have emerged, the price war has become more and more fierce, and the sellers' profits have become thinner and thinner. In addition, the imbalance between supply and demand in the container shipping market has also stimulated the continuous surge in logistics and transportation costs. Last year, a popular joke said: "All the houses in Shenzhen Bay No. 1 have been bought by Amazon." This year, it became: "All the houses in Shenzhen Bay No. 1 have been bought by freight forwarders." Compared to Amazon sellers who are struggling to make ends meet, freight forwarders are doing increasingly well, the logistics and transportation industry is booming, and major shipping companies are making huge profits. A report recently released by Matson predicts that profits in the third quarter are expected to reach US$358 million to US$363 million. The report pointed out that the rapid growth was mainly due to the sharp increase in cargo volume and strong container shipping demand from Chinese shippers. With increased risks and reduced profits, turning to independent websites and other platforms has become a new trend. However, although operating an independent website is free from the risk of platform supervision compared to third-party platforms, it is also a big challenge to have sufficient funding channels without native traffic support and a strong supply chain. Many sellers blindly follow the trend, but lack strong capital to rely on, and end up losing everything. Many industry insiders believe that today's cross-border industry is gradually entering a new trend: taking the path of compliant operations, building a multi-channel operation model, and shifting from an extensive distribution approach to a refined and branded route. However, transformation inevitably involves a period of pain. Breaking the old model and starting over is a big challenge for many sellers. With the rapid rise of independent websites and the catching up of numerous third-party platforms, the turbulent cross-border e-commerce circle is entering a new era. Sellers at the center of the storm must assess the situation, stay rational at all times, avoid being overwhelmed by various trends, and find the right path in the midst of changes and breakthroughs.
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