Cross-border sales are strong! Is Anker's position no longer secure?

Recently, 3C category big seller UGREEN Technology submitted a prospectus to the Shenzhen Stock Exchange, planning to IPO on the Growth Enterprise Market and raising 1.504 billion yuan.

As one of the veteran 3C sellers, UGREEN is more well-known in China than Anker. In many product lines, it competes directly with Anker, the current top Amazon seller, in data cables, chargers, power banks and other 3C products. The two companies are equally sized and both are leading players in the electronics category. Many people think that UGREEN's listing will bring a fierce battle to Anker. In fact, the two companies have already formed a misaligned competition. UGREEN's success rate in impacting the high-end market is not high.

The starting points of these two 3C sales are actually very similar. They were established in 2011 and 2012 respectively, and their product lines were highly overlapped at the time. However, in terms of market choice, the two companies went in opposite directions. Anker chose to directly expand into overseas markets, and has been deeply rooted in overseas markets for many years and gradually moved towards high-end branding. In the past two years, Anker changed its strategy of "exporting to domestic sales" and entered the domestic high-end 3C market with a foreign brand and a reputation accumulated overseas for many years.

UGREEN chose to stay in the domestic market and fight. As we all know, the domestic competitive environment is that one reason is that the consumption level cannot support too high a premium, and the other is that the competition is too fierce, especially for small items such as data cables. There are too many mixed merchants and brands competing for the domestic 3C cake. After years of fierce competition, UGREEN finally won, but it was a miserable victory. After years of low-price competition, the entire brand tone has already had an inherent impression, and it is difficult to impact the high-end market. Facing Anker, which returned from overseas and went straight to the high-end market, it basically had no room to fight back.

The thinking of these two companies can also be seen from the data. Take the financial report data of the two companies in 2021 as an example. Most of Anker's sales come from overseas, and more than half of them are contributed by the Amazon platform. In previous years, Amazon's share of this part exceeded 60%, and 21 was the first time that it dropped to more than 50%.

UGREEN's overseas expansion has not been as timely or forceful as Anker's, and its overall sales are only about a quarter of Anker's.

Although Ugreen still has an advantage in sales in the domestic market, the growth is not optimistic. The main growth point in the future is still the overseas market, and Anker currently has a very stable position in the overseas market and controls most of the profits in the 3C category. So we can see a very strange phenomenon. Even if Ugreen is fully promoting only the Ugreen brand in the overseas market, many listings are close to Anker in terms of display position and ranking. Some products on some sites are even ranked higher than Anker's competitors. However, in terms of revenue and profit, there is such a ruthless gap. However, the total sales on the Amazon platform can even open up a gap of 4 or 5 times. Anker's brand building strategy is undoubtedly successful. This is another time that the high-profit branding route has been confirmed to be Amazon's evergreen.