Shulou(Shulou.com)11/24 Report--

Author (key frame)

Editor, Han

Since landing in the United States in September last year, pinduoduo's cross-border e-commerce platform Temu has soared overseas and has entered 27 countries and regions in less than a year. Recently, Temu has been launched one after another in Japan and South Korea, officially entering the Asian market; at the same time, there is another news that pinduoduo is cooperating with extreme Rabbit Express, which means that Pudo will use extreme Rabbit Express to get through the Southeast Asian market.

At present, Temu, which also carries pinduoduo's "barbaric growth" gene, is not only ferociously sweeping the world, with its participation in the market, the competition between platforms is also "white-hot". According to the analysis and comparison of Zheshang Securities Research Institute, in the North American market, the price of clothing and footwear items on Temu is lower than that of Shein30%, the price of household department stores is more than 40% lower than that of Amazon, and some prices are even more than double.

Recently, Temu sued Shein in Boston in the United States for violating the US antitrust law in its dealings with clothing manufacturers. On the surface, the incident is a "suicide" among China's cross-border e-commerce giants, but from a slow point of view, the cake, which has been "occupied" by Amazon for many years, is constantly being sliced up by platforms and merchants from China.

Cross-border e-commerce, the largest gold rush for Chinese players, the penetration of Chinese merchants into international cross-border e-commerce platforms in recent years, as well as the rise of China's own cross-border e-commerce platforms, are very astonishing.

According to the report on the share of Chinese sellers in global e-commerce platforms released by eCommerceDB in March this year, Chinese sellers' share of total merchandise transactions (GMV) on Amazon is increasing year by year. In 2017, Chinese sellers' GMV on Amazon was $48 billion, equivalent to 18% of Amazon's total GMV; in 2023, Chinese sellers' GMV is expected to reach $238 billion, accounting for 28% of Amazon's total GMV.

On the world's first cross-border e-commerce platform, Chinese sellers will account for nearly 30% of GMV, which shows how effective Chinese merchants have been in developing cross-border e-commerce export transactions in recent years.

At the same time, several figures occupy a place on the list of the "top 20 cross-border e-commerce in the world". Among them are AliExpress, owned by Alibaba, which ranks fifth with 530 million monthly visitors in 2022; shopee,2022, which Tencent invests and owns, ranks sixth with 460 million monthly visitors; and JD.com International, which ranks 13th, ranks 17th, which is also Lazada under Alibaba.

Vertically, Alibaba Group's focus on the international business sector is still deepening. Not long ago, Ali International CEO Jiang Fan, rookie CEO Wanlin newly became Ali partners, this landmark event also indicates that Ali "heavy position" international business signal.

In addition to Alibaba, Tencent and JD.com on the list, byte Jing and pinduoduo are also entering overseas markets with the trend of "high winds and showers", becoming the most potential "spoilers" in the current cross-border e-commerce debate.

In June, TikTok announced plans to quadruple its global e-commerce business to $20 billion this year, according to GMV; research firm Insider Intelligence, which said TikTok had 135 million active users in Southeast Asia by the first quarter of 2023.

As of July, the number of downloads of Temu has exceeded 70 million; in the US market, Temu surpassed Shein and Amazon to top the list of US shopping App downloads just one month after its launch.

It seems that for a while, all the giants are rushing to overseas markets, not hesitating to invest in opening the gap in the cross-border e-commerce market. But in the final analysis, hundreds of millions of dollars invested in overseas gold prospecting also seems to be the only way for the giants to go now.

The dominant reason is that cross-border e-commerce has become a new engine of foreign trade growth, and continues to grow at a high speed. Customs data show that China's cross-border e-commerce imports and exports exceeded 2 trillion yuan for the first time in 2022, reaching 2.1 trillion yuan. In the first half of 2023, China's cross-border e-commerce imports and exports totaled 1.1 trillion yuan, an increase of 16 percent over the same period last year, of which exports accounted for 821 billion yuan, an increase of 19.9 percent.

The hidden reason is closely related to the peak of domestic commercial dividend. Alibaba's Chinese business revenue fell 1% in the first quarter of 2023 compared with the same period a year earlier, a phenomenon that is the most direct sign. You know, Alibaba has served more than 1 billion Chinese consumers, and when its Chinese business is saturated, it will be equally difficult for other e-commerce platforms to create high-speed income growth in the domestic market.

Therefore, to vigorously develop cross-border e-commerce business and go out to other markets to grab share has become an inevitable choice for the giants.

02, the encounter intensified, the eight Immortals across the sea each showed their powers to compete for the cross-border e-commerce market, directly leading to changes in the competition pattern in overseas markets. The global market, which had been firmly occupied by Amazon and eBay for many years, ushered in the challenge of AliExpress; in the Southeast Asian market, shopee and Ali's Lazada competed with each other while growing at a high speed; on the other hand, the entry of Temu also made SHEIN, which had been established for 9 years, slapped by "Houlang".

Alone, Lazada is actually the one under the greatest pressure. It not only has to face the transcendence and competition of shopee and Tiktok, but also beware of Temu all the time. Once Temu enters the Southeast Asian market, its situation will be "surrounded by strong enemies."

However, although there are fierce encounters between Chinese players in major markets, in depth, they still strive to explore and practice a "golden game" on the basis of maintaining their respective competitive advantages.

Specifically, each "main position" is different. Alibaba's AliExpress was a global platform at the beginning of its establishment, covering more than 200 countries around the world. but relatively speaking, it focuses more on emerging market regions such as Brazil, where Amazon has a weaker grip. SHEIN mainly plays a strong clothing supply chain, mainly starts with clothing categories, and competes with overseas fast consumer brands such as ZARA through the low-price mode of small orders and fast reverse; Temu is also a comprehensive shopping platform similar to Amazon, but has high similarity with SHEIN in terms of market area and price. For example, major markets are also in North America, led by the United States, and low prices are the main advantage to attract users.

Recently, the price and litigation dispute between the two in the US market has the meaning of "two tigers competing with each other".

But the struggle, from the platform model, now all are "assimilation". Up to now, the four major platforms of Chinese e-commerce going out to sea, AliExpress, SHEIN, Temu and TikTok Shop have fully embraced the full escrow model.

In the full escrow mode, merchants only need to ship goods to the platform's warehouse and quote to the platform, while the rest of the operation, logistics and after-sales can be handed over to the platform for processing. For many sellers, it only needs to ensure supply to make money, which makes this model very attractive; for the platform, this platform supply model is not only efficient, but also can reduce costs and give high competitive and low prices.

At the end of 2022, AliExpress launched the full escrow model and opened 200 conferences across the country, which achieved gratifying results. According to the data, as of March 2023, the overall user size of AliExpress increased by 45% year-on-year, and orders increased by 50% year-on-year, an all-time high.

In order to thoroughly implement the full escrow model, Alibaba decided to take the cross-border + local model, and through the rookie this "special forces", for Ali International in the cross-border e-commerce supply chain competition to gain an advantage.

It is reported that Ali International is deepening the localization of Southeast Asian e-commerce Lazada, Turkish e-commerce Trendyol and South Asia e-commerce Daraz, and continues to strengthen investment in logistics and other infrastructure. At the 2023 Global Wisdom Logistics Summit held in June, Cainiao Group CEO Wanlin also announced that Cainiao would formally launch "global five-day" international express products within this year, starting from key national markets, and gradually enable cross-border parcels to be delivered within five working days.

03, "Amazon Killer", will become the biggest dark horse? In addition to Alibaba, who has made efforts in the global market for many years, Temu, which is also known as the "Amazon killer" as an integrated e-commerce platform, should have the best chance to become a dark horse tearing apart the original market pattern.

The strong pinduoduo style inherited by Temu undoubtedly gives it a greater opportunity in the "barbaric growth". First of all, Temu uses the full hosting model as soon as it is launched, and this "small profit and quick turnover" model is exactly what pinduoduo is good at; compared with JD.com and Tmall, who are mainly self-employed and brand stores, pinduoduo platform itself is the majority of small and medium-sized businesses, factory stores and other businesses, which lays a solid foundation for its "low-price advantage" of reengineering Temu.

At the same time, Temu also completely inherits pinduoduo's genes of "violent marketing" and "low-price competition". Temu, which launched in September 2022, is said to have spent $140 million on marketing in the first month of its launch, while the total budget will be nearly $2 billion by August 2023, a year after the App's launch.

In the previous shocking Super Bowl ad, Temu bought two 30-second advertising spaces, which cost $7 million according to a 30-second Super Bowl ad, which translates to about 50 million yuan, or nearly 100 million yuan.

In addition, the "incredibly low price" is also an important factor in the rapid expansion of Temu. Pinduoduo chooses to give priority to entering markets with high purchasing power, such as providing low-priced goods to users in the United States, Canada, Australia, Britain, Germany, Italy, France and other markets, which is undoubtedly very attractive to them; coupled with promotional activities such as order exemption for customers, this set of games, which are "taken for granted" at home, still have a wonderful effect on customers' access to fission in many overseas countries.

A series of actions have revealed pinduoduo's bold background, and this trait has indeed brought him excellent returns. According to a data from Insider intelligence, from April 2022 to March 2023, the growth rate of unique user visit data of Temu in the United States was higher than that of AliExpress, SHEIN and Wish, and it exceeded 70 million in Temu in March this year. Even the industry estimates that, at the current growth rate, Temu GMV for the whole year of 2023 may reach the order of ten billion US dollars.

More importantly, pinduoduo launched Temu itself as an integrated shopping platform. Compared with SHEIN, which mainly focuses on clothing, it has inherent advantages in category. Compared with the platforms of several markets under Alibaba, Temu does not focus on Southeast Asia or any single market region in Latin America, but completely adheres to its own "well-designed" route, starting from Europe and the United States, thinking about Japan and South Korea, and then perhaps gradually entering Southeast Asia, and maximizing the "head-on conflict" with multi-platforms in terms of competitive strategy, focusing ammunition on a main battlefield, it can naturally bring the greatest benefits.

From the perspective of public information, Temu has indeed benefited from "snatching food" from SHEIN. By analyzing billions of credit and debit card transactions, Temu's sales in the United States were 20% higher than those of the more established fast-fashion retailer SHEIN in May 2023, according to a report released by Bloomberg in mid-June.

Conclusion

Nowadays, the pace of China's cross-border e-commerce platforms vying for global market share is unstoppable. Looking to the future, slowly thinking that the platforms hatched by the three giants, namely, AliExpress under Alibaba, Temu under pinduoduo, and Tiktok under byte Jump, are more capable of participating in the competition to "take out Amazon". In particular, Temu, if it can thoroughly improve the local compliance operation mechanism of each market, and realize the healthy and healthy operation of the whole process, with its existing investment and playing method, it will certainly become the fastest growing "wave" in the global cross-border e-commerce market.

Reference:

1. E-commerce newspaper, eCommerceDB released a report on the share of global e-commerce platforms, the Chinese seller GMV will reach 238 billion US dollars.

two。 Sohu's ranking and visitors to the global cross-border e-commerce platform in 2022

3.Tech Commerce (Tiktok e-commerce) aims to quadruple the GMV target to US $20 billion by 2023

4. Financial Detective Agency? in 27 countries, pinduoduo rolls from North America to East Asia at a low price. Chinese enterprises continue to write overseas growth myths.

5. China Economic Times: cross-border e-commerce promotes China's foreign trade to stimulate growth potential

6.Tech planet, cross-border e-commerce overseas fighting, Temu and SHEIN hand-to-hand combat

7. Hugo Cross-border? who will be the king of cross-border e-commerce in the next decade, Temu or Amazon?

8. Beijing Business Daily: can fully managed e-commerce shops really win when they go to sea?

9. E-commerce pro, radical pinduoduo, crazy Temu

10. What did Temu do right?

This article comes from the official account of Wechat: slow play (ID:manfangsd)

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