In 2023, the four emerging giants in overseas expansion (TEMU, SHEIN, TikTok, AliExpress) embraced the full-service management mode, significantly changing the cross-border industry ecosystem.
What new changes will the cross-border logistics industry face against the backdrop of the full-service management mode?
Embrace International Expansion
Domestic e-commerce platforms venturing into international markets are driving the global expansion of Chinese product supply chains. In the next 3-5 years, platforms such as TEMU, SHEIN, TIKTOK, and AliExpress will likely become world-class e-commerce platforms comparable to Amazon and Walmart. The international expansion of Chinese e-commerce platforms will further promote the globalization of Chinese logistics companies.
Currently, cross-border e-commerce is evolving towards global and overseas local e-commerce. Based on changes in customer demographics and supply chain migration, this evolution spans from the globalization and localization of e-commerce logistics to customized services for platforms and core customers. It ultimately extends to globalized supply chain fulfilment services.
As e-commerce logistics becomes more globalized, businesses will prioritize the ability to allocate global resources. When the trend of localizing cross-border e-commerce becomes prominent, an emphasis on localized services will be crucial. In terms of customization, companies need to focus on controlling customers’ overall needs, requiring the ability to provide customized solutions. All these factors pose higher demands on the team.
Intensification of Orders and The Platformization of Logistics
The intensification of orders in the current context is the full-service management mode. This model strengthens the e-commerce platform’s authority in allocating logistics orders, making the e-commerce platform the single largest shipper for many airlines and logistics companies.
In 2023, the largest shipper in global air freight was no longer Apple but TEMU and SHEIN. Rough estimates indicate that these two platforms’ annual export volume through air freight has reached millions of tons.
Orders flow to companies that have core resources and capabilities in critical areas such as air routes, overseas customs clearance, overseas warehousing, and final delivery.
E-commerce platforms are forming control effects on local markets, route capacity, and pricing. Specifically, with a daily air freight volume of thousands of tons, e-commerce platforms can choose to arrange flights from any location, such as Shenzhen, Guangzhou, Hong Kong, Zhengzhou, Chengdu, Shanghai, Ezhou, etc.
The platform can choose from multiple ports nationwide based on cost considerations, subsidies from local governments, station handling fees, airline rates, port security standards, and customs clearance efficiency.
Besides controlling local airport or regional air freight prices, larger platforms can influence pricing and capacity deployment in local routes and charter markets. Full-service managed giant e-commerce platforms have more say in pricing for air freight as they control the flow, use the flow to carry orders, and thereby control order allocation.
This change in the model also involves every aspect of the entire industry chain, including airports, ports, airlines, shipping companies, freight forwarders, and more.