The market is becoming more competitive, with sellers experiencing a general profit decline. New platforms are emerging, and various platforms are intensifying efforts to attract merchants offline. The question arises: should one enter or refrain from entering the game?
Many sellers make plans for 2024, deciding whether to “hold on” to an existing business or actively expand. Should they consider establishing a presence on new platforms? For each seller, the answer varies.
To grasp the direction of the trend, several leaders in the cross-border e-commerce industry share their perspectives on industry trends.
About “Internal Competition”
One of the main themes in the cross-border e-commerce industry in 2023 is “internal competition.” Sellers are competing, platforms are competing, service providers are competing – everyone feels the pressure of competition but wants to become the “competition king.”
As the new year begins, should we continue with this competitive trend? How should we navigate it?
Chen Wenping, Chairman of Seewo Era:
Regarding the “internal competition” question, it depends on the platform. Our primary platform is Amazon, which could be more competitive in 2024. The prerequisite is to operate in compliance and not engage in questionable practices on Amazon. Brands involved in compliant cross-border operations will likely feel better as the situation of bad practices driving out good practices diminishes.
Sun Yutao, Chairman of EuroTax:
For sellers, the following suggestion is to expand across multiple platforms. We primarily serve Amazon sellers, and while Amazon sellers may not necessarily venture into platforms like Temu or Shein, they can diversify by incorporating platforms such as TikTok Shop.
For service providers, the trend is toward increasing specialization. Clients seek more than just competitive prices; they also demand reliable services, strong teams, and robust backend support to achieve excellent service quality.
Zhou Kang, Founder and CEO of Chengzhe Technology:
Low-end supply chain goods should continue to remain in a competitive state, with no sign of reversal in the short term.
Apart from market factors, products related to new energy storage are also influenced by certain policy factors and require observation.
“High-quality development” is a direction the country encourages and reflects the policy in overseas operations. Therefore, products that are innovative and competitive still have considerable opportunities internationally.
Founder of a leading 3C ODM company:
Our approach is to produce products, not just to achieve significant sales. The profits of trade merchants are decreasing, and we have a more positive outlook on the direction of middle and high-end brands. As long as we firmly follow our path, the question of competition or non-competition does not exist.
For mid to high-end products, it’s crucial to have core control capabilities over the supply chain, spanning from branding, distribution channels, research, and development to production. Any mismatch in one of these aspects can lead to issues.
The market for low-priced products has a higher tolerance, as customers are more accepting of both the strengths and weaknesses of the products, reducing the probability of encountering problems.
About the New industry ecosystem
2023 is a turning point for cross-border e-commerce, signalling a more profound development in the industry.
Over the years, practitioners in cross-border e-commerce have honed excellent operational capabilities, and the supporting e-commerce service facilities have gradually deepened, raising overall standards. Going global has become a significant trend.
Internet giants are all venturing into overseas e-commerce, with platforms like Temu, Shein, TikTok Shop, AliExpress, 1688, and new cross-border platforms and businesses reshaping the entire cross-border ecosystem.
Domestic consumer brands are also going global, and “branding going global” is gaining momentum.
What efforts can we make when faced with the new changes in the industry ecosystem?
Chen Yong, Founder of Savvy Marketing Consultancy:
Cross-border e-commerce still has significant growth opportunities. There will be changes, such as transitioning from relying on third-party e-commerce platforms to a more brand-oriented direction. TikTok Shop is a considerable variable, bringing new opportunities for traffic dividends.
Shi Wenlu, Founder of Fastmoss:
The cross-border e-commerce industry will enter a 2.0 stage. The global rise of short videos and live streaming has brought massive traffic. Domestic e-commerce platforms and new consumer brands are also going global on a larger scale.
TikTok is already mature in Southeast Asia, has enormous growth potential in the United States, and is likely to open in Brazil and multiple European countries this year. Therefore, this year is the outbreak year for TikTok Shop.
The ecosystem of service providers around TikTok will also grow, with more MCN agencies, operational agencies, advertising service providers, and data service providers. There are also many new tools, such as our TikTok shopping influencer alliance platform, MossCreator.
The future ecosystem of marketing service providers will become more specialized: the number of service providers of the same type will increase, and competition will intensify.
Executive of a senior manager at Lege Overseas Warehouse:
Cross-border e-commerce is moving from a new format to a new norm. One direction is refining segmented areas, and the other is branding and customization. Therefore, over the next two years, there is an opportunity for traditional foreign trade factory-type sellers and experienced foreign trade professionals to carve out their own space in the cross-border field.
There will likely be two trends in the later stage of overseas warehouses: one is that warehouses will become more extensive, and the second is the move toward customized services. Large warehouses can reduce unit costs and enhance explosive warehouses’ stability and fault tolerance. Small warehouses will emerge to meet customers’ differentiated and personalized needs with higher flexibility.
Conclusion:
“Internal Competition” is inevitable, but it is even more crucial to identify one’s strengths in an environment of intense competition. Polishing those strengths to the utmost can lead to better long-term development. Searching for new opportunities horizontally is also a method.
Cross-border e-commerce will continue to expand, and in the face of more significant challenges, those with genuine capabilities who identify suitable opportunities can still carve out a space for themselves in this intense environment!