A few years ago, when cross-border e-commerce was on the rise, I was a bit surprised. Isn't cross-border e-commerce still foreign trade? Later on, it was learned that Chinese goods were sold directly to consumers on e-commerce platforms, with the whip long enough to prevent middlemen from profiting from price differences.
The original path for Chinese goods to be exported overseas was for foreign merchants to purchase and sign orders. This model has led to the success of Yiwu Small Commodity City and Canton Fair, where foreign merchants return to China to sell and distribute goods. The channels are in the hands of foreign investors. In addition, there are some brand merchants who come to China to process products or engage in OEM production. The media often laments that the majority of profits have been taken away by foreign parties, and Chinese companies are just earning a hard-earned fee.
Cross border e-commerce mainly relies on the rise of Amazon, where Chinese manufacturers and merchants can display and sell products on the platform. In recent years, many merchants have emerged on the Amazon platform, and this process has also created a number of new brands, such as Anke. Because facing consumers directly increases the unit price of goods, domestic enterprises have more lucrative profits.
AliExpress TEMU、TikTokShop、 Xiyin, Shopee, and Lazada have sprung up like mushrooms after rain, expanding their overseas territories. Not only their products, but also their sales platforms are gradually in the hands of domestic capital.
From easy to difficult, from commodity to channel, and then to platform, gradually penetrate into the terminal. The premise is that China has strong commodity manufacturing capacity, Chinese people understand and are familiar with commodities, adapt to iterative needs, and have natural advantages in communication and transaction.
Pao Pao Mart recently released its third quarter report, with revenue growth of 120% -125% and overseas growth of 440% -445%. The performance has significantly increased, mainly in Thailand where there has been a substantial growth. Affected by this, the company's stock price rose by 18.52% yesterday, with a market value of HKD 101 billion.
Bubble Mart has found a strategy to expand into the European and American markets by targeting East Asia and Southeast Asia. With diversified IPs and an increasing number of large IPs, the company began its global expansion in 2018. This year, Bubble Mart's overseas revenue accounted for 39% of its total revenue.
In Thailand, due to the celebrity effect, consumers queue up all night at the entrance of Pop Mart to compete for LABUBU. If they buy a hidden item, it can be sold for 10 times the price in the market. Due to its popularity, enthusiastic Thai consumers have launched a global leak detection model and even went shopping in the Chinese market.
Miniso is another successful overseas player, with 7063 global stores and 2753 overseas stores, accounting for 35% of overseas sales. The model of Miniso is somewhat similar to MUJI, which assigns brand value to ordinary products. However, Miniso uses IP authorization and collaborates with numerous IPs, resulting in high sales gross profit margins and lucrative profits that are still increasing.
Miniso has raised the overseas selling price of Chinese made products, just like Pop Mart. Both companies have high gross profit margins, which has made their market values strong. Especially Miniso, which has brought considerable investment returns to investors after going public in the generally sluggish Chinese concept stocks.
Selling well through e-commerce and expanding business through physical stores, Bubble Mart and Miniso have moved Yiwu Small Commodity City to the doorstep of overseas consumers. This model has already been implemented, and there will be similar enterprises rising in the future.
The catering industry is also experiencing similar stories, with hotpot and new tea drinks going global. The competition in overseas markets is not as fierce as in domestic markets, and profits are also better than in domestic markets.
Many commodity exports are advancing. Taking electronic cigarettes as an example, they used to be outsourced to overseas companies. China is a manufacturing center, and there are also some self owned brands that have not developed smoothly. In this process, some companies are good at marketing, find a path to suddenly sell well, and directly distribute goods through overseas channels, which is very recognized by consumers. It is more difficult for these companies to develop and have greater potential for growth.
In addition to tangible goods, intangible goods are also forging ahead overseas.
In 2023, the overseas market revenue of domestic games reached 16.366 billion US dollars, which is also the fourth consecutive year that the scale of China's self-developed games' overseas revenue has exceeded 100 billion yuan. In the same year, the revenue scale of China's online literature overseas market reached 4.35 billion yuan, a year-on-year increase of 7.06%. In addition, short videos are also very popular overseas.
The vast domestic market has created a group of competitive gaming and online literature companies that understand consumer needs and how to expand their business. With the help of content and algorithms, Internet companies have also made a number of APPs overseas, and Chinese netizens have begun to set up a global stage.
Whether it is tangible or intangible goods, the quality of going global has significantly improved. They are all flowers blooming in the domestic market, and deep roots make flowers beautiful. However, the two are interconnected and mutually supportive.