Yuan Jingxian, Chief Journalist of Shenzhen Business Daily · Reading and Innovation Client
After three years and nine months, the Amazon Global Store Cross border Summit was restarted in Shenzhen.
The 2023 Amazon Global Store Cross border Summit (hereinafter referred to as the Cross border Summit) will be held in Shenzhen from December 12th to 15th. This is a landmark event in the cross-border e-commerce industry. The exhibition area covers an area of 7000 square meters, with over 50 high-quality exhibition business units selected.
Shenzhen is the "headquarters" of China's cross-border e-commerce. According to industry statistics, Shenzhen has over 150000 cross-border e-commerce sellers, accounting for about half of the Chinese sellers on platforms such as Alibaba International, AliExpress, and eBay. One third of Amazon's Chinese sellers come from Shenzhen.
Compared to directly signing orders, most cross-border e-commerce platforms at the summit prefer to obtain "information". Breaking through the information "cocoon" will bring more orders.
When the reporter visited the exhibition, it was found that unlike ordinary exhibitions, Amazon Cross border Summit does not leave most of the exhibition area for exhibitors to set up exhibitions. Instead, it sets up a parallel forum model, dividing most of the exhibitions into forum areas, leaving enough time for sellers, cross-border payments, and other "players" in the cross-border e-commerce ecosystem. Through keynote speeches, roundtable forums, and other forms, the latest news is shared with industry practitioners. Incomplete statistics show that guests have accumulated more than 30 hours of sharing time within 4 days.
After the Amazon account suspension wave, cross-border e-commerce has ushered in a new round of growth
In recent years, cross-border e-commerce has become an important component of China's import and export trade, with great development vitality and potential. According to data released by the General Administration of Customs in October, preliminary estimates show that in the first three quarters of this year, China's cross-border e-commerce imports and exports reached 1.7 trillion yuan, an increase of 14.4%. Among them, exports reached 1.3 trillion yuan, an increase of 17.7%; Imports reached 0.4 trillion yuan, an increase of 5.3%. Compared to last year, the total import and export volume of cross-border e-commerce in the first three quarters of this year has reached 80% of last year's total (2.11 trillion yuan), and the growth rate has also increased by 4.6 percentage points (last year's total growth rate was 9.8%).
At this summit, Amazon reviewed the progress and achievements made by Chinese companies on Amazon over the past year in opening global stores. Data shows that in the past year, the number of Chinese sellers with sales exceeding $1 million on Amazon has increased by over 25% year-on-year; The number of Chinese sellers with sales exceeding 10 million US dollars increased by nearly 30% year-on-year; The number of products sold by Chinese sellers to consumers and corporate customers through Amazon's global website has increased by over 20% year-on-year.
According to the latest customs statistics, in the first five months of 2023, Shenzhen's import and export to countries along the "the Belt and Road" (hereinafter referred to as "countries along the Belt and Road") amounted to 340.81 billion yuan, an increase of 14.3% over the same period last year (the same below), 1.3 percentage points higher than the growth rate of imports and exports from countries along the "Belt and Road", ranking third in China's cities. Among them, exports reached 215.28 billion yuan, an increase of 31%; Imports amounted to 125.53 billion yuan, a decrease of 6.2%.
Since the end of April 2021, Chinese sellers have experienced a wave of Amazon account bans, with over 600 Chinese brands and 3000 seller accounts being banned. The reason given by Amazon for this is that the merchant has engaged in illegal operations, including manipulating comments, brushing orders, and linking illegal accounts.
From this year's data, it can be seen that Chinese sellers have started a new round of growth after the Amazon account suspension wave in 2021.
Security compliance and information barriers, two major challenges for cross-border e-commerce sellers
"Against the backdrop of the increasingly fierce competition on the overseas market, safety and compliance remain the primary and biggest issues faced by cross-border e-commerce," Qin Tong, Sales General Manager of Payoneer's Payoneer in Greater China, told a reporter from Shenzhen Business Daily.
Payoneer is one of the world's first financial technology companies, founded in New York in 2005 and listed on NASDAQ in June 2021. Paianying entered China in 2015 and has offices in Shanghai, Shenzhen, and Guangzhou, mainly serving cross-border B2C export e-commerce sellers and new forms of foreign trade enterprises. In 2020, Paianying processed over $44 billion in transaction volume through over 7000 unique trading channels, creating 3 Revenue of $45.6 billion.
It is reported that in terms of fund security and compliance, Pai An Ying provides Amazon sellers with full site payment services, with the highest security level certification of PCI DSS level 1, multiple verification of 3DS 2.0 accounts, big data AI risk control models, security isolation account architecture, and strict internal and external audits of Nasdaq listed companies. Currently, it has obtained financial compliance qualifications in 58 countries and regions and is continuously adding and improving.
In addition to security and compliance, another major factor affecting Chinese cross-border e-commerce sellers is the difficulty in timely receiving market feedback information.
Qin Tong gave an example, for example, in the United States, a very nice coffee cup that can automatically keep warm and has a beautiful appearance is very popular in the market. Some agency companies may push all channels in the United States to users at once and complete the quotation. However, it is unclear what successful cases, marketing channels, and scenarios these companies have. The price has doubled, and the price difference in between is an increase in channel costs.
"From the data on cross-border payments, three years is a life or death barrier for a cross-border e-commerce (seller) to succeed. Basically, the sales data surged in the first year, but was hit by costs and profits fell in the second year. If the revenue strategy was not adjusted correctly in the third year, they would simply exit." Qin Tong told reporters that sellers in Shenzhen have flexible thinking and rich supply chains, which can be adjusted through continuous product selection and optimization, But in some regions that do not have such a mature supply chain, this situation is particularly evident.
Chen Shu, General Manager of Marketing for Paianying Greater China, also stated that Paianying has conducted research on such issues and found that many new stores experience a significant decline within three months. Nearly half of the new sellers have already given up within six months. In addition, some merchants are not clear about the rules and have been banned by the platform for violating regulations, "The main reason why they rush into the market with enthusiasm but lack channels to understand the actual market information is that they are eager to enter and hastily exit," said Chen Shu.
In this context, in order to create a better cross-border e-commerce ecosystem, some operational intermediaries, cross-border payment enterprises, and others have introduced corresponding measures to help sellers grow. Chen Shu introduced that for novice sellers, Pai An Ying has launched the "Million Dollar Operating Hands - Sales Enhancement Camp Project". This project is specifically aimed at cross-border e-commerce merchants aged 0-3, with the aim of improving seller sales conversion. It is aimed at Amazon sellers who have just registered their stores and hope to receive clear guidance, as well as business operators and managers who hope to improve their operational capabilities.
The momentum of cross-border e-commerce in China is becoming stronger, and Amazon is reducing commission to cope with it
In recent years, Amazon has also been facing new threats from cross-border e-commerce in China.
This includes Xiyin, which plans to go public in the United States for the first time next year, as well as Temu, the overseas version of Pinduoduo, which was launched in the United States last year. On the cross-border e-commerce platforms from China mentioned above, a dress costs $3.2 and a pair of jeans costs $7.9. Low priced clothing provides consumers with more room for choice. At present, Temu has become the fourth most visited retail website in the United States, after Amazon, Wal Mart and eBay.
According to Second Measure, which analyzes consumer bank card transaction data, Temu's sales in May this year surpassed its competitor Heyin for the first time in the United States, by about 20%. In the following months, its leading advantage continued to expand every month, and Temu's sales in the United States in September were more than twice that of Xiyin.
Industry practitioners have stated that Chinese cross-border e-commerce platforms such as Temu, Xiyin, and TikTok reduce sellers' operational and advertising costs through a fully hosted model in exchange for pricing power. The platform further achieves extreme low prices through subsidy strategies, thereby occupying market share.
According to data from mobile analytics company GWS, the daily active users of Amazon's US site decreased from 54 million to 46 million from April to July this year, clearly impacted by these emerging competitors.
Faced with the impact from Chinese cross-border e-commerce platforms, Amazon has insisted that it will not engage in a price war. At the Amazon Global Store Cross border Summit, Amazon released its strategic focus for sellers in 2024, including building brands, simplifying operations, and improving logistics. This strategic adjustment aims to improve user experience and enhance its market competitiveness by optimizing seller services.
Recently, Amazon announced that it will reduce the commission rate for clothing products priced below $15 to 5% starting from January next year; Reduce the commission rate for clothing products priced between $15-20 to 10%. Previously, the commission rate for both types of products was 17%.
"Amazon has lowered service fees/commissions for certain categories, which is a huge change for it." Qin Tong said that the e-commerce market is still continuing to grow. According to statistics and EDGE reports, the compound annual growth rate of e-commerce market size in North America and other regions is expected to reach 14.43% from 2017 to 2027, and the GMV of the US e-commerce market will increase from $400 billion to nearly $130 billion.
At the same time, the consumer group, economic environment, and trade environment are also undergoing changes. In terms of consumer groups, Generation Z has become the main consumer group in society, leading to a shift in overall consumption habits and expectations. The trend of consumption shifting towards mobile devices requires cross-border e-commerce sellers to consider new strategies for customer acquisition and interaction.
"The flow of people at this summit far exceeded expectations (15000 people)." Qin Tong believes that currently, the cross-border e-commerce industry, whether in the market or the government, needs an opportunity to boost industry confidence, support and grow together, establish a good ecosystem, and truly enable Chinese sellers to "sweep globalization" through capital and product spillovers.