China's e-commerce giants, overseas fierce fighting

The fight doesn't end.

作者 | 黄昱  编辑 | 张晓玲

In 2023, Chinese enterprises will usher in a new historical node when they go overseas.

After many years of going overseas with Huawei, ZTE, Haier, Wanda and other older Chinese-funded companies, Chinese Internet giants such as Alibaba, Pinduoduo and Byte have also joined the wave of the times, and have performed more amazing versions, composing a magnificent song of globalization.

In the eyes of many practitioners, cross-border e-commerce platforms have experienced the most ferocious year of overseas fighting.

This year, under the catfish effect brought by Pinduoduo TEMU, the major cross-border e-commerce platforms accelerated their madness, and the "Big Four of China's Overseas Companies" composed of Shein, TEMU, TikTok shop, and Ali International Commerce formed a strong encirclement and suppression of the global cross-border e-commerce giant Amazon.

In addition to Shein, who was born at the grassroots level, TEMU, TikTok shop, and AliExpress International all stand behind domestic Internet giants, representing Pinduoduo, ByteDance and Alibaba.

Chinese e-commerce giants have launched fierce and exciting business wars around the world, and they will continue to be staged in 2024.

1

Bureau

As the overseas version of Pinduoduo, TEMU has opened the curtain of the fierce battle of cross-border e-commerce in 2023 with its super krypton gold ability.

Back in February last year, TEMU, which was born only 5 months ago, spent $14 million to place a 60-second ad in the "Super Bowl" finals, the top event in the United States, which not only set the highest price in the history of the event's advertising, but also became the youngest brand ever to advertise in the "Super Bowl".

In this event, known as the "American Spring Festival Gala", the advertising slogan "Shop like a billionaire" made TEMU quickly become popular.

Pinduoduo rushed into the blue ocean of cross-border e-commerce like a catfish, relying on the full hosting model and low-price strategy, and quickly expanded to 48 countries and regions around the world in 2023, ranking among the top 10 apps in the world in terms of app downloads, and becoming one of the most downloaded apps in the United States.

It is worth mentioning that TEMU's fully managed model has blown like a hurricane and has become the hottest topic in the cross-border e-commerce industry in 2023. Following in the footsteps of TEMU, since the end of 2022, AliExpress, Shein, and Tik Tok shop have successively launched a full custody model, hoping to attract more sellers in demand in the Chinese market.

With the ultimate low-price strategy, TEMU has fought its way out.

According to Bloomberg data, TEMU's sales in the United States surpassed Shein's North American sales for the first time in May last year, exceeding by about 20%. Since then, TEMU's lead has expanded every month, and sales in the U.S. in September have more than doubled Shein's.

TEMU's strong growth has been reflected in Pinduoduo's earnings report, which led to Pinduoduo's share price surpassing Alibaba on November 30, 2023, becoming a milestone event in the internet industry.

In the face of TEMU's strong attack, Shein, who has always been low-key, can't sit still. This year, in order to hold its ground and break through the bottleneck of growth, Shein, as the world's largest fast-fashion retailer, accelerated its IPO while offering a platform-based, full-category and localized strategy.

And TikTok shop, which has been using Southeast Asia as its main battlefield for the past two years, will also start to focus on the United States in 2023. The U.S. is home to TikTok's largest user base, with 150 million monthly active users, almost half of the U.S. population. The launch of TikTok Shop in the United States marks a key step in the development of TikTok e-commerce.

In the future, TikTok shop will also focus on the U.S. market. So far, China's four major cross-border e-commerce platforms have gathered in the United States, and this is Amazon's home base.

On the battlefield of last year's Black Friday promotion, the "Big Four of China's Overseas Giants" have formed a fierce situation of competing with Amazon for the market, users, and merchants, which can be said to be the most fierce competition. The Black Friday event period in the United States is generally a total of five days from "Thanksgiving" to "Online One", and the entry of Chinese e-commerce platforms last year promoted the early opening of Black Friday discounts.

TEMU began to warm up as early as October 20th, and the big promotion lasted for 47 days, with a discount of up to 90% OFF, and a coupon of $200 was given; SHEIN The number of regular promotions has more than doubled, and the price is also aimed at TEMU Constantly updated, TikTok Shop's discount for this big promotion is also as high as 50%, AliExpress International is also fully prepared, it is reported that AliExpress Cainiao cross-border preferred warehouse before Black Friday stocked up nearly 9 times year-on-year.

Compared with its Chinese rivals, Amazon's big promotion came even later, starting to warm up on November 17, and the total cycle lasted 11 days, which was the first time that it extended the Black Friday promotion.

Under the pressure of China's Internet giants' "external volume", Amazon has felt an unprecedented chill. According to data from mobile analytics company GWS, from April to July last year, Amazon's daily active users in the United States decreased from 54 million to 46 million, and according to AMZ123 data, as of November 26, more than 40% of sellers reported that sales were less than expected, and 10% of sellers said that their profits were not performing well.

2

risk

The overseas expansion of China's cross-border e-commerce giants is essentially the export of domestic manufacturing. What is different from the past is that now it is not only the output of commodities, but also the output of the industrial chain.

Whether it is a platform or a supplier, they are ushering in a good era of cross-border e-commerce. Under the efforts of the "Big Four of China's Overseas Manufacturers", the threshold for domestic sellers to go overseas is getting lower and lower, and they have more opportunities to play their own brands.

However, in addition to seeking commercialization breakthroughs, cross-border e-commerce must also face uncertainties from local regulatory policies and market competition, which is their biggest concern for going overseas.

As two Chinese cross-border e-commerce platforms with the most popular and similar business models, Shein and TEMU will inevitably go awry in the competition. Litigation battles have been fought over issues such as trademarks and copyrights, antitrust, commercial defamation, and unjust enrichment.

The TikTok shop was banned due to a serious trade protection conflict in Indonesia, and the Southeast Asian market began to be shaky. It was not until December 12, 2023 that TikTok shop was relaunched by holding a stake in Tokopedia, a local e-commerce platform in Indonesia, and the risk of localization policy was temporarily resolved.

Earlier in the United States, TikTok was considered a threat. In 2020, then-U.S. President Donald Trump issued a presidential executive order banning TikTok from operating in the U.S. and forcing ByteDance to divest TikTok's U.S. business.

Since then, Zhou Shouzi has taken over TikTok and served as CEO, mediating in many ways in a complex international environment. At a congressional hearing in March last year, Zhou Shouzi came out of the circle with his strength and won more respect for TikTok, but the crisis of TikTok has not been lifted because of this.

Traffic is a double-edged sword, especially when Chinese companies have huge traffic in the U.S. market.

In the past, Chinese companies went global, and they also faced many risks, including localization policies, which is an inevitable problem for enterprises to go global.

Taking Huawei as an example, starting from African countries to Europe and the United States, it has taken the route of encircling cities from rural areas, from the initial localization policy challenges to the later sanctions, all the way escalating to fight monsters. Huawei's solution is to deepen localization, communicate with local governments, enterprises, and consumers, continuously optimize business strategies, and even make price concessions if necessary.

Not only Huawei, but also Haier, Hisense and other overseas companies have also encountered various resistance, including the recent CATL, and the American battery factory built in cooperation with Ford has also experienced twists and turns, which are often encountered problems. For overseas enterprises, solving the localization problem is the meaning of the topic.

Years later, the Chinese company evolved to a deeper stage. Whether it is the United States or Southeast Asia, emerging cross-border e-commerce platforms from China have created a whirlwind in the local market, rapidly revolutionizing the local business landscape and competitive landscape, and even changing people's consumption Xi.

Zhou Shouzi, Chen Lei, Jiang Fan, Xu Yangtian and other people in the war must have felt more deeply.

Of course, in such a trillion-level market, the "Big Four of China's Overseas Giants" will have to face not only the giant Amazon, but also the rising stars that will emerge from the world at any time in the future.

This market opportunity will always exist, and the fight will not end.

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