Dangerous undercurrents lurked under the waves.
More than 50000 Chinese businesses have been affected, and many brand-name big sellers who have been stationed for a long time have failed to escape this wave of “store closure tide”.
Someone sees the danger, someone reads the turnaround and trend.
More and more domestic businesses come to the B2B (business to business) channel. From a large company with tens of thousands of employees to the “invisible” pin crown focusing on the vertical track, they are all on the card table to witness this unprecedented reshuffle.
They can’t decide where the tide is going. However, cross-border e-commerce is ushering in a new historical opportunity, and more businesses are trying to find their own direction.
The price of a “returnee” seat has increased 12 times
In 2007, Zeng Hui returned home to take over the business of his parents.
This auto parts factory, located in Nanchang, Jiangxi Province, is suffering from the pains brought by the changes of the times: the sales channels are narrowed and the profits are becoming thinner and thinner. Once, it was difficult for customers to line up to come to the door, and the market fell into a situation where the strong take all.
What should I do? Or follow the big brands and meet the accessories manufacturers with more than ten years of experience; Or try to find a new track, in Zeng Hui’s words, “dislocation competition”.
In the first year, the young man failed to save the decline of the factory. The disadvantages of brand and product strength can be seen with the naked eye, “an exhibition costs more than 100000, and you may not even get a customer.”
The next year, he finally began to understand the true meaning of “dislocation competition”. The accessories factory plunged into a small vertical track and began to study, focusing on the seats of industrial and agricultural machinery. For example, Zeng Hui, a small category of construction machinery is forklift, “let’s do the forklift first.”
It is effective to be the “invisible champion” of the subdivision track. The factory was revitalized, and the sales growth rate in those years reached an amazing 50%. Today, Zeng Hui’s factory has occupied 60% of the domestic forklift seat market.
In addition to improving the product strategy, Zeng Hui also began to study e-commerce to open new sales channels for the factory. He is proud: “we are the first batch of manufacturers in China to sell vehicle seats on Taobao and 1688.”
By chance, Zeng Hui came into contact with cross-border e-commerce B2B.
He learned for the first time that there is a magical world on the other side of the sea. Buyers there are more familiar with mechanical products and have strong ability of maintenance and modification. Some small agricultural machinery can be sold directly in supermarkets.
At that time, cross-border e-commerce was still a new thing, but the traffic brought by Alibaba was real: since entering Alibaba international station, Zeng Hui’s factory could receive seven or eight or even more inquiries a day. On other B2B platforms, it is rare to have one or two inquiries a week.
“At that time, translation software was not developed,” Zeng Hui recalled. “We typed it word by word and then translated it with an online dictionary.”
Forklift seats and lawn mower seats cross the ocean and are assembled on the other side of the ocean. This is another perfect dislocation competition. European and American countries have achieved the second development curve of the factory.
“Overseas” means new market, halo and brand premium.
Once, Zeng Hui chatted with a customer and learned that the other party had entered a batch of Italian seats. Curious, he went to observe it and recognized the craft of his factory at a glance: “isn’t this our product?”
The pure made in China has traveled across the sea and returned to Chinese buyers. These seats have gone around Italy and their value has increased 12 times.
These “returnees” seats shocked Zeng Hui: the overseas market is not a permanent safety island. To gain a firm foothold in the storm of cross-border e-commerce, the brand power is the core.
At that time, the price war was still popular in China, “if you sell for 5 yuan, I’ll sell for 4.9 yuan.” Zeng Hui has begun to think about a new question: “what should I do if I want to sell twice as much as others?”
He also began to hire “returnees”. The accessories factory has attracted more than 20 technical backbone, and the whole factory has only more than 80 employees.
Zeng Hui said that we should hold the core technology and process in our hands and lay out the brand development. “I hope to create something valuable instead of low-level and repetitive competition.”
After five years, he returned to the battlefield of cross-border e-commerce
In Luoyang, Henan Province, “big capital plastic industry” is a gold lettered signboard.
There are many auras around it, and the most eye-catching is undoubtedly the “leading enterprise of targeted poverty alleviation in Luoyang”: over the past eight years, the large-scale plastics industry has established 17 poverty alleviation workshops in Luoyang, radiating from Xin’an County to the surrounding Yichuan, Luoning, Ruyang and Yiyang, driving more than 2000 people to employment.
The original intention of this enterprise was to “help the poor”: Guo Songtao, who graduated from Zhengzhou University, returned to his hometown with capital and experience after several startups.
At that time, although Xin’an County had been lifted out of poverty, the rural development conditions still lagged behind. After repeated investigation, Guo Songtao resolutely selected rural areas to set up enterprises, “rural areas also have great prospects.”
A plastic weaving industry base has quietly taken shape.
Based in rural areas, the large-scale plastics industry has been developing and growing, with an annual revenue of 350 million and a number of loyal offline customers. Due to the strong nature of the company, Guo Songtao never put business e-commerce on the agenda, and only had a short water test in 2015.
The result of the experiment is: very difficult“ Cross border e-commerce needs time to boil before it can come out. ” Guo Songtao said frankly.
The first cooperation with Alibaba international station was interrupted, but it is obvious that he did not give up his attention to this position. By the end of 2020, the change of global epidemic situation and the rapid recovery of foreign trade orders made Guo Songtao keenly smell the wind.
Guo Songtao (first from the right)
Returning to the battlefield of cross-border e-commerce, the large-scale plastics industry has made full preparations.
The first is talent reserve. Guo Songtao proudly introduced that the company has recruited several foreign trade professionals. “Three returned from abroad, several English majors and one French major…” he said.
The second is the process improvement. Thanks to the progress of production capacity and technology, the container bag products produced by large-scale plastics industry have been in line with international standards.
Luoyang Municipal government also gave timely assistance: in 2020, the State Council approved the establishment of Luoyang Comprehensive Bonded Zone, which is defined as four strategic core areas: high tech Zone, free trade zone, self creation zone and cross-border e-commerce pilot zone.
After five years of absence, Guo Songtao could not help feeling the change of this “old friend” when he met Alibaba international station again: the customer service was more perfect, the technical strength was more top-notch, and all kinds of e-commerce knowledge training and lectures were richer.
Only five months after the launch, the export volume of the large-scale plastics industry reached 10 million yuan, and the intensive investment had a satisfactory return. Guo Songtao said with a smile that it has always been pleasant to cooperate with ALI, “just follow them.”
China economic weekly once quoted Guo Songtao as saying: “a person’s success is not success, but collective success is more glorious; A person’s wealth is not wealth, but the collective’s wealth is even richer. ”
Just like the origin of the name “big funded plastics industry” (“tolerance is big, seniority is strong”), this group of simple and vigorous children of Henan, rooted in the loess, are crossing the ocean on the giant ship of the times.
One side is sea water, the other is fire
Since 2020, thanks to the stability of domestic epidemic prevention and control and the advantages of supply chain, cross-border e-commerce has once become a golden track for gold miners.
However, in front of the super large-scale “store closure tide”, the former prosperity has long been dashed. Shenzhen cross border E-Commerce Association has estimated that at least 50000 Chinese business accounts will be affected and the loss may exceed 100 billion yuan. The uncertainty of B2C subject to environmental constraints has once again become an alarm bell hanging over businesses.
At the same time, the fundamentals of foreign trade data are still going well. According to the General Administration of customs, China’s foreign trade exports have maintained positive growth for 14 consecutive months. With the global economic recovery, the demand of overseas class B buyers has also reached a historical peak.
One side is sea water and the other is fire.
According to the latest data of Alibaba international station, from January to July 2021, the average number of visited buyers, paid buyers and online transaction volume increased by more than 60% year-on-year. Among them, the average number of active buyers in the United States, India, the United Kingdom, Brazil and other places even doubled.
With low investment cost, short turnaround time and many market opportunities, more businesses have re focused on cross-border e-commerce B2B, the oldest and most developed model of e-commerce.
Before that, Dalian Zhicheng Furniture Co., Ltd., which only engaged in to C business and mainly engaged in mattress products, soon after joining the cross-border e-commerce B2B field, its turnover on Ali international station has exceeded US $10 million, accounting for one quarter of the total sales of all channels.
“B2C competition is too big and the cost is high.” The person in charge of the enterprise said, “we want to balance competition by doing B2B, improve performance and accelerate the brand to go to sea.”
This is the mainstream mode and main track of cross-border e-commerce, where newcomers and the elderly gather. Since its establishment in 1999, many sellers and buyers registered 22 years ago are still active on Alibaba international station.
Referring to the significance and mission of the international station, Zhang Kuo, vice president of Alibaba group and general manager of the international station, believes that he hopes that the platform can solve the most difficult part of cross-border e-commerce B2B – minimize the threshold and cost of going to sea, so that any foreign trade Xiaobai can “sell the whole world with one click”.
Zeng Hui is here to match orders and expand transactions.
Guo Songtao studies advertising and marketing management here.
The situation is difficult and the wind and waves are dangerous. But after a thousand sails, some people still choose to go to the sea and start again
Post time: Aug-31-2021