Which one has greater influence: AliExpress, TEMU, SHEIN, TIKTOK or Amazon

“Cross-border e-commerce rushes to Europe and the United States”

Since 2023, under the siege of SHEIN and TEMU, the number of daily users of Amazon App has decreased by 8 million.

At the same time, TEMU’s daily active users in the United States continue to rise. So far, the platform has added nearly 10 million new users this year.

With one increase and one decrease, it is no longer necessary to say that the competitive situation is serious.

In fact, Amazon's sales this year have been very good. The recently concluded Prime Day sales broke records and became the best-selling sales promotion in history.

Data shows that during the two-day sale, Prime members around the world purchased 375 million items, up from 300 million items in 2022; a total of millions of transactions saved consumers more than $2.5 billion.

Third-party data shows that American consumers spent $12.7 billion in two days, a year-on-year increase of 6.1%, setting a record high.

But behind the hot sales, increasingly obvious industry changes have begun to sweep across Amazon and even the entire cross-border e-commerce market.

Data from the General Administration of Customs shows that China’s cross-border e-commerce exports reached 1.44 trillion yuan in 2021, a year-on-year increase of 24.5%.

As an important giant in the global e-commerce market, Amazon has been the most directly impacted by this wave of Chinese cross-border e-commerce.

In the past, TIKTOK entered the market strongly with its hot traffic advantage, and later TEMU used mechanisms to reshape consumers' minds at low prices. Recently, SHEIN also broke the news of opening up third-party sellers.

Coupled with Alibaba and AliExpress, these four e-commerce platforms that focus on "domestic products going overseas" form the mainstream of China's cross-border e-commerce, and are jokingly called the "Four Little Dragons going overseas" by domestic sellers.

Under their competition, platforms such as Amazon and eBay began to see a decline in the number of users.

Since the beginning of this year, eBay has lost nearly 2 million daily active users in the UK: from nearly 6 million at the beginning of the year to about 4.2 million now.

In addition to the loss of member users, Amazon is also facing the exodus of sellers. According to a survey by Capterra, a subsidiary of Gartner, 99% of Amazon's small and medium-sized sellers plan to open stores on other e-commerce platforms in 2023.

Among them, we will not say more about the industry competition between TEMU and SHEIN. Now, TIKTOK has also begun to compete head-on with Amazon.

Last month, TIKTOK was cooperating with local logistics companies in the United States to store goods and package and ship goods for sellers, instead of building its own warehouses and logistics networks. A person familiar with the matter said that TIKTOK has signed a logistics agreement and is currently testing it with American sellers.

At the same time, US news website Semafor reported that people familiar with the matter said that TIKTOK plans to launch its own online shopping service in the US version of the application as soon as one month, thereby directly competing with e-commerce platforms such as Amazon.

There is no doubt that in the increasingly fierce industry competition, the good days of Amazon are becoming a thing of the past.

How to establish a new balance in an increasingly competitive market environment is a question that these Chinese e-commerce giants and Amazon are thinking about together.

There is no doubt that compared with previous years, the competitive landscape in Southeast Asia must be mentioned when talking about cross-border. Since this year, more and more cross-border giants have begun to directly enter the European and American markets to compete head-on with Amazon.

SHEIN, a low-key but powerful company, can be regarded as a pathfinder at the forefront. While the path is gradually opening up, it also gives latecomers more opportunities to repeat their success.

Specifically, the expansion journey of these three giants is always inseparable from three big moves: low price, supply chain, and high-heat marketing.

Especially during the expansion of TEMU, these "three axes" were used more skillfully.

Let’s talk about the low price first.

In terms of low prices, TEMU has never stopped and always maintains the lowest prices on the entire network.

TEMU emerged in September last year, and the prices on its website may be two to three times lower than Amazon. The socks cost $2.29. Lenovo headphones are $8.99.

According to securities sampling results, the price of TEMU's single products is more than 30% lower than that of SHEIN, and the price of some standard products is only half of Amazon. It is expected to continue to occupy the "low price" mentality of consumers.

Now TEMU continues to continue the low-price competition. At the beginning of July, the platform launched the slogans of “10% off on clothing, shoes and kitchen supplies” and “Special Promotion Zone within $1”. TEMU recently ran a wave of advertisements on foreign social media, including a pair of sandals priced as low as $0.64.

Let’s talk about the supply chain, which is also an important support for low-price products on TEMU.

TEMU's model is a self-operated model: TEMU is responsible for product pricing, marketing, customer acquisition, and contract fulfillment. As a supplier, merchants only need to prepare goods and arrive at the warehouse, forming a "supply chain-platform-overseas consumer" transaction link.

The more links in the supply chain, the higher the cost. TEMU’s approach is to shorten the supply chain as much as possible and supply directly from the source.

To put it simply, TEMU's supply system is directly oriented to the factory level. The factory doesn’t have to do anything except supply goods. TEMU takes care of everything from shelf placement, marketing, logistics, and after-sales.

In this process, TEMU gained pricing power. The platform has developed a strict price review mechanism. If a merchant's price for a product on TEMU is higher than the price of similar products on domestic wholesale e-commerce 1688, the platform will ask the seller to re-quote.

At the same time, TEMU, which is backed by Pinduoduo, has no worries about supply. Pinduoduo has accumulated more than 11 million suppliers in its long-term operation. Since 2015, it has cultivated and incubated more than 1,000 factory brands, some of which are even suppliers of world-renowned brands.

Beyond low prices and supply chains, their other trick is marketing.

In the early days, SHEIN completed the mental shaping of global consumers through the internet celebrity economy and major social media marketing.

TIKTOK, the traffic king of social media, is naturally very familiar with marketing strategies. TEMU, a latecomer, also learned this trick.

On social media channels, TEMU launched a “credit giveaway” event on Facebook to allow platform users to earn rebates and help them promote their products; on short video channels, TEMU teamed up with internet celebrities to launch try-on haul (unboxing and trying on cross-dressing) ) and other interactive activities attracted many young users to watch.

At the same time, the platform does not let go of traditional channels. In February this year, Pinduoduo spent US$14 million to place a 60-second advertisement at the top event "Super Bowl", making 208 million American viewers remember the new TEMU brand.

Under these three tricks, TEMU, TIKTOK, and SHEIN have become household names, and their users and revenue are growing faster and faster.

In February this year, TEMU's average daily order volume has reached 200,000, with a peak of 500,000; SHEIN's daily order volume in the United States is about 300,000.

According to Sensor Tower data, SHEIN currently has more than half of Amazon’s global monthly active users, and its TEMU is about one-fifth of Amazon’s.

Another survey shows that 99% of Amazon’s small and medium-sized sellers plan to open stores on other e-commerce platforms in 2023.

At this point, let’s look back and forth at Amazon.

Faced with such a series of silky offensives, Amazon also began to change.

In recent months, the Amazon platform has undergone several adjustments, all of which seem to be related to TEMU.

Especially in terms of low prices and subsidies, the actions are extremely obvious.

At the end of June, Amazon's US station announced that it would cancel the small and light product program and start from August 29 this year, it will introduce lower FBA rates for all products priced below $10. The delivery fee for products priced under $10 is $0.77 less than before, and there is no need to pay holiday peak delivery fees.

It can be seen that Amazon is actively guiding sellers to make low-priced products below $10, which is at the same price level as TEMU.

Some time ago, many sellers found that their products were tagged with 20% discount codes. Amazon’s official customer service said: This is automatically set up by Amazon for sellers and will not charge sellers’ fees.

From the perspective of subsidy model, this move is exactly the same as Pinduoduo’s tens of billions of subsidies.

The core purpose of these new changes on Amazon is to improve the delivery time and service quality of low-priced light and small commodities through more favorable prices, and compete with platforms such as TEMU, SHEIN and TIKTOK for users.

We must admit that in the mid-to-high-end e-commerce market, Amazon is still the well-deserved dominant player. The “record-breaking” prime day that just passed once again allowed us to witness the strength of this industry giant.

But it is also undeniable that in the low-price e-commerce market, TEMU, TIKTOK, and SHEIN have strongly occupied the minds of users in the cross-border market.

Just as Pinduoduo has ignited industry competition in sinking markets, the accelerated expansion of TEMU and SHEIN is also stimulating a wave of cross-border e-commerce layout by Internet giants.

But after a detailed analysis of TEMU's "three axes", we also saw the drawbacks of this model: burning money in exchange for expansion.

Duan Yongping, who has a great influence on Huang Zheng, is also not optimistic about TEMU's current model.

He said at the forum, "It is unlikely that TEMU will challenge Amazon, but it is possible to occupy a place in certain market segments. I still don't understand this business model and can't imagine what it will be like in five or ten years." .”

Judging from the latest competitive situation, TEMU and SHEIN have indeed occupied user minds and market share in low-price and other segments.

But unlike the pattern of "collective siege on Amazon" we imagined, there is also "friction" among these domestic cross-border giants.

Pinduoduo TEMU's lawsuit against SHEIN is an important microcosm of this.

These two platforms have the same user groups. The essence of the price war and litigation war between the two giants is actually a battle for the supply chain.

At the same time, TIKTOK also emerged in the low-price involution track and began to compete with Alibaba for the market.

The latest news shows that TIKTOK Shop’s revenue in Vietnam has surpassed Alibaba’s Lazada.

The e-commerce market report for the first half of 2023 shows that TIKTOK Shop ranked second with a revenue market share of 16.3 trillion VND and sold 117 million products.

At the same time, we cannot miss the overseas layout of the two giants Alibaba and JD.com.

In fiscal year 2023, Alibaba International Business achieved revenue of 69.204 billion yuan, a year-on-year increase of 13.3%, accounting for 8% of the group's total revenue, becoming a sub-business second only to Alibaba Cloud.

As it digs deeper into the Southeast Asian market, Michael Evans, president of Alibaba International Digital Business Group, said that Alibaba plans to expand Tmall to Europe and establish local business and e-commerce platforms there.

At the end of last year, Alibaba launched Miravia, an e-commerce platform in Spain. According to data.ai, a third-party data agency, in March this year, Miravia’s downloads exceeded SHEIN and ranked first among Spanish shopping apps.

And JD.com. As cross-border e-commerce platforms compete fiercely for the market, JD.com has begun to focus on international logistics.

The latest news shows that JD Logistics and France Post’s international express company have reached a strategic cooperation agreement. The two parties will cooperate to carry out international supply chain logistics cooperation and promote the fastest same-day delivery in many European countries.

JD Logistics has always regarded Europe as an important development market and has built a mature and complete self-operated warehousing and logistics system in the region.

Taken together, the competition among these cross-border platforms has both homogeneous and diversified aspects. Focusing on the supply chain, focusing on the international logistics system, and continuing to expand into new markets have gradually become the general development direction of the industry.

On the whole, when domestic e-commerce giants go overseas, they still inevitably focus on the low-price market.

In the competition with Amazon, Amazon still occupies a dominant position in mid-to-high-end online shopping in the European and American markets. The warehousing and logistics they have continued to build over the past decade or so have also guaranteed their excellent service experience and formed their own core barriers.

In this more "valuable" market, China's Internet giants are far behind Amazon in terms of product positioning, market share, and logistics services.

Therefore, considering Amazon’s strong position and the importance of cross-border e-commerce, cross-border e-commerce will be trapped in a protracted war or even a war of attrition in the future.

In the siege of Amazon, what appears on the surface is a battle for market share. What is hidden under the water is how Chinese brands seize the right to speak in the mid-to-high-end market.