The Battle Of Traffic Monopoly Giant Dominating Cross-Border E-Commerce Is Quietly Going On

After Ali and byte, there is another giant who encircles and suppresses sheen.

In early April, a number of media sources said that the cross-border e-commerce platform buy with Microsoft, which Microsoft began internal testing in March, was expected to be launched in April or may. In addition, Microsoft has shown a strong interest in Chinese businesses, saying that "this product will enable Chinese high-quality brands, products and suppliers to help them sell their products to the global market."

In recent years, cross-border e-commerce has become a "good idea" for Internet enterprises. In 2021, byte beat launched the cross-border e-commerce tiktok shopping and Fanno, and women's clothing cross-border e-commerce independent station dmonstudio. Alibaba has an early layout of cross-border e-commerce. Although it holds many old brands such as Alibaba international station, global express and lazada, it also launched the women's cross-border e-commerce platform allylikes in 2021.

Dmonstudio and allylikes are considered to be the products of byte and Ali against sheen respectively, but they underestimate the pattern of the giants. To be more accurate, byte and Ali want to take advantage of the east wind of sheen and take advantage of women's wear as the entry point to enter the overseas market, while the ultimate goal of byte Ali is to do a good job in comprehensive cross-border e-commerce, not just for sheen.

But from the perspective of sheen itself, we have to treat byte, Alibaba and Microsoft as important rivals. At present, sheen is no longer a single category of women's e-commerce platform, covering children's wear, men's wear, home furnishings and other vertical categories, and gradually transformed into a comprehensive cross-border e-commerce. The ultimate goal of sheen and the giants is to build a comprehensive cross-border e-commerce platform.

　　PART. 01 who is imitating sheen?

Women's clothing category is the "golden key" of the e-commerce industry. The rise of Taobao, to a certain extent, benefited from the growth of women's clothing brands of Taobao, attracting a number of female users. Even in recent years, the category of women's wear is still one of the categories with the highest sales share of Taobao.

Taobao is proud of the domestic women's wear market, but it ignores that in terms of cross-border e-commerce, women's clothing category still has a bright future, which gives sheen the opportunity to monopolize the blue ocean and become a "black horse" in the cross-border e-commerce field.

In 2020, the annual revenue of sheen will be nearly 10 billion US dollars. According to several media sources, the revenue of sheen in 2021 will double that of 2020 and is expected to be about 20 billion US dollars. Among the traditional fast fashion giants, Zara had sales of about $30 billion in fiscal year 2021, while UNIQLO had about $17 billion. It can be seen that in 2021, Sheen has finally surpassed the traditional fast fashion giants in terms of sales.

From 2013 to 2020, sheen achieved revenue growth of more than 100% for eight consecutive years. The exponential growth of Sheen has attracted the attention of giants in the past two years. Ali and byte's allylikes and dmonstudio want to enjoy the cross-border women's wear bonus brought by sheen.

The failure of dmonstudio means that it is not easy for the giants to take a share in the cross-border e-commerce field of women's wear. In the business model of sheen, the supply chain mode of "small order and quick return" (first order in small batch and many times of return) is the most talked about mode. It seems that the barriers are not high and the actual operation is not simple.

In the small order quick return mode, a large number of buyers and designers are needed as support. People close to sheen told "new entropy": "The essence of fast fashion is to quickly launch and keep up with the fashion, which determines that fast fashion brands don't need to spend too much time on original design, and can directly learn from the design and style of big brands. The buyer designer of sheen is a composite post that combines the buyer and the designer, responsible for the buyer's selection and change of design. The buyer designer will observe the trend for a long time, and then open up Send the style that follows the fashion. "

Byte is not unaware of the importance of professionals. A person familiar with the matter disclosed that the number of team members was close to 400 when dmonstudio was launched three months ago. At least 100 people were directly recruited from the high salary of sheen. However, it was still hard for dmonstudio to escape "death" and announced its shutdown in February this year.

As for Ali, as it has many cross-border e-commerce products, Ali has more resource advantages than byte in making cross-border women's wear. However, Alibaba's cross-border e-commerce platforms such as sumitong are service-oriented platforms and do not participate in the manufacturing and design process of merchants, while sheen is a self-supporting brand platform, which participates in the design and manufacturing of suppliers, so it is more closely bound with suppliers.

For this reason, allylikes, which is affiliated with express, can not get practical help from express. In addition, allylikes is in a completely independent state within express sales, so the supply chain building is almost starting from zero. According to a source, allylikes even went straight to the sheen supplier.

However, the promotion content and discussion about allylikes on instagram is far from enough, with only 15000 posts with allylikes tag. The number of posts with sheen tag has reached 5.72 million.

On instagram, the number of posts with allylikes and sheen tags is estimated to be more than 1 million each year based on the data that the annual sales of sheen exceed 100%. This increasingly crazy content output speed, on the one hand, is due to Sheen's small-cost cooperation mode such as giving away clothes to help promote a large number of Kocs. On the other hand, when the consumption boom of sheen is formed, consumers will spontaneously share sheen clothes in instagram and become free brand promoters. In this benign pattern of traffic explosion, sheen is eating up the social media dividend.

Recent data show that the social media traffic of allylikes from Facebook is as high as 98.16%, and even on Facebook, the number of likes, posts and team members of sheen is far more than that of allylikes. Of course, there is a bonus for sheen to cultivate overseas markets for a long time. However, at the moment of the blowout of social traffic in sheen, if allylikes can't find a way to make the social traffic explode quickly, the gap between allylikes and sheen will be bigger and bigger.

However, there are also views that Ali's allylikes is just a test of the water, because allylikes did not build its own station, but used Shopify to build the station. Second, it found a Guangzhou flash store to provide service on behalf of its customers. Generally speaking, it doesn't seem to be a valued project. In this way, even if allylikes quickly repeats the mistake of dmonstudio, it has no significant impact on Alibaba's cross-border strategy, because Ali attaches more importance to the development of comprehensive cross-border e-commerce platforms.

Coincidentally, dmonstudio is also considered not to be the e-commerce project focused on by byte, because the supply chain and R & D have not seen the big action of byte. Tiktok shopping and Fanno, two comprehensive cross-border e-commerce platforms, are considered to be highly expected by byte.

However, the giants should not forget that women's wear is the "golden key" in e-commerce business. If the category of women's clothing in the comprehensive cross-border e-commerce platform is always hung up by sheen, the comprehensive cross-border e-commerce business of giants will not be too good in the process of gradually transforming sheen into a comprehensive e-commerce platform.

　　PART. Why did the 02 giant lose women's wear?

The moat of sheen seems not wide, but there are many difficulties in the actual imitation process.

First, the supply chain needs long-term training of the platform, and Sheen has developed a supply chain with tacit understanding. At the early stage of Sheen's cross-border women's wear, domestic manufacturers have just come into contact with this mode. They are willing to try and make mistakes with sheen, and then shorten the delivery and replenishment cycle. After the first entrants have cultivated a stable supply chain, the cost of establishing the supply chain for the later entrants will be greatly increased.

In the "quick return of small orders" mode, if you want suppliers to be willing to make small orders, the prerequisite is that the platform has a very short replenishment cycle. And Sheen has achieved an average accounting period of 7-10 days, inventory unsalable less than 10%, and all new models can be returned within 6 days after they are put on shelves and shipped. The top suppliers of sheen can basically settle the payment on a weekly basis. Under the premise that the giants can't guarantee that their platforms can test money as quickly as sheen, it is very difficult for suppliers to cooperate with "small order quick response".

In this way, byte dug up a group of sheen employees and failed to disk dmonstudio, which is more like "a clever woman can't cook without rice."

People close to sheen said to "new entropy", "The merchandiser is responsible for taking the styles selected by the designer buyer to the supplier for printing and price negotiation. In the process of price negotiation, the buyer of sheen will try his best to lower the price, even close to the cost price. Sheen will negotiate with the platform flow advantage and efficient operation mode to persuade suppliers to compromise with long-term profits. In short, Sheen's commitment is attractive, and suppliers are generally willing to take advantage of it Run for big orders. Coupled with the strong ability of buyers, the product price has been maintained at a low price for a long time. "

In terms of platform operation efficiency and the negotiation ability of supply chain manufacturers, it is difficult for giants to compete with sheen.

As a result, the product prices of dmonstudio and allylikes are higher than those of sheen. Dmonstudio claims to make high-quality products and price them more than $30 to ensure that there is enough profit margin.

Allylikes chose to focus on the European market with higher profits. The price of women's wear is mostly between 10-40 euro, which is slightly higher than that of sheen, which is also a manifestation of cautious pursuit of victory.

It's worth mentioning that the discount is a big way for allylikes to attract new users. "New entropy" has learned from many overseas consumers that downloading allylikes will get a 6-pound no threshold coupon, a 3-pound discount, and free postage on Sundays. However, some American consumers complained that the discount frequency and intensity of allylikes are still significantly lower than that of sheen.

In any case, the prices of dmonstudio and allylikes are hard to match those of sheen, which is mostly priced between $5 and $25.

Second, in terms of promotion and operation, the giants of Sheen's methodology are more like "painting tigers and painting bones".

Sheen is the first enterprise to speculate on women's consumption psychology in overseas markets, and its experience requires giants to spend their time trying and wrong, including Koc launch, picture optimization, etc.

In terms of delivery, sheen was not willing to advertise at a high price in the early stage, and only looked for Koc. Among the nearly 6 million posts with the sheen tag on instagram, most of the bloggers who showed their clothes were ordinary Kocs with 10000 fans. This methodology was accurately modeled by allylikes.

But at present, there are also a few big bloggers with hundreds of thousands of fans recommending Sheen's clothes to help her win more potential consumers. Some big bloggers spend tens of thousands of dollars on promotion. At the same time, sheen is also looking for high-end transformation to impact groups with higher consumption ability. At present, there are also a small number of clothing priced at more than $30 in sheen, leaving room for impact on the high-end market.

In this case, if allylikes still follows Sheen's initial approach, and does not develop a more efficient delivery scheme, it is bound to be doomed to failure.

In terms of bytes, although dmonstudio has announced the shutdown, Fanno, its cross-border e-commerce platform, is still focusing on clothing category. In 2021, it was reported that byte had already set up cross-border e-commerce business in Guangzhou. It not only cooperated with a fashion supply chain platform, but also recruited employees in Guangzhou. Focusing on clothing, Sheen has become a strong opponent that byte has to face. But promotion is not a weakness of byte. Relying on its own cross-border short video product tiktok, Fanno has quickly opened its popularity.

The last moat of sheen is MES process management system developed by ourselves. Through this system, Sheen has realized the standardization management of thousands of suppliers with scattered and inconsistent process standards. Moreover, the system is very supplier friendly and is developed from the supplier's perspective.

For the giants who are used to platform and earn commission, how to get through, intervene and manage the upstream supply chain is a new topic in the self-supporting mode.

　　PART. Two mountains above the head of 03sheen

　　 Although it is difficult for tycoons to successfully encircle and suppress Shan, sheen also has its own worries.

"New entropy" found that on trustpilot, an e-commerce review service website, overseas consumers gave more than 100000 comments on sheen, with a score of 3.9 (out of 5). However, the evaluation polarization is very serious, 61% of the users gave 4-star and 5-star praise, 32% of the users gave 1-star and 2-star poor evaluation, and relatively few users chose the intermediate evaluation.

In most cases, the number of positive reviews should be increasing or decreasing. In the one star rating of sheen, most of them are complaints about product quality, logistics and after-sales service.

In the little red book, overseas Chinese and overseas Chinese consumers also focus on the quality of sheen.

The polarization of Sheen's word-of-mouth indicates to a large extent that a considerable part of Sheen's audience are consumers who care about price and do not care about quality; There are also some consumers who care about quality but are attracted by price. However, the latter cannot be precipitated by sheen.

Wang Annie, a Chinese student studying in the United States, said: "the quality of clothes bought by sheen several times is not bad. If you buy 8 pieces at a time, two or three pieces may be very good value for money. The remaining five or six pieces may be of poor quality and can not be worn out, or they can only make sex clothes once."

Under the premise of extremely low price, the quality dispute of sheen is not unexpected. However, with the popularity of advanced consumption concepts such as environmental friendliness in overseas countries, Sheen has also been criticized more and more.

First, the product is not durable, resulting in a waste of resources; Second, the product in the production, packaging and other processes do not conform to the concept of environmental friendly. A large number of outsourcing supply mode makes it difficult for sheen to prove whether the brand products have environmental protection measures in the production process.

Last year, sheen appointed a global head of environmental and social governance (ESG) to tackle disputes such as environmental protection and overtime work. However, due to its highly efficient business model, sheen can not rely on self built factories for production, and must rely on different suppliers to receive orders to maintain supply chain flexibility.

However, as long as a large number of outsourcing is relied on, environmental problems, overtime labor and other disputes will be difficult to completely solve. Because Sheen has difficulty supervising thousands of factories at the same time. In 2021 alone, Sheen has more than 4000 cooperative factories.

On the other hand, it is unrealistic for sheen to strictly limit the working hours of workers in the factory.

Before sheen, the supplier told "new entropy": "The development order period of sheen is 5 days, and delivery must be made within 5 days. Our small factory has limited personnel, so if we want to deliver the goods on time, we can only rush to work all the time. It is unrealistic to require the manufacturers to hire more employees for shift system. One is that workers are not easy to recruit; the other is that the price of taking goods by sheen is already the cost price or even a slight loss price. In order to control the cost, the factory will not recruit more people. Environmental protection issues It is also related to the cost. In a very low profit, manufacturers can not use more environmentally friendly materials and production technology. "

Due to the extremely low profit margin, it is difficult to solve the environmental friendly problems and labor overtime query of sheen in the short term.

Three things sheen must do in the future are to improve the profit margin of suppliers, improve the quality and price of products, and transform the high-end brand. Otherwise, sheen may become the next wish.

Wish was born in Silicon Valley in 2010, focusing on low-cost products, known as "American version pinduoduo". In the glorious period, wish had more than 300 million users, and was once the world's largest shopping app with download volume. But in the past few years, wish has fallen out of the list of popular shopping platforms, and its market value has dropped 90% compared with the peak. The root cause of wish's failure is still quality problems. Quality control problems caused by low price strategy will eventually exhaust the patience of most consumers.

Today's sheen looks like wish.

Another emerging cross-border platform for women's clothing, cider, abandoned a large number of new models and chose the original route with a small number of new ones. Although the price of the product is the same as that of sheen, it pursues quality more.

There is wish as a reference before, and cider and giants catch up later. The development time of sheen is not long. It is urgent to complete the platform transformation before the consumers patiently wear off.

At present, sheen is transforming into an integrated e-commerce, which means that sheen is shaping a new type of supply chain.

According to new entropy, since February this year, sheen is recruiting women's shoes, bags and other vertical suppliers from various channels, still focusing on women's market. This is not without hidden dangers. If in the war of cross-border e-commerce, the later giants give up specializing in women's clothing and focus on new vertical categories such as small department stores, beauty makeup and men's clothing, sheen may lose its first mover advantage in cross-border e-commerce.

The case of focusing on the electric goods with weak rivals and then rapidly rising to become another top e-commerce giant has been staged repeatedly in China. When Taobao is booming by rolling down the price of physical stores, Jingdong breaks through the vertical category of focusing on electrical appliances; When Ali pushed tmall to promote consumption upgrading, it made great efforts to pick up leaks and sink the market, focusing on low profit products such as small commodities, and gradually became one of the giants.

The time left for sheen by giants and consumers is running out.