Cross-border e-commerce product life cycle and its analysis method

The product life cycle refers to the entire process that a product goes through from entering the market to exiting the market. It is divided into four stages: introduction period, growth period, maturity period and decline period. Understanding the product life cycle helps companies make correct decisions at different stages of the product life cycle.

Introduction period

In the early stages of the product entering the market, it has not yet been accepted by customers on a large scale, and sales are low, so the production cost is high; at the same time, a variety of promotion methods are needed, and the marketing cost is high. Therefore, at this stage, the company makes less profits or even loses money. The introduction period of electric blankets is from June to August every year. When preparing for new product promotion, companies must conduct market research to understand product market capacity, peer prices, sales volume and other information. They must also fully understand the selling points of their own products.

Growth period

In the growth stage, products have mature technology and stable processes. Consumers are familiar with the products and have established relatively stable sales channels, with profits growing rapidly. At this time, a large number of latecomers entered, and competition intensified. The growth period of electric blankets is generally from September to November every year. The growth period for Christmas-related products is from September to November every year. When the products arrive at overseas warehouses or FBA warehouses, the platform will give the products a certain traffic tilt.

Maturity period

In the mature stage, product market demand tends to be saturated, sales growth rates begin to decline, industry-wide surpluses occur, and market competition becomes more intense. The maturity period of electric blankets is generally December every year. The maturity period of Christmas-related products is generally December every year. At this stage, businesses need to maintain their loyalty and satisfaction through various marketing strategies.

Recession period

Commodities are gradually replaced by new products, consumers’ interest begins to shift to other commodities, prices will drop to the lowest level, and most companies are no longer able to make profits and are forced to withdraw from market competition. The decline period of electric blankets is from February to August every year. The decline period for Christmas-related products is from January to August every year. At this stage, companies can let nature take its course and adopt a small amount of preferential measures to give back to such consumer groups.

Life cycle analysis method

The life cycle theory believes that the development of any industry must go through four stages: introduction, growth, maturity and decline. We can identify the stage of the product or category in the life cycle through market growth rate, demand growth potential, number of product varieties, number of competitors, market share, entry barriers, technological changes and user purchasing behavior. . By collecting the sales performance of a certain online store’s products in a year, filtering the data through Excel’s “Pivot Table” function, and visualizing the data through charts, we can then draw relevant data analysis conclusions.

Factors affecting life cycle

Factors that affect the life cycle include seasonal changes, traditional festivals and platform activities. Seasonal change factors affect seasonal products such as electric blankets; traditional holiday factors such as Christmas-related products; platform activity factors such as Amazon’s Prime Day.

References:
1. Article 1
2. Article 2
3. Article 9