When operators cross industries to develop businesses they are not good at, they will encounter various new problems and difficulties. These various obstacles to new operators are industry barriers. For cross-border e-commerce product selection, barriers are determined by comprehensive factors such as product technology, supply chain advantages and disadvantages, financial strength, market competition, industry development status, personnel team, special tax incentives, patent protection, brand recognition, customer loyalty and high customer conversion costs, including the need for new companies to obtain licenses or regulatory approvals before operation. The industry barriers of cross-border product selection are obstacles that prevent or restrict the entry of new sellers. They are effective means and important methods to protect the market and exclude competition. The stronger the industry barriers, the more market barriers, the more difficult it is for new sellers to join, the higher the market monopoly, and the relatively mild competition; the weaker the industry barriers, the fewer market barriers, the easier it is for new sellers to join, the lower the market monopoly, and the relatively fierce competition.
The first is the scale cost of the product. As the base input and quantity of the product increase, the product volume increases and the unit product cost decreases. This forces new sellers to enter on a large scale, which poses a strong risk to existing companies. If they enter on a small scale, they will force new sellers to be at a disadvantage in product costs.
The second is brand recognition and customer loyalty. Old sellers have already had brand recognition and customer loyalty through years of operation. For new sellers, it takes a huge amount of money to influence brand recognition and gain new customer loyalty.
New sellers may bring different products to the market, and they must clearly communicate to target customers and find positioning, which often requires strong marketing resources.
The third is capital demand. For the financial support required for the design, research and development and marketing promotion of the product itself, especially in industries with high technological content, the barriers restricting new sellers from entering the market will be higher. Some new sellers can also raise funds or cooperate with investment companies to meet their funding needs.
The fourth is the transfer cost of suppliers. If there are new sellers entering the market, the products of existing suppliers will be transferred to the new sellers, which will face various one-time costs, such as employee retraining, new equipment, technical support, etc.
The fifth is the distribution channel. In addition to selling on online platforms, some sellers also have many distribution channels. If these distribution channels have been monopolized by old sellers, they will also become barriers to entry for new sellers.
The sixth is product patents.