Cross-border e-commerce operation model and its challenges

With the continuous advancement of globalization and the vigorous development of e-commerce, cross-border e-commerce has become the focus of much attention in today’s business field. Cross-border e-commerce not only provides new business opportunities for enterprises and individuals, but also brings many challenges. This article will explore the main operating models of cross-border e-commerce and some of the problems encountered during the operation.

The main operating models of cross-border e-commerce

M2C mode

The M2C (manufacturer to consumer) model refers to a business model in which manufacturers provide their own products directly to consumers. Under this model, manufacturers bypass traditional middlemen and trade directly with consumers, thereby greatly reducing circulation links and lowering sales costs. At the same time, because manufacturers face consumers directly, they can better understand consumer needs and feedback, adjust products and services in a timely manner, and improve product quality and after-sales service quality. In addition, the M2C model can also shorten the supply chain, speed up product delivery, and improve consumer satisfaction. For example, some well-known cross-border e-commerce platforms, such as Amazon, have adopted the M2C model to provide consumers with a large number of high-quality products and a convenient shopping experience.

C2C model

The C2C (e-commerce between individuals) model is mainly realized in the field of cross-border e-commerce through some specialized cross-border e-commerce platforms. The advantage of the C2C model is that the transaction threshold is low, anyone can participate, and the product variety is rich. However, the C2C model also has some problems, such as difficulty in ensuring product quality and hidden dangers in transaction security. Therefore, when consumers choose the C2C model for cross-border e-commerce shopping, they need to choose platforms and sellers carefully and pay attention to protecting their own rights and interests.

Platform mode

The e-commerce third-party business is introduced into the platform, adopting a light-funding model, providing goods and services, and the income is mainly commission. The quality of third-party merchants varies. Under the platform model, merchants settle on the platform, transactions are conducted between merchants and consumers, and payment and information communication are resolved through the platform.

Self-operated + platform model

Adopt a model that is partially self-operated and partially allows merchants to settle in. It has strong supply chain management capabilities. Popular products use the self-operated model. Non-standard products can be introduced to merchants and have rich SKUs. They are genuine products and establish stable relationships with brands to open up products. In the circulation link, focus on asset models.

Flash sale mode

Using a low-price snap-up strategy, relying on accumulated flash sale experience and user stickiness, product replacement speed is fast, freshness and customer repeat purchase rate are high, which brings sufficient profit margins. At the same time, large discounts increase the probability of customer repurchase. big.

Offline transformation O2O

Relying on the advantages of offline stores and resources, we conduct online platform layout to form an O2O closed loop, creating synergy with physical stores, experienced purchasing teams and online platforms.

Buyer system + overseas direct mail platform model

The platform introduces overseas professional buyers to provide goods and services, and relies on its own official international logistics and transportation to ensure that the goods come from overseas and are sealed and safe throughout the process.

Vertical self-operated platform

Highly specialized, focusing on specific fields, with diverse supply chain models, including procurement, bonded, and direct mail options.

Self-operated mode

Merchants purchase goods from suppliers and sell them to customers. One-stop shopping has low gross profit and few categories to choose from.

Shopping guide rebate platform model

By editing overseas e-commerce information, the purpose of shadow streaming is achieved, and then the orders are summarized to overseas e-commerce.

C2C purchasing model

After the customer places the order, overseas individual buyers or merchants purchase from the local area through international logistics and distribution, resulting in a large cash flow accumulation. SKUs are expanded through a large number of buyers, the cost is managed, the source of goods cannot be controlled, and the income is only commissions and service fees.

Problems existing in operations

The operational capabilities of cross-border e-commerce are not strong

The integration time of conventional international trade and e-commerce is relatively short, mainly small and medium-sized foreign trade enterprises. The main participants in cross-border e-commerce are small and medium-sized enterprises. Due to their weak financial strength, low information level, and lack of experience in cross-border e-commerce, knowledge and operational experience, inadequate data understanding of cross-border e-commerce platforms, poor precision marketing effects, and poor supply chain communication and coordination capabilities. As a result, the development process of cross-border e-commerce business reflects the poor operational capabilities of cross-border e-commerce. Low.

Unbalanced product quality

A large number of small and medium-sized enterprises have joined the cross-border e-commerce team. Products are homogeneous and lack innovation. This is a common problem that small and medium-sized enterprises face when providing products. In addition, due to excessive supply, companies adopt low-price strategies to attract customers, which ultimately leads to a decline in product quality. As a result, the quality of various products in the cross-border e-commerce market is uneven, and problems such as counterfeiting and infringement have even occurred, causing the credibility of cross-border e-commerce products to continue to decline.

Cross-border logistics lags

Cross-border online shopping users expect a longer delivery period, which will reduce the cross-border online shopping experience and affect the cross-border online shopping order rate. At present, my country’s small and medium-sized foreign trade companies mainly complete the logistics and transportation business of cross-border online shopping orders through international express delivery, international parcels, postal parcels and air parcels. Because of the lag in the development of the international logistics industry, the cost is high and the time is long, such as to Europe and the United States. It takes 7 to 15 days to travel to other countries, and 25 to 30 days to countries such as Russia and South America. This reduces customers’ desire to purchase and improves customer experience, hindering the development of cross-border e-commerce business. In addition, factors such as various customs seizures, cumbersome foreign exchange settlement, difficulty in tax refund and payment, and rejection of express delivery have restricted the development of cross-border logistics.

Serious lack of specialized talents

Cross-border e-commerce is a new business format full of innovative elements. With the rapid development of cross-border e-commerce, the contradiction in the talent supply structure of cross-border e-commerce for small and medium-sized foreign trade enterprises has become increasingly prominent, which has become a bottleneck in the development of cross-border e-commerce. In particular, there is a shortage of high-level, innovative and comprehensive talents.

Enterprise innovation and brand awareness lag behind

As the level of cross-border online consumption increases, netizens are increasingly pursuing low prices. In the past, it was difficult for SMEs to maintain competitiveness in the cross-border e-commerce market through low price strategies. The lack of innovation ability and brand awareness of small and medium-sized enterprises prevents them from forming international competitiveness.

In short, each cross-border e-commerce operation model has its own advantages and disadvantages. When enterprises and individuals choose a cross-border e-commerce operation model, they need to consider comprehensively based on their actual circumstances. At the same time, the cross-border e-commerce agency operation market is also constantly developing and changing, and more new models and formats may emerge in the future. Sellers need to constantly learn and explore to adapt to market changes and developments.