Ningbo’s foreign trade companies are no strangers to localized operations in overseas destination countries. As a traditional foreign trade city, many large-scale foreign trade companies will establish their own branches in overseas destination countries for market development and customer maintenance. Although the business model of cross-border e-commerce is slightly different from that of foreign trade, the business principles are the same. The following is a case study of the value of localized operations to cross-border e-commerce.
Case of localized operations of cross-border e-commerce
In the traditional foreign trade era, the company has always had a very reliable American gift buyer. This American buyer is small and medium-sized, very professional, and the business cooperation relationship is also very stable. However, after the financial crisis in 2008, the operation of this American buyer’s company has deteriorated. Coupled with the world economic downturn in recent years, this American company eventually went to the brink of bankruptcy.
As a traditional foreign trade manufacturing company, it has been facing transformation and adjustment in recent years. The traditional foreign trade is sluggish, coupled with China’s production and manufacturing costs, including labor, raw materials, exchange rate changes and other unfavorable factors, it has chosen to open up the foreign trade blue ocean market through cross-border e-commerce very early. At first, the company chose to do cross-border trade through third-party cross-border e-commerce platforms such as “AliExpress” and eBay. For this purpose, the company established a special cross-border e-commerce team and invested a lot of resources and funds, but after two years of operation, the results were mediocre. After analyzing its own cross-border e-commerce operations, it was found that the products were relatively large in size and not suitable for cross-border e-commerce logistics. It was difficult to maintain the products after sales because many products were DIY series. In addition, there was a lack of more professional talents for cross-border e-commerce operations.
Because I have a very good personal relationship with this American customer, I inadvertently talked about the ideas of both parties after a business meeting. After another very in-depth communication, I finally decided to explore the US market together. Although this American company is facing bankruptcy, they have very professional market analysis capabilities in the United States. At the same time, they have very rich experience in independent websites, Google search engine promotion, Amazon, and eBay operations, and have 3 relatively large warehouses in the United States. The most important thing is that they have a very good understanding of the US market and a very accurate understanding of the needs of American consumers. Therefore, the American company was merged through acquisition and holding. Through this model, cross-border e-commerce business has developed very rapidly in recent years. Now basically 3 to 4 containers are shipped to American companies in advance by sea each month and sold online through American companies.