1. Market size
As of 2020, the global population is approximately 7.5 billion, and China’s population is approximately 1.4 billion. Domestic e-commerce mainly targets Chinese buyers. In terms of market size, cross-border e-commerce has a larger audience.
2. Labor expenses
As we all know, if you want to be a domestic e-commerce company, art, operations, packaging, customer service, and procurement are all indispensable. Without exquisite pictures and detailed product introductions, it is difficult to publish one. Customer service staff are busy communicating with buyers.
With AliExpress, the couple can run a store very well. Because the products are equipped with beautiful pictures, they are very easy to order. Buyers can purchase the goods relatively quickly and directly, and can place orders independently, which can reduce a large part of labor costs.
3. Risk of stockpiling
Domestic e-commerce companies need to stockpile goods. If the delivery speed is too slow, buyers may return goods or receive negative reviews. If you stock up on goods, there is bound to be a certain risk: once the product is unsaleable, funds will be unable to circulate, but if you don’t stock up on goods, there will be no price advantage. Although many domestic e-commerce companies are still opening stores without supply of goods, it is actually difficult to do well.
For AliExpress, more than 95% of sellers do not need to stock up on goods in the early stage, because buyers who purchase products on AliExpress know that the delivery time takes 5 to 7 days, and the transportation time It takes 15 to 30 days. Since sellers have 5 to 7 days to prepare goods, they can do AliExpress without stocking up. Therefore, after the product is ordered, you can ask the supplier to ship it one by one; when the product is hot-selling, you can stock up a small amount. This can not only reduce the risk of stockpiling, but also reduce financial pressure.
4. Seller situation
Mainstream domestic e-commerce platforms such as Taobao, Tmall, JD.com, and Pinduoduo have low thresholds, many sellers, extremely competitive pressure, and lack of teams, innovation and price. Advantaged small and medium-sized sellers basically act as “green leaves”. There are currently fewer sellers on the AliExpress platform, and many big sellers are individual sellers. Cross-border e-commerce is a hot topic, and a large number of large domestic sellers will be welcomed in the next 3 to 5 years.