If you want to achieve brand expansion overseas through cross-border e-commerce, the US market seems to be the first choice for most Chinese companies to “test the waters”. However, the escalating “China-US trade war” in recent years, the increasingly tightened tax policies of US states, and the negative effects of the sharp increase in Chinese sellers on some platforms have made more and more companies re-examine this market. At the same time, with the support of national bonus policies and the influence of the “East Wind” of the “Belt and Road” construction, Chinese companies have become more and more demanding to reach the European economic circle and markets along the route through this “Online Silk Road” with a cross-border e-commerce model.
So, how can we sell high-quality Chinese products to countries along the route while taking into account the US market camp? How can we further expand overseas markets and enhance the brand’s influence in the international market while integrating local high-quality resources to achieve iterative upgrades in the company’s comprehensive strength?
The “fat meat” of the US e-commerce market is still there, but how to “bite” it is particular
It is said that “a lean camel is bigger than a horse”. Although the competition in the US e-commerce market is unprecedented and the challenges for new and old sellers are intensifying, the US is still one of the markets that Chinese sellers focus on in the short term because of its huge market coverage, online shopping has become a consumption trend, and infrastructure is complete.
According to data from market research company eMarketer, US retail e-commerce sales will reach US$586.92 billion in 2019, a year-on-year increase of 14.0%.
At the same time, the data also shows that the penetration rate of digital consumers in the United States will exceed 80% for the first time in 2019, rising from 79.6% in 2018 to 80.5% this year. The penetration rate of digital consumers in each age group between 18 and 54 years old exceeds 80%, among which the penetration rate of 25-34 years old, an important consumer group, is the highest, at 89.6%. This age group covers nearly 40 million online consumers, accounting for more than 20% of the total population of online consumers in the United States.
The U.S. e-commerce market may seem like a piece of fat meat, but the days when you could get your mouth full of oil after just one bite are gone. From an internal perspective, as Andrew Lipsman, chief analyst at eMarketer, pointed out, the U.S. e-commerce market is approaching saturation point, as its growth is in line with the growth of the entire Internet population. If the U.S. e-commerce market is to maintain a double-digit growth rate, it will increasingly rely on the continued strong growth of the consumption rate of each buyer. From an external perspective, the number of sellers on existing platforms is approaching saturation, internal product homogeneity is obvious, price wars are rampant, black technology emerges in an endless stream, and some platforms have a poor market reputation, all of which have caught sellers off guard.
In such an environment, to continue to cultivate the U.S. market, it is even more necessary to choose the right channels to avoid becoming unnecessary cannon fodder, while local professional category e-commerce platforms in the United States are constantly surging with “new” vitality in this process. The obvious local advantages and the familiarity with the market’s regional culture, policies and regulations have given local professional category e-commerce platforms more initiative. Take Newegg as an example. As a well-known e-commerce giant in the technology category in North America, it has won countless fans with its advanced logistics capabilities and excellent market performance. It has a good reputation in both market response and merchant feedback. At the same time, Newegg International Mall has also cooperated with Kickstarter and Indiegogo, two influential crowdfunding websites in the United States. This cooperation aims to bring more cutting-edge technology products to Newegg customers while allowing technology innovators to better reach consumers.
Digging for gold in the emerging markets of the Belt and Road Initiative, how can sellers develop new blue oceans of billions of business opportunities?
Of course, if you are tired of the turbulent red ocean market in the United States, then it is not a bad idea to try the emerging markets along the Belt and Road Initiative. It is reported that the Belt and Road Initiative covers Asia-Pacific, Eurasia, the Middle East, Africa and other regions, with a total population of more than 4.4 billion and an economic output of more than 20 trillion US dollars, accounting for 30% of the global economic output. Most of these countries are emerging economies and developing countries, and are generally in the rising period of economic development. Among them, markets such as Russia and Turkey are becoming new blue oceans that Chinese companies going overseas are paying attention to.
1. Russia: The “Golden Age” of the Billion-Dollar Market
As the earliest overseas emerging market for Chinese cross-border e-commerce, Russia spans across the Eurasian continent and occupies an important international position in the implementation of the “Belt and Road” strategy. It is one of the largest e-commerce markets in the “Belt and Road” region. However, in order to seize the opportunities in the Russian e-commerce market, it is necessary to understand the current market status and future development trends.
According to Statista data, the scale of Russian e-commerce will reach US$18 billion in 2018, and it is expected that by 2021, the market transaction volume will reach at least US$23 billion.
According to data released by Yandex, a Russian online payment service provider, in the first half of 2017, Russians’ online orders for Chinese goods increased fivefold year-on-year compared with 2016, and the operating income of Chinese online retailers who received payments through Yandex increased by 94%. OEC Atlas Profile data shows that most of the goods ordered by Russian consumers overseas come from China. In the ranking of Russian import data in 2017, China ranked first (with a total import volume of US$37.3 billion), Germany ranked second (with a total import volume of US$23.6 billion), followed by Belarus (US$10.9 billion), Italy (US$7.44 billion) and the United States (US$5.79 billion)
2. Turkey: 3C products are very popular, and many holidays can trigger consumption
Turkey is not only present in romantic songs or in forms for traveling abroad, but also as a country spanning the Eurasian continent, its business opportunities should not be underestimated.
According to Statista data, the size of Turkey’s e-commerce market will reach US$5.9 billion in 2018, and the annual growth rate is expected to be 3.1% in the next five years. By 2022, the size of Turkey’s e-commerce market will reach US$6.726 billion.
Among them, Turkey’s online shopping penetration rate is constantly rising. According to the data in the above figure, about 31 million Turkish consumers chose online shopping in 2017, and about 33 million in 2018. It is expected that the online shopping penetration rate will grow steadily every year by 2021.
At present, the largest market segment in the region is Electronics & Media products, and the market size of this category alone reached US$2.26 billion in 2018. Therefore, if you are a seller in the 3C consumer electronics category, you can choose a professional technology category platform like Newegg to layout. The second is the furniture and appliances market, with a market size of US$1.18 billion in 2018.
In addition, local holidays in Turkey are also a good way for sellers to promote sales. Seizing important time points and combining traditional festivals can be a good opportunity for promotional sales. The holidays in Turkey in 2019 include: New Year’s Day, National Sovereignty and Children’s Day, Labor and Solidarity Day, National Father’s Day, Youth and Sports Day, Muslim Eid al-Fitr, Victory Day, Eid al-Adha/Eid al-Adha, Republic Day, National Father’s Day, etc.
3. Mexico: Price advantage and efficient logistics experience are essential
In addition to the above-mentioned countries along the “Belt and Road” becoming the focus of cross-border e-commerce practitioners, the Mexican e-commerce market adjacent to the United States has also attracted much attention from the industry in recent years.
As the second largest economy in Latin America, Mexico has a population of 128 million and is also the third largest online retail market in Latin America. Relevant data show that Mexico’s current e-commerce retail sales account for only 3.1% of its total retail sales, and there is huge room for future development, with an annual growth rate of about 25%.
From the perspective of consumer groups, Mexican online consumers are mainly young urban people. According to statistics, more than half of online consumers are between 18 and 34 years old. If Chinese sellers want to stimulate Mexican consumers’ desire to shop online, then special prices and discounts, as well as efficient logistics services are essential.
From the perspective of consumer categories, local Mexican consumers like to buy clothing accessories and electronic products online. Among all online shoppers, nearly 2/3 of them have made cross-border purchases. In addition, the market demand for mobile phones and their accessories has also maintained rapid growth in this market, among which the growth rate of smart phones and smart watches is more prominent, mainly due to the continuous improvement of the market’s awareness and acceptance of smart products, and sales have begun to enter a stage of rapid growth.
3. Japan: Sellers who have worked in the European and American markets are easy to get started
In addition, Japan is also an e-commerce market that cannot be ignored. As the world’s third largest economy, Japan meets all the characteristics of a mature e-commerce market in terms of gross national product, total population, and network coverage.
According to the white paper “E-commerce Trends and Prospects in the Asia-Pacific Region” jointly released by Facebook and Forrester, the sales of Japan’s online retail market in 2018 were US$96.5 billion, exceeding the sales of the United Kingdom, the largest e-commerce market in Europe, at US$93.5 billion. By 2022, Japan’s online retail sales will reach nearly $160 billion, and per capita online spending will reach $2,000.
Geographically, Japan is adjacent to China. Influenced by European and American culture, Japan is more similar to developed countries with higher economic development in Europe and the United States in terms of consumption habits and preferences. Therefore, for Chinese sellers with experience in e-commerce sales in the European and American markets, entering Japan may be faster to get started, and there is no need to make too many adjustments in terms of product selection or opening.
From the category point of view, toys, hobbies and DIY products are very popular in the Japanese e-commerce market. The market value of this category exceeded $22 billion in 2017 alone. In addition, fashion accessories are one of the most popular online shopping categories, and e-commerce sales of food and beverages continue to rise. Overall, there is a high demand for high-quality products and well-known brand products.
It is worth noting that if you plan to enter the Japanese market, you also need to understand the shopping rhythm of local consumers. Generally speaking, the peak shopping period for Japanese consumers is usually concentrated in July and December each year, and local consumers need to shop online 1-2 times a week. At the same time, local consumers rarely choose to consume during working hours, and often choose to consume during their free time after work, such as the time periods from 12:00 to 13:00 noon and from 20:00 to 24:00 at night.
Emerging markets have both opportunities and challenges. Newegg International Mall has opened up a long-lasting and fast channel for Chinese sellers
Of course, there are more emerging markets worth cultivating for Chinese sellers, but facing such a huge market opportunity, it is not easy to achieve success overnight, especially based on different regions, nationalities, religions, races, economic conditions, and degrees of globalization. The development stages of e-commerce and user consumption characteristics are different. If you are not careful, it is easy to touch the minefield of the local market and backfire on the seller’s business itself, such as:
1. If you want to cover multiple markets, you must register multiple platforms and stores. However, the operation of the platforms is very different. Registering multiple stores is not only cumbersome and risky, but also has huge labor costs.
2. Phenomena such as follow-selling and black technology are common on mainstream e-commerce platforms; local e-commerce platforms are mixed, and without good qualifications and backgrounds, it is easy to get off the tiger and the return on investment is not guaranteed.
3. Serving multiple markets requires different logistics support, which makes management difficult.
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Limited by the difficulties mentioned above, is there a relatively convenient and safe way to solve the sellers’ worries? Quickly identify market opportunities and promote business development, Newegg International Station is a platform worthy of full value exploration.
It is understood that Newegg is currently actively promoting its global expansion plan and has conducted business in more than 80 countries, including emerging countries such as Turkey, Russia and Mexico mentioned earlier in this article. Newegg’s main categories are the most popular electronic technology products in the local area. At the same time, Newegg has successively launched Spanish and Arabic versions of the website, especially for marketing in emerging markets such as the Middle East and South America. The most exciting thing is that all operations and management of businesses in all 80 countries can be completed through one account, and sellers can also adopt completely personalized price and inventory strategies based on the characteristics of different countries and regions; in addition, Newegg will also provide sellers who intend to enter the emerging market with special support projects such as product content optimization, search engine ranking improvement, email promotion, third-party promotion website advertising, and free event promotion positions. These new initiatives will greatly save sellers’ operating costs and increase Newegg’s attractiveness to Chinese cross-border sellers.
More professionally, for Chinese sellers, Newegg has specially provided each seller with a localized professional account manager who is familiar with the situation of Chinese sellers, understands foreign market trends, and can speak Chinese. In addition to enjoying one-on-one guidance on entry and business strategies, Newegg Logistics Service SBN and Newegg International Transportation Project NISP have been launched for Chinese sellers to solve the problems of sellers’ cross-border logistics and customs clearance.
Chinese sellers can make full use of Newegg’s platform technology, marketing and customer resource advantages, effectively integrate global vision and local execution, so as to get a share of the emerging e-commerce market and open up a fast channel for a lasting foothold.
If you have plans to enter emerging markets, want to expand into new markets while taking into account the North American market, or even want to advance B2C and B2B businesses in parallel, you can choose Newegg as an effective channel for “expanding territory”.