Visual China.
Text |New Stand ProThe annual "Black Friday" promotion has come to an end.
According to Adobe Analytics research data, online sales in the United States are expected to increase by 7% year-on-year this year5% to $9.8 billion, and the entire holiday shopping season will reach $221.8 billion, both hitting a record high. However, what is paradoxical is that Amazon, the old head e-commerce platform in the United States, does not seem to have been able to continue the explosion of orders in previous years this year. Judging from the current public reports, most Amazon sellers failed to achieve order growth as expected during this year's "Black Friday".
A common speculation about this is that due to the similar promotion activities of domestic e-commerce platforms such as temu, tiktokshop and AliExpress, while dividing the traffic of the Amazon platform, consumers have "discount fatigue", resulting in the same product on Amazon if there is no lower **, it is difficult to attract consumers to buy.
This point seems to have been slightly confirmed by the Black Friday war report released by e-commerce platforms and sellers such as temu and tiktokshop a few days ago.
Temu entered the warm-up period of Black Friday at the earliest, and launched a "up to 90% off" discount during the official period of the event, and issued $100 and $200 large coupons. According to AMZ123, as of November 25, many sellers on Temu have successfully achieved explosive orders, and even some sellers have thousands of orders per day.
In the first week of the "Black Friday Early Purchase" event, TikTok Shop set a record of "GMV sales increased by 155% and order volume increased by 145% in the US market", and many small store sellers stood outDuring the "Black Friday" promotion period from November 14 to November 20, TikTok Shop's fully managed orders in the US market increased by 205% month-on-month, and the number of moving goods increased by 177%.
There is no doubt that the spotlight on the home of this year's "Black Friday" is focused on Chinese e-commerce, but as the "upstart" of China's overseas e-commerce, the journeys of temu and tiktok are very different.
After reviewing the business models of the two and the process of going overseas, "New Position" found that the two straight lines that extended in parallel at the beginning, in the three-dimensional space composed of time, space and business model, a traditional e-commerce platform, a short ** platform, and two parallel straight lines have gradually intersected. The two companies that talked to themselves finally embarked on the same path to the same end.
In the beginning, these were two very different paths.
Standing at the node in 2022, perhaps no one would have expected Temu to burst out with such an amazing growth rate. In September last year, Temu took the lead in launching in North America and set an anniversary goal for itself: to surpass SHEIN in a single-day GMV in North America for at least one day by September 2023.
Because SHEIN's valuation had exceeded 100 billion US dollars at that time, this goal was once considered quite radical by the outside world. But it turns out that Pinduoduo is clearly underestimating the energy of low prices, and according to a report by Lei Feng, Americans' consumer spending on Temu in May this year has been nearly 20% higher than Shein. From its launch to today, the moat created by ten years of cultivation in North America has been gradually eroded by Temu.
Following the success of the first stop in North America, on April 21 this year, Hurricane Temu crossed the Atlantic, launched the UK station on the 21st, and only two days later, TEMU launched the German station, the Netherlands, Italy, France and Spain stations at the same time, sweeping the European continentOn July 1, Temu, which had just gained a foothold in the European and American markets, returned to its doorstep and entered Asia, landing in Japan for the first time. In September, TEMU launched in the Philippines, officially kicking off the conquest of Southeast Asia.
From North America to Europe to Southeast Asia, New Stance refers to Temu's business path as "urban encircling countryside".Facts have also proved that this set of low-price + social fission play is also very useful for "foreign adults" who are soaked in coffee and red wine all year round.
On the other hand, TikTok's way to go to sea is a completely different "rural encirclement of the city". It should be emphasized that the New Position is not intended to evaluate the advantages and disadvantages of the two paths.
Judging from the timeline, TikTok Shop was the first to go live in Indonesia in February '21, but it was only open to local sellers;In the first half of 2022, it successively entered Thailand, Vietnam, Malaysia, the Philippines and Singapore, and completed the layout of six Southeast Asian countries, and then turned its attention to the US market.
However, unlike Temu's expansion in the North American market as soon as it was launched, TikTok Shop's progress in Southeast Asia can only be described as unsatisfactory.
At present, the e-commerce market in Southeast Asia is a situation of "one super and many strong": Shopee is in the lead, followed by Alibaba's Lazada and Indonesian local platforms Tokopedia and Bukalapak, while TikTok Shop and Temu are far behind them.
According to Momentum Works data, as of the end of 2022, Shopee's GMV was $47.9 billion, accounting for almost half of the Southeast Asian e-commerce market ($99.5 billion), while Lazada ranked second among all Southeast Asian countries except Indonesia, with a GMV of $20.1 billionTikTok Shop is only $4.4 billion, which is not even better than Indonesia's homegrown platform Bukalapak.
Previously, the new position put forward a point of view in "Temu Philippine Site Opening, E-commerce Giants Meet Southeast Asia":Although the market consumption structure in Southeast Asia is highly consistent with Temu's route, due to the more mature development of low-cost e-commerce here, Temu's layout in Southeast Asia does not seem to be easy to cultivate users' minds in a short period of time. In this sense, the above speculation seems to apply to TikTok to explain its slow progress in the Southeast Asian market.
In contrast, the reason why Temu can tear a hole in the mature North American market of e-commerce is that the extremely low price created by Temu's full custody model is really indispensable.
Different from the past, sellers need to set up their own teams to complete marketing, logistics, after-sales and many other links;Under temu's full custody model, domestic sellers only need to provide goods to the platform, and the platform will complete almost all subsequent operations.
For sellers, the full custody model reduces the labor cost of running the store;For the platform, taking over the operation from the seller can not only avoid the problem of counterfeit goods flooded by cross-border e-commerce, but also gain key commodity pricing power due to the connection between the best merchants and consumers.
Coupled with TEMU's online price comparison system, it almost recreates a perfectly competitive market in economics textbooks: ** becomes the decisive factor in market competition.
According to CICC's **, with the arrival of "Black Friday" and Christmas, Temu's annual sales can even reach 18 billion US dollars. However, according to a later report, Temu itself estimates that it will complete $14 billion in GMV for the whole of 2023.
In a sense, the rapid growth of Temu and SHEIN proves the rationality of the path of the full custody model.
Just as the two were carving up the North American market, TikTok clearly sensed the sound that the bonus window was closing. In the first half of this year, TikTok Shop officially announced the launch of a fully managed operation model. Once launched, the model has the same priority as the U.S. domestic business, with TikTok Shop taking on almost all operations beyond supply, including warehousing and transportation, as well as marketing, trading, logistics and after-sales.
So far, Temu and TikTok Shop, which originally had different paths, have a practical intersection in terms of business model, target users, and business layout after stabilizing the original basic market.
Frankly speaking, TikTok Shop's full custody road was not smooth at the beginning, according to the previous exclusive report of Lei Feng.com, at the TikTok Shop investment conference, the investment managers had sworn to the ** business, TikTok Shop full custody traffic is large, fast collection, worry-free and effort-saving.
However, the actual business docking team seems to have been formed in a hurry, which is very rustyThe back-end processes and mechanisms are very imperfect;**The traffic is also very unstable, and the sales of goods are sometimes high and low, and it is elusive;Even if the goods are sold, the payment cycle is stretched for a long time......Even many small and medium-sized ** businessmen have been left to dry for a long time.
In order to alleviate this decline, TikTok Shop merged the search department into the e-commerce department, which is no longer a first-level business department, and the national line operation personnel in the fully managed business operation post have also changed. As of October this year, the size of TikTok Shop's fully managed business team has increased to about 500 people, which has largely solved the problems of business processes and products, and the average daily GMV of the US site has also increased to 1 million US dollars, and it is expected that the daily GMV will reach 5 million US dollars by the end of this year.
However, while TikTok Shop and Temu were brutally expanding, a seed of suspicion was also planted.
As the theme of the current era, with the intensification of global geopolitical competition and the escalation of the game between countries, the best protection policies of various countries are emerging one after another.
According to foreign media sources, Teten, Indonesia's Minister of Cooperatives and Small and Medium-sized Enterprises, has suggested to ** that temu be banned from entering the country's market.
It has already entered several ASEAN countries, but I have told Jokowi** that this kind of thing should not enter Indonesia. If they enter, MSMEs will not be able to compete, and if production is paralyzed, unemployment will increase and purchasing power will decrease," Teten said.
Prior to this, TikTok Shop had been excluded by Indonesia, Southeast Asia's largest e-commerce market, ahead of Temu.
Although it has been reported, TikTok will invest in Tokopedia, a subsidiary of the Goto Group and an e-commerce platform, to jointly develop an online shopping service. But if TikTok Shop really does not set up a new e-commerce entity, but bets all its chips on cooperation with local platforms, there is no doubt that the future development of TikTok Shop in Indonesia may be greatly limited due to lack of independence.
From this point of view, the future development prospects of TEMU in the Indonesian market are worth putting a question mark.
Taking a step back, it's not Southeast Asia that TikTok faces the most serious regulatory problems, but North America and Europe, which is largely determined by TikTok's target user demographic.
According to the statistics of the Internet monster thief group, TikTok's user base in North America is quite young, including a large number of minors. As of the end of 2021, 25% of TikTok's U.S. users were under the age of 19;As of 2022, TikTok penetration is as high as 67% among Americans aged 13-17, much higher than Facebook, Instagram, and Snapchat. While these young people have made an indelible contribution to the prosperity of TikTok, they are also restricting the development of its commercialization.
In most developed countries in Europe and the United States, there are strict legal restrictions on advertising and pushing products to underage usersFor example, some countries and regions prohibit the delivery of e-commerce services to underage users altogether. This is also an important reason why TikTok e-commerce has been moving forward in Europe and the United States.
If temu also has a large number of underage users under the age of 19 or even 17, then its growth will undoubtedly carry a big burden. But fortunately, at present, Temu has no such concerns.
At the same time, the popularity of TikTok Shop in the United States during the "Black Friday" period has also made some Southeast Asian TikTok e-commerce players actively consider the layout of the United States. According to reports, in order to counter TikTok Shop's attack in North America, Temu is asking logistics providers to accept TikTok Shop's orders in accordance with the prescribed proportion.
One of the most intuitive examples is that this year's Black Friday air freight has doubled, resulting in a sharp increase in the cost of platforms such as Temu and SHEIN. According to a report by Leifeng.com, on October 24, the unit price of a charter flight from China to Miami was CNY44 kg, but in just one month on November 23, the price increased to 80, which directly doubled. This compares to 60, the highest point of the peak season in previous years.
The growth of air logistics costs has directly affected the growth of cross-border e-commerce platforms such as Temu, SHEIN, and TikTok. Relevant data shows that the daily GMV peak of TEMU at the end of September and October this year has reached 80 million US dollars, and such a scale must consider the constraints of logistics factors.
In order to solve the logistics problem, TEMU has been actively arranged. For example, Temu's recent launch of fast shipping services in the seller service may alleviate the dilemma of air transportation capacity shortage.
Today, when China's e-commerce continues to erode overseas market share, any cross-border e-commerce practitioner from South China City and Yiwu Trade City can be used to understand the reasons for the success of China's e-commerce going overseas: such as capital blitzkrieg, algorithm recommendation commodity flow, and one-knife new acquisition.
But clearly, the key is still to keep the price low enough. Such low prices not only come from the scale effect brought by China's super-large industrial system, but also from the continuous use of rules by the platform to reduce cross-border transaction costs, so that the first chain can temper more affordable goods.
The rapid development of temu overseas is inseparable from my country's ** chain, but in addition to more sales, what does the crazy expansion of temu and tiktok bring to the latter?The low-price model has remained unchanged for more than two decades, except that the market has shifted from domestic to overseas, and manufacturers may have even less money than before due to rising costs.
Temu, TikTok and Shein may have sold more goods from China to the world, but "made in China" is still not synonymous with high quality.