Wen Rao said that the aftermath of the Chinese Spring Festival Gala has not yet dissipated, and the "Super Bowl" (Super Bowl), known as the "American Spring Festival Gala", is also staged as scheduled.
On February 12, the annual NFL Annual Championship Game was held, and the tournament, known as the "Super Bowl," is one of the most-watched sporting events in the United States and the most commercially valuable super event in the world.
At this year's "Super Bowl" competition, Pinduoduo's overseas e-commerce brand Temu once again flashed. This is the second time that TEMU has appeared in the Super Bowl after sponsoring this mega tournament in February 2023. It is reported that Temu has launched three 30-second advertising slots this time.
Behind temu's active embrace of the "Super Bowl" in the United States is the broad market prospect of cross-border e-commerce and the increasingly fierce competition.
On the track of cross-border e-commerce, in addition to Temu, which started the latest but ran fast, there are Alibaba's overseas e-commerce platform AliExpress, which started early but developed slowly, and Douyin's overseas platform TikTok e-commerce service, which has been killing all sides in the past two years and has been twists and turns, as well as Shein, a fast fashion unicorn company that has been independently developed for more than ten years.
These four platforms are now also known as the "Four Tigers" in the field of cross-border e-commerce, each with its own characteristics and advantages, but they also compete with each other.
In the "Four Little Dragons", AliExpress has the support of the big platform Ali, TikTok has the support of Douyin, and behind Temu is Pinduoduo, but Shein does not have the support of a big platform behind him, and it does not have an advantage in terms of capital and comprehensive strength.
This may be the reason why SHEIN is eager to go public in the United States in the past 2023, due to the increasing competitive pressure, SHEIN, which has experienced rapid growth, has ushered in an inflection point, not only the performance growth rate has declined, the valuation has declined, and the listing has also encountered resistance.
Today's SHEIN may need an American "Super Bowl" even more.
Two "veteran veterans" are under pressure
Cross-border e-commerce is a market with huge potential, and according to customs estimates, the total import and export volume of China's cross-border e-commerce in 2023 is 238 trillion yuan, an increase of 156%, of which, exports 183 trillion yuan, an increase of 196%, such a growth rate is significantly ahead of the overall foreign trade growth rate.
The proportion of cross-border e-commerce goods import and export in foreign trade has also increased from less than 1% five years ago to 5 in 2023About 7%, it is this kind of business opportunity that has created the rapid development of the "Four Little Tigers Going to Sea".
AliExpress, a subsidiary of Alibaba, was the first of the "Four Little Dragons" to go to sea. AliExpress was officially established in 2010, when Ali was on the rise, and had e-commerce platforms such as ** and 1688, which could reach more Chinese factories and merchants, with the blessing of Ali's superior resources, AliExpress was launched at the beginning, and the rapid growth of the user scale was realized.
Two years later, in 2012, AliExpress transformed into a retail business, in the field of cross-border e-commerce at that time, AliExpress had almost no Chinese opponents, and merchants were also very convenient to sell goods.
Perhaps because the domestic e-commerce business is doing too well, the early development of overseas e-commerce business is too smooth, Ali's investment in AliExpress is not much, and there are problems with strategic decision-making.
Due to the brand upgrade and the introduction of a large number of brand merchants, the requirements for merchants are becoming more and more stringent, resulting in the departure of some small and medium-sized merchants who are not competitive, and this wave has also affected AliExpress.
The well-known cross-border e-commerce platforms Wish and Shopee were attracting large-scale investment in China at that time, and those small sellers who were dismissed flocked to these two rival platforms.
In 2016, AliExpress promoted brand transformation more radically, requiring merchants to have corporate qualifications and brand authorization, and comprehensively cleaned up individual sellers, AliExpress even directly invited Tmall's big sellers to settle in, but at that time, Tmall was in a stage of rapid growth, and brand merchants made money lying down, so the willingness to expand overseas was not strong.
It wasn't until Jiang Fan became the owner of Alibaba's international business sector that the sluggish development of AliExpress improved.
On February 8, Ali released its new quarterly financial report, in which Ali International performed well, with revenue increasing by 44% year-on-year to 2851.6 billion yuan, AliExpress orders increased by 60%, exceeding market expectations for 6 consecutive quarters.
Alibaba's financial report pointed out that an important reason for the growth of business is the strong growth of overall orders in retail commerce, and AliExpress choice has contributed more to revenue.
In the same period as AliExpress, which was deeply engaged in cross-border e-commerce, it was another independently developed cross-border e-commerce SHEIN, which grew rapidly by relying on fast fashion and low-price routes.
Xu Yangtian, the founder of SHEIN, began to get involved in foreign trade business when he was in college, in his opinion, although Amazon has done the ultimate in standard products, but non-standard products have not done a good job, and the largest category in non-standard products is clothing, so since 2008, Xu Yangtian's foreign trade career started in Nanjing.
SHEIN tried dozens of categories including cross-border wedding dresses in the early stage, and then focused on fashion** and moved its headquarters from Nanjing to Guangzhou, a garment production base. Because SHEIN's clothing is stylishly designed, suitable for young women, and affordable, it has attracted a large number of social users in the United States.
SHEIN often experiments with orders of less than 100 pieces, and if the demand is strong, it organizes thousands of **chain enterprises to produce quickly and deliver them on the same week, which not only improves the certainty of sales, but also makes SHEIN closer to users.
In 2017, SHEIN went deep into the upstream and built a first-class chain system that in-depth clothing design, fabric procurement, processing, ordering and other processes, and even helped first-class merchants to expand their factories and improve equipment.
As a result, SHEIN has become the chain owner of the entire industrial chain, and its business currently covers more than 150 countries and regions around the world, with the United States, Europe, the Middle East, and Southeast Asia being SHEIN's four main markets.
According to "Late LatePost", in 2022, SHEIN's revenue will reach $29 billion, and it is already the largest fast fashion brand in the United States, with a market share of 40%, far exceeding the other two fast fashion brands H&M and Zara, which have a share of 16% and 13% respectively.
StillIn recent years, cross-border e-commerce has ushered in strong competitors, and AliExpress and Shein, two senior cross-border e-commerce platforms, have also had to face fierce competition.
This competitive pressure has been reflected in the strategic change, and at the end of February 2023, AliExpress completely mimicked the fully managed model of the latecomer Temu and launched the Choice channel. Half a year later, in August 2023, AliExpress launched a semi-custodial model and conducted trial operation, and the semi-custodial model was fully launched in January this year.
In order to allow more merchants to join semi-custody, AliExpress has continuously increased semi-custody not long ago, including a number of preferential policies such as cash subsidies. It can be seen that AliExpress is adjusting its strategy in the face of competition.
In fact, although AliExpress has grabbed the dividends of the first wave of cross-border e-commerce in the past ten years, it has missed the opportunity in the subsequent strategic mistakes, and although it is now back on track, the pressure is increasing in the face of new rivals that are rising.
After SHEIN has experienced rapid development in the early stage, it is also bidding farewell to the comfort zone and safety zone, the development rhythm has also been disrupted, and the well-planned road to listing is not smooth, and the next development is also facing many variables.
Two "latecomers" deeply disrupted the situation
If AliExpress and Shein are the senior "veterans" of cross-border e-commerce, then TikTok and Temu are latecomers in the real sense and powerful deep disruptors.
TikTok's e-commerce service was officially launched in February 2021, when it was planned to enter the US market, but due to the announcement of the then US ** Trump that he would ban TikTok, TikTok had to change its original plan and shift the pilot market to the UK and Indonesia.
However, business in the UK did not go well, because European users and merchants did not have the habit of live shopping, and there were not many local merchants willing to settle in, so they had to rely on Chinese merchants to sell goods across borders.
The Indonesian market situation is better than that of Europe, the anchors and users have a high acceptance of live broadcasts, and the difficulty of local investment is also small, but due to the protection of Indonesia's ** local **, local merchants can open stores on TikTok, and TikTok has to give up cross-border e-commerce and attract local merchants with zero commission.
Data shows that in 2022, TikTok e-commerce will complete sales of 4.4 billion US dollars, of which about ninety percent will be contributed by the Southeast Asian market. And when TikTok was ready to intensively cultivate in the Southeast Asian market, Indonesia** directly banned TikTok e-commerce in September 2023 on the grounds of prohibiting social media platforms from conducting direct sales transactions.
In fact, as early as 2020, TikTok was investigated by the United States, the European Union, Australia and other places on the grounds of data security, and in August of that year, there were rumors that TikTok reached a ** deal with Microsoft, but in the end TikTok still maintained independent operations in the United States.
In order to cope with the risks, TikTok has successively established data centers in Europe, the United States and other places since 2020, and accepted local supervision.
Recently, it was reported that from November 2023, TikTok's front-end and back-end development, data, algorithm and other positions working in China have been notified to transfer to overseas jobs, including Singapore, Australia, Canada and the United States.
Industry analysts believe that TikTok is doing this in order to operate in compliance around the world, and compliance has now become the primary issue faced by enterprises going overseas.
Data from the app analytics agency DataAI showsTikTok has nearly 1 billion monthly active users worldwide, of which TikTok has more than 1 monthly active users in the United States500 million, close to 45% of its total population.
In terms of revenue, according to The Information, ByteDance's revenue in the second quarter of 2023 increased by more than 40% to $29 billion, and revenue from overseas markets accounted for nearly 20% of ByteDance's total revenue.
Overall, TikTok's overseas business is growing rapidly, but there is also a lot of resistance.
Temu started the latest in the "Four Little Dragons to the Sea", but it developed the most. Unlike AliExpress, TikTok e-commerce and SHEIN, the emergence of Temu is more like a sweeping storm, which not only has a huge impact on the original pattern of cross-border e-commerce, but also intensifies the competition between e-commerce platforms.
In May 2022, the temu project was officially launched, showing Pinduoduo's unique high efficiency and strong execution rate at the beginning, and launched the preferential policy of "0 yuan to settle in, 0 deduction points" to attract merchants, merchants only need to be responsible for the goods on the shelves, according to the order within 24 hours of delivery to Pinduoduo's domestic warehouse, as for product selection, pricing, logistics and after-sales, all handed over to the platform, merchants do not care.
This business model is the full custody model, which is also the core tactic of temu, because it greatly reduces the cross-border threshold, so it is very attractive to merchants who lack overseas marketing experience.
Although Temu was the latest entrant, its fully managed model has been copied by three other platforms and has now proven to be the best business model for cross-border e-commerce.
Temu's ultimate goal is to surpass Amazon, due to the fierce competition in Southeast Asia, Temu's first stop is the U.S. market, and the U.S. e-commerce growth rate is faster than the global market, and the proportion of Americans who place orders when they consume is much lower than that of China, which means huge market space and business opportunities.
At the beginning of September 2022, Temu was officially launched in the United States, although it lacked practical experience and the launch was also rushed, but the progress was better than expected, with an average daily GMV of more than $1.5 million in just one month, a total of more than $200 million in three months, and nearly 30,000 merchants.
Temu really became popular in the U.S. market when it debuted at the Super Bowl, the annual championship game of American professional football, in February 2023, and Temu became a sponsor of the "Super Bowl", buying two of the 30-second ads, becoming the youngest brand ever to advertise in the "Super Bowl".
As a result, temu's brand awareness in overseas markets has also increased significantly, and it has earned a lot of traffic. Data shows that on the night of the "Super Bowl" ad broadcast in February 2023, the number of temu** increased by 45%, and the number of daily active users also increased by 20%. Since then, under the impact of huge traffic, many warehouses of Temu have even exploded.
Goldman Sachs analyst Eric Sheridan saidAs of the end of the second quarter of 2023, TEMU's global ** volume is 1200 million times, of which the earliest entry into the United States** exceeded 70 million times.
This time, TEMU invested heavily again and held hands with the "Super Bowl", which shows Temu's determination to the American market.
According to reports, temu's products are currently sold in 48 countries around the world, and in the third quarter of 2023, its global monthly visitors reached 1With 1.4 billion people, it is already the second most popular e-commerce app in the United States, second only to Amazon.
According to the data published by many partiesTemu, which has only been online for a year and a half, is expected to achieve more than $14 billion in GMV in 2023 and $30 billion in 2024.
SHEIN needs the "Super Bowl" even more
In the "Four Little Dragons of the Sea", Shein does not have an advantage in terms of financial strength, AliExpress has the big platform Ali behind it, TikTok behind Douyin, and behind Temu is Pinduoduo, the fastest growing e-commerce platform in China, but there is no support from a big platform behind Shein.
This may be the reason why SHEIN has been in a hurry to go public in the United States in the past yearIn recent years, in order to accelerate the process of listing in the United States, SHEIN has taken a series of measures.
For example, in terms of talent introduction, Shein has successively introduced international executives such as Gui Lei, the former VIPKID CFO, who has worked in many companies with cross-border payment business such as eBay and PayPal, Tang Wei, who has worked in Merrill Lynch and Lehman Brothers, and Marcelo Crowle, former chief operating officer of SoftBank and former deputy of Masayoshi Son.
At the same time, SHEIN has also adopted measures such as transforming the platform model, increasing investment in the global fashion field, carrying out public relations for listing, and expanding the global ** chain.
Previously, foreign media reported that SHEIN has secretly applied for listing in the United States, which may become one of the largest initial public offerings (IPOs) in recent years, and may be officially listed for trading as early as 2024.
However, it was recently reported that SHEIN's listing in the United States failed to obtain the approval of the relevant domestic authorities, which may be related to SHEIN's eagerness to "go Chinese" before listing.
SHEIN was first founded in Nanjing in 2008, and then moved from Nanjing to Guangzhou, after which founder Xu Yangtian moved SHEIN to Singapore and obtained Singapore permanent resident status for himself. In 2022, SHEIN will relocate its headquarters to Singapore.
At the same time, Xu Yangtian has cancelled many domestic companies related to SHEIN's business, for example, 9 of the 10 companies that Xu Yangtian has worked in China have been cancelled, and Xu Yangtian no longer serves as a legal person in the only remaining company.
Today, SHEIN has been said to be a Singaporean company in its external publicity, and in the list of Hurun Report released not long ago, the residence of SHEIN founder Xu Yangtian has also been marked as "Singapore".
In addition, just after SHEIN's application for listing in the United States, the U.S. legislature strengthened its review of SHEIN, requiring it to provide evidence of the labor status of the use of the relevant ** chain.
Judging from the ** report, SHEIN has been involved in at least 50 lawsuits for alleged trademark or copyright infringement. It is worth noting that the U.S. regulators will consider the intellectual property situation when reviewing the company's listing application, especially for some companies that rely on innovation and unique design, such as technology companies, fashion companies, etc., SHEIN happens to belong to the category of fashion companies.
This means that SHEIN also faces some risks in terms of the degree of compliance and protection of intellectual property rights.
In addition to the obstacles to listing, after experiencing rapid growth in the early stage, SHEIN is ushering in an inflection point, not only facing a decline in performance growth, but also a significant valuation.
On May 18, 2023, SHEIN completed the G+ round of financing, raising $2 billion, and the valuation at that time was $66 billion.
Not only that, but in January of this year, according to Bloomberg, SHEIN investors were trying to be "in a private market transaction", valuing the fashion giant as low as $45 billion.
In this regard, SHEIN couldn't sit still. On January 26, Peter Pernot-Day, head of strategic communications for the UK and the United States at SHEIN, was interviewed by CNBC and responded to the recent spate of negative news.
Pernot-Day said that SHEIN's listing in the United States is in sight, and the valuation of investors' secondary sales does not necessarily reflect the value of the real world.
In addition to internal worries, there are also external troubles. In the European and American markets, Temu and SHEIN have similar markets and overlapping users, and the ferocious Temu is snatching market share from SHEIN's original market.
With Temu's strong entry, SHEIN's market and ** chain have been greatly impacted, data show that SHEIN once occupied 75% of the US fast fashion market, but TEMU grabbed 20% of the share with extremely low prices after entering the game.
Compared with Temu, SHEIN is not competitive in terms of **, and Temu's categories are also more extensive, not only clothing and fashion products, but also daily necessities, and electronic products, etc., but SHEIN's advantages are more concentrated in the fashion category.
Some industry insiders said that SHEIN wants to avoid competition with temu and launch better quality products to form differentiation, but in doing so, it will also face head-on competition with the giant Amazon, and the pressure is also not small.
Perhaps, now SHEIN needs an American "Super Bowl" more.
Cover** and text with pictures** on the Internet, invaded and deleted. ）
References: 1. "Going to Sea "Three Kingdoms Killing": The Civil War and Foreign War of Temu, Shein, and TikTok", *Late latepost"; 2. "In 2024, AliExpress will take the "extended range" route? , New Stand Pro.