In the past year, in the United States, Temu, Shein and other overseas giants have fought from business wars to lawsuits, while in the Japanese and South Korean markets at home, there has been no similar competition between Mars and the Earth. Although in July 2023, Temu continued its previous strategy of throwing money in the United States to buy volume, and has successively advanced to South Korea and Japan.
However, compared with the first-class war in the United States that is "lower than the ex-factory price after subsidies", in the Japanese and South Korean markets, between SHEIN, AliExpress and Temu, which entered the game first, the drums of war have sounded, but the smell of gunpowder is not strong. Even the usual strong spoilers such as temu have been quite cautious about entering Japan and South Korea.
Taking Japan as an example, although it claims that "the maximum discount is 90%", the strength of "600 off over 3700 and 1200 off over 7500" on the first day of launch is not only lower than that of AliExpress Japan in the same period, but also not as good as the discount of "200-30" in the ordinary domestic shopping festival. Its advertising volume has also been rarely quickly extinguished, just launched in July, and began to weaken in August.
The e-commerce war between Japan and South Korea is quiet, and the general public has limited perception, and only people in the industry can truly feel that the giants have rolled up to Japan and South Korea.
In the past year, between China and Japan, China and South Korea, logistics has been beaten down by SHEIN, Temu, and AliExpress", Yang Yusen, a businessman who settled in Japan, told the alphabet list, at the same time, a large number of Chinese overseas platforms that ship and stock up on China, so that many logistics providers have signed a large number of aircraft, and the logistics speed has been delivered from 10 days, 5 days, and even the next day.
Figure: AliExpress is tied to Ma Dong-seok in South Korea (left).
temu has a 90% discount in Japan (right).
** Screenshot of the alphabet list
From the perspective of market share, the presence of overseas giants in Japan and South Korea cannot be ignored. South Korean economy** citing dataBetween Sept. 25 and Oct. 9, Temu was sold in South Korea at 39., according to AI data90,000 times ranked first in the application list, and AliExpress won 2570,000** ranked third.
One of the reasons why the rumbling artillery fire at the door of the house is not perceived by China is the gap between the scale of the e-commerce market in Japan, South Korea and the United States.
According to eCommerceBD**, in 2023, the sales revenue of the U.S. e-commerce market is expected to grow by 144%, up to 1$1 trillion, contributing 9With a growth rate of 6%, it is the second largest market in the world's e-commerce scale; Japan and South Korea are in third and sixth place, respectively, and Japan's growth rate is expected to be 68% to 1539$8.4 billion, South Korea's sales revenue is expected to reach 85.5 billion$400 million.
There is a significant gap between the volume of the e-commerce market in Japan, South Korea and the United States, and the giants are naturally more cautious in their investment.
According to people close to SHEIN, SHEIN's annual revenue in Japan has reached 140 billion yen, but the team is still only a dozen people.
In March 2023, AliExpress announced that it would invest about 100 billion won ($76.4 million) in the South Korean market to optimize the user experience. But the number of AliExpress teams that first entered Japan and South Korea was only a few dozen.
Obviously, the cross-border giants who have just entered the Japanese and South Korean markets have no time to fight the subsidy war like they do in the European and American markets, which makes the war in the Japanese and South Korean markets relatively deserted.
But Japan and South Korea are already a piece of fat, and now the main players have all entered the market, outside the United States, how the giants compete for the Japanese and South Korean markets is undoubtedly a major attraction of the next overseas e-commerce.
A participated in this battle for cross-border e-commerce between Japan and South Korea, including AliExpress, an old-timer who entered the Korean market in 2018, SHEIN, which entered Japan and South Korea first, and, of course, the menacing Temu.
Before using Temu, Wang Ying, who lives in Fukuoka, Japan, noticed Shein, which will advertise on YouTube on a large scale in 2022. Shein, which was hotly promoted by Japanese high school students and college students on Twitter, took the lead in firmly occupying the clothing track. "Shein is good-looking and cheap, similar dumpling buns, which can be twice as bad as ZRA and UNIQLO. ”
The important reason why the overseas giants have not been able to fight in Japan and South Korea is that in the Japanese and South Korean markets, they have their own strengths and have not yet attacked each other's fields. Unlike temu, which is good at small goods, AliExpress will be able to become the third largest e-commerce platform in South Korea in 2023, relying on "big items" such as umbrellas, new energy auto parts, kitchen appliances, and even mattresses.
Another important reason why the giants have not been able to fight in Japan and South Korea is that they have already had their own advantageous battlefields.
According to data from WiseApp Retail Goods, a South Korean application software analysis service provider, in October 2023, the number of AliExpress South Korean users soared to 6.13 million, surpassing the old shopping ** Gmarket to become the third largest e-commerce platform in South Korea.
In the Japanese market, AliExpress was left behind by SHEIN, before Temu, SHEIN topped the shopping app list in 2022, and after the pop-up store, it opened a permanent physical store in Japan in November 2022.
However, with Temu occupying the top spot in the 2023 Japan and South Korea shopping app**, the pattern has quietly changed, and the war will start sooner or later.
The first step for the giants to compete for the Japanese and South Korean markets is to "win" the best businessmen.
Different from the hinterland of the sea - "European and American markets", Japan and South Korea are quite unfamiliar in the eyes of factory owners. Whether it is South Korea, which is fiercely fighting in the e-commerce market, or the Japanese market, where supermarkets dominateAs a latecomer, China's overseas platforms often need to find unmet needs and quickly capture them, all of which must be supported by domestic factory owners.
Therefore, finding suppliers who are willing to try the Japanese and Korean markets has become the first step for giants to go overseas. Cheng Sheng, a small industry boy in AliExpress, told the alphabet list that the first thing he does when he goes to work every day, he needs to understand the market demand in South Korea from the Korean KOL, and then feedback the "plate merchants" according to the demand.
In order to find a supply factory, whether it is the most upstream chip manufacturer or the most downstream sales chain, we have to contact," Cheng Sheng said, in the offline rivers and lakes of cross-border e-commerce, finding a powerful supplier and persuading the factory to settle in is often the first and most important step. And in order to pry the supplier, four times a month, back and forth, "local small."
Second, the industry small two in turn, "in the end, it was said that the corresponding accessories suppliers settled in Japan and South Korea."
Figure: Talk to the bosses in Guangzhou about settling in the teahouse
** Provided by Cheng Sheng
In Yiwu, Guangzhou, and Shenzhen, the bosses of different industrial belts often have their own characteristics. "The Yiwu boss is the most pragmatic, the warehouse at home can also talk about business, the northern boss goes to the restaurant, and compared to the fast-paced Shenzhen boss, the Guangdong boss often asks to make an appointment in the teahouse, chatting while drinking tea." Cheng Sheng told the alphabet list that after the past three years, many old foreign trade factories have begun to contact e-commerce platforms, and their attention has also quietly turned to Japan and South Korea.
The growth of sales in the Japanese and South Korean markets has become the most direct and critical factor for leveraging large suppliers.
In the past three years, the foreign trade orders of the factory operated by Zhang Hongjun have plummeted by 60%, and the orders that have been produced are also hopeless to be returned.
Although the product style does not conform to the aesthetic preferences of European and American users, "plaid skirts, linen shorts", these Uniqlo-like items, have been sold in Japan and South Korea "300 pieces on the first day, and the warehouse was blown up in more than 1 month," and the same model, "can be sold twice as much as in China" in Japan, which also made Zhang Hongjun see new profit margins.
In the end, with the help of SHEIN's 15% discount for new users, Zhang Hongjun quickly cleared the tail goods, and also drove many factory owners to start researching Japanese plaid skirts and stacking socks, "To do Europe and the United States, you still need to redo the goods, but to do Japan and South Korea, you only need to make a slight change, and the domestic supply is lower than that of Japanese local companies, and the advantage determines the sales volume." ”
bCompared with Europe and the United States, in the Japanese and South Korean markets, the myth of China's wealth creation on overseas e-commerce platforms has just begun.
At the beginning, the Korean order came up, and I wondered if it was hacked. ”
As a native of Chaoshan, Mary, the founder of Zeuslap, settled in AliExpress as early as 2013, and in 2019, her portable monitor became popular in South Korea because of a hot blog post by a Korean buyer.
Previously, as a factory, Mary's monitors were sold more to Russia and Brazil, and her "lucky start" also happened to hit the beginning of AliExpress's layout in the Japanese and Korean markets.
"After trying to launch a new product in the Korean market, the response of the market has given Mary more confidence in South Korea, not only the brand has quickly gained popularity, but at the same time, the first business continues to place bulk orders every month, which also makes Mary feel the potential of the Korean market."
From 2019 to the present, Mary has ranked first in the entire industry category of AliExpress. "We are the best businessmen, and we are urging delivery every day. Mary said with a smile that with AliExpress among the top three in the Korean e-commerce market, she also sees the consumption potential of the Korean market, which has only tens of millions of users.
Recently, Zhang Hongjun has also begun to test the waters of temu. However, compared with SHEIN's positioning as a franchise in Japan, Temu is more like a "little Yiwu" in Zhang Hongjun's view. In Japan and South Korea, Temu's goods are smaller and lighter, "At present, the best selling ones are mobile phone cases, small pendants, and stickers, as long as there are enough store categories, there will always be sales." However, compared with Japan and South Korea, the sales of the same product in the United States "can double".
At the same time, in Japan and South Korea, using TikTok to attract traffic to their products has also become a routine operation for Zhang Hongjun. "Cooperate with MCN, ask influencers to shoot publicity**, and then lead people to independent stations from TikTok," TikTok has the young user groups they most hope to get.
Like Zhang, Mary recently started testing the waters of TikTok. Although TikTok has not yet opened Japanese and South Korean sites, during the Black Friday in the United States in October, "more than 500 orders were issued a day, and more than 4,000 were sold in just a few days", which still made Mary smell the traffic dividend.
The sales growth of merchants can naturally drive the growth of platform sales, which also makes local ** merchants feel the "aftershock".
As the founder of Umori Co., Ltd. in Japan, Yang Yusen has been in Japan for 6 years, and the popularity of platforms such as SHEIN and TEMU has not only "knocked down" the cost of logistics in Japan, but now the transportation of goods between China and Japan is almost the same as that of Amazon distribution in Japan, but also made him rub on the traffic dividend of "next-day delivery".
The East Asian market, represented by Japan and South Korea, is second only to Europe and the United States in terms of volume.
To North America, Japan and South Korea are closer than Europe and the United States, for TEMU without overseas warehouses, it is necessary to send to the European and American markets from Guangdong and Oceania, but the logistics cost of Japan and South Korea is significantly lower, and at the same time, for TEMU, it is also the best market to improve service quality and verify play. A person close to Temu told the alphabet list that whether it is the advantage of logistics costs or the potential for future e-commerce development, it is understandable for Chinese giants such as Temu to choose the Japanese and South Korean markets.
Whether it is AliExpress, or Temu and Shein, which entered later, are still expanding the e-commerce market in Japan and South Korea. However, at this stage, they themselves are also in the exploration stage, and the manpower and material resources invested by Japan and South Korea are also limited, which makes the e-commerce market in Japan and South Korea not have a war with the outside world as scheduled.
cThe giants go to Japan and South Korea, and in addition to the merchants making enough money, the life of the platform is not as good as imagined. The giants who have been complained about quality problems, sued, and gone to sea in Japan and South Korea have a lot of lawsuits.
Japan's economy is now in a downturn, and Japanese people who want to be cheap will also use temu to buy things", Wang Ying explained the rapid rise in the amount of temu in Japan.
As a user, Wang Ying's experience in temu is really not good.
Previously, as a Chinese who worked and lived in Japan, previously, Wang Ying was more accustomed to overseas shipping to Japan after placing an order, whether it was a small snack such as spicy strips and duck necks, and the same ** air conditioning shelf, Wang Ying specially found the same price of 20 yuan in **, Nichia (Amazon platform Japan station) 1000 yen, temu only needs less than 200 yen, but after more than a week of waiting, in Japan, which can only rely on air conditioning for heating in winter, Wang Ying found that "temu can't be installed at all" 。
Although the seller took the initiative to say that she could "refund only", Wang Ying not only needed to place a new order in Nichia, but what gave her a headache was that Japan is a country where garbage management is very strict, and different garbage has a set time, and some garbage needs to be booked in advance, and even the regulations in different areas are different, and sometimes the online purchase of tables and chairs is not satisfied, and it takes an additional 500 yen to dispose of the garbage.
In the end, in order to throw away the goods ordered from temu, Wang Ying had to specifically inquire about the disposal method of the garbage on the outer shelf of the air conditioner, and this twist and turn also made Wang Ying never place an order on temu again.
After all, "although the goods on temu only cost 100-200 yen, there are many 100-yen stores in Japan, and temu wins in many categories, but in Japan, users pay more attention to the purchase experience, and the quality of offline shopping is also more *** in China, only refunds the buyer is happy, and the seller saves trouble, but in Japan, temu such after-sales will not work." ”
In the clothing category with a higher return rate, SHEIN has also caused many Japanese and Korean users to complain about its quality.
The clothes and plaid skirts I bought at SHEIN have been worn for more than half a month, plaid skirts are particularly easy to pill, and sweater cardigans are easy to hook although they are not pilling. Acai, who lives in Fukuoka, Japan, said, "You get what you pay for, and in the future, except for gadgets like mobile phone cases, I won't place orders on SHEIN anymore." ”
In addition, recently, according to Korean media reports, AliExpress (AliExpress) is facing controversy over the sale of counterfeit products and product delivery in the South Korean market.
Korean media pointed out that although AliExpress held a special press conference in December 2023, announcing measures to prevent the sale of counterfeit products and investing 10 billion won ($7.47 million) to protect customers and intellectual property, counterfeit goods are still easy to buy on the platform. Ongoing disputes such as delivery delays, the proliferation of counterfeit products, and quality issues still need to be resolved.
In addition to the quality concerns caused by low prices, Uniqlo recently sued three companies in SHEIN (Roadget Business Pte.). ltd., fashion choice pte. ltd.and Shein Japan Co, ltd.), alleging that it sells counterfeit Uniqlo round mini shoulder bag products (also known as "dumpling bags"), and demanded damages.
Figure Uniqlo Notice of Prosecution
** Uniqlo official website
For SHEIN, which aims to go public, although SHEIN has said that it will invest more than $55 million in two years to support nearly 3,000 designers around the world, and continue to emphasize the cultivation of original designers and the protection of intellectual property rights, this complaint obviously interrupted SHEIN's listing footsteps.
According to the OpenSecrets report, SHEIN's recent expansion of lobbying spending in the United States is mainly in response to the U.S. investigation of its **chain. And Temu, who is in the limelight, was also investigated by a select committee of the US House of Representatives because of similar motives. While OpenSecrets has not tracked Temu's U.S. lobbying record, according to its report, Temu has "spent a lot of money" lobbying in hopes of blocking criticism of its U.S. chain in China.
Of course, it's not easy to gain trust in a new market. According to OpenSurvey, Coupang and N**er Shopping together account for nearly 65% of South Korea's e-commerce market share. In Japan, Amazon, Rakuten, Yahoo three entrenched, while physical stores are all over, although the network penetration rate of 96%, but "compared with the United States and Southeast Asia, Japanese users are not high in consumer sentiment, but also more picky, the development of e-commerce in Japan is very slow, often a product can be sold for several years." Yang Yusen said, "If China's overseas platform wants to build customer trust, it needs a little bit of it. ”
In the proportion of e-commerce, overseas direct purchase can only account for a small part. According to Yonhap News Agency, South Korea's cross-border e-commerce imports increased by 26 percent year-on-year9% to 67,567 trillion won. In terms of imports, China increased by 121 year-on-year2%, catching up with the United States for the first time and becoming the largest import destination for South Korea's cross-border e-commerce, but in absolute terms, South Korea's imports from China are 32,873 trillion won, or about 177 yuan200 million yuan.
The Japanese and South Korean markets are a piece of fat, but they are indeed a bit difficult to bite, and for the giants, if they want to really gain a foothold, they may need to be armed to the teeth.
(Zhang Hongjun, Wang Ying, A Cai, and Cheng Sheng are pseudonyms in the article).