It'S Time For Chinese Brands To Go Abroad

In recent years, driven by national policies and market demand, China's cross-border e-commerce has maintained a momentum of rapid growth, and has become a new driving force for foreign trade development and a new starting point for high-quality development. According to the data, in 2021, China's cross-border e-commerce exports reached 1.44 trillion yuan, an increase of 24.5%.

Since the beginning of 2022, the cross-border e-commerce market moves frequently, which also shows that this new foreign trade format is in the ascendant.

In order to stabilize the development of cross-border e-commerce for 8 consecutive years, the government of zam123 has stressed the importance of cross-border e-commerce development for two consecutive years. Up to now, China has set up cross-border e-commerce comprehensive test zones in 132 cities and regions, forming a development pattern of land-based, domestic and foreign linkage and east-west mutual aid.

There is no doubt that the current of the era of cross-border e-commerce is forcing the transformation from "made in China" to "Chinese brand". Among them, such as sheen, Zibuyu and other cross-border clothing sales are particularly prominent.

Amz123 learned that after the stepson Buyu and Savi times submitted their listing applications again, it was reported that sheen was planning a new round of financing, with a target valuation of about $100 billion.

How did these cross-border clothing sales achieve such a brilliant performance? Does the cross-border e-commerce apparel market have the potential to be shortlisted?

This paper will use Sheen, the age of Seville, Zibu language From the perspective of the status quo and opportunities of e-commerce, it can provide some ideas for the rise of e-commerce industry.

01 about timing: supply advantage, flow dividend

As Su Shi said, when you come and you can't miss it, you can't miss it if you dance.

In the ever-changing and developing cross-border e-commerce market, only those sellers who are good at seizing the opportunity can be one step ahead and become the leader in the industry. The success of the sellers such as sheen, Zibuyu and Saiwei era is closely related to seizing the market opportunities.

　　 1. Advantages of China's supply chain

The so-called supply chain is defined by experts as a functional network chain that can convert raw materials into intermediate products and finished products, and sell the finished products to users.

It took nearly 40 years for China to become the first country in the world in manufacturing added value in 2010, starting from raw materials with low added value. Therefore, the strength of China's supply chain network is not only due to its large scale, full range and fast logistics, but also to the fact that many suppliers can produce high-quality parts and semi-finished products at a lower cost.

At present, among the more than 500 major industrial products released by the United Nations, China has the most complete manufacturing system in the world, with more than 220 kinds of output ranking the first in the world. It is the center of the global supply chain of many manufacturing industries.

Among them, Sheen has made the best use of the advantages of domestic supply chain. From the very beginning, she aimed at the overseas market with relatively high threshold and low competitive pressure at the same time. She kept a low profile for many years and made a great success in 2021 by taking advantage of the epidemic situation. Zibuyu and Saiwei era also achieved rapid development by relying on Chinese supply chain resources in the early stage to meet the product demand of overseas consumers.

　　 2. Category Dividend: the scale of clothing industry continues to grow

And the global garment industry is growing strongly. According to the data, the size of the clothing market will reach 1.5 trillion US dollars in 2021, and will increase to 2.3 trillion US dollars in 2025.

In recent years, affected by the epidemic situation, consumption habits have changed, and the clothing industry has accelerated the expansion of the online market, and the penetration rate and market size of e-commerce have increased against the trend. According to Euromonitor statistics, the global apparel e-commerce market size in 2020 will be 411.697 billion US dollars, while the global apparel e-commerce penetration rate will reach 28.7% in 2020.

As one of the largest industries in the world, fashion industry is a powerful engine for global economic growth and development. In 2021, the global online market scale of clothing, footwear and accessories is US $759.5 billion, ranking the first in the global online transaction scale of various industries. It is estimated that the overall penetration rate of fashion e-commerce will rise to 60.32% by 2024.

At present, the export of cross-border e-commerce clothing brands is still in the golden age.

　 　3. Traffic Dividend: public domain to private domain

In the era of "cash flow", the "business flow home" has become a "unicorn" of "business flow".

And sheen, as early as ten years ago, caught up with the marketing opportunities before the commercialization of online celebrities, chose to cooperate with overseas online celebrities, and won the amazing flow dividend at that time with low cost.

At the same time, sheen is also very good at using social media to drain. The company has opened official accounts in overseas social media such as instagram, Facebook, youtube and so on, and the number of fans has been very large. Taking instagram as an example, Sheen has more than 24 million fans on the platform.

At present, although some sellers mentioned that the penetration rate of independent stations in cross-border industries has become higher and higher, and the flow dividend has begun to fade, amz123 believes that in the current mobile Internet era, with the support of digital and big data technology, the communication channels and methods are more abundant, and the target population can be reached more accurately, The marketing boundary of e-commerce is still expanding.

With the intensification of competition, the current traffic environment is entering the "private domain traffic bonus period" after the public domain traffic dividend period. Brand sellers who can take the lead in completing private infrastructure construction and scale development have the opportunity to take the lead.

　 02 about products: low price, data driven

In the cross-border circle, there is a saying that "seven points depend on selection, and three points depend on operation". We can see the importance of products for cross-border e-commerce. Products that can avoid homogenization and have a sustainable life cycle are almost every seller's "dream in love".

However, for the clothing category with obvious seasonality and relatively short life cycle, it is obviously impossible to emerge with only a few excellent single pints. Therefore, more effective measures should be taken.

　　 Based on overseas demand

From the perspective of market research, most overseas consumers are price sensitive customers who are keen to buy products with high cost performance. Therefore, many cross-border sellers will sell their products at a lower price in the early stage of brand establishment, so as to obtain excess profits by pursuing low cost.

China's strong supply chain system has greatly shortened the production cycle of products, making China's clothing industry to meet the needs of overseas consumers for high cost-effective products.

From the perspective of the development process, from 2012 to 2016, the Seville era, which was established in 2012, met the demand of overseas consumers for low-cost products and achieved rapid development by relying on Chinese supply chain resources. Sheen also benefited from the advantages of China's supply chain, and realized its concept of "small single quick response", making "fast fashion" prosperous.

But the positioning of low price also determines the limitations of product quality to a certain extent.

In order to seek a longer-term development and obtain higher brand loyalty, sheen and Zibuyu, who won at the initial stage with low price, began to find the starting point to break through the limitation of low price and build a brand matrix.

　　 2. Data feeds R & D and builds brand matrix

　　（1）SHEIN

Through the digital supply chain and consumer demand system, we have opened up the supply chain.

Among them, through Google's search algorithm, sheen can quickly track clothing related content around the world in real time, find fashion items that are currently in the forefront of search volume, and consumers' reactions to competitors' websites. Then these data are provided to the huge internal design team for the development of new products, greatly improving the efficiency of brand design.

It is worth noting that Sheen has also won half of the daily life of global fast fashion brands on the mobile end, which can be used for trend analysis and product order scheduling.

(2) Seville era

Seville has always attached great importance to product R & D, always focusing on market-oriented, combined with digital analysis, to achieve accurate mining of consumer demand.

In the stage of focusing on brand strategy, based on the accumulated independent system R & D capability and market research data, Savi era also quickly launched new products, arranged factory production samples and selected suitable suppliers through data research on cross-border e-commerce platforms such as Amazon and eBay, and considering the market and price.

As of the first half of 2021, Seville has incubated 43 private brands with a revenue of more than 10 million.

(3) Zi Bu Yu

Zibuyu always thinks that products are the core elements to promote the development of the company. Therefore, Zibuyu has adopted the mode of "independent design + factory OEM" for operation and established a huge database. By the end of 2020, the product design database has accumulated about 41796 clothing shoes and 51801 surface accessories samples, and more than 90% of the products are designed by the company independently.

Through this design database, Zibu Yu successfully built his own brand matrix. Dellytop, a women's wear brand launched in 2015, ranks top two on Amazon's similar best seller list in 2020; As of December 2021, the leisure men's wear brand runcati, launched in 2017, has ranked among the top three of Amazon's similar best-selling products... By the end of 2021, Zibuyu has cultivated 64 popular brands with annual sales of more than RMB 10 million.

　　 About the current situation of financing

Amz123 learned that according to the statistics of the General Administration of customs, the growth of overseas demand is driving the export of China's clothing products. In the first two months of 2022, China's clothing export volume continued to maintain a positive growth since the fourth quarter of 2021, with the export volume reaching 25.461 billion US dollars, an increase of 6.1% year-on-year.

In this golden age of Chinese brands going abroad, the pace of cross-border clothing sales has never stopped, but the results are quite different.

　 1. Sheen: rush to 100 billion US dollars for valuation

According to foreign media reports, sheen, the main fast fashion independent station, is currently negotiating with some potential investors, including general Atlantic, which has raised about $1 billion in a new round of financing. After the fund-raising, its valuation may reach US $100 billion, which will surpass the combined valuation of famous European and American fast fashion brands H & M and Zara, and become the third largest Unicorn company in the world.

Amz123 also understands that the size of Sheen's valuation is likely to change as the deal is not yet closed. But if the $100 billion valuation can be finalized, sheen will become the most valuable start-up in the world after tiktok and space X.

　 2. Zibuyu, Saiwei era: impact listing

In recent times, Amazon and other third-party e-commerce platforms are not affected.

On March 7, it was disclosed by the Hong Kong stock exchange that, following the failure of the prospectus submitted in 2021, zibulu group, a cross-border e-commerce company, once again submitted an application for listing on the Hong Kong stock exchange. Huatai Hong Kong and ABC international financing were the co sponsors.

On the other hand, Seville times formally submitted its listing application to the Shenzhen Stock Exchange again, but on March 31, it was suspended from listing because "the financial information recorded in the IPO application documents has expired and needs to be supplemented".

Looking at the revenue reports and Prospectuses of Saiwei era and Zibuyu, we can see that they have certain "dependence" on the third-party e-commerce platform (especially Amazon).

Affected by the wave of Amazon's name closures, the revenue of Seville times in the third and fourth quarters of 2021 will drop year-on-year, and the net profit of parent company in the third quarter will drop by 80.63% year-on-year, and the situation is not optimistic.

Zibuyu also mentioned that in the foreseeable future, the company's sales through Amazon will continue to account for the vast majority of the company's total revenue. Therefore, the company's profitability, financial performance and financial position will depend on the firm business relationship between the third-party e-commerce platform and the company. However, if the third-party e-commerce platform modifies the terms of the agreement to the detriment of the company, the profitability of the company's products may be significantly affected.

In this regard, in order to accelerate the treatment of "Amazon dependence", Zibuyu is also focusing on the establishment of a large independent website.

But generally speaking, from the perspective of revenue: in the cross-border e-commerce industry, the third-party sellers account for the highest proportion, and the growth of self-supporting independent stations is slightly faster than that of the third-party sellers. According to the data, in 2020, the seller market size of China's cross-border e-commerce platforms will be 172 billion yuan, while that of self-supporting independent stations will be 570 billion yuan. It is predicted that cross-border clothing e-commerce is expected to maintain high-speed growth in the future, whether it is a third-party platform seller or an independent station.

　　 04 about the future: different ways lead to the same goal, brand operation is inevitable

On the 22nd day of 2024, the number of sellers registered for intellectual property rights in China increased significantly on the 22nd day of 2024.

In recent years, China has attached great importance to the development of new trade formats such as cross-border e-commerce. It regards cross-border e-commerce and other new business forms as an effective force for China's foreign trade development, and has launched a lot of supporting policies, creating a golden era for cross-border sellers to go to sea.

However, as cross-border sea going has become the general trend, the competition in cross-border e-commerce industry is becoming more and more fierce. From the supremacy of cost performance to the pursuit of personalization, the growing brand demand of consumers is also promoting the cross-border industry from white brand to brand sea.

For the sellers of cross-border clothing industry, building brand barriers is the most important thing.

In the new era of consumption, consumer demand has gradually transformed from rational consumption focusing on price to emotional consumption focusing on service. The main consumption force of cross-border fashion apparel export is the new generation of Internet consumption conscious generation Z. they will pursue a higher level of brand experience and pay more attention to brand awareness and product quality.

In addition, from the perspective of the company's long-term strategic development, when the scale of the consumer group reaches a certain size, it is necessary to excavate the two indicators of single rate and customer unit price. Brand operation is the most effective way to improve these two indicators.

Therefore, both the third-party e-commerce platform and the sellers of cross-border clothing industry with independent stations should put brand building barriers in the first place of operation. After all, the only way to keep a brand is to build a brand with low price.

　　 Final

In 2022, the international situation is changing rapidly, and the uncertainties faced by China's clothing foreign trade are increasing. However, as a clothing export country, China not only has a complete supply chain, but also has strong international cooperation advantages. From the perspective of market demand, the dependence of key markets on Chinese products has also increased due to the impact of the outbreak.

It is expected that China's clothing export will maintain a steady growth in 2022, and the potential of cross-border clothing industry will continue to rise.

He who observes the trend is wise.

It is the right time for Chinese brands to go out to sea.