China's Ecommerce Shift: Brands vs. Platforms in a Global Game

From Amazon to Southeast Asia: The Evolution of Cross-Border E-Commerce

The landscape of cross-border e-commerce is undergoing a significant transformation. Data from the 2024 Cross-Border Warehouse Blue Book reveals that 92.52% of sellers operate on two or more platforms, and 97.51% utilize two or more warehouses. This trend highlights the increasing complexity and competition in the global marketplace.

A prime example is a prominent DTC brand specializing in home goods who decided to expand their presence on Amazon this year. Despite similar costs between self-managed logistics and using overseas warehouses (both accounting for around 25% of their total bill), they opted for the latter. This decision allowed them to better manage cash flow and optimize billing cycles, even though it slightly impacted delivery speed.

A similar narrative unfolds in emerging markets. During this year's 618 shopping festival, more businesses began venturing into global commerce. "Parent Era," a leading maternal and child care brand on TikTok Shop Malaysia, exemplifies this shift. Prior to entering Southeast Asia, they operated domestically, facing intense competition with slim profit margins (3-4%).

Recognizing the potential in Southeast Asia, they decided to leverage their existing expertise and product portfolio. While initially encountering challenges finding reliable overseas warehouses ("many warehouse owners are middlemen who disappear when problems arise"), they discovered that self-managed warehousing proved more cost-effective once daily order volumes reached 1500-2000 units, covering monthly operating costs of 10-15 million yuan.

Parent Era's experience underscores the evolving landscape of cross-border e-commerce. Platform support policies merely serve as tools; true success hinges on self-reliance and a step-by-step approach. The founder emphasizes the importance of integrating online and offline channels for future growth.

The shift in the industry is evident: platform traffic ceilings are becoming apparent, and the honeymoon period for relying solely on platforms like Amazon is ending. This has divided global businesses into two camps: those reliant on platform-driven sales (vulnerable to disruption) and those building their own brands with independent logistics and distribution networks (better equipped to weather economic cycles).

Under the current trend towards brand differentiation, demands on overseas warehouses and platforms are intensifying. The divide between purely transactional sellers and established brands is widening, leaving little room for middle ground. The days of easy wins in cross-border e-commerce are fading, replaced by a more strategic and nuanced approach.

China's exploration of global markets presents an intricate puzzle. While local talent can be found across various operational hubs, competition remains fierce among Chinese businesses vying for market share. This reality necessitates continuous innovation and adaptation to succeed.

The takeaway: The future of cross-border e-commerce lies in specialization, resilience, and a holistic approach that transcends reliance on single platforms. Building strong brands, optimizing logistics, and understanding local markets will be crucial for sustained success in this evolving landscape.