Now, the massive orders from the "Black Friday" promotion are pressing on the logistics side. On November 27, a number of logistics and e-commerce merchants told reporters from Beijing Business Daily that the demand for 3C small household appliances, clothing and other products increased at the end of the year, and the low-price war launched by cross-border e-commerce also provoked logistics to get involved in a price war. . Under the surface of problems such as fluctuating contract performance and warehousing lag during large-scale promotions, there are various pain points such as the lack of say in logistics companies, resource dispersion, and long return cycles. There is still a long way to go for enterprises to build a stable and stable cross-border supply chain capability.
Logistics pressure increases suddenly
Like "Double 11", every "Black Friday" is a tough battle for domestic and foreign trade merchants, and logistics resources have become scarce. According to a cross-border logistics service provider, due to Amazon's "Black Friday" promotions and other factors, e-commerce cargo volume has surged, air transport capacity resources have been reduced, and prices will continue to rise.
Dai Bin, vice president of cross-border logistics company Sifang, told a Beijing Business Daily reporter that consumer demand for 3C categories and clothing usually increases significantly at the end of the year. The average monthly demand for 3C small home appliances such as sweeping robots increased by 40.68%, and the average monthly demand for platform clothing increased by 50.96%.
A set of data from Adobe, an American e-commerce research institution, shows that on Black Friday, American users spent a record $9.8 billion online, an increase of 7.5% from last year. The best-selling categories were televisions, smart watches, and speakers. Electronics such as devices, as well as toys and games, etc.
The volume of e-commerce orders has entered a peak period, which means that the pressure on logistics companies will rise sharply. For example, 3C small home appliances have a high probability of return and exchange and high after-sales requirements, while clothing has many SKUs and has high warehousing pressure. Not only that, if the merchant's sales forecast is significantly different from the actual sales, goods stranded in overseas warehouses will cause considerable logistics costs.
Regarding the uncertainty that merchants are worried about, Wu Linhao, general manager of cross-border business at Best International, believes that the main reason is that there are many logistics links, poor timeliness, and long cycles, which ultimately lead to fluctuations in merchants' supply chains. Generally speaking, domestic e-commerce logistics performance can be completed in 2-3 days, while cross-border logistics requires 15-30 days. The first-shipped goods arrive late and other irregular arrivals will also put pressure on domestic warehouses.
In October and November this year, BEST opened two new warehouses in Yiwu and Guangzhou respectively. Wu Linhao pointed out that Best International has locked in shipping schedules and shipping spaces during the peak season in advance to ensure that its shipping capacity can cope with peak traffic.
Giants "roll" to fulfill contracts at low prices
It is worth noting that this year’s trend of pursuing cost-effectiveness in online consumption has also swept overseas markets. As a veteran player who has been engaged in the cross-border industry for six years, Ding Bo (pseudonym) admitted that this year has become “the most difficult year to make money.”
According to Ding Bo, this year he and the heads of domestic cooperative factories took turns meeting to discuss the production plan for "Black Friday": emphasis should be placed on cost-effectiveness, not brand; to sell goods, not to mix traffic. If it were based on previous years, Ding Bo would only need to create one hit item to sell out on Black Friday, but this year the logic of hit items is no longer easy to use. There are obvious changes in both platform channel costs, user acquisition costs and conversion efficiency.
In the past, Ding Bo's own beauty instruments and shoulder and neck massage instruments priced at more than US$500 were popular on platforms such as Amazon, but now almost no one cares about these products. On the contrary, low-priced orders such as wigs, false eyelashes, and manicure patches are not so affected. "We basically focus on daily necessities with a gross profit margin between 25% and 60%. But in fact, with cross-border logistics and labor costs, the net profit will be less than 20%."
In a low-price environment, merchants are also more concerned about cost issues. A cross-border merchant selling daily necessities told a reporter from Beijing Business Daily that logistics has been severely affected by the epidemic in the past two years and costs have been high. This year, consumption in the European and American markets has become more rational, and the platform focuses on low prices. The company decided to choose sea express to reduce logistics costs. cost.
An analysis report from Zheshang Securities shows that among the sampled items, the price of TEMU is more than 30% lower than that of Shein, and the price of some standard accessories in home department stores is even half that of Amazon. According to Qian Dazhu, co-founder of the "AI Cross-border" ecological chain, most merchants on TEMU rely on themselves to "cut a knife" to obtain orders. Compared with traditional shelf e-commerce, the platform allocates traffic through bidding and other methods, and the profits of operating on TEMU and Tik Tok are obviously much less.
Therefore, as more and more merchants try to save money in the logistics environment, leading domestic logistics companies such as SF Express, Cainiao, and JD Logistics have released signals such as price concessions and shorter logistics timeliness to the cross-border market before this year’s Black Friday. , to attract foreign trade merchants to place orders. It is understood that SF Express has recently launched a latecomer compensation service for sellers who use Amazon's online "buy and deliver" service. Sellers can also enjoy a 10% discount on shipping from China to the United States. The stocking volume of AliExpress Cainiao's cross-border preferred warehouse increased nearly 9 times year-on-year before "Black Friday". The goods are mainly sent to countries covered by the "Global 5-Day Delivery" service. Merchants can choose "10-Day Delivery for US$5". ” and “20-day delivery for $2” and other tiered products.
At the same time, platforms such as Tik Tok, TEMU, and AliExpress also solve merchants' concerns about logistics through full custody and subsidies. Merchants only need to send the goods to designated warehouses in China, and the platform will be responsible for subsequent transshipment and distribution.
Balance input and output
The purpose of logistics companies to "roll up" prices is to grab more orders in a limited market, which also proves that the domestic cross-border logistics industry is still a market with many brands and fragmented competition. According to the TransLink Research Institute's "2022-2023 Cross-border E-commerce Logistics Industry Insights White Paper", there are 3 cross-border logistics companies with revenue exceeding 10 billion yuan, 7 companies with revenue between 2 billion and 10 billion yuan, and 7 companies with revenue between 2 billion and 10 billion yuan. There are 24 companies with revenue between 1 billion and 2 billion yuan.
TransLink Research Institute believes that cross-border e-commerce logistics service providers are a business that survives in the cracks. The right to speak is in the hands of a few upstream and downstream entities. Their weak position is directly reflected in the industry's continued homogeneous competition. At the same time, logistics companies often take into account the results of seller clusters and shipping port locations when setting up domestic node locations, rather than based on considerations of radial network cargo routing optimization, so it is difficult to form a network effect. In the destination country, we will also rely on the local delivery network.
It can be seen that in order to undertake and expand cross-border e-commerce business, leading companies such as Cainiao and JD Logistics have continuously invested in the construction of overseas warehouses and transshipment hubs in recent years, building self-operated networks in many countries and regions to improve their control of resources. force. For example, JD Logistics is based on multiple overseas warehouses and collaborative warehouses operating in North America. Its self-operated trucking services cover more than 90% of the United States, and delivery across North America can be achieved as quickly as 2-3 days.
However, these investments require both large amounts of capital and sufficient order size. Dai Bin gave an example to the Beijing Business Daily reporter using overseas warehouse operations. "The main pressure on enterprises comes from the level of warehouse capacity and cost control. The market conditions and business volume of each overseas warehouse, as well as operating costs such as equipment, manpower, and materials, all determine the investment return cycle of the overseas warehouse." He pointed out that if the new If a warehouse can stabilize its storage capacity utilization rate at about 70% within three months and maintain a healthy gross profit level, it will also take about three to five years to recover costs, which also puts a certain amount of pressure on enterprises.
At present, the domestic supply chain has developed to this day, and the logistics and warehousing parts can already meet the personalized needs of merchants, but the development of overseas supply chain models still takes time. In order to accelerate competition, leading logistics companies mainly rely on the natural "bundling" relationship of their own e-commerce companies to go overseas. Cainiao and JD Logistics are typical representatives. SHEIN, TEMU, etc. are expanding their service networks by leveraging third-party logistics.
At the same time, domestic logistics companies are also investing in automation to improve efficiency in specific links. Dai Bin also revealed to a reporter from Beijing Business Daily that in order to improve the efficiency of the supply chain, Sifang has further increased the research and development of automatic sorting equipment. The invested automatic intelligent palletizing system can realize single robotic arm, multi-palletizing, and multi-port for deformed bulging cartons. The channel's unmanned intelligent palletizing can increase the efficiency by 4 times compared to manual palletizing. It can also reduce the error rate of cartons placed on the wrong pallet during manual palletizing to 0.01%.
