618 is coming, analysis of 5 different cross-border e-commerce operation models

This article analyzes different cross-border e-commerce operation models of different species, mainly analyzing their advantages and disadvantages, and then puts forward relevant suggestions. Let’s take a look~

1. M2C Model

Representative companies : Tmall Global and Ymatou .

Overview: The two companies are of different sizes, but in essence both rely on merchants to enter the platform, transactions are conducted by merchants and consumers themselves, and payment and information communication are resolved through the platform.

advantage:

The model is light and the investment is low. Although there is no profit model, due to the special timeliness of cross-border transactions, the cash flow turnover period is very long and a lot of cash can be deposited on hand, so it doesn’t matter how to make money. What the platform actually needs to do is to increase transaction volume, regardless of whether it makes money or not.

JD.com has been making losses for 10 years, but it still went public. Those who think that e-commerce makes money by selling goods are laymen. The most important thing about the platform model is to maximize the essence of the Internet and reduce all intermediate links. This is the essence of e-commerce .

shortcoming:

1. No profit point;
2. Unable to control product quality;
3. The after-sales service is poor. After all, cross-border disputes are different from domestic ones. Once there is a problem, returns and exchanges are a very troublesome matter.

There is one thing that must be done when building a platform, and that is to solve the supply chain. Although the essence of e-commerce is to solve the supply chain, the platform must do it even more. Local e-commerce is so powerful because there are so many express logistics companies to solve the supply chain, but there is no mature cross-border e-commerce company.

Therefore, Tmall and Yangmatou will build their own warehouses and create logistics. Yangmatou even has its own forwarding company to solve supply chain problems. Indeed, the platform is meant to solve the supply chain problem.

Suggestion: The threshold for the platform model is set here. If anyone still wants to take the platform route, it is a bit late, unless your operations team is as good as Tmall and your supply chain solution has the operational capabilities of several major express delivery companies. Otherwise, it’s better not to touch it.

2. C2C Buyer Model

Representative companies: Global Shopping, Yangmatou Shopping App, Jiemi, etc.

Overview: There is no doubt that Yangmatou was the first shopping app, and all the apps that came after it copied it. Some of the apps even copied its interface exactly. Of course, we copied a lot at first, but later we started to develop our own direction. For example: Jie Mi and Hai Mi are taking the route of non-standardized products.

advantage:

Compared with merchants, the number of buyers is geometrically large. Before finding suitable merchants, the buyer model is the most suitable platform.

The SKU problem is easy to solve. In addition, buyers will also introduce customers from their own circles into the platform to help platform marketing . If you start early, it will be easier to seize the leading position. Taobao in its early days is the best example. If you start as a merchant from the beginning, you will definitely not be able to make it. Only by relying on Xiao C can you gradually transition to a merchant. Large cash flow accumulation.

shortcoming:

1. High management costs and huge after-sales customer complaints;
2. There are too many fakes;
3. If the backend functions are not done well, it is easy to lose buyers;
4. The timeliness of logistics cannot be controlled;
5. Homogeneous competition is too fierce, and there are too many duplicate products;
6. The interface display of pure apps is limited, which will cause a lot of redundant information. Whether it can effectively prevent the display of good product information is a question that needs to be considered;
7. No profit model.

3. B2C Model

Representative companies: JD.com, SF Express , and various traditional industries that have transformed into cross-border enterprises.

Overview: More and more giants are beginning to participate in the cross-border e-commerce industry, and the competition is extremely fierce. B2C is not something that small players can do. Funding, team, supply, logistics, no single link can be missing.

I strongly advise all cross-border e-commerce entrepreneurs who want to adopt this model to think carefully. If you are engaged in traditional import trade, you have to be careful. The operation of e-commerce is completely different from that of traditional enterprises. The above four things are indispensable in the cross-border B2C field.

If you are an e-commerce practitioner, unfortunately, if you lack one of the above four, you will still not be successful. Cross-border e-commerce is different from domestic e-commerce. There are too many problems to be solved. Not only do you have to do a good job in local e-commerce operations, you also have to solve logistics warehousing, sourcing, and require a huge and healthy cash flow, which are simply not something ordinary people can have.

advantage:

1. The purchase price is low, so it is easy to attract consumers with cheap prices, because the essence of cross-border shopping is "I want cheap and good products", and cheapness is a very important characteristic
2. The quality of goods is easy to control, after-sales service is not difficult, and the customer complaint rate is not high.
3. Due to unified logistics, it is relatively easier to control the timeliness, so that goods reach consumers in the shortest time possible.
4. With sufficient financial support, we can expand our product categories horizontally and enrich our product lines more easily.

shortcoming:

1. It's very expensive.
2. The profit is slim. Although there is a commodity spread, the personnel cost, logistics cost, and the funds for payment are too high, so being able to break even is already very strong. In the early stage, the company basically relied on burning money to grab the market.
3. The model is too heavy and the threshold is too high, so it may be the model for the future stage of cross-border e-commerce, but it is not suitable for now. It can only be done by mature e-commerce companies, and entrepreneurs should never touch B2C.

4. Sale Model

Representative companies: Vipshop and Kaola.com.

Overview: Kaola is an e-commerce project of NetEase (according to data, it currently has the top 1 market share). Boss Ding finally spotted an opportunity to enter the e-commerce field, observed their e-commerce model, and found that the entire entry point was very good.

Although NetEase is not a traditional e-commerce company, it has huge cash (earning money from games ), huge user traffic , and the background of a listed company. Whether in domestic customs clearance and logistics or in overseas procurement of goods, it is the most powerful company besides Tmall, JD.com, and Vipshop, and there is absolutely no problem for it to enter the first echelon.

There is a slight difference between Vipshop and Kaola. Kaola adopts a self-operated model, while Vipshop relies on suppliers to stock up on goods.

advantage:

1. The nature of a sale itself fits the characteristics of overseas shopping. The source of goods for overseas shopping itself is usually uncertain, which just fits the essence of a sale, which ends when all are sold out.
2. If you have money, you can get very low discounts and have enough profit margins.
3. The sale itself tends to increase the user return rate. There are new products every day, and freshness is the core of Internet marketing.
4. Due to the special timeliness of cross-border shopping, cross-border cash is basically collected first and then purchased. Special sales will maximize the use of cash flow, which is one of the core values ​​of the cross-border special sales model.

shortcoming:

1. As with B2C, no matter how much money you have, it is still not enough to face the world. Therefore, opening a platform is something that both sales events and B2C will do. The first phase of self-operation will only last for a short period of time, and the improvement of the supply chain is to provide access to services for subsequent channel dealers.
2. The entry barrier is low, anyone can try, and the competition is fierce.
3. Small players are easily squeezed out by giants.
4. The logistics costs are not low.
5. You need to have a strong corporate background or overseas sourcing background, otherwise you can't play.

5. Social and shopping guide

Representative companies: Xiaohongshu , What’s Worth Buying , Xiaotaojiang, etc.

Overview: I personally prefer small and beautiful companies, especially app startups. The essence of small and beautiful is market segmentation. But I believe that every entrepreneur is ambitious, otherwise why start a business? Even if you don’t have ambition, investors do have ambition and will whip you to grow.

The advantage of shopping guides is that they continue to use the word-of-mouth effect of social networking and the fan effect to strengthen the brand , and it is easy to gain loyal fans of their own among the crowd.

advantage:

1. The team is small, the model is light, and the investment is not much.
2. It has a brand effect, high user loyalty , and authority.
3. Good at hyping some products and creating hot-selling products.

shortcoming:

1. Because the model is very light, it is extremely dependent on external suppliers, and the supply chain needs to be outsourced, making it difficult to control quantity and timeliness.
2. Even if you find suitable suppliers and supply chain outsourcing companies, they are not replicable, the business model is not easily replicable, and it is not easy to scale up quickly.
3. No Chinese investor will wait for you to be small and beautiful; they all hope that you can reach the pinnacle of life overnight.
4. The entry threshold is not high and it is not easy to form barriers unless it is done early.

Suggestion: Small and beautiful is fine, but you have to be able to endure loneliness, and most of these apps may eventually move towards c2c.

The author of this article @keji compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!

Product promotion services: APP promotion services, advertising platform, Longyou Games