Amazon's entry into Tmall will affect overseas shopping landscape

Last night, during the Lantern Festival, Amazon China's "Amazon Official Flagship Store" appeared in Tmall stores. Amazon China's "import direct purchase business" has started cooperation with Tmall. According to media reports, the "import direct purchase" business that has officially settled in Tmall will mainly focus on food, women's shoes, toys, maternal and child care, and kitchenware. It is true that there is no eternal enemy in the mall, and the two heavyweight e-commerce platforms have finally turned from confrontation to cooperation.

Why do we only cooperate on direct import purchase business?

Some friends may feel strange about the cooperation between the two parties. Since they have cooperated, why not limit it to the direct import business instead of all categories? Tie Ge is not surprised. He thinks this is the important point of this cooperation. Taking cross-border trade as the initial cooperation is extremely beneficial to both parties.

Alibaba officially launched its cross-border e-commerce business on November 11 last year, and representative products from key countries and regions can be purchased on Tmall. However, Tiege believes that Tmall’s cross-border business has only been in operation for a few months, and the entire ecosystem is not yet perfect. For example, currently Tmall International products are basically imported into China through overseas shopping, and most products take half a month to arrive.

Direct import purchase means that the merchant first imports the goods into the country, and the goods are shipped from the domestic warehouse when the user places an order. The user does not need to submit the ID card information required for customs declaration when purchasing, which is fast and convenient. However, due to inventory cost issues, direct import purchases are often concentrated in popular products such as food, maternal and child products.

Therefore, the entry of Amazon will improve the ecosystem of Alibaba's cross-border e-commerce, forming a pattern in which essential goods are purchased on Amazon, while non-essential goods are purchased overseas.

Which party benefits more from the cooperation?

Regarding the profit from this cooperation, Tie Ge believes that both parties have obtained the benefits they expected, and there is no difference in size.

Tmall has not only enriched its product categories with the entry of Amazon, but also brought in a new model. Since the import direct purchase model requires high operational capabilities of enterprises, there are very few enterprises that can afford large-scale import direct purchase on a platform with such high shipment volume as Tmall, so Amazon’s entry into Tmall is great news for Tmall.

More importantly, Tmall's cross-border e-commerce has just been launched and the team does not have much experience in this area. By cooperating with established cross-border e-commerce platforms, we can learn about Amazon's global supply chain management model, which is the most valuable asset.

Amazon, on the other hand, has gained the most important traffic and users in e-commerce. Although Amazon China has been working in China for a long time, its market share has not increased much due to cultural differences and other issues. The cooperation with Tmall will quickly turn Tmall users into the first batch of experience users of the Amazon brand, which is undoubtedly what Amazon needs most at the moment.

What is even more profound is that after years of operation, Tmall has accumulated the largest amount of e-commerce big data in China. If Amazon can use user data to analyze and study the preferences of Chinese consumers, this will be very necessary for Amazon, which has been confused in its transformation in China.

It is not difficult to see from the above that this cooperation between the two parties is a win-win cooperation. Alibaba has accelerated its internationalization process, while Amazon has accelerated its localization process in China.

Overseas shopping websites may face disaster

Tie Ge believes that Amazon’s entry into Tmall will have a huge impact on the cross-border e-commerce sector, and some overseas shopping websites may face a devastating disaster.

The reason why overseas shopping vertical websites can be so popular in front of the powerful Tmall is mainly because the massive amount of goods for overseas shopping makes it difficult for Tmall to complete the investment work in a short period of time. On the one hand, Tmall has to find merchants to settle in, and on the other hand, it has to strictly review their qualifications. This cannot be done in just a few months. As a result, some vertical overseas shopping websites have grown and developed.

Once Amazon settles in, products such as maternal and child products, food, toys, and kitchenware will be immediately enriched, and with the endorsement of Amazon's strong brand, Tmall's brand awareness will be greatly increased.

Tmall can focus its main efforts on the development and investment promotion of other non-essential products, accelerating the process of product enrichment.

In time, when Tmall's cross-border e-commerce products are so abundant that they are on par with other vertical overseas shopping websites, and due to Tmall's brand advantage, users will naturally abandon overseas shopping websites. At this point, overseas shopping websites will have completed their historical mission.

In fact, Tie Ge was a little surprised by this cooperation, after all, it is quite difficult for companies of this scale to merge, and the cooperation between the two parties has lasted for nearly two and a half years since the intention to cooperate in 2013. However, the impact on the entire Chinese e-commerce ecosystem is huge. If Dangdang, Gome, and Vancl entered Tmall mainly for traffic, in the future, it may extend from simple traffic cooperation to e-commerce ecosystem cooperation.

Maybe one day JD.com will also enter Tmall.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.