This article is reproduced by authorization from: Beluga goes to sea
Author: Zhiting
edit : Yin Guanxiao
Hanlin Association is an investor community founded by a group of like-minded overseas investors. People will meet occasionally to discuss some hot topics and exchange some industry observations. The content of this article is derived from the exchange and discussion of the first phase of the Hanlin Club investors' meeting, and is exclusively recorded and reported by the head media of the cross-border outbound industry, Moby Dick Outbound.
Investors participating in this discussion include: Sun Jialiang, Vice President of Leading Fund, Tao Yangfeng, Executive Director of Zero One Venture Capital, Luo Wei, Head of Cross border Investment of Yingdong Capital, Xiao Xiao, Vice President of Qingrui Venture Capital, Vivian, Vice President of Qingbo Capital, Chen Bo, Chief Investment Officer of Fengyuan Capital, Lance, Cross border Investor of Kangxu Investment, and thousands of cross-border investors of Yilian Capital And Lily, a half way entrepreneur.
In the first half of the seminar, everyone focused on the analysis and discussion of the overall situation and market demand of intelligent hardware, AI escort and other tracks that VC investors have focused on since this year. This paper focuses on the analysis and discussion, In the current environment, what dividends may exist in different consumption modes.
At the request of the guests, the identity of the speaker corresponding to the specific remarks in this article is replaced by A, B, C, D... Some companies and products mentioned in the discussion are also represented by letters. For the convenience of reading, we have simplified and edited the speeches of investors.
01 Who ate the legendary "flow bonus"?
Investor A:
First of all, from the Amazon platform itself, its stock is growing in double. In addition, Amazon officials told me that, Most categories on the platform grow well ， Even better than they imagined. From my personal perspective, I recently updated some Amazon websites Large consumer goods, such as leading companies in consumer electronics and small household appliances , found that in almost every category, As long as the stage of round B and round C is achieved, this year's growth is very good 。 So I was thinking, is there really no dividend online? Or is the 28/20 effect more obvious, with a better head and a worse tail?
Investor B:
Now? The public opinion about "whether there is any flow dividend overseas" is mainly from the perspective of a start-up team 。 For example, in the past, when Amazon launched some categories and went to Google to buy quantities, there might be a large number of keywords to choose from, and the traffic price was relatively cheap.
But now we can do some more Red Sea categories. If we want to compete with the top sellers, it is really difficult to have advantages. We also went to pull The launching efficiency and price of social media platforms such as Tiaoyin and INS are found to be calculated comprehensively There is really no flow depression. This may also explain why the categories we see are more and more subdivided, such as coffee machines and intelligent musical instruments. Because at least for a new enterprise, the ROI is relatively high to launch these categories.
Under this premise, can some top brands come out? Still, Can we only use a particularly strong product force to pry the flow? If we only sell some common categories, isn't it more difficult? Isn't the logic that we used to invest in big sales untenable? Anyway, as far as I'm concerned, it seems to be true.
Investor C:
Let's compare brand C and brand H, both of which are sellers in the cross-border clothing category. I think the biggest difference between the two is that one is struggling to stand independently, and the other is working on various channels, including social media.
If there is an online dividend deposit, I think it must still exist. After all, the online penetration rate continues to increase. The problem now is that this wave of bonuses has almost been taken away by giants. As a single player, it is difficult to compete with giants for traffic through independent stations. But if we say, If you can achieve the goal in this channel, I think you can still get some dividends.
On the one hand, it is difficult to do independent stations now, and there is no traffic dividend. On the other hand, I heard that Yama said that various categories have grown well, and TikTok said that the transformation is also OK. I think these two aspects are not contradictory. The key depends on how you choose to play as an entrepreneur.
Investor D:
If the risk of TikTok being banked is not considered, the dividend of this wave in the United States is actually quite large. Then TikTok's traffic also overflows to Amazon and other channel platforms.
As far as the Amazon platform is concerned, the situation of each seller may indeed be different. If the seller has done a relatively good job in the past, not many SKUs, product updates are not very fast, and they have already accounted for a relatively high share in the category, then there may be no special growth. Because many of Amazon's sub categories are really not very large, and there are not many single categories that exceed one billion dollars.
Investor E:
I have friends who are TikTok. We are relatively cautious in stocking up on TK. Generally, we stock up for three months. Many TK sellers When it comes to spare parts, it will cooperate with several top sellers of Amazon category , which is a bit similar to the TikTok distribution of Amazon sellers. In fact, they did not receive the largest overflow dividend of TK.
Investor F:
My point of view at the beginning was very similar to that of Investor A. That is to say, from last year to now, Amazon's top sellers have had a good time. For online traffic dividend, first of all Amazon is actually clearing the middle and tail. As investor E said, many manufacturers swarmed into the market, but now they have calmed down. At least in some categories, they found that brand sellers who could not compete with the head had quit. On the other hand, Amazon's e-commerce penetration rate still has room for growth.
There are several problems with the TikTok platform. The first is that TikTok in the United States is still in the fast hand stage, that is, users go to have fun. There are few professionally produced videos, and institutions such as MCN are also very loose. It has not yet reached the stage of dithering. Some products can be sold on TK, but their life cycle is really short. Some sellers have found some ways, mainly in the categories that are suitable for display and live broadcast, such as the automatic tracking camera of security equipment brand Wyze, which is very expressive. When I painted TikTok, I saw that brothers and women of all ethnic groups were pushing this product. But there are not many such categories, There is no collective outbreak. Wyze's sales in the TK channel have not exceeded the peak since November last year.
Another problem is that the supply of goods cannot keep up. Since TK is closely pursued, it is not dare to open cross-border stores, and in terms of performance rules, cross-border goods are also directly blocked. It requires that you have a local waybill in North America the next day, This is Must stock locally ， It is a great test for everyone to select and stock ， So there won't be too many goods coming in. It's really a smart way to cooperate with Amazon, but this group of people who play TK may not earn the most money. Instead, it is possible for sellers with local stock on Amazon to come to TK as a new distribution channel I think TK is also welcome because of its good brand, quality and warehouse stock. Therefore, the head seller of Amazon can get a bonus from TK.
Another piece of traffic dividend is online popularity. Several companies in Shenzhen do distribution software platforms. Finally, it is found that the largest part of their order increment returns to online popularity channels.
In other offline distribution channels, there are not many successful teams, but some of them have started. For example, there are a number of Chinese supermarket distributors. It is said that the profit margin is very high, which is a good business. Current domestic sellers and brands are thinking about how to find offline channels in North America, The only way for the Chinese branding in North America is offline, building and after-sales, including the human resources team... This whole set of products actually comes down in one continuous line, and is the next stage of going to sea - the brand stage. If a group of people can organize this event, I think it will be a good opportunity, but when and who can come out is not certain.
Investor G:
Let me add a case about the relationship between TikTok and Amazon. I find The category that has benefited most from Amazon and TikTok traffic dividends is large furniture. Because of the high customer price and expensive storage of furniture, we need to invest a lot in the United States to stock up in the early stage. As far as I know, there are several leading sellers with a size of billions who have long recognized the dividends TikTok brings. They have ready-made goods in the United States, which is almost the only commodity supply on TikTok, so they have made a lot of money through live broadcast. I just talked to a seller some time ago. He has about two or three billion revenue a year. He told me The profit in TikTok last month is comparable to his profit in the past year , which is quite shocking.
Investor H:
I visited an executive of Amazon in February, and he shared with me that the overall growth rate of Amazon in January and February this year was very good. Among them, The fastest growing market in the United States Since the war between Russia and Ukraine, the proportion of the European market has declined, but from an internal perspective, The industry barrier and threshold for the European market are higher than those in the United States, and the seller's profits are also better than those in the United States.
In addition, from the perspective of Amazon, Whether SHEIN, TikTok or TEMU, they may have some influence on Amazon in clothing category, but from their overall market, this influence is very limited, Not enough to pose a competitive threat to Amazon. The sellers who do large items will not be affected. He thinks that what may bring challenges to Amazon in the future is that these platforms do their own business. It is to directly ship American goods to TikTok in the United States, which is much better than the current cross-border direct delivery process and experience.
Investor I:
I added that the revenue of Amazon's platform increased in 23 years compared with 22 years ago, but I talked to one of their business managers at that time. He said that if I looked at the data of some old sellers, the performance actually fell year on year. So, The competition between Amazon's middle waist and tail is fierce 。
From the perspective of traffic dividend, we need to start a link in 2015, and the cost of RMB 100000 to RMB 200000 can fully meet the top 50 of BSR. However, at this time point from 2021 to 2023, many Shenzhen sellers will spend 2 million yuan on a link. From this perspective, you may think that Amazon's traffic dividend is not enough.
From another perspective, Whether TEMU, SHEIN or TikTok, cross-border outbound traffic differentiation has been relatively large, which requires much improvement in the ability of cross-border e-commerce sellers. Many old players don't adapt. They will find that the original playing method may not be able to maintain the business scale, which will be more difficult in the future. However, if we can overcome this threshold, there may be many growth opportunities and some good enterprises may emerge.
02 Overseas regions this year What are the unique opportunities in the market?
Investor H:
I began to pay attention to Latin America last year. From the overall data, The markets in Mexico and Brazil are growing rapidly. Personally, Brazil seems to be very suitable for platform players. For example, SHEIN has successfully tested the three-way platform. Shopee has retained its site in Brazil, and has done a good job in Brazil. TEMU should also have a large number of units in Brazil. Last year, Polar Rabbit transferred to TEMU in Brazil, which also indicates that the single volume of TEMU in Brazil should be OK. In addition, I am also concerned The single volume of cross-border logistics in Latin America has almost doubled every year for two consecutive years ； Mexico's cross-border order volume doubles every two years on average. In addition, some of China's supply chains may be transferred to Mexico to build factories, which has led to the recent rise in land prices and labor costs in Mexico.
The other region is Africa. This year, with the urbanization process in Africa, I think there may be a wave of business opportunities for small household appliances. Moreover, in some African countries, it is relatively simple to set up a local factory or office and sell the goods directly to the local dealer.
Investor A:
Let me share the regional market opportunities I see. first, stay In the Middle East, there are two categories that are very profitable, one is * * *, and the other is new energy vehicles. We have seen a project, which is an asset light operation platform, selling second-hand luxury cars or new energy vehicles from the United States to the Middle East. It can be operated about five to six times a year, and the gross profit can reach about 20% each time, so the net profit is very good.
In addition, Japan is also a better market than we expected. We have invested in some small household appliances and some Saas like products in Japan. We found that in Japan, products in software oriented or painting oriented subdivisions, such as notes, are doing very well.
Investor B:
I overheard a project to make outdoor flashlights some time ago. Some of their businesses are in the Latin American market. Last year, the e-commerce sales are said to be more than 1 billion, and the net profit is about 10%. They sell electronic products, handbags, outdoor products, and some household products. Because the logistics, performance threshold and barriers in Latin America are relatively high, they also have some overseas warehouse supporting capabilities, and also have their own logistics companies, with a good overall growth.
Investor C:
I'm still Amway Let's take a look at various asset light and flow type projects. There are still opportunities for many products , also very profitable, It is more in line with the current investment era. For example, if the overseas associations can invest in the worry free media in a certain regional market, I think it is also very good.
Investor D:
From the perspective of the efficiency of making money and selling goods in kind, the European and American markets are definitely better. Everyone has made so many big sales that the main battlefield is not in Europe and the United States? On the other hand, in terms of the absolute value of the market size, the increase of these big sales in the European and American markets may be larger than that in most emerging markets. After all, VC still needs to consider the size of the project. If you look at it as a bystander, you may think that many companies are doing well; But if you change your identity, when you are a shareholder of these companies, you may not think so.
Investor F:
We went to Japan with LP to acquire some cheaper assets and then integrated them. There are many old enterprises in Japan and South Korea with good quality, good customer base and international brand reputation. Then some industries of our LP happen to intersect with some traditional industries in Japan, so we went to acquire some of them. Of course, this is not the perspective of VC investors.
(Source of cover: Tuchong Creativity)
(Source: friends of Hugo. com)
The above content only represents the author's own opinion, not Hugo's cross-border position! If you have any questions about the content, copyright or other issues of the work, please contact Hugo cross-border within 30 days after the publication of the work.
