Since the beginning of this year, a number of foreign trade factories have declared bankruptcy and ceased production due to arrears in the payment of goods, resulting in a broken capital chain, a sharp drop in orders, and the inability to afford operating costs. A piece of announcement, a few hundred words, announced the end of the operation, which is very embarrassing. They defeated their opponents, but lost to the times. At the same time, they also gave a warning to the foreign trade enterprises that "survived". If they want to "live long" and "live well", they must get out of their comfort zone and keep up with the pace of the times.
Difficulties at home and abroad, foreign trade enterprises "go overseas again"
Since joining the WTO, China's supply chain has relied on OEMs to become the world's factory to form a mature manufacturing system. Many foreign trade enterprises rely on price advantages to receive orders softly and make a lot of money. That is the era of "laying and earning" for foreign trade enterprises.
But today, environmental changes have made traditional foreign trade companies "distressed both internally and externally". On the one hand, as labor-intensive industries gradually shifted to emerging markets such as Southeast Asia and South Asia, and offline customer expansion was hindered, corporate orders fell sharply. On the other hand, affected by multiple factors such as repeated epidemics, supply chain crises, and global inflation, companies are also facing the dilemma of surging costs and diluting profit margins. The bigger pain point is that companies generally "strong manufacturing and weak marketing" and lack bargaining power in the current competition.
Under such circumstances, transformation is particularly necessary and urgent. In the long run, traditional foreign trade faces three major trends of "de-intermediation, onlineization and fragmentation". On the other hand, the rapid development of cross-border e-commerce is becoming a new driving force for the transformation and upgrading of foreign trade. Therefore, going online and embracing digitalization have become a new way out for traditional foreign trade companies.
This is where the radical transformation begins. More and more traditional foreign trade companies are "going overseas" through cross-border e-commerce to start B2C and B2 overseas small business, such as Amazon. However, compared with traditional foreign trade, cross-border e-commerce has many differences in procurement, product selection, and operation. Although some companies have successfully overcome difficulties and achieved transformation, most companies have repeatedly encountered "stumbling blocks" in the process of transformation, and the transformation effect has been slow.
When traditional foreign trade companies transform into Amazon
Hugo Cross-border learned that most traditional foreign trade companies will take Amazon as their first stop when they are transforming into cross-border e-commerce. But they are accustomed to the traditional B2B model, and when they really face the consumers in front of the screen, they seem a little helpless.
In fact, these factories have accumulated a good foundation for transformation in the process of "evolution" in the past 20 to 30 years. There is even a saying in the industry, "Only customers can't think of it, and there is nothing that Chinese factories can't make." But this is their advantage, and it is also a constraint when they transform into cross-border e-commerce.
For a long time, traditional foreign trade companies have dealt with overseas importers, and the user thinking is slightly lacking. They are not good at understanding consumers, and it is often difficult to grasp consumer preferences when selecting products, and subsequent marketing and conversion will naturally be hindered.
"Old ideas" are difficult to break for a while, and on the platform side, Amazon's new policy is frequent and changing rapidly. There are also great differences in compliance matters between different sites. Without a lack of in-depth understanding of the policy, it is easy to step on the pit, make a wrong step, and make a wrong step.
In fact, the occurrence of these problems is not unrelated to the deviation of enterprises' understanding of cross-border e-commerce and the Amazon platform. First of all, cross-border e-commerce orders are in small batches and multiple batches, and it is difficult for many business owners to escape from fixed thinking; Advertising, consumer experience, and other full-service services, many companies understand production and sales, but do not understand online operations. Furthermore, the needs of consumers are becoming more and more diversified. They not only need high cost performance, but also high-quality and personalized products, which is also a big test for the product power of enterprises.
How to build competitiveness for foreign trade enterprises "going overseas again"?
"Transformation, fear of death! If you don't transform, wait for death?!" The transformation of traditional foreign trade factories into cross-border e-commerce is the general trend, but how to take this transformation road? In general, companies need to focus on the following two aspects to build competitiveness.
First of all, foster strengths and avoid weaknesses, and forge product strength. As mentioned above, strong intellectual manufacturing strength is the "confidence" for the transformation of these traditional foreign trade enterprises. Although channels are changing, the essence of business competition remains the same. Continuous innovation and creating differentiated products that meet demand is the key. For the mining of consumer demand, it can be completed with the help of a large number of user research and data analysis.
Second, clear positioning and enhance brand power. Now that cross-border e-commerce has entered the golden age of brand going overseas, building a brand is the general trend, and it is also the only way for traditional foreign trade companies to get rid of being "stuck" by foreign companies and improve their bargaining power. Building a brand is also conducive to supporting enterprises to attract more talents, thereby feeding back R&D and forming a virtuous circle.
Of course, the improvement of product power and brand power is a long-term process, which requires a professional talent team to guarantee. However, the lack of talents is also a major pain point faced by traditional foreign trade enterprises in their transformation. Cross-border e-commerce has complex links and a wide range of marketing. Professional operators are needed in various links such as marketing, logistics, warehousing, and after-sales. Due to the difficulty of finding talents, some companies have to temporarily set up online teams, and often rely on their own exploration in the process of business promotion, spending a lot of time and trial and error costs with little success.