How does Pinduoduo help factories sell goods overseas?

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More than 70% of China’s false eyelash companies are concentrated in Pingdu County, Qingdao City, Shandong Province. In this county, half of the people are engaged in the production of false eyelashes. The raw materials such as mink hair, chemical fiber, human hair, etc. are in sufficient supply here, and the supporting processing facilities are also there; in Xiantao, Hubei, the people here work in the form of fellow villagers leading fellow villagers. Tens of thousands of people poured into the clothing city in Haizhu, Guangzhou; and in Zhili Town, Huzhou, Zhejiang, most families make a living day and night by producing children’s clothing.

Many of them are engaged in foreign trade business, but few of them can speak foreign languages. The usual practice is for brands to provide designs, rely on middlemen and agents to get orders, and only do the weakest OEM links. A product is often sold for only a few cents or a few cents. These factories are called “contract factories”. Most of them do not have their own brands, their profits are thin, and they only earn hard-earned money.

The capabilities of factories determine that it is difficult for them to do trade on their own. Traditional cross-border e-commerce has long links and high uncertainty. In addition, whether the industrial belt can understand the changing needs of overseas consumers, various challenges lie in front of merchants. .

With the shift of labor-intensive industries, the passive nature of the OEM business has become more and more prominent. It is more difficult for them to cope with changes in the general environment, and they can only make more compromises in aspects such as deposits, account terms, and goods. Three years after the epidemic, these pressures and risks have become even greater. Many foreign trade factories have disappeared due to changes, and many foundry factories are struggling to operate.

Chinese merchants who are quick to respond and tenacious in seeking change have noticed the new cross-border e-commerce platform. They are trying to participate in it, find a way for themselves, and find new digestion channels for China’s productivity.

Duoduo Cross-border has emerged rapidly since September last year, expanding overseas with extremely high speed and efficiency, which is impossible to ignore. It relies not only on Pinduoduo’s strong ability to “find goods and people”, but also on China’s large number of industrial merchants and their cost-effective products.

Cross-border e-commerce is not a new thing. SHEIN has been exploring optimizing the supply chain 10 years ago, and countless individual merchants are also trying to sell goods overseas through platforms such as Amazon and AliExpress. Pinduoduo has not had large-scale cross-border experience before, but TEMU now has more than 100 million users in the United States. Even sellers who have experienced the golden age of Chinese manufacturing exports are surprised by its energy and speed.

Opportunities for the new generation of foreign trade professionals

Liu Wenhai, who is engaged in cross-border e-commerce of hats in Yiwu, Zhejiang, was born in the 1990s and is a “second generation foreign trader”. In his hometown in Shandong, his parents’ factory can produce more than 70,000 hats a day, all of which are exported.

The “second generation” who are about the same age as him have generally experienced the e-commerce era. They either majored in e-commerce when they were studying, or they worked in e-commerce. Liu Wenhai worked as a waiter on an e-commerce platform before starting his own business. Seeing the huge transaction volume every day, he considered upgrading his family’s OEM business to a cross-border business.

There are many conceptual differences between the two generations in foreign trade. Liu Wenhai talked to his parents about the brand premium. What brand do they think ordinary people wear hats? Their English is only enough to say “OK”, and they are used to having dinner with middlemen. They use favors and small profits to retain opportunities, but a hat You can only earn 5 cents from selling, but Liu Wenhai knows that you can have more opportunities and profits by directly connecting with consumers.

He once tried to do cross-border e-commerce on AliExpress. At the beginning, he only had about a hundred orders. He started by purchasing goods from his own factory. The order quantity was so small that his parents did not even notice that there was a shortage of goods in the warehouse.

He has realized that cross-border e-commerce is difficult to do since then: the links are long and the uncertainty is high. There is only one shipment. For example, if you want to send goods from China to American customers, you must first send the goods to the freight forwarder. The freight forwarder then transports the goods to the port by sea, then transports them from the port to the Amazon warehouse, and then performs last-mile delivery from the warehouse. Affected by the epidemic in the past few years, overseas shipping capacity was often insufficient, and shipments from ports to warehouses to last-mile delivery were often stranded. Problems in any link would increase inventory costs. These costs will either be borne by the merchant, or they will be reflected in the price of the product.

Operational difficulty is also high. For different styles of products, you need to think of titles that can attract traffic. Their English is not very good, so you have to look them up word by word; the logistics calculation method on AliExpress is different from that in China. Calculated in terms of gram weight, the difference between a hat and the hat is 20 There are obvious price differences in the cities of Grammar and Grammar, and the shipping costs are different in each country. It often takes Liu Wenhai a week to make a set of shipping templates.

Similar to domestic e-commerce promotion, merchants must also learn to place advertisements on the platform, constantly monitor keywords, set budgets, etc. This requires merchants not only to have factory production capacity, but also to have foreign trade experience, operational capabilities, and advertising skills.

He has tried Tmall, AliExpress, Amazon and other platforms, but found them all quite complicated. His day is divided into several fragments: thinking of titles for products, looking up English words, setting up logistics freight templates, focusing on promotions, etc. One day he was very tired and did not pay close attention. As a result, the operator set the price of 5 US dollars to 0.5 US dollars. This small mistake caused him to lose tens of thousands of dollars in one fell swoop.

On Amazon, merchants often need to design more than a dozen freight templates to deal with orders with different needs, including product prices, different freight rates for sea and air freight, port transportation and last-mile delivery. There are many variables, which requires merchants to accurately calculate Profit, but the reality is that merchants often experience flat profits or small losses due to errors in freight calculations.

Liu Wenhai’s troubles and lessons are representative.

Lang Xiaoming, a merchant who exports home appliances and personal care products, also feels the difficulty of cross-border e-commerce. What troubles him the most is logistics. He once sold goods on Amazon. The goods were mainly shipped to the United States via Matson ships. However, when unloading the goods at the port, they were often stranded due to lack of transportation capacity. The goods that were supposed to reach consumers in one month would wait until they were put on hold at the warehouse and then arrive at the destination. It takes 2~3 months to reach consumers. To avoid stockouts, buffer stocks must be designed, which increases costs and makes it difficult to estimate profits. During the epidemic, goods were often stranded in ports or Amazon warehouses due to insufficient shipping capacity. More buffer stocks needed to be set up, and costs suddenly increased.

Coupled with marketing expenses, “all costs will be reflected in the selling price, which will weaken the competitiveness of our products.” He said.


Inside Lang Xiaoming’s razor factory

Lower the threshold for cross-border e-commerce to the lowest level

Pinduoduo’s first step in lowering the threshold for cross-border e-commerce business is to make shipping simple.

On the supplier side, the last process for OEMs to do cross-border e-commerce is to send the goods to Pinduoduo’s warehouse in Guangdong. There is no need to worry about all subsequent processes.

Just the delivery step saves merchants a huge amount of energy, allowing them to focus on improving production capacity and controlling quality. This is also the reason why many businesses are willing to try Duoduo cross-border.

Wang Guoqing, a Qingdao native, runs a false eyelash OEM factory. The trendy nature of the product determines that the life cycle of a product is short, usually only about 45-60 days. Therefore, merchants need to constantly develop new styles if they want to find popular products and sell products.

Similarly, most of Wang Guoqing’s energy was previously spent on the cumbersome operations of cross-border e-commerce. At that time, his monthly withdrawal limit was 5 to 8. With one-stop operation provided by Duoduo Cross-border, he is able to open 30 funds every month, which gives him a greater chance of winning the hot money.


In Pingdu, Qingdao, many local women make false eyelashes in factories during off-peak hours.

Duoduo’s cross-border one-stop operation is not only the logistics link, but also includes subsequent operations, customer service and after-sales service. In the front-end customer acquisition process, Pinduoduo, which has always been good at “finding people for goods”, uses a large number of buyers to directly feedback to the headquarters what kind of merchants and products are needed. Being invited to settle in means that there must be demand for this category on Duoduo Cross-border, and merchants do not have to worry about lack of sales.

In the long link of cross-border e-commerce, Duoduo Cross-border draws the line of division of labor further forward, or in other words, the middle traders and service providers who share the interests of merchants at all levels are eliminated. Let the factory focus on what it is good at and leave the rest to the platform. In the part of the platform, deep integration capabilities are used to improve efficiency.

When Duoduo launched cross-border online last year, it was the moment when traditional foreign trade was under greatest pressure from the impact of the epidemic. The emergence of the epidemic cut off the offline customer acquisition channels that traditional foreign trade relied on, and the entire foreign trade market was sluggish and chaotic. Liu Wenhai recalled that a foreign customer who paid a 30% deposit could not even be found, and all the prepared goods were piled in the warehouse.


The warehouse of a clothing manufacturer on Duoduo Cross-border

The emergence of Duoduo Cross-border has given industry leaders like Liu Wenhai an opportunity to get out of trouble. Because Pinduoduo can accurately determine which categories are in demand, after the inventory is put on the shelves, orders that were originally unsalable in traditional foreign trade were quickly taken over by Duoduo across the border.

From being unable to get orders during the epidemic to settling in Duoduo Cross-border, Liu Wenhai’s hats sold an average of more than 10,000 orders per day on Pinduoduo. 90% of his factory’s production capacity is currently absorbed by cross-border e-commerce; Wang Guoqing’s factory It produces 20,000 units of false eyelashes every day, and sends about 10,000 units to Duoduo’s cross-border warehouse in Guangdong every day.

The one-stop service provided by Duoduo Cross-border means that merchants do not need to worry about front-end customer acquisition, nor do they need to deal with complex logistics, operations, investment, and after-sales. At this stage, there is no entry fee or commission. The only thing merchants need to do is What we need to do is to prepare the goods according to the stocking list, produce them efficiently, and then uniformly send them to Duoduo’s cross-border warehouses.

Merchants in different categories of industries encounter vastly different problems in cross-border e-commerce. When the platform unifies logistics, warehousing, terminal distribution, online marketing, after-sales and other service links, merchants are freed from these links.

Lang Xiaoming mainly produces razors and home appliances and personal care products. Logistics problems used to be his biggest headache. In the past, it took a month or more for razors to reach U.S. consumers, but now in the U.S. market, Duoduo Cross-Border has enabled customers to receive packages within 15 days and free returns within 90 days.

As for Wang Guoqing, who makes false eyelashes, the goods are light, small, and the freight is cheap, so it is not easy to accumulate inventory. However, he needs to do a good job in advertising on Amazon and win by quantity. A box of false eyelashes sells for US$9.9 on Amazon, and the cost of a single click on Amazon is about US$1. It often loses money in the early stage, and can only rely on refined advertising traffic to improve its ranking and sell more goods. Now, merchants can make money faster and with greater certainty whenever they have the chance to be selected.

On the Duoduo cross-border platform, what benefits merchants the most is not only the cross-border costs saved by the fully managed model, but also the direct sales brought by the explosive order volume. Merchants can make money faster and with greater certainty by taking advantage of Duoduo’s cross-border bonus period.

Evolving cross-border e-commerce

Duoduo Cross-border has inherited some of the styles of Pinduoduo’s main website, such as precise price control, good at data analysis, and fast execution. In every aspect, Duoduo Cross-border strives to make operations as refined as possible.

In terms of front-end product selection, Duoduo Cross-border relies on a large number of buyers on the platform. Buyers first screen the products they need on the platform to ensure that once they are put on the shelves, the products can be quickly shipped. On the other hand, they do data analysis, paying attention to the number of product views, shopping cart additions, click-through rates, etc., and then feed the results directly to merchants, so that merchants can quickly keep up with trends and make adjustments.


Duoduo cross-border jewelry merchants

Wang Guoqing sometimes asks a buyer to place a stocking order. He is worried that there is not enough and wants to prepare more, but the buyer will dissuade him from having inventory pressure. This makes Wang Guoqing, who has long helped foreign customers bear inventory pressure and pay for goods first, feel very good. “They will think about us.” Wang Guoqing said.

On important shopping days such as Black Friday, Christmas, and Spring Festival, buyers will also sort out the data in advance, analyze the categories needed overseas, and notify merchants in advance so that they can stock up quickly to avoid misjudgment of peak profit seasons.

This order return process seems simple but is actually complicated. For example, around Christmas every year, it is an important marketing node for lighters. Since the shipping cycle takes as long as one or two months, Lang Xiaoming will stock up more goods because he is afraid of running out of stock. But once The time estimate was wrong. The goods were not sold out at the end of Christmas, and it would be difficult to sell them in the following seasons. According to Amazon’s platform rules, the storage fees are borne by the merchants, and they can only be sold through discounts or more advertising investment.

Determining when to sell which products, determining the stocking time, how to ensure logistics timeliness, how to ensure that the goods on the shelves can be sold well… This series of links that were originally difficult for many merchants to control are all solved by the Duoduo cross-border platform.

The smooth solution to these problems mainly consists of three parts: buyers, quality inspection and operations assistants.

After merchants submit product information in the background, buyers need to analyze the product supply price, market competition, and whether the product advantages are in line with the platform’s direction, and then apply for a stocking order after reviewing all aspects.

When the goods are shipped to the warehouse in Guangdong, the next step of the process will be strict quality inspection by quality inspection personnel; after being put on the shelves, the operation staff will conduct testing according to different countries and different products. Only after the data feedback is feasible, the merchant will be notified to return the order for replenishment. goods.

Because the information fed back by buyers is quite accurate, many merchants have experienced the experience of “hot sales as soon as they go online”. During the Chinese New Year this year, clothing merchants represented by Foshan, Guangdong will receive specific style information about overseas Tang suits and Hanfu. One of the factories immediately had an average daily sales of 1,000 pieces after putting them on the shelves.

Pinduoduo provides merchants with the ultimate one-stop service experience. For Duoduo Cross-border, it is directly oriented to consumers. By controlling products, it understands consumer behavior, digitizes the behavior, and then in turn controls the source of domestic goods to ensure quality and improve the consumer experience.

Wang Guoqing lamented, “If you are a novice who wants to do cross-border e-commerce, Duoduo Cross-border is the most suitable platform at this stage. Wanting to be an Amazon requires heavy capital, which is not very suitable for novices.”

For merchants in the industrial belt, being selected by Duoduo Cross-border in the early stages is quite lucky, which makes them full of hope. After Liu Wenhai and Wang Guoqing settled in Duoduo Cross-border, they both talked about trying to build a brand in the future.

Liu Wenhai, who has experienced several platforms, knows that if you just sell white-label products, whether on Duoduo Cross-border or other platforms, you will eventually fall into a price quagmire. Each other will provide similar currency, and eventually it will become “you”. If you sell it for 8 yuan, he will sell it for 7 yuan,” Liu Wenhai said, “and with a brand, consumers can recognize you at a glance.”

Wang Guoqing once OEMed for the American brand KISS. In Qingdao alone, there are about 30 OEMs for this brand. He saw with his own eyes that his OEM products were sold for 5 to 6 times the supply price through brand support, and were selling thousands of orders a day on Amazon. Compared to their own similar products, which could only sell a few hundred a day. one. He believes that he must have his own brand.

Wang Guoqing’s family has been producing false eyelashes in Qingdao for more than ten years, and he is very confident in his products. Only after Duoduo Cross-border used one-stop services to help them shorten the cross-border e-commerce link, allowing them to produce better and have the ability to trade, did he have the confidence and opportunity to explore branding.

From the current point of view, the window period will continue to exist with Duoduo’s cross-border expansion. In less than a year, Duoduo Cross-border has opened up markets in the United States, Canada, Australia, New Zealand and several major European countries.

Pinduoduo leverages its own traffic and full hosting model to firmly attract capable foreign trade factories to join its global expansion, greatly reducing the huge waste of previous intermediate links; as a platform, it unifies logistics, warehousing, terminal distribution, and line operations. It also helps merchants save money and time costs by improving marketing, after-sales and other service links, allowing them to provide better products and enhance the overall image of Chinese factories.

By unleashing various potentials, Duoduo Cross-border can present a good impression to overseas consumers – a platform with the most cost-effectiveness and the fastest update.

Source of title picture: Visual China

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