Original link: https://www.latepost.com/news/dj_detail?id=1377
SHEIN pilots Taobao model in Brazil
“LatePost” exclusively learned that China’s largest cross-border fast fashion platform SHEIN is piloting a platform model in Brazil: merchants directly open stores on SHEIN, and are responsible for operations and logistics, just like Taobao. Previously, SHEIN designed and purchased products by itself.
A person close to SHEIN said that the decision on the pilot will be made in 2021 and will be officially launched in March this year.
Since last year, SHEIN has been trying to attract investment on a platform, mainly focusing on the OBM (Original Brand Manufacturer) model, mainly for domestic and overseas local brand suppliers in China and overseas. It has a supply chain, independent operation capabilities and a clear brand tone.
After SHEIN implemented the store model in Brazil this year, the store name will be displayed in the corner of the product map, and the store name can be viewed at the bottom right of the product details page, similar to the product map page of Taobao merchants.
A cross-border e-commerce practitioner said that at present, SHEIN is in the global market, and the third-party platform revenue model is more inclined to the OBM model, but under this model, brand suppliers only supply goods, and the platform is still responsible for logistics and operations. A local logistics service provider in Brazil revealed that SHEIN Brazil’s B-to-B (local merchant delivery mode) business has about 40,000-50,000 orders per day.
“SHEIN’s trial of the Taobao model in Brazil is reasonable. To pilot a third-party platform model, the larger the market size, the better the advantage. Smaller markets are more suitable for piloting SHEIN’s buyout model, such as IfYooou (ByteDance piloted in the European market) The fast fashion independent station). The Brazilian market is large and the profit margin is limited compared to the US market. Shopee has also proved that there are enough local third-party sellers in Brazil.” Another cross-border e-commerce practitioner told LatePost “Analyze the motivation of SHEIN to pilot Taobao model in Brazil.
“LatePost” learned that at the end of last year, Shopee’s local shipments in Brazil accounted for 85% of its total orders in Brazil. One reason is that cross-border business in the Brazilian market is limited by high tariffs.
The sales of SHEIN in the United States are comparable to those in Europe, and the sum of the two accounts for about 50% of the total sales of SHEIN; in Latin America, the shares of Mexico and Brazil are close, accounting for about 3%. The unit price of SHEIN in the Brazilian market is about 30 US dollars. From the perspective of growth rate, Brazil will be one of the next key markets for SHEIN.
The move also accelerated other companies’ business moves. “LatePost” previously reported that TikTok e-commerce has advanced the time to enter the Brazilian market – from the second half of 2023 to the first half of the year, an important reason for the adjustment of priorities is to see SHEIN’s active expansion in the country internally.
SHEIN is still trying more new models. This year, SHEIN also opened the world’s first long-term offline store in the Shinsaibashi business district of Tokyo, Japan. The store does not sell products directly, but mainly for consumers to try on and check the products. If consumers want to buy, they need to scan the QR code online. Place an order, and the store will also host fashion shows and designer events in the future.
Interestingly, the location of SHEIN’s offline store originally settled in Uniqlo. SHEIN has also opened offline pop-up stores in Brazil and other places before. In the future, SHEIN may explore the possibility of more offline scenarios.
According to market news earlier this month, SHEIN’s revenue is expected to reach $24 billion this year, and its revenue has approached Zara’s $27.6 billion in the previous fiscal year. In 2021, SHEIN’s GMV (transaction volume) will reach 30 billion US dollars, of which the third-party platform business GMV accounts for 24%. “Late Finance” learned from people familiar with SHEIN’s financial situation that in the first half of this year, SHEIN’s GMV was about 150%. billion, with a growth rate of about 50%.
In addition, “Forbes” reported on November 6 that SHEIN has hired Bear Stearns investment banker Donald Tang as executive vice chairman. The industry generally believes that Tang Wei’s joining is to boost SHEIN’s IPO process.
In addition to continuing to maintain its growth rate, SHEIN is now facing a more complex competitive landscape. It has to face two young but powerful competitors – both of which have created growth myths in China in the past few years – Pinduoduo Temu and TikTok Shop. SHEIN needs to prove to the capital market that it has a high enough threshold, more innovation and more lasting patience. (Text | Edited by Zhang Qin | Guan Yiwen)
Pinduoduo Temu US launches new logistics model for merchants
The next stop may be Canada and Spain
“LatePost” learned that Temu is preparing to open in Canada, the next stop is Spain, the current unit price of the US station is 20-25 US dollars.
In addition, “LatePost” also learned that in October, Pinduoduo’s cross-border e-commerce platform Temu opened the JIT (Just-In-Time) pre-sale model to merchants. There is no need for sellers to stock up to the warehouse in advance, but to complete the delivery within 24 hours (to the official warehouse in Temu domestically) according to the actual sales order.
Previously, Temu merchants listed products in the background, and the product information and price had to be reviewed by the platform before they could apply for stocking. The Temu platform would pay for the freight, which would involve a lot of logistics costs. The goods will be sent to domestic transshipment warehouses such as Zhaoqing warehouse. The first batch of new products will be stocked up to 30 pieces, and the second batch will be unlimited.
For some categories, employees at the Temu tasting post need to look at the samples first. The merchants need to send the samples to the Temu office in Panyu, Guangzhou. After the goods are in the warehouse, the product link will be online on the front end. If the product corresponding to a product link is out of stock in the warehouse, it will be automatically removed from the shelf.
Before launching the JIT pre-sale model, the biggest difference between Temu on the merchant side and Shopee, a cross-border e-commerce platform covering Southeast Asia and Latin America, is that Shopee merchants do not need to stock up first, but deliver goods after consumers place orders; Temu stocking up in advance ensures that Aging, but also put forward higher requirements for its warehouse management. Affected by the epidemic in Guangdong Province since October, many Temu merchants have been out of stock. Even if they have prepared the goods and delivered them to the warehouse, they have to queue up to enter the warehouse. Sometimes the products have been removed from the shelves while waiting for the warehouse.
In order to improve this problem, Temu has launched a new JIT pre-sale model. The participating merchants in the early stage are limited to the provinces near Guangdong and need to pay a deposit of RMB 5,000. According to the actual sales situation, the merchant will receive the JIT stocking list at 8:00 and 16:00 every day. Within 24 hours after receipt, the merchant needs to package and deliver the goods as required. The delivery can only choose “SF Express” delivery, and the freight Merchants are responsible for their own responsibility, and the platform will impose fines on merchants based on the value of the goods for untimely goods.
The specific fine amount is that if the merchant fails to deliver the goods within 24 hours, the platform will punish 1 times the value of the goods and remove the goods from the shelves; if the goods are not delivered within 48 hours, the penalty multiple will increase to 5 times.
However, many businesses may not choose the JIT mode. Some merchants believe that the JIT model is only “the difference between stocking on the platform and stocking on the platform”, which alleviates the problem of shortages caused by the above-mentioned warehousing contradictions on the platform. For Temu, the JIT model is more convenient, and the storage area does not need to be expanded in the short term, creating conditions for merchants with greater capabilities to take on greater responsibilities.
There is a view in the market that Temu will adopt a “low price” strategy like Pinduoduo did when it first started, and it will not control the quality and user experience so strictly. Temu is regarded as a channel for merchants to “clear out the goods”.
A cross-border industry practitioner told LatePost: “The platform is constantly screening sellers, and the standards are not low. Product information, packaging standards, and supply prices must be compared to Ali’s global wholesale platform 1688, and each product must have a size. Figure, must be marked with both cm (centimeter) and inch (inch), and each product is visually reviewed by Temu employees, which is not available in 1688 and Shopee.”
At present, Temu is fully preparing for the most important shopping festival of the year in Europe and the United States, “Black Friday” (Black Friday), which is also its first big promotion test in the United States. (Text | Edited by Zhang Qin | Guan Yiwen)
Double Eleven Eve
Express and e-commerce companies face more complex challenges
A number of e-commerce platforms and couriers told LatePost that compared with the two major promotions on Double Eleven in 2021 and 618 in 2022, the challenges facing Double Eleven this year are more complicated.
An e-commerce platform source told LatePost that during this year’s 618 promotion, express companies and e-commerce platforms can deploy warehouses and couriers in other cities to ease the pressure on goods and distribution. During the Double Eleven this year, the pressure of inter-city distribution has eased, but the challenges of intra-city distribution have become greater, including the last mile delivery from city warehouses to outlets, and outlets to consumers.
Take November 1 this year as an example – this is the first day when consumers pay the final payment on e-commerce platforms such as Tmall and JD.com and merchants start centralized delivery. Data monitored by the State Post Bureau shows that on this day in 2021, the national A total of 569 million express parcels were collected and received, this year’s figure was 529 million, a year-on-year decrease of 7%.
During the Double Eleven in 2021 (November 1-16), monitoring data from the State Post Bureau showed that China Post and express delivery companies received a total of 6.8 billion express parcels, a year-on-year increase of 18.2%; a total of 6.3 billion express parcels were delivered, a year-on-year increase of 18.2%. An increase of 16.2%. This year’s Double Eleven, whether these two figures can increase compared to last year’s Double Eleven will depend on the performance in the coming week.
It is understood that the proportion of collection/delivery restrictions at the national terminal outlets of the three leading express delivery companies is all about 20%. Affected by this, from November 1st to 7th, the national postal and express delivery/delivery volumes decreased by 6.84%/11.02% year-on-year respectively.
After the pre-sale of the e-commerce platform started on October 24, Yiwu and Guangdong production areas entered the peak season for express delivery, and each express delivery had an increase of 0.2 yuan – 0.3 yuan. According to the analysis of the CITIC Construction Investment Logistics Industry Report, this will bring about a decline in revenue growth, but The result of profit improvement, especially for express companies that can continue to stabilize output and logistics during the promotion period, will exceed expectations.
According to the big data of the G7 IoT platform, in the first week of November, the throughput index of the distribution centers of major express delivery companies (the total number of vehicles entering and leaving, based on 2019 data as the base 100) was about 76.9% of the same period last year.
The Alibaba platform has updated the logistics policy for merchants. For physical orders with the shipping address or receiving address within the exempted area, it will be given “exemption from the sub-assessment of logistics experience, extension of the time limit for delivery and return, exemption from overtime penalties for collection and delivery, and 48-hour delivery.” Policies adjustment such as “Goods Rate Assessment”. As of November 9, this policy exempts packages from 787 regions (cities, counties, districts) across the country. (Text | Edited by Shen Fangwei | Guan Yiwen)
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