What real pitfalls will branded merchants encounter? 丨Jingxi
Latest update time：2024-09-14
Reads：
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On TikTok, 3 beauty eggs for $3 and 7 beauty eggs for $6 are completely different sales logic.
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Author | Ma Ruilei
Editor | Dai Runze
The path for Chinese companies to go overseas is no longer a single linear development, but has become more diversified and complex.
From relying on e-commerce platforms such as Amazon in the early days, to the rise of independent sites today, to the content e-commerce model of social media platforms such as TikTok, every change in the industry structure brings new challenges and opportunities.
At present, successful brand expansion overseas requires not only high-quality products and strong brand power, but also a deep understanding of the target market and flexible strategy adjustments. Recently, we invited business founders with practical industry experience to share the real "traps" encountered by branded merchants in the process of expansion overseas.
The guests invited by Whale Rhino for this issue are:
- Tongtong, founder of Cross-border Boss Sister Circle and founder of Shenzhen Yisangu Technology Co., Ltd.
- Lu Shidong, founder of Gloda, a three-in-one data selection platform
The following is the content of the live broadcast discussion, which Whale Rhino has edited and organized without changing the original meaning:
1. What pitfalls do businesses generally encounter when they want to expand their brands overseas?
Tongtong:
There are a few major pitfalls. First, if a product is to be exported, it must be legal and compliant, and have detailed trademark qualifications. Second, it is important to pay attention to the selection of overseas warehouses. Third, in terms of the company's overall management, can the team members execute according to the company's overall strategic rhythm?
We say that cross-border e-commerce is sometimes like a "noble game". There are companies around us that sell goods from overseas warehouses. Although the entire company team is not large, a few people can really sell 400,000 goods every month, so there are still many ways to play on the cross-border road.
Lu Shidong:
Speaking of the pitfalls of going overseas, let me first share a personal real-life case. In 2021, I started working on the TIKTOK big data analysis platform. Through the data on the platform, I can see TTS's products, videos, influencers and other data. At that time, the number of registrations and user levels were very good, and the market recognition was also very high. Even the penetration rate of the entire TTS seller reached about 90%, but I still couldn't make money.
Because at that time, no one in the entire TTS Southeast Asian market was making much money, and sellers were even less willing to pay for tool products if they were not making money. So it is not a good idea to enter the market early, but you need to choose a more appropriate time to enter. This is a "pitfall" I have personally experienced. During that period, there were also some external factors, such as the epidemic, the plunge in the U.S. stock market, etc., which caused great problems in financing and ultimately failed. In fact, we did not find a good market entry point to do this. So no matter how vibrant or potential this industry looks, if you don't grasp the timing well, you will easily encounter some problems.
When I was working on the data platform, I saw a lot of problems that sellers would have. First, when some sellers select products, they blindly copy products. After copying and putting them on the shelves, the store is likely to infringe. So when selecting products, there are actually many strategies. You need to use them in combination with some data displays, so that you can ensure that your product is the first.
Second, data actually has many dimensions, but many people don’t look at the data carefully. For example, when he selected a product, he didn’t pay attention to the inventory. He took someone else’s goods and brought them to the store. Suddenly, he received a huge order through his own operation, but the goods were out of stock. This is a big problem.
Third, let me talk to you about some practical cases of sellers. We must understand the local culture, customs, consumption habits and contemporary expressions when doing cross-border business. In 2021, I started an English live broadcast, and many domestic anchors moved the domestic Douyin gameplay to overseas intact. He expressed in the live broadcast room that he was losing money today, and the boss was going to scold him, so everyone should not buy this product. In China, there may be many users in the live broadcast room who pay for it, but overseas users really don’t buy this product. Therefore, some words are valid in Douyin in China, but not in overseas. This is the result of not understanding the local culture and consumption habits.
2. Why do European and American users not accept marketing tactics such as “big sale at a loss”?
Lu Shidong:
It has something to do with the thinking logic of European and American users. Compared with Chinese users, European and American users prefer direct words, which is one of the manifestations of cultural differences. For example, in terms of content, domestic users may use superb editing techniques to do short video marketing, but the ability of such videos to bring goods in Europe and the United States is uncertain. On the contrary, many European and American video marketing is basically one-shot, very casual, and without many editing techniques.
Tongtong:
When it comes to content, we are currently solving some pain points of foreign talent shooting. We will directly bring the shooting team, provide our scripts to the talents, let them shoot themselves, and we will be responsible for editing after the shooting. At present, we find that we need their original materials too much. We must build a network of talents, because there are too many samples now, but the talents are limited.
So we will take our team directly to the United States to train talents and teach them how to live broadcast. We want to shorten the pace of materials that may have taken 30 or 45 days to be called back to a pace that can be completed in one week, and then train talents on how to live broadcast and shoot short videos.
3. Is the sales logic different on TikTok and other platforms?
Lu Shidong: First of all, the support logic of these two platforms is different. TikTok is actually a social e-commerce platform, which is mainly based on content; Amazon and Walmart are actually shelf-based. Overall, its sales logic is also different. For the TikTok platform, it is more about displaying through content. TikTok will push to users based on algorithms, so you will find that low customer unit price is not the core on TikTok. The core is to let users see your products first.
The logic behind TIKTOK and Amazon’s hit products is also different. For example, Amazon’s best-selling products may have a continuous cycle. This product can last for two years on Amazon, but currently on TIKTOK, most of the hit products have a cycle of 1-3 months.
4. The product must have a first-mover advantage on TikTok.
Lu Shidong:
Let's say a store sells swimming goggles for $18.5. Its current market share accounts for 90% of the market share of this single product. Other competing products of the same type are much cheaper, selling for only $12. But why do they sell so well? It's because they have done a lot of work on the marketing and operation side, reaching more potential consumers through content and influencers, so they can sell well.
That is, if I promote a product now, if I have more resources or more traffic, I can promote it throughout the entire network. In this way, even if the customer unit price is higher than that of the same product of the competitor, I can still sell better than others. Therefore, in the TikTok e-commerce ecosystem, it is necessary to let users see your products first. After having the first-mover advantage, you are no longer limited to the volume with low customer unit price.
5. How to determine the average order value of products on TikTok?
Lu Shidong:
When pricing products, it must be in line with the spending power of consumers on this platform. Pricing is very particular. Its market share will not be taken away by some stores and products that are comparable to other products. Its marketization is still to be completed. For example, if a product is priced at 300 yuan for a group of people, this group of people will not buy products priced at 50 or 60 yuan.
Therefore, if your average order value reaches a certain level, the group you are targeting will actually be very large, and they will not switch to buying other products just because of a cheaper average order value.
Tongtong:
If you are a customer with a high average order value, you need to control the price of the product, otherwise the user will feel backstabbed. In the past, we would sell some products in limited quantities, mainly with the logic of a collectible. We also make products of different colors and styles according to the crowd and usage scenarios.
6. How to adjust strategies to adapt to different e-commerce platforms and market environments?
Lu Shidong:
This is a problem that many sellers have seen. Some sellers are very confident and think that if a product sells well in China, they will sell it abroad. As a result, they do not understand the habits of overseas business, and then find that they cannot sell it after selling it abroad. When you cannot sell it, you will find that the biggest cost is wasted time.
For example, a seller sells beauty eggs. He referred to the price of Amazon to sell six series of beauty eggs, but he didn't sell much. I came to him and suggested that he refer to the data. For example, it is 7 US dollars for 6 eggs, and it is changed to 3 US dollars for 3 eggs. In fact, your cost is almost the same, and then he has sales. This is because you need to understand what the consumer groups on this platform are concerned about, instead of copying the sales of others to sell products. Data is very important.
Therefore, we should not blindly trust our own feelings. We should determine your audience, target customers and needs through very objective analysis of some points, events and populations.
Tongtong:
Many products may sell well on Amazon and on shelf e-commerce platforms, but may not sell well on other platforms. For example, a friend of mine had a product that sold well on Temu and Amazon, so she set up a new team on TK and sold the same product. After running for a few months, she lost some money and still couldn't run. Because her product was not suitable for content e-commerce, everyone should make product adjustments for their own products, and don't rush in at the beginning, which will easily lose money.
But beauty products are easier to display, and scenes are more suitable for combination. For example, a short video we recently released showed a celebrity dyeing her hair with hair dye and then turning around in the sun. This video became a hit.
7. When it comes to product selection, what advice would you give to merchants?
Lu Shidong:
I have actually been in this industry for a long time. We have our own set of reasoning logic, especially for overseas TikTok. Currently, if sellers use our products and follow the steps step by step, they will hardly encounter any major problems in product selection.
The core issue of building three smart platforms, Amazon, TikTok and Douyin, is to find definite differentiation in the same market and with the same customer base. In other words, sellers only need to move similar products to the platform, and a lot of work can be done with just operations. This is the simplest, most direct and fastest work, and this is what we do.
Of course, we have other sections. For example, after I select this product, there must be competing products. These competing products are divided into direct competing products and indirect competing products. Direct competing products are the same style and type, and indirect competing products are commodities. We can now make a keyword based on this product on our platform, and you can search to form a complete set of dashboards. Both direct and indirect competing products will be on this dashboard.
Tongtong:
Mr. Lu, the platform as a whole has technical barriers, and our operations have been very good. Because when selecting products, you can almost use some data platforms to benchmark the products sold by your own platform stores, and you can see its sales volume and value. You can make better strategic adjustments, otherwise if you blindly enter the market, the losses will be very serious. If you use some data to solve some problems, you can make more things controllable and adjustable.
The reason why many sellers cannot sell their products is that they blindly promote their products based on their own ideas and preferences. They think that if a brand sells well in domestic activities, then it will definitely sell well abroad. Or, if it sells well to foreign customers, it will also sell well in China. The good sales of a product are composed of many factors.
—About Whale Rhino—
Whale Rhino was jointly initiated by Lin Jun, founder of Leifeng.com, and Yao Kaifei, founder of Brand AI. Its predecessor was the WeChat group of Guangmingding, a global e-commerce company. This WeChat group, which adds members monthly, includes industry evergreens, serial entrepreneurs, top sellers on Amazon, early co-founders of Duoduo, the earliest gold fingers to bet on SHEIN, DTC brands blessed by Zhang Yiming, super players in traffic and logistics ecology, executives of Alibaba, Xiaomi and JD.com, and top players in smart hardware. In the future, they will all appear on stage in Whale Rhino Live, so stay tuned.
In 2024, Jingxi will regularly carry out online and offline activities, and sincerely invite people from all walks of life to join! To join the group, please contact Jingxi assistant, please note "
name-company-position
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