As competition intensifies in the global e-commerce market, Amazon's upcoming fully managed business model raises important questions about how it might transform the cross-border logistics landscape. Industry observers predict that traditional freight forwarders and third-party logistics providers will face significant challenges as this new service rolls out, potentially shrinking their market share.
Amazon's Growing Concerns
Like an athlete sensing a competitor closing in, Amazon is responding to pressure from emerging platforms like Temu. Recent data shows Temu attracting 208.8 million monthly unique visitors—still far behind Amazon's 2.225 billion, but with a staggering 49.06% growth rate compared to Amazon's modest 3.09% increase. This dynamic resembles an energetic teenager rapidly gaining on a slowing middle-aged runner.
To counter this traffic erosion, Amazon recently launched its "Low-Price Store," targeting budget-conscious shoppers while complementing its traditional brand flagship stores, thereby strengthening its overall e-commerce position.
How the Managed Service Will Transform Logistics
Amazon's new managed business model will significantly impact not just sellers but the entire cross-border logistics industry. The approach gives Amazon complete control over two critical components: information flow and physical logistics, offering sellers an all-in-one solution. Key features include:
- Amazon handling all marketing and promotion, with products listed on the main marketplace without brand identification, reducing brand recognition constraints
- Sellers simply ship goods to Amazon's Chinese warehouses, after which Amazon manages rapid delivery to end customers within 9-11 days, with no inventory storage fees
This model allows sellers to focus solely on product quality and price competition, potentially marginalizing traditional logistics providers. Small and medium-sized logistics companies face particular pressure as Amazon consolidates control over shipping operations—a challenge compounded by existing price pressures from platforms like Temu.
Moreover, Amazon's comprehensive logistics management could potentially capture the entire logistics value chain. By offering end-to-end solutions, Amazon aims to maximize profits—a development that threatens countless small and mid-sized logistics providers.
The cross-border logistics market can be broadly categorized into three types of providers:
- Resource-based logistics companies: These foundational players maintain stable operations regardless of market conditions, though Amazon's pricing pressure may erode their profit margins.
- Operation-focused logistics providers: Leveraging strong operational capabilities and service quality, these firms can maintain their position but still face profitability challenges.
- Marketing-driven logistics companies: Smaller providers relying on marketing strategies will see their market share significantly threatened by Amazon's managed model.
While traditional cross-border e-commerce models won't disappear entirely, many logistics providers will need to fight harder for survival. As Amazon expands its managed service, the logistics industry will continue undergoing consolidation, forcing freight forwarders and third-party providers to enhance their specialized capabilities to find new opportunities in this evolving landscape.
