There was a time when Amazon was hailed as the "gold rush" of cross-border e-commerce, with countless sellers flocking to the platform dreaming of "hundreds of daily orders and millions in annual revenue." However, as reality set in, many discovered that what was once perceived as "easy wins" has now become a struggle for survival, with some even facing complete failure. The wave of store closures has led to growing skepticism about Amazon's future. But is Amazon's predicament truly an isolated case?
I. Macroeconomic Downturn: Amazon Is Not Alone
Rather than saying Amazon has "changed," it would be more accurate to say the entire economic environment is undergoing profound transformation. Let's look beyond cross-border e-commerce to examine performance in other domestic industries.
Automotive Industry: Facing Headwinds
China's once-booming automotive market encountered unprecedented challenges in 2022. In April alone, national automobile production and sales reached 1.205 million and 1.181 million units respectively, plummeting 46.2% and 47.1% month-over-month, and dropping 46.1% and 47.6% year-over-year - the lowest figures in nearly a decade. Even the much-hyped new energy vehicle sector saw month-over-month declines exceeding 30%.
Emerging automakers like NIO and Li Auto have reportedly rescinded campus recruitment offers and implemented internal layoffs. If industry leaders face such difficulties, the survival status of other new energy vehicle manufacturers becomes even more precarious. Weekend visits to multiple 4S dealerships revealed sales staff significantly outnumbering potential buyers, illustrating the market's chill.
Real Estate: A Coming Winter
Similar to the automotive sector, real estate faces tremendous downward pressure. Plummeting sales have strained developers' cash flow, with tightened bank lending and a surge in foreclosed properties.
First-quarter 2022 data painted a bleak picture for real estate. Property development investment grew just 0.7% year-over-year, marking 12 consecutive months of slowing growth. Commercial housing sales area fell 13.8%, with residential sales area dropping 18.6%; commercial housing sales value declined 22.7%, including a 25.6% decrease in residential sales value. Developers' land acquisition enthusiasm also waned significantly, with first-quarter land purchases totaling just 1.339 million square meters, down 41.8% year-over-year.
To stimulate the market, local governments have rolled out new policies relaxing purchase restrictions and mortgage requirements while lowering interest rates - measures that underscore the industry's difficulties.
Food Service: Struggling to Survive
While "food is heaven for the people," the restaurant industry faces immense challenges. Repeated pandemic impacts have left traditional establishments struggling. While online orders provide some relief, steep platform commissions further squeeze already thin profit margins, and pandemic controls create delivery obstacles.
Data shows that since the pandemic began, one food service business closes every two minutes nationwide on average. For many restaurants, shutting down has become the only way to stem losses.
Cross-Border E-Commerce: Setbacks Abound
Even ByteDance's cross-border platform Fanno couldn't escape the downturn. After experiencing precipitous traffic declines, Fanno shut down just six months after launch - a sobering development.
II. Cross-Border Challenges: Internal and External Pressures
Against this macroeconomic backdrop, cross-border e-commerce faces particularly complex challenges from multiple directions.
Internal Factors: Intensifying Competition, Rising Costs
- Seller saturation and cutthroat competition: The Amazon platform's growing seller population has created exceptionally fierce competition. Homogeneous products flood the market, price wars escalate, and profit margins continue shrinking.
- Operating cost increases: Rising expenses for advertising, logistics, and warehousing further compress seller profits. Particularly burdensome FBA fee hikes have pushed many to their limits.
- Tightening platform policies: Amazon's increasingly stringent requirements for product quality, intellectual property, and compliance demand greater seller attention to policy changes.
External Factors: Complex Global Conditions, Weak Demand
- Geopolitical and economic complexity: Trade friction, regional conflicts, and other factors create cross-border uncertainty. Exchange rate fluctuations and tariff adjustments directly impact seller profitability.
- Sluggish overseas consumption: Global economic downturn has weakened purchasing power, making consumers more price-sensitive and limiting sellers' pricing flexibility.
- Supply chain instability: Pandemic-induced global supply chain disruptions, rising material costs, and extended lead times present numerous obstacles.
III. Pathways Forward: Precision Operations, Diversified Development
Despite these challenges, cross-border sellers aren't without options. Consider these strategic directions:
Precision Operations to Enhance Product Competitiveness
- Differentiated product selection: Avoid homogeneous competition by choosing products with unique advantages. Explore niche markets or innovate to add value.
- Supply chain optimization: Strengthen supplier partnerships and streamline management to reduce procurement costs. Consider collaborating with domestic manufacturers to develop proprietary brands.
- Brand-building: Develop proprietary brands to increase recognition and reputation. Leverage social media and content marketing to build consumer relationships.
- Targeted advertising: Improve ad precision to reduce costs. Utilize Amazon's advertising tools for data analysis and strategy refinement.
- Enhanced customer service: Provide superior service to boost satisfaction and repeat business. Promptly address inquiries and post-sale issues to cultivate loyalty.
Diversified Development to Expand Sales Channels
- Multi-platform expansion: Beyond Amazon, consider eBay, AliExpress, Shopify and others to spread risk.
- Independent store operation: Establish proprietary sites to control branding and presentation for promotion and customer engagement.
- Social commerce: Leverage platforms like Facebook, Instagram and TikTok for live-stream sales and short video marketing to attract users.
- Offline channels: Explore physical retail through trade shows and partnerships to expand influence and sales.
IV. Conclusion
While cross-border e-commerce's golden age has passed, challenges and opportunities coexist. Amid macroeconomic headwinds, sellers must adapt through precision operations and diversified development to stand out in fierce competition. Rather than fixating on Amazon's path forward, the solution lies in focusing on the road ahead.