Chinese companies have been making great progress overseas, but only when they are truly rooted in the local market do they realize that there are too many unexpected problems hidden in overseas markets, from logistical obstacles in Saudi Arabia and lagging payments in Latin America to cross-border e-commerce facing policy changes and brand breakthroughs. Every step forward is breaking the inherent perception and finding a way out of the situation through exploration.
The experience of going to Saudi Arabia to do logistics business and build a local logistics system was very impressive.
After the Chinese logistics team arrived in Saudi Arabia, they discovered that the local address did not have a house number. The description on the address sheet was mostly “the house is next to the mosque, the third house with a red door on the right.” This had a great impact on the mature logistics standard system.
This kind of situation is also a true portrayal of Chinese enterprises going overseas. When going overseas, they will encounter various practical problems and the original standard system will also face huge challenges. All layouts are explored step by step.
After entering the Latin American market, some cross-border e-commerce companies found that the local mobile payment and credit card payment systems were imperfect, cash payment was still the mainstream, and the infrastructure was very different from that in China.
There are also companies that are planning to expand into the Indonesian market. With the exception of Jakarta, the rest of Indonesia is spread over numerous islands. The land is long and narrow. Building a local transportation and logistics network not only tests the company’s manpower and experience, but is also limited by local infrastructure capabilities. Companies need to recalculate business profitability. It is difficult to make a profit by copying domestic models, and they must explore new ways to adapt to the local area.
China’s cross-border e-commerce has developed to a considerable scale.
However, there have been many regulatory controversies in the European market recently. Both Shein and Temu are facing many regulatory issues, and related matters are still being resolved.
In addition to Europe, has China’s cross-border e-commerce in Southeast Asia and Latin American markets already established a firm foothold?
What is the overall development trend?
Is it fully integrated into local consumer life, or is its development still unstable?
Core consumer demand has always existed. The core advantage of Chinese products is high cost performance. This advantage comes from the strong domestic production capacity and the flexibility of the supply chain. It is also highly related to the small parcel tax exemption policies in many places around the world. The rise of cross-border e-commerce relies heavily on the price dividends brought by small parcel tax exemption.
In recent years, the small package tax exemption policy has been continuously controversial, and many countries have successively planned to cancel this policy. Once the tax dividend disappears, can the existing price system be maintained?
Whether products can maintain low prices and whether suppliers can maintain sufficient profit margins are all questions that need to be answered.
In addition, companies also face the choice of selling single products or building brands.
When fast fashion brands enter the European market, they encounter resistance from local merchants. Even so, there is still a situation of “verbal opposition but actual purchase”, which also affects the long-term development of the brand.
As for the decision-making of brand upgrade, there is currently no standard answer, and companies are still groping. The final result will take time to be verified. China’s cross-border e-commerce companies are still crossing the river by feeling their way around the sea.
