Amazon’s strong rivals from China SHEIN, Shopee, TikTok
After founder Bezos stepped down as CEO to focus on rockets, Amazon, the global e-commerce giant, had a huge crisis in the first quarter of this year.
Last night along with the heavy drop in U.S. stocks, Amazon shares fell 7.56%, the market value evaporated $96.5 billion, or about 642.2 billion yuan.
At the end of April, after Amazon announced its financial report for the first quarter of 2022, the stock price plummeted by 14.05%, and the market value evaporated by 206.2 billion US dollars (about 1.34 trillion yuan) overnight.
China’s e-commerce industry has become a pack of wolves
But in fact, if Amazon is compared to a lion in the e-commerce industry, then in addition to the above factors, he needs to face another core problem, which is the wolf pack formed by the major Chinese giants in the global e- commerce market in various regions.
For example, the current e-commerce dark horse SHEIN (shein), which belongs to Nanjing Shein E-commerce Co.
This cross-border e-commerce platform is backed by the domestic supply chain, and the clothing business has been established in many overseas markets such as Europe, America, and the Middle East. At present, its business lines cover more than 150 countries around the world, with 120 million registered users and over 30 million daily active users.
How hot is Shein? In early April, a number of media reported that the PYMNTS shopping app ranking data showed that Shein surpassed Amazon, Walmart, AliExpress and other giants to dominate the US IOS and Android dual platforms, becoming the world’s most downloaded shopping APP.
In April 2022, SHEIN was rumored to have conducted a round of financing of $1 billion,with a valuation of up to 100 billion US dollars. Such a valuation scale exceeds the sum of European and American fast fashion brands H&M and Zara, and also exceeds the market value of JD.com, which is basically equal to two Pinduoduo.
In addition to Xiyin, there are also a number of e-commerce platforms with the background of Chinese giants, which continue to grow and develop in overseas regional markets.
For example, Shopee, a Southeast Asian e-commerce giant invested by Tencent, started in the Singapore market as early as 2015, and then continued to expand its e-commerce business to Malaysia, Thailand, Indonesia and other places, and gradually entered Spain, France and other European markets, as well as Latin American markets.
Over the four years from 2016 to 2019, Sea’s e-commerce revenue, which is primarily based on Shopee, was $17.7 million, $47 million, $270 million and $820 million in that order, representing a compound annual growth rate of 359%.
The 2021 fourth quarter and full year results show Shopee’s 2021 GAAP revenue of $5.1 billion, up 136.4% year-over-year; total orders of 6.1 billion, up 116.5% year-over-year; and GMV of $62.5 billion, up 76.8% year-over-year.
Lazada, another giant in the Southeast Asian e-commerce market, has a similar path to Shopee, that is, based on the Southeast Asian market, it has gradually expanded to other regional markets such as Europe. The difference is that Lazada was acquired by Ali for $1 billion in 2016.
According to Ali’s financial report, Lazada’s annual active consumers reached 130 million in the 18 months to December 2021, an increase of 80%, and monthly active users were 159 million. Lazada GMV hit a record high of $21 billion in the twelve months to September 2021.
Ali also invested in Trendyol, the largest and fastest-growing mobile e-commerce platform in Turkey, the Middle East and North Africa, in 2018. With the investment and increase in holdings, Ali’s shareholding in Trendyol will be as high as about 86% in 2021.
Also in 2018, Ali wholly acquired Daraz, a South Asian e-commerce platform. By the end of 2021, Daraz has accumulated 35 million users in five countries: Pakistan, Bangladesh, Sri Lanka, Myanmar and Nepal.
The company said it expects to reach 100 million active users by 2030, supporting Alibaba’s goal of reaching 2 billion global consumers by 2036.
Ali reported strong growth in Lazada, AliExpress, Trendyol and Daraz for the 12 months ended September 30, 2021, with 285 million active annual consumers, $44.1 billion in cumulative annual GMV excluding unpaid orders, and 62% year-over-year growth in order volume.
TikTok, the overseas short-video app of Byte Jump, has become the seventh member of the “Internet Billion Users Club”, as its global monthly active users exceeded 1 billion in September 2021 under the pressure of strong competition from Facebook.
At the same time as the rapid growth of user scale, TikTok is also seeking a business model for monetizing traffic, and developing e-commerce business represented by live streaming is one of them. Public information shows that in the past 2021, TikTok has frequently tested its e-commerce business in regional markets such as Southeast Asia, the United Kingdom, and the United States.
In general, whether it is the dark horse of e-commerce SHEIN, backed by Tencent, Ali and other giants, in the regional markets continue to plow the layout of Shopee, Lazada, or sitting on a billion monthly traffic pool of TikTok, are bound to Amazon’s e-commerce business and user traffic to form a diversion, cannibalization and other impacts.
How to resist and defuse these “Chinese wolves” in each regional market in the future will undoubtedly be a headache for Amazon, which needs to solidify its e-commerce fundamentals.