Chinese sellers seek to reduce reliance on Amazon

 

According to foreign media reports, although Amazon is the main channel for Chinese brands and sellers to reach consumers in Western markets, Chinese sellers are seeking to reduce their dependence on Amazon, and the sentiment of “leaving Amazon” in cross-border e-commerce is growing.

The overseas edition of the People’s Daily wrote in an article titled “Resolving the “stuck neck” risk of cross-border e-commerce channels”: “In the future, Chinese companies should reduce their reliance on the Amazon platform. Enterprises can optimize and improve their service capabilities by building their own independent stations.”

In recent years, Chinese cross-border e-commerce companies are experiencing the trend of “going to Amazon”.

The report pointed out that there are three main reasons for this:

First, the entry fee for the Amazon platform remains high. The operating costs of foreign trade companies on the Amazon platform are relatively high. In the context of the peak traffic dividend, the price of traffic on Amazon has continued to increase. Chinese foreign trade companies can obtain cheaper traffic on social platforms such as Facebook, YouTube, and TikTok.

The second is that Amazon has shut down a large number of foreign trade enterprise accounts. Closing the store will make it impossible to withdraw funds from the account, which will bring a serious blow to small and medium-sized enterprises.

Third, Amazon does not provide consumer core data. From April 2021, Amazon will no longer provide FBA (Fulfillment by Amazon) sellers with buyer’s name, address and other details. It is difficult for foreign trade companies to analyze consumer preferences based on consumer information, and then carry out product design and precision marketing.

These moves by Amazon have led to many Chinese sellers being forced to close their business, and the sentiment of “leaving Amazon” has intensified.

According to the report, many Chinese sellers banned by Amazon have turned to the Walmart platform, and have begun to turn their attention to self-built independent stations, and are encouraged by the Chinese government.

According to the South China Morning Post, the Shenzhen Bureau of Commerce has provided 2 million yuan ($310,000) in subsidies to local cross-border sellers to build their own independent stations; China’s JD.com and independent station Shopify have also reached a partnership to help Chinese brands use Shopify Build its DTC sales channel.

For example, the global promotion of IBNEWS (International Business News) provides overseas brand promotion services for Chinese merchants. IBNEWS has more than 60 sites around the world, which can better promote Chinese enterprises to the world.

But it is worth noting that despite the increasing sentiment of Chinese cross-border sellers “leaving Amazon”, the number of “self-built independent stations” will not increase significantly in the short term. From a technical point of view, Chinese sellers are still relatively lacking in independent website building tools; from a market perspective, compared to independent websites or other platforms, Amazon is still the largest platform to reach global consumers.

However, getting rid of dependence and leaving Amazon seems to have become the consensus of cross-border sellers. Nowadays, many big sellers have begun to diversify their layout. Ruokeshu said that while seeking to unblock stores and unfreeze funds, the company is also adjusting its business strategy in a timely manner, relying on Aliexpress, Shopee, lazada and other platforms to focus on development Latin America, Southeast Asia and other emerging markets business.