TREND 1 of the internationalization of brands: Marketing means change from “product” “category” to “social contact”, and online celebrity marketing, short video and livestream sale have become the new outlet
1.Take sale as the center, utilize market share to promote brand awareness.
During the development of cross-border e-commerce, most of the early sellers used “set up more stores ”, “increase the ranking” and “make long tail words” as the marketing means in the internationalization of brands and have enjoyed the platform bonus. Cross-border e-commerce sellers take well-known cross-border e-commerce platforms like Amazon, eBay as the traffic pool, employing means like PPC ( Pay per click), purchase advertising space with eye-catching position and put promotional ads and the logic in it is: as long as the exposure is high enough, there are enough stores, the market share is high, and the brand awareness is improved, it can get recognition from consumers.
2.Take categories as the center, target at subdivided groups with differentiated brand strategy
Some of the cross-border e-commerce sellers have known that even if they increase operating costs on advertising, the conversion rate is difficult to be improved. Therefore sellers put their emphasis on the building up of competitive categories and expand other relevant supplementary categories by competitive categories. Take tool industry as example, Hangzhou Ezarc Tools Co., Ltd focuses on solving single and centralized product demand of users, and launches premium tool brand Ezarc. This brand pursues perfection in product quality so that it wins the praise of an evaluation blogger who has millions of followers in hand-made tool circle and gains a position in tool category: Ezarc Tools won the second place in the tools category in AliExpress within three months, achieved profits and became a "gold seller".
3.Take social contact as the center, let brand serve people’s psychological needs
Because the global epidemic has led to the blockade of national borders and limited overseas travel, more and more people rely more on social media platforms. TikTok as the representative of those social platforms has become a mainstream choice of “Gen Z” (people who were born in 1995-2005). According to the data issued by Sensor in 2021, the global downloads of TikTok are over 3 billion times, the user expenses of which has reached 2.5 billion dollars. TikTok, WhatsApp, Facebook, Instagram have become “4 giants” of global social media.
When the internationalization of brands replace cross-border selling, social media marketing and content marketing are more important. The brand needs to show the brand’s personality in the operation of social media to obtain the approval from the local market and users and to improve the competitiveness of the brand. New media forms such as short video, celebrity marketing and online livestream will become new channels for efficient marketing of cross-border e-commerce.
YouTube whose main presenting form is long videos and TikTok whose main presenting form is short videos have both manifested an increasing trending. The creation of fashion brands and popular trends is also reflected in the hot short videos with more than one million likes.
Livestream sale is a type of purchase with strong interaction which brings offline face-to-face shopping experience back to life. Some of the cross-border e-commerce brands acutely notice the new direction for marketing of the internationalization of brands, construct the consumption scenario through KOL, make the atmosphere with livestream sale, let the brand serve the social needs of the consumers so that to establish the brand culture. Data of CoresightResearch indicates, By 2023, the livestream purchase market of the North America market will be up to 25 billion dollars. According to the survey, 55% of the Gen Z and 62% of the Millennials say they would like to finish the purchase in the livestream activity for brands to promote the new products. For instance, Beauty makeup brand Bobbi Brown does the livestream sale through Facebook Live and it specially invites the beauty talent to show the tips of summer makeup for the fans and meanwhile recommends the products.
TREND 2 of the internationalization of brands: subdivided fields build up stand alone website, DTC brands usher in their bonus time
In 2021, influenced by the account block on Amazon, more and more platform sellers transformed from “platform sellers” to “stand alone website sellers” by means of website-building tools such as Shopify. On the other hand, the seller structure in the original field of stand alone websites is also experiencing a lot of changes. From the beginning of 2021, plenty of top website sellers have started shutting down the websites in large quantities and have transformed to more subdivided DTC mode. Meantime, manufacturing factories, brands and Chinese e-commerce sellers began to pour into the field of cross-border stand alone websites in great numbers. It is estimated that the number of Chinese stand alone websites has reached around 0.2 million.
stand alone websites possess great advantages that the third-party platform can’t have, and they possess great value in the building of cross border e-commerce brands:
Firstly, it’s easier for stand alone websites to obtain high quality traffic of private field
When operating a stand alone website, you can study your own fan group and obtain more refined and first-hand data feedback than that provided by the third-party platform. If you know what content and products your brand users like, you can develop new products in a customized way for some categories.
Secondly, stand alone websites are appropriate for the internationalization of brands and the telling of brand stories
DTC is the abbreviation of Direct to customer, which directly reaches consumers through the marketing channel of social media. It is an important traffic channel for DTC brand through the way of adding product links of stand alone websites on social media.
Thirdly, the trend of cross-border e-commerce socialization has accelerated the development of stand alone websites of vertical brand
Facebook launches Facebook Shop which can also be used together with shopping programs of Facebook apps such as Messenger and Instagram. TikTok develops 3 types of purchase entry such as “yellow shopping carts”, “TikTok business” and “stand alone website”. These social e-commerce providers have established business cooperation with stand alone website platforms such as Shopify, and users can shop in the app without jumping links.
In the ranking list of "shopping apps" in the US, fast fashion clothing brand Shein ranks second. Shein's social traffic is mainly obtained through Facebook and instagram. As early as 2011, Shein began to use online celebrity to promote and draw traffic on social networking sites. According to media reports, Shein is now valued at more than $15 billion.
TREND 3 of the internationalization of brands: entire chain compliance, cross border e-commerce compliance is the irresistable trend of the industry
The nature of cross border e-commerce decides it is limited by platform rules, Chinese laws and laws of the local country and it involves laws and regulations in various fields such as finance and taxation, intellectual property rights, product quality, advertising, anti-unfair competition, foreign exchange settlement compliance, data compliance, etc.
1.Compliance for each chain of cross border e-commerce industry
From April to September 2021, Amazon closed the sales authority of about 600 Chinese brands, involving about 3000 seller accounts, including many of China's top seller brands, such as Mpow, Aukey, VicTsing, OKMEE, Fairywill, etc. An Amazon global store executive revealed, these accounts all left comments repeatedly and some brands involved themselves in bribery. Amazon “account block wave” has pushed platform rules into a situation in which the victory or defeat of cross border e-commerce enterprises would be determined, thus making the cross border e-commerce industry reshape the idea and understand compliance.
Except the platform, each stand alone website also has its own platform store opening policy and commodity policy. Taking Shopify as an example, its fair use rules prohibit sellers from providing goods or services that infringe intellectual property rights; It is prohibited to use the service for deceitful business activities or any other illegal or deceitful activities. In recent years, the stores of many sellers have been closed by Shopify.
Cross border e-commerce sellers are going to be strictly limited by Google and Facebook and regulated by the limits of collection-making channel including the compliant use of Paypal, VISA global brand protection scheme, etc. Take Paypal, a collection-making channel for example, it will launch review and investigation on fraud risk, credit risk and brand risk and each violation can be fined $2,500 which sometimes could be very heavy.
2.Tax compliance requirements represented by EU VAT compliance
Cross border e-commerce taxation becomes a hotspot that gets world’s attention. More and more countries or regions strengthen the supervision on the taxation of cross border e-commerce and explore and practice the taxation mode and path of cross border e-commerce.
Take EU VAT compliance as an example, since January 1, 2021, the EU has implemented a new law on the standardization of VAT(Value Added Tax) for cross-border e-commerce commodity trade. Its main measures include: canceling the exemption policy of import VAT on low-priced goods (less than 22 euros) imported from non EU countries to the EU.
When cross border e-commerce sellers promote the strategy of the internationalization of brands, they shall make tax planning and layout in advance for the target market to ensure it comply with local compliance policies.
3.Regulatory requirements for cross-border e-commerce industry in China are stricter
An official document issued by the State Council in July 2021 pointed out that we should study and formulate guidelines for the protection of intellectual property rights of cross-border e-commerce, prevent fake and shoddy goods and protect the legitimate rights and interests of enterprises; We should optimize the list of cross-border e-commerce imported retail goods to better meet domestic consumption demand.
TREND 4 of the internationalization of brands: Localization of products, teams and services, the internationalization of brands is in urgent needs of overseas sufficient localization operation
How to build an internationalization team? For cross-border e-commerce internationalization enterprises, they shall have teams and talents with full understanding and insight into the target market, establish a global communication system and have localized marketing ability, which is the key to marketing for internationalization of brands.
1.Localization of products
Most brands will choose the hit products in China to sell overseas, but popular products in China will not adapt to overseas markets. Localization is not simply to translate the content into local words, but to study local customs, cultures and habits, understand local cultural characteristics and user needs, design products according to local conditions, and adopt localized channel layout in combination with target markets, category attributes and consumer habits. Snapchat usually will provide support to advertisers in 3 aspects when it comes to localization. First is local insight, it often provides some local industry research reports and marketing trend. Next is creative strategy, what interactions, elements and hue local users like, how to combine them creatively. The last is operation guidelines including marketing direction and price competition guidance in busy season, etc.
2.Localization of teams
"Product and capital output are ahead and international talent team construction is way behind" has always been a problem for Chinese internationalization of brands enterprises facing overseas market competition. From "internationalization of product " to "internationalization of brand", the key variable is "talent".
Chinese enterprises have strong product R & D and manufacturing capabilities, but weak overseas brand promotion and operation abilities. Due to the influence of language and cultural differences, brand identity and other factors, "lack of localization team" has always been the biggest obstacle for Chinese manufacturing enterprises to face the overseas market and seize the "last mile" of users' minds.
In order to empower more enterprises with the brand model of "international management team + Chinese manufacturing enterprises + overseas localization operation team", the "2021 Alibaba GDT global business challenge: Global Youth co create borderless brands" was launched in June 2021, aiming to recruit more excellent international teams through the competition. At present, 30 Hangzhou enterprises have participated, attracting the attention of 0.1 million entrepreneurs around the world, 10,000 people (2,000 entrepreneurial teams) participated in the competition, and the competition is exposed among 0.5 million overseas consumers.
3.Localization of services
For the internationalization of cross-border e-commerce brands, we need to summarize a set of whole process system for brand construction and operation (including: market research - user insight - brand positioning - marketing strategy), and land the brand operation center overseas to help the cross-border e-commerce platform do a good job in localization work such as logistics, after-sales, customer service, operation and R & D, so as to overcome the disease of difficult adaption.
Hangzhou cross border e-commerce comprehensive test zone has established 108 cross-border e-commerce overseas service network demonstration projects in more than 30 countries around the world, covering overseas warehousing, digital marketing, intellectual property rights, offshore companies, international tax law, customs clearance agency services, landing delivery, financial payment, etc., to further optimize the brand experience of overseas consumers, and strive to solve the problems faced by cross-border e-commerce enterprises when they go overseas, such as changeable rules of cross-border e-commerce platforms, diversified marketing and promotion, weak awareness of brand cultivation and intellectual property protection, customs clearance compliance, imperfect payment and collection network, etc.
By Global Cross-border e-commerce Branding Research Center
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Report on the Internationalization Trend of Cross-border e-Commerce Brands){kind=link}
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