How should enterprises choose the first stop when going overseas?

How should enterprises choose the right overseas strategy in the wave of globalization? With the rise of cross-border e-commerce, more and more enterprises are beginning to seek new opportunities in the international market. Through expert interviews, this article analyzes the feasibility of overseas expansion for different types of enterprises, the strategy of first station selection, and the promotion methods of advertising and cooperation with influencers. Whether you are a supply chain enterprise or a brand enterprise, you can gain valuable overseas experience and suggestions from this article.

With the booming development of cross-border e-commerce, brand overseas expansion has become a strategic choice for many companies, and more and more companies are seeking new growth points and business opportunities overseas. However, facing the complex overseas market environment, which companies and brands have the opportunity to successfully go overseas? How to choose the appropriate overseas expansion path and strategy? Some pioneers have actually given us references. From Mixue Ice City to emerging individual brands, and even some white-label brands, as long as they have certain productivity and design capabilities, they may find their own place in the international market. But the road to overseas expansion is not a smooth one. Before taking the first step, companies need to think deeply about many issues: their own advantages and positioning, such as whether they are supply chain companies or brand companies? What is the cost structure of the product? What is the operational capability of the team? These are the key factors that determine whether a company should go overseas and how to go overseas. In the process of going overseas, advertising and cooperation with influencers are two common promotion methods. How should companies choose? Which promotion path is suitable for small fast-moving consumer goods and high-priced products? In a previous live broadcast of Jianshi, we invited Luo Xiaoshuai, the person in charge of overseas growth of Thunder Simulator, Chen Lei, the director of brand operations of Weizhuo, and CiCi, the senior operations director of Shoplazza, to discuss this issue. They all have rich practical experience and research on the issue of going overseas. I hope it can bring you some inspiration. You are also welcome to join Jianshi members at the end of the article to view the full text of the live broadcast. As follows, enjoy:

1. Which companies are suitable for going overseas?

Jianshi: What kind of merchants, enterprises or brands have the opportunity to successfully go overseas in the current market environment? Luo Xiaoshuai: Speaking of which brands have opportunities, I once heard an industry leader say that all brands can be reshaped in the overseas market. (If I am wrong, please don't mind). Whether it is a brand that has already gone overseas, such as Mixue Ice City, or some emerging individual brands, or even white-label brands, as long as they have productivity or design capabilities, they have the opportunity to go overseas. We initially went overseas in the form of Internet tools. This method is relatively simple and can quickly acquire users by purchasing traffic. But as the number of users grows, the cost of acquiring customers gradually increases, and we began to look for ways to reduce costs. Then we found that KOL channels can help us reduce costs, so we started to cooperate with them. In this process, we found that we can provide services to other overseas brands, so we started to form MCN. As the business develops, we began to contact more cross-border products. At first, we only promoted them through KOLs, but later we found that we could use traffic more effectively, so we started to build our own independent stations. We found that the private domain operation of independent stations can increase the transaction rate and customer unit price. Therefore, through the experience of the game industry, we help other industries, such as beauty, to start building private domains. Through simplified marketing activities and direct communication methods, such as using Line or WhatsApp to communicate with users, customer acquisition costs can be effectively reduced and conversion rates can be increased. Our entire experience shows that despite the rising cost of traffic, it is still possible to successfully go overseas through strategies to reduce costs and improve efficiency. From buying traffic to cooperating with KOLs, to building our own MCN, and finally to private domain operations, we are all trying to reduce costs. I think that as long as you are willing to try, every brand has the opportunity to go overseas. Chen Lei: The global market is large enough, and the market potential of 7 billion people is huge. Even very well-known brands in China may just be starting out in overseas markets. Therefore, when companies consider going overseas, they need to think about a question from the source, that is, whether I should go overseas and how I should go overseas? Our company usually asks customers, what are your advantages? In my opinion, products come first. Products are the foundation of an enterprise, and product capabilities actually determine what type of enterprise you are. If you are a supply chain-based enterprise, then your product cost may be very low. In this case, you will have more marketing budget when going overseas, and there is a lot of room for improvement in both cultivating a professional team and investing in marketing. If you are not a supply chain company, but a brand company, then the requirements for the operation team will be higher. The markets you choose to go overseas may tend to those regions that can accept high premiums and have strong brand recognition and awareness, such as the European and American markets. At this time, our team's operational capabilities are required in turn. Therefore, this is a corporate strategy issue that needs to be decided based on the company's own advantages.

2. Where should you choose as your first stop when going overseas?

Jianshi: What characteristics do companies and brands base their decisions on when choosing a country to go overseas? CiCi: The overseas market is very large. In the past year, we have observed that most customers are still focused on the European and American markets, where users have relatively strong purchasing power. China's rich supply chain has a large premium space and good sales in these regions. In terms of product categories, about 60% to 70% of Chinese cross-border sellers have chosen the clothing category, including men's clothing, women's clothing, swimwear, accessories, wigs, shoes, etc. In addition, some niche categories are growing rapidly, such as the growth rate of customized on demand (POD) products, and clothing-related peripheral products, such as outdoor sportswear, plus-size women's clothing, dresses and other vertical subcategories are also performing well. From a market perspective, some sellers have begun to turn to some emerging markets, such as Latin America, the Middle East, and Eastern Europe. However, the online payment rate in the Middle East and Eastern Europe is not high, so cash on delivery is still the main transaction method. From the perspective of corporate structure type, many domestic companies that used to do foreign trade TO B have begun to transform and directly face the C-end to build independent stations. This is a typical change we have observed in our customer base. Chen Lei: I see two types of customers here. One is very clear about what region they want to enter, and the other is not so clear and hopes that we can provide advice. Usually we will ask customers about their basic capabilities. We found that brand customers who are doing very well in China have already achieved a high share and market share in the domestic market. They regard overseas markets as the second growth curve and hope to replicate domestic technology, resources and operational capabilities overseas. For customers who are just beginning to consider going overseas, we will first evaluate the maturity of the categories they want to enter in the global market. If a market is not stable in terms of infrastructure or policies, we usually do not recommend entering.

3. Should you choose advertising or cooperation with influencers?

Jianshi: Should we choose to run advertisements or cooperate with influencers after going overseas? How to determine whether a certain area is feasible? How to conduct tests? Luo Xiaoshuai: Usually, we will choose to cooperate with influencers first, and then run advertisements. If you are very confident in the product, you can start advertising directly. For example, our traffic on TikTok mainly depends on influencers. If you choose to sell in TikTok Shop, then you basically choose to cooperate with influencers. It is normal for the ROI to be between 0.6 and 0.8 at the beginning. It is good if the Southeast Asian market can reach more than 0.5 within a month. It is good for small consumer goods to reach more than 1 within three months. Whether to find influencers for testing depends mainly on the amount of funds. There are two platforms to choose from: TikTok and YouTube. YouTube is better for digital 3C products. We have tested it before. A YouTube influencer with 10,000 followers has a single video price of about US$500 and a conversion rate of about 5%. TikTok's conversion rate is similar, but its advantage lies in its large traffic. A TikTok influencer with a fan base of US$200 may have about 100,000 followers. So in the early stage, find the answer as soon as possible for testing. But this only applies to industries such as small fast-moving consumer goods, beauty and clothing, accessories, and daily necessities.

Eyebrow pencil ads on TikTok Chen Lei: The choice of advertising or working with influencers actually depends on the product category. If it is a small product, influencers will respond very quickly, such as games and beauty products. But if it is a slightly larger product with a high customer unit price, such as 3C home appliances, it will involve sample logistics issues. In the European and American markets, it may take a month from the beginning of contacting influencers to going online. Advertising can be launched within a week. So it depends on the product category. The advantage of advertising is that it is fast to start, but its challenge is that if the target users do not have a certain understanding of the product or brand, they may not click or convert, so the effect will be discounted. Influencers and advertising have different roles, they are not mutually exclusive and can be used together. Jianshi: Do you find influencers through the platform or through MCN? Is this different from the domestic operation? Chen Lei: We have three ways to find influencers, self-established contacts, through MCN agencies or using platforms. The challenge of overseas influencers lies in establishing contacts, management and communication. Domestic MCN companies are very mature in terms of services, but the fees are relatively high. Overseas MCN companies may not be able to meet the requirements in terms of communication speed and execution, but the price is relatively cheap. We have also tried to establish connections ourselves, which requires a certain amount of experience accumulation in the early stage, but in the long run, the cost is the lowest. Luo Xiaoshuai: We have more than 20 BDs. At the beginning, we looked for influencers through MCN agencies, but the effect was not good. Later, we began to use local employees to establish connections ourselves. We found that using local employees would be more familiar with the environment, and TikTok accounts would be easily blocked if they did not use the local network. We tried to have influencers come to the company to live broadcast for one day, and then shoot videos. Our directors and BDs completed this task together, which was more satisfactory. Chen Lei: Domestic influencers belong to creative jobs, but the situation overseas is very different. Their work is more like human work. Overseas, you will spend a lot of time solving basic problems, such as establishing connections, executing control and rights communication, etc., while it is difficult to communicate with them in terms of creativity. For powerful companies, if they can compete in scale, they actually have opportunities. In the marketing process, some big brand customers have a budget but don’t know how to start. We will suggest that they do a small-scale test with influencers first. For 3C technology products targeting the European and American markets, TikTok and YouTube are must-have platforms, especially YouTube, which has been proven to bring conversions. Facebook does not necessarily have to do it, but Instagram may need to do it, especially if the target users are high in female or maternal and child users. Google is also opening a YouTube store for the YouTube platform, similar to the closed-loop model of TikTok Shop, which provides us with new opportunities.