In the last boom of e-commerce, who is reaping the benefits?

In the cross-border e-commerce boom, how many people are attracted by the attractive opportunities and rush to buy the class places, but in fact they are cut off? The author of this article uses real cases to help you distinguish the truth from the false.

By spending 3,980 yuan on a class, you can open the door to a fortune of tens of thousands of yuan a month - in the boom of cross-border e-commerce, Li Qing was attracted by this tempting opportunity.

"This is our new student. He started cross-border e-commerce with zero basic knowledge and achieved sales of 15,543 Malaysian ringgits in 7 days, which is 24,632 yuan in RMB. After deducting all costs, he still made a 35% net profit, which is more than 8,600 yuan. Hurry up and sign up for hands-on teaching. You will also be the next successful entrepreneur."

In the live broadcast room, the female lecturer in professional attire repeated her words over and over again, and posted screenshots of store revenues ranging from a few thousand yuan to more than 100,000 yuan per month. Among the successful cases they listed, there were post-90s mothers, white-collar workers with no basic English skills, and a 65-year-old retired man who could not speak English at all.

The success stories given by the lecturer are very attractive. Source: Interviewee

Li Qing's ears and eyes were filled with strings of numbers. She was still hesitating, and the registration information in the live broadcast room had already started to scroll. "There are still three places, first come first served, the places are limited, and the teacher can't teach so many students." The assistant teacher grabbed the microphone and added.

Li Qing decisively placed an order and grabbed the last spot. But a month later, she felt like she had been ripped off.

01 A Dream

Before paying the fee, the instructor of the training camp promised Li Qing that he would teach her how to do cross-border e-commerce, providing one-on-one service from opening a store, selecting products to operations, and making the difference between "small profits and big profits."

After paying the money and getting the learning materials, she quickly realized that this textbook was not a secret to turning stones into gold, "it was just some basic, correct nonsense."

She went to the instructor with questions, and the instructor sent her a payment link and asked her to transfer another 500 yuan to register a store. "Merchants registered on Shopee need a business license and historical online store transactions, and the instructor said that all of these can be done."

After the money was transferred, Li Qing got an empty store, and the instructor was silent for a while. She sent private messages to the instructor many times, and finally got a detailed list of products. The instructor asked her to move according to the list, "Then wait for the order, and we will teach you step by step when the time comes."

"I was very excited at the time, but also very worried about how to ship the goods when placing an order." Li Qing told Snow Leopard Finance that she had even begun to imagine the balance number in the background jumping up from 0.

However, two weeks after dozens of products were put on the shelves, the number of views was only in the single digits, and the number of orders was 0. Li Qing selected products according to the instructor's "strategy", but her account was blocked by the authorities on the grounds that she was reported for product infringement.

Li Qing, who always obeyed the lecturer, lost her temper and asked for a refund of her tuition. The other party asked her to pay another 1,000 yuan before she could use the "internal channel" to unblock her account. Only then did Li Qing realize that she might have been ripped off. After repeatedly asking for a refund without success, she found that she had been blocked by the instructor and the salesperson.

When Li Qing went to the live broadcast room again, she still saw the lecturer speaking hard and encouraging fans to sign up, which was no different from the day she signed up.

Wang Ying suspected that she had encountered a cross-border e-commerce "pig killing scheme".

She started a small store on Amazon and found an agency through an agency advertisement. The agency told her that Amazon is currently a red ocean with too much competition and recommended her to a platform called Lelong shop. She checked it out and found that it is a regular and established e-commerce company in Malaysia.

Immediately, the customer service promised to provide her with one-stop services including store opening, supply sourcing, ERP system, data analysis, and delivery.

"The way to make money is very simple. After someone places an order, the payment is made to the supply channel provided by the instructor. After delivery, the order number is added to your own store, and you can wait to withdraw the money." Wang Ying told Snow Leopard Finance that it was smooth to get the money back at the beginning, with a net profit of at least 35%.

Wang Ying's store backstage Source: Interviewee

But as the number of orders increased, Wang Ying had to pay more and more, more than 300,000 yuan a month. She told the lecturer that she had no money to buy more goods, but was threatened with "platform blocking".

At this time, Wang Ying still had tens of thousands of dollars of repayments frozen in her account and could not withdraw them. The customer service told her that she had to pay half of the repayment amount (about 40,000 US dollars) to unblock it. Only then did Wang Ying realize that she had been cheated.

After reporting the case to the police, she learned that she had logged into a fake backend created by the fraud team in imitation of Lelong shop. The supply channel website and overseas buyers were all part of a carefully planned scam. There are at least dozens of victims like her, and the largest amount of money defrauded is over one million yuan.

The wealth-making myth of cross-border e-commerce has attracted wave after wave of gold diggers, but it has also caused endless stream of profiteers to raise their sickles.

Statistics from Tmall’s consumer platform show that as of March 2, there were 6,092 complaints about cross-border e-commerce, most of which were complaints about cross-border e-commerce courses.

Many students told Snow Leopard Finance that common tricks in cross-border e-commerce courses include selling low-quality second-hand online courses and ERP tools at high prices (costing a few hundred yuan but selling for tens of thousands of yuan), claiming to provide "one-stop" services for opening stores which ultimately lead to account blocking due to illegal operations, and impersonating overseas websites and supply channels to commit fraud.

Just like the gold rush in the United States in the 19th century, the gold diggers had little harvest, but the people who sold shovels made a fortune.

02 Who is “cutting leeks”?

"If you knew that the instructor on the screen was a man who had bankrupted three stores, would you still dare to pay him?" Li Jiahao, who has been engaged in cross-border e-commerce for five years, asked back.

According to him, most people who sell cross-border e-commerce courses are losers in this industry.

"I know a so-called gold medal lecturer packaged by a company, but he is actually a cross-border e-commerce boss who is heavily in debt." Li Jiahao told Snow Leopard Finance that this gold medal lecturer A took advantage of the cross-border e-commerce boom to join Amazon's gold rush in 2021. Due to lack of experience, he suffered repeated defeats and closed 3 stores within a year.

In 2022, the influx of gold diggers made A smell business opportunities. He used the original team to build a new company, reselling cross-border e-commerce courses, and turned losses into profits.

The method of making quick money is very simple: ask someone to record some basic courses, and sell them by taking advantage of the information gap. At 999 yuan per copy, it is almost a profitable business. But when students get the courses, they find that most of the content can be found on the official website of the platform.

In Li Jiahao's opinion, it is best not to trust training institutions on the market when engaging in cross-border e-commerce, especially those that promise to make money. "If you really have an exclusive secret, it is a skill that has been tested with real money and you can never tell others."

Over the past five years, he has traveled back and forth between Yiwu, Zhuhai and other places to select products, but has never found the so-called shortcut to success. "If the gold medal lecturers have run dozens of hot-selling stores and made a lot of money, why do they spend all day on various forums, answering questions, posting articles and videos? Is it just to be a good person? Even if he tells you a unique skill, would you dare to believe it?"

Li Jiahao told Snow Leopard Finance that cross-border e-commerce business is not easy to do. The rising platform commission, high logistics costs, skyrocketing marketing costs, exchange rate fluctuations, and the difficulty in selecting products caused by different regional cultures, coupled with the influx of more and more Chinese sellers, have made this a "sea of ​​red that cannot be redder".

Zhang Ziyu used to run an Amazon boutique store. Due to factors such as the decline in overseas buyers and high operating costs, her store's net profit has been cut in half. "Amazon has raised its rates several times a year, and there is really no profit to speak of."

In the second half of 2022, Zhang Ziyu began to shift his focus to selling courses. "It's mainly about registering people and helping with product selection and supply strategies." The main purpose of running this store has gradually changed to providing materials for teaching.

Luo Ran, who once worked in a cross-border e-commerce training institution, told Snow Leopard Finance that their goal is to capture fanatical gold diggers and make their money.

Her company is divided into two groups. One is the sales group, which is mainly responsible for "refining" the sales pitch, "using exaggerated words and large amounts of money to stimulate people's nerves", and then using photos and videos with backstage payment balances to entice users to place orders for courses.

The other is the technical team, which is mainly responsible for finding and making one-click crawling tools for e-commerce platforms. These tools can simply and roughly crawl, collect and copy the product information of other merchants and put them on the shelves with one click, but they also have great disadvantages. They are often judged as infringement by the platform, which often leads to students being blocked. After users find that their accounts have been blocked, these institutions either disappear directly or ask users to pay another "unblocking fee."

03 Empty Hands

Is cross-border e-commerce easy to do? Outsiders are just watching the excitement, while insiders are tasting the ups and downs of the situation.

A report released by the China Internet Network Information Center shows that in 2022, the total financing amount of China's cross-border e-commerce was 6.2 billion yuan, a year-on-year decrease of 70.15%, only 30% of the total financing amount in 2021, the lowest in five years.

Amazon's financial report is regarded as a barometer of cross-border e-commerce business. In 2022, Amazon's revenue was US$514 billion, a year-on-year increase of 9.4%, the lowest growth rate since the company went public. Among them, the growth rate of third-party service revenue, which is most relevant to cross-border e-commerce players, has declined significantly, from 49.6% in 2020 to 13.9% in 2022.

The weak growth rate still occurred against the backdrop of Amazon's repeated increases in service fees for third-party sellers. In 2022, Amazon increased merchant advertising and logistics costs, and also reduced merchants' overseas storage space.

Compared with 2020, the cost of small-item delivery for FBA (warehouse and delivery service provided by Amazon) in 2022 increased by nearly 30%. "It is becoming increasingly difficult for small businesses to make profits because they are spending more and more money on Amazon services," said Marketplace Pulse, an overseas e-commerce research organization.

From a macro perspective, not only has the mainstream European and American markets in cross-border e-commerce become a red ocean, but the growth rate of global e-commerce is also slowing down.

According to data from Insider Intelligence, global e-commerce sales are expected to grow by 9.7% year-on-year in 2022, the lowest growth rate in nearly 12 years.

Li Jiahao, who was unwilling to give up cross-border e-commerce, tried to find a blue ocean in the red ocean, and he focused his attention on Southeast Asia.

In recent years, Southeast Asia's retail e-commerce growth has led the world. A report jointly released by Google, Temasek and Bain shows that from 2017 to 2022, Southeast Asia's e-commerce GMV will increase from US$10.9 billion to US$131 billion, with a compound annual growth rate of 64%.

But there are no gold mines everywhere. Amid the fierce competition between the two major players, Shopee and Lazada, and content e-commerce platforms such as TikTok and Facebook, the growth of e-commerce in Southeast Asia has gradually slowed down.

The aforementioned report predicts that Southeast Asian e-commerce GMV will increase by 16% year-on-year to US$131 billion in 2022, which is much lower than the 31% and 50% in 2020 and 2021. Since January 2023, JD.com has gradually withdrawn from the Thai and Indonesian markets, and Shopee, a leading e-commerce player in Southeast Asia, has also started large-scale layoffs.

Luo Ran, who left the cross-border e-commerce training company, wanted to find a new job, but after interviewing several companies, most of them invited her to be a lecturer. She felt that she no longer had the ability to mobilize other people's emotions well, so she chose to refuse.

Li Qing was upset and started to relearn cross-border e-commerce knowledge. This time she did not buy courses online, but planned to join a regular cross-border e-commerce company and learn while working.

More than a hundred years ago in the United States, enthusiastic gold diggers had a hard time, but most of them came away empty-handed. Sutter, who first discovered the gold mine, eventually went bankrupt, while Brennan, who sold shovels, became the richest man in California, and Levi Strauss, who sold jeans, also became a billionaire.

Wang Ying feels that she has suffered more than the gold diggers back then. "At least they still have a sharp shovel and a pair of durable jeans left in the end, but I have nothing."

(All characters in this article are pseudonyms)

Author: Yan Xuegong

Source: WeChat official account: "Xuebao Finance (ID: xuebaocaijingshe)"