Successful transformation! Domestic trade OEM has become the leader of Shopee

China's domestic trade market is full of volatility and the market is crowded. For example, the source factory, because it is busy with production and OEM, cannot reach consumers, has low bargaining power, and is difficult to increase profits.

In contrast, cross-border e-commerce continues to heat up. In 2023, cross-border e-commerce imports and exports reached 2.38 trillion yuan. Chinese brands have successively risen overseas. More and more factories have realized the possibilities of the cross-border market and have embarked on the road of making money overseas. Mr. Zhou, the home textile seller in this article, is one of them.

He switched from domestic and foreign trade OEM to cross-border business, and later made a name for himself in Southeast Asia. What is his secret to success? And what experience can be used as a reference for overseas sellers?

Flexible supply chain helps turnaround

Looking at the domestic and overseas markets, two different perspectives are presented: in the domestic market, oversupply and excess supply chain lead to fierce competition; at the same time, in the overseas market, various segmented products are in urgent demand and the market potential is immeasurable.  

Take Southeast Asia as an example. It has a total population of over 675 million, and 80% of the online consumers are over 15 years old. It is not only one of the regions with the greatest potential and fastest growth in global e-commerce, but also China’s second largest cross-border export market. In recent years, Southeast Asia has attracted more than 70% of overseas companies to set up their businesses.

The home textile sellers we interviewed in this article are also part of this large group of sellers going overseas, and are also a true portrayal of sellers who have successfully transformed from domestic trade.

In 2017, the factory's orders for domestic trade OEM business declined, but it continued to receive orders from cross-border sellers. Realizing the new opportunities, Mr. Zhou decided to switch to the cross-border e-commerce market. After testing multiple platforms, Shopee received the most enthusiastic response.

Initially, due to his unfamiliarity with the Southeast Asian market, Mr. Zhou could only cross the river by feeling the stones, step by step, and gradually adjust the supply chain to adapt to the differences in domestic and foreign consumer demand. For example, Thailand and Singapore have a hot climate all year round and do not need winter products, so the company flexibly adjusted its product line accordingly.

Boss Zhou admitted: "The gap in between once made the company self-doubt, but we still insisted on continuous exploration and reorganization of the team. We also tried to develop categories that we were not good at. We took many detours, but finally returned to the home textile industry and was determined to make solid products. "

We adhere to the principle of "customer first", give priority to launching good products, and then continuously adjust the supply chain to make it more flexible and resilient, so that the company's product line has both common parts and differentiated parts between each country's market. We rely on the advantages of the supply chain to continuously optimize costs, and then push the most cost-effective products to more markets, forming a virtuous supply chain business cycle. "I am also very grateful to the Shopee platform for giving us huge development opportunities, so that our supply can have a huge demand side."

With the best-selling products in hand, it has successfully broken through in Southeast Asia

The fabric material of bedding is often a key factor that consumers cannot ignore when purchasing. The climate in Southeast Asia is hot, so sweat-absorbent fabrics and soft, skin-friendly materials are particularly important. "The Ice Silk series of bedding is our best-selling category in Southeast Asia. It performs very well in all stations and basically ranks first." Boss Zhou said that the Ice Silk series has received a warm response since its launch in mid-to-late 2020, and it is still one of the company's flagship products.

When asked about the reasons, he concluded: “ We focus on the quality of appearance and touch in product design and manufacturing, while strictly controlling costs to maintain price competitiveness. In addition, our products are novel and unique, different from traditional chemical fiber products on the market, and at the same time, cheaper than cotton products, which makes consumers feel refreshed. ”

In addition, unlike China, the sizes, design requirements and preferences of bedding products vary among the markets in Southeast Asia. For example, a special candy pillow is a must-have for every household in Southeast Asia. It is shaped like a long round pillow. This candy pillow is significantly different from the standard normal pillows commonly seen in China. In Southeast Asia, you can often see pillows of various sizes, lengths and shapes. These products have almost no market in China, but are in great demand in Southeast Asia.

As for the experience of explosive sales, Boss Zhou has something to say: "In the beginning, no one knows what is right or wrong, and operational ideas are only auxiliary." Boss Zhou believes that all sellers on the Shopee platform have great opportunities. The key to success lies in mastering the basics, maintaining cost-effectiveness, and insisting on quality and service.

“Do the right thing in the right direction and platform”

In recent years, the Southeast Asian e-commerce market has risen at an astonishing speed, and the penetration rate of e-commerce has continued to increase, making it a gold mine for a large number of sellers. Taking the home textile industry as an example, in the first 11 months of 2023, China's home textile industry as a whole maintained a high level, with cumulative exports of home textiles reaching US$30.09 billion, an increase of 17.3% over the same period in 2019 before the epidemic.

There is no doubt that it is the right time to go overseas to Southeast Asia. However, when going overseas, sellers will inevitably encounter some inevitable pain points. Boss Zhou mentioned, "Home textile products are just-needed products, so keeping prices affordable is a key. However, due to the large size and weight of bedding, logistics costs are also correspondingly high, which poses certain challenges to sales. " This is also an important reason why the company did not increase its volume in the early stages. "Fortunately, Shopee's local overseas warehouses in Southeast Asia allow us to deliver products to consumers smoothly at a lower price and faster speed, which greatly alleviates our pressure in this regard."

Currently, Mr. Zhou mainly promotes transactions through Shopee’s on-site advertising. As the store grows in size, he also plans to increase off-site promotion in the future, establish local warehouses, launch his own website, and develop social media accounts to increase brand awareness. “I hope that with the help of Shopee, we can make the entire cross-border chain smoother and make more localization and branding efforts in the future.”

During the interview, Boss Zhou always emphasized the importance of doing the right basics, doing the right things in the right direction and on the right platform, and was full of confidence in the future. "Even now, we are still excited about the Southeast Asian market, because the consumption volume of this market is huge and there is still a lot of room for development. I also believe that with the dual support of the market and the platform, more and more excellent sellers will emerge, and we are just a representative."