A list released by data.ai not long ago showed that in the first three quarters of this year, Temu, Shein, AliExpress (AliExpress), and TikTokseller became the shopping apps with the fastest growth in downloads in the global market. Among them, Shein and Temu have surpassed Amazon in terms of downloads this year, ranking first and second respectively.
Source of download rankings for the first to third quarter of this year: data.ai
At the same time, another iOS global shopping app usage behavior penetration ranking released by data.ai shows that Amazon currently ranks first on the list, followed by Shein, Temu and AliExpress.
Since the beginning of this year, the "Four Little Dragons" consisting of Shein, AliExpress, Temu, and TikTok have had high hopes. These four young platforms have stirred up the global e-commerce market in the past year, and the former hegemons Amazon and eBay can only avoid the spotlight for the time being.
Compared with these traditional cross-border e-commerce giants, the "Four Little Dragons" can be said to have their own characteristics. They use advanced concepts and models to adapt to global market trends and meet the needs of global consumers.
For example, Shein, as an e-commerce platform focusing on fast fashion, relies on its innovative on-demand production and flexible supply chain model to provide users with a rich variety of cost-effective products. As the brand's influence increases, Shein also invites global third-party sellers to settle in on the basis of its self-operated brands, and has now formed a unique "self-operated brand + platform" dual-model development.
Previous media reports stated that Shein’s sales reached US$22.7 billion last year and it has been profitable for four consecutive years. This year’s expected profit is US$2.5 billion, an increase of 150% from last year.
AliExpress, as part of Alibaba International Digital Business Group, has seen many new changes in the two years since Jiang Fan took charge. For example, its "platform + full hosting" transformation has quickly kept pace with platforms such as Shein and Temu.
Coupled with the advantages of self-built logistics and negotiated pricing, AliExpress is more friendly to merchants, which also ensures the richness of its categories and wins the favor of consumers around the world.
Especially in the Korean market, a survey released by Wiseapp Retail Goods, a Korean mobile application and retail analysis service provider, on December 20 showed that AliExpress has become the mobile app with the most new users in the Korean market this year, with Temu ranking second.
Temu, which was only launched in September last year, has grown at an astonishing rate. As a cross-border e-commerce platform owned by Pinduoduo, Temu still relies on "low prices" to make a name for itself in overseas markets.
In the third quarter of this year, Temu's sales exceeded US$5 billion, and its full-year GMV is expected to reach US$14 billion in 2023. Although there is still some gap between the US$16 billion GMV set by Temu at the beginning of the year, the growth rate is already very scary.
As for TikTok, its e-commerce business has copied Douyin’s successful experience and performed well in Southeast Asia and the United States. It is reported that TikTok e-commerce has previously set a 2023 annual GMV target of US$20 billion, and currently it has exceeded US$13 billion in the Southeast Asian market alone.
Looking towards 2024, both TikTok and Temu, which are confident, have significantly increased their expected GMV targets. According to 36Kr and LatePost, TikTok and Temu’s 2024 goals have reached 50 billion and 30 billion US dollars respectively, which is equivalent to doubling GMV growth.
In 2023, cross-border e-commerce is surging
The pressure on foreign trade in the past few years has given cross-border e-commerce a new supply of blood. At the beginning of 2023, it seems that the floodgates have been opened, and batches of sellers and suppliers are rushing overseas, following the platform of their choice to prepare for a big fight.
This year, the growth momentum of China's e-commerce in overseas markets can be described as "making rapid progress".
In January, the pattern of “Four Little Dragons going overseas” was initially formed.
In the ranking of monthly active users of iOS global shopping apps in January 2023 announced by data.ai, Shein ranked 2nd, AliExpress ranked 7th, and Temu quickly rose to 17th place. Coupled with Bytedance, the world's number one unicorn, its overseas platform TikTok has begun to deploy e-commerce business on a large scale, and the "Four Little Dragons" have officially converged in the overseas e-commerce market.
Ranking list of monthly active users of iOS global shopping apps in January Source: data.ai
In February, Temu spent 14 million US dollars at the Super Bowl in the United States and launched the slogan "Shop like a billionaire", which instantly swept the North American market; TikTok launched TikTokShop in Thailand, the Philippines and other countries, identifying Southeast Asia as an incubation pool for shelf e-commerce business; AliExpress attracted large-scale investment in industrial belts in key domestic cities, laying the foundation for "full custody".
In March, AliExpress increased its marketing efforts and officially announced actor Ma Dongxi as its spokesperson in the Korean market. For a time, the meme "Change your avatar to Ma Dongxi and buy things on AliExpress and get them delivered faster" swept across Korean social platforms, setting off a download/shopping craze on AliExpress. It can be said to be an extremely successful marketing case.
TikTok, on the other hand, has encountered its biggest crisis this year. CEO Zhou Shouzi attended a U.S. Congressional hearing, and various states in the U.S. have also initiated bills to ban TikTok.
From April to May, North America's supervision of Chinese e-commerce became increasingly strict, and AliExpress and TikTokShop officially launched full custody models.
At this point, the four little dragons going overseas have invariably embarked on the road of full custody. Sellers only need to be responsible for stock preparation, delivery and replenishment, and other product selection, contract fulfillment, pre-sales and after-sales links are all completed by the platform, which greatly reduces the threshold for domestic suppliers/factories to go overseas.
In June, AliExpress' order volume exploded in the Korean market, and Korean Customs experienced the longest "liquidation" in history, which lasted for about a month.
AliExpress's explosive orders led to a liquidation of warehouses at South Korea's customs
In July, Temu and Shein began to sue each other. The two sides were fighting openly and secretly while accelerating the pace of global expansion. The contradictions between them have intensified and continue to ferment to this day.
In August, the Brazilian tax compliance plan (RemessaConforme) officially came into effect, and Brazil began to levy a unified 17% goods and service circulation tax on cross-border packages on local platforms such as AliExpress and Shein.
The Latin American e-commerce market, which was originally regarded as a blue ocean, suddenly began to turmoil. AliExpress quickly obtained the "Tax Compliance Program" license and launched Brazilian tax payment services. Shein also subsequently applied to join the tax compliance program.
In September, AliExpress and Cainiao launched the "Global Five-Day Delivery" international express express product, with the first batch landing in the United Kingdom, Spain, the Netherlands, Belgium and South Korea. With strong cross-border fulfillment timeliness, AliExpress's competitiveness has been greatly improved.
In October, TikTokShop was suddenly banned by Indonesia on the grounds that it was to protect local small and medium-sized enterprises and prohibit commodity transactions on social platforms.
In November, the “Four Little Dragons” besieged Amazon on Black Friday and Cyber Monday. Temu provides large coupons of up to US$200, with discounts of up to 10% off on all products; TikTokShop's US site's total GMV increased by 131% month-on-month, with a single-day GMV exceeding US$33 million on November 24; Shein is rumored to have an IPO valuation of US$90 billion, and AliExpress has become South Korea's third largest e-commerce platform.
In December, TikTok reached a cooperation with Indonesian GoTo Group and controlled 75.01% of Tokopedia's equity. TikTok's Indonesian e-commerce business has returned to the Indonesian market after merging with Tokopedia, and continues to carry out live broadcast e-commerce and other businesses normally.
Looking back on the past year, Chinese e-commerce has made rapid progress overseas, with both opportunities and challenges. Fortunately, they turned dangers into dangers again and again, fully demonstrating the strong adaptability of the "Four overseas little dragons" and finally being able to successfully take root in the global market.
In 2024, China’s e-commerce will establish a new order
Back in time, Temu, Shein, TikTok, and AliExpress are already chasing after Amazon. Of course, there is still a gap with Amazon in terms of market share.
In this year's North American local market, Amazon continues to rank first with a market share of 37.6%, while Walmart, which ranks second, only has a market share of 6.4%.
Market share of various local e-commerce platforms in North America in 2023
In the third quarter of this year, Amazon’s revenue was US$143.1 billion, a year-on-year increase of 13%; operating profit was US$11.2 billion, much higher than last year’s US$2.5 billion.
In the face of this behemoth, the "Four Little Dragons" will still stand on the stage of the global e-commerce market as challengers in the upcoming 2024.
But the results of the past year are enough to prove their influence on the cross-border e-commerce industry. The "full custody" model is rampant in the markets of various countries and is expected to drive more cross-border e-commerce platforms to follow suit.
In addition, Shein’s flexible supply chain capabilities, Temu’s low-price mentality, AliExpress’s logistics fulfillment capabilities, and TikTok’s unique charm of social e-commerce are all destined to become models for other platforms to learn from.
Of course, the competition between the "Four Little Dragons" will continue in 2024, and may even become fierce. For example, in the process of market expansion, they have inevitably begun to compete head-on:
In the North American market, with the official entry of TikTokshop in September this year, all the Four Little Dragons have gathered here; in the Korean market, AliExpress, which has just established its foothold, met Temu, which suddenly broke in, and the two App downloads ranked in the top two; in the Latin American market, AliExpress and Shein shared weal and woe in the Brazilian tax reform crisis...
In the subsequent market expansion process, in addition to the North American market structure being basically determined, compliance-related issues will continue to arise in Europe, Japan, South Korea, Latin America, Southeast Asia and other places. All they can do is to block it with troops and cover it up with water.
In 2024, as the "four overseas little dragons" impact the markets of various countries again and again, the new order of cross-border e-commerce will inevitably be gradually reshaped, and the globalization of China's e-commerce has officially begun.