How can a razor produced in a county town be sold to the other side of the world?

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How can a razor produced in a county town be sold to the other side of the world?

(Opening remarks: From ancient times to the present, Made in China has never stopped exploring the other side of the sea. In the past, merchants who wanted to go out to sea to find new blueprints stayed at this end of the sea, pinning their dreams of overseas gold digging on foreign trade ships. Later, the rise of cross-border e-commerce platforms fully opened the era of great navigation of Made in China, allowing the vigorous productivity of Made in China to have a larger market and stage.

On September 1, it was one year since Pinduoduo's cross-border business was officially launched. It has steadily entered more than 20 countries and regions, covering Asia, Europe, North America, South America and Oceania, once again refreshing the ease of companies going overseas and providing Chinese merchants with a new cross-border export with unlimited potential.

Reporter Yang Xinyi

Using translation software to check buyers' reviews is becoming a daily routine in Lang Xiaoming's life.

He was born in a small county in Anhui Province. He never went to university and was not good at English. However, he sold lighters and razors produced in his hometown to millions of "foreigners" he had never met on Duoduo Cross-border, and made his cross-border business flourish. "This was something I never dared to think about before."

In recent years, Made in China has not stopped telling more stories overseas - Alibaba continues to increase its investment in AliExpress, ByteDance's TikTokShop (an e-commerce service) has expanded rapidly, and unicorn Shein has also made frequent moves. Pinduoduo's Duoduo Cross-border was launched on September 1 last year, which not only brought together the "Four Little Dragons of Cross-border Commerce", but also provided a new outlet with unlimited potential for Chinese merchants who want to make money on the other side of the world.

As one of the first to try out the new platform, dealer Lang Xiaoming has witnessed the changes in Duoduo Cross-border over the past year. He used to be able to read all the buyer reviews every day, but the sales volume has increased much faster than he imagined. "There are almost 50,000 reviews now, and it's too much to read."

The latest data released by Sensor Tower, a mobile application data analysis company, on August 15 showed that due to the successful development of the European market, Temu, an e-commerce platform under Duoduo Cross-border, has broken through and entered the top ten in global downloads, and its popularity is still increasing. At the same time, Temu is also accelerating its global expansion. Since its launch in September last year, Temu has entered more than 20 countries and regions, covering Asia, Europe, North America, South America and Oceania.

Running wild along with Duoduo Cross-border are a large number of China's internationally competitive manufacturing industrial belts, which contain many manufacturing "hidden champions", and Cheng Dahong is one of them.

In Wenzhou, which once accounted for more than 70% of the world's lighter orders, Cheng Dahong has been ranked first in sales for 9 consecutive years. He is well-known in local lighter factories of all sizes.

In the first year when he sold the most lighters, two dealers who operated cross-border e-commerce platforms contacted him and wanted to sell his lighters abroad. However, due to the cumbersome packaging and transportation links and the high investment costs, Cheng Dahong "took some twists and turns" in cross-border business.

It was not until last year that he and his fellow villager Lang Xiaoming joined Duoduo Cross-border, and the road to the vast overseas market became easier.

In order to reduce unnecessary intermediate links for factories as much as possible, the full-hosting model launched by Duoduo Cross-border has undoubtedly refreshed the convenience of overseas e-commerce, allowing factory-type sellers like Cheng Dahong to make cross-border business easier and more profitable.

Moreover, with the help of real-time information from buyers and store assistants, merchants can grasp the trends of overseas consumer markets at the first time even though they are far away across the ocean.

Through frequent exchanges with buyers, Cheng Dahong has continuously accumulated an understanding of the preferences of foreign consumers. Whether it is lighters or razors that he returned to his hometown to start production in 2019, his products have experienced many "explosive orders" and "basically sold out as soon as they were put on the shelves."

This also gave him greater motivation and drive to upgrade products and build brands, "to work hard on a razor and make a mid-to-high-end product", "This is also the biggest advantage of Duoduo Cross-border, with a division of labor with merchants, and each doing what they are best at."

The "explosion" at 2:30 in the morning

Following the investment promotion policy of his hometown, Wenzhou's "Lighter King" Cheng Dahong returned to his hometown, Shucheng, Anhui, in 2019 and spent nearly 200 million yuan to build a new factory to produce razors.

Although the factory is new, it has the genes of a "production king". In the first year and a half of production, the high cost-effectiveness of the basic products made by the factory owner was highly compatible with the Pinduoduo main site, and the first single-head mini razor was sold out as expected.

The first cross-industry success also gave Cheng Dahong a deeper trust in Pinduoduo. Therefore, when Lang Xiaoming first mentioned Duoduo Cross-border to him at the end of August 2022, he had no hesitation about this "overseas version of Pinduoduo".

In this way, Cheng Dahong and Lang Xiaoming hit it off. The former was responsible for factory production, while the latter focused on store operations, connecting the assembly line in his hometown to Duoduo Cross-border. At present, the lighters produced by Cheng Dahong's factory are mainly exported, and the export of household appliances and personal care products such as razors and hair clippers accounts for 30%. The SKUs (minimum stock units) of products sold on Duoduo Cross-border have exceeded 100.

Fortunately, Duoduo Cross-border did not disappoint their trust and expectations, and the "explosion of orders" came much faster than expected. At 2:30 a.m. one day around Christmas last year, Lang Xiaoming noticed that the sales of a type of lighter in the store soared, "rising from a few orders to more than 500 orders."

Seeing that the order volume was still soaring, Lang Xiaoming could not sit still. He called Cheng Dahong and hoped that the supply chain could ensure the uninterrupted connection of this product. Cheng Dahong sent more people to the factory early the next morning to rush a batch of new goods to the Guangzhou warehouse. "For the first time, I felt the rapid increase in volume. There was a flywheel effect (in product sales)."

Lang Xiaoming introduced that the current score of the igniter is as high as 4.8 points, "there are almost no negative reviews", "the platform will also promote good products for free, and the sales of this product are also very good now."

In the past, small business owners in the manufacturing industry had to rely on the "dumb method" of going abroad to participate in exhibitions to find customers in order to get foreign trade orders. Cheng Dahong went to Dortmund, Las Vegas and Dubai, but he only got a few retail investors after all the hard work, which he didn't think was worth it.

However, the sales volume of orders on Duoduo Cross-border made Cheng Dahong feel for the first time the "super high cost-effectiveness" of cross-border business. Before the factory settled in, the factory exported less than 1,000 orders of a single product a day, but now the daily export volume of many single products exceeds 3,500 orders.

In terms of the proportion of factory orders, cross-border orders have increased from 10% to 20% to 50%, of which the output of Duoduo Cross-border has also exceeded 50%. "This proportion will gradually increase, and this platform will be the top priority for our future development."

How can a razor produced in a county town be sold to the other side of the world?

The energy efficiency of the manufacturing industry belt has also been fully utilized by Duoduo Cross-border. "There are often 'hot products' on the platform. If a product becomes popular, you cannot have no production capacity to supply it." In order to expand production capacity, Cheng Dahong has gradually added four-wheel machines to the factory, and the number of workers has also expanded from less than 200 last year to nearly 400, and is expected to reach 600 by the end of the year.

Every day, hundreds of thousands of razors leave the factory and go out into the world. Today, the factory's daily production capacity is about 150,000, and the actual shipment volume is between 100,000 and 120,000. "In the future, the production will be increased by 20% per month to meet the demand of platforms such as Duoduo Cross-border."

New model solves cross-border "old problems"

"I started to operate cross-border business on other platforms in 2018, but I didn't go deep into it because there was no particularly efficient platform at the time. Duoduo Cross-border was the first platform I focused on." A year ago in the summer, Lang Xiaoming received a call from Temu in the crayfish restaurant that the store had passed the review, and he realized that his opportunity had come.

Having worked in purchasing for many years, Lang Xiaoming had long wanted to get orders from foreign markets. But it was not easy to sell goods across the ocean, even on the mainstream cross-border platforms at the time.

At that time, Lang Xiaoming needed to monitor every link from the delivery to the receipt of goods. Various difficulties such as not knowing how to place goods, difficulty in mastering the inventory, and complex cross-border fulfillment consumed the energy of many cross-border novice sellers like Lang Xiaoming.

Once, Lang Xiaoming made a mistake in selecting products on other cross-border platforms, and a batch of expensive razors were unsalable in the United States. Considering the freight cost, it was impossible to return the goods. The only solution was to wait for the storage fee or to sell them off. After many twists and turns, Lang Xiaoming found a company willing to take over the remaining goods. He cleared the goods in one month and ended up losing 100,000 yuan.

Due to the lengthy chain of domestic and international transportation and distribution, such troubles are not uncommon. For example, a lighter handled by Lang Xiaoming is a hot-selling product around Christmas, but the fulfillment time of other platforms is difficult to control, which easily leads to wasted inventory. "I am afraid of being out of stock, and I am also afraid that the time will not be well managed and the goods will arrive out of season, so I can only sell them at a discount or try to increase advertising fees."

“As more cross-border intermediate chains are involved, there will be more areas that are difficult to control when going overseas, and merchants will need to incur more costs. They will also need to configure more job positions, plus marketing costs, and the price competitiveness of products will be weakened,” said Lang Xiaoming.

He gave an example. On cross-border e-commerce platforms that mainly use platform models, logistics costs generally account for 15% to 20% of the sales price of goods, and advertising fees for popular categories are as high as 20% to 30% of the sales price of goods. "Especially during the epidemic, there was a shortage of transportation capacity and logistics costs rose sharply. The delivery at that time made us lose confidence in cross-border business."

In his opinion, Duoduo Cross-border's full-trust model is a "through train" that saves merchants worry, effort and money. Under the full-trust model, the factory only needs to be responsible for producing goods and shipping them to the platform's domestic warehouse, and the platform is responsible for marketing, traffic diversion, sales and overseas distribution.

Specifically, Duoduo Cross-border can provide merchants with one-stop services including website traffic, cross-border logistics, legal affairs, intellectual property rights, etc. At the same time, through a flexible supply model of small quantities, multiple times, and quick response, the platform can promptly identify, summarize, and feedback changes in consumer demand in different overseas markets to businesses, providing long-term and stable orders for manufacturers.

"Under the fully managed model, the platform can also play to its own strengths and work with us to optimize costs to the best." Lang Xiaoming explained, "When negotiating cooperation with overseas social apps (mobile software) such as Facebook and logistics companies, the price and funds that the platform can get are obvious advantages. How can we, as a small business, afford to charter a plane?"

In addition to saving time costs, the new full-hosting model does not squeeze the profit margins of merchants. On the contrary, it has demonstrated a "small profits but quick turnover" situation in many popular categories.

Compared with the profit margin of a single product, Cheng Dahong pays more attention to sales volume. "The order volume of Duoduo Cross-border is much larger than that of other platforms, so the overall profit is not low."

After the county razor went overseas

The consumer market is always changing rapidly, especially when facing consumers in different regions. How to detect market changes and grasp consumers' consumption habits and preferences? Duoduo Cross-border uses a group of people as the answer.

They are called "buyers" and play a central role in the entire transaction chain. On the one hand, buyers are responsible for communicating with factories and suppliers, participating in the entire process of product selection, price verification, arranging goods flow and market operation; on the other hand, they observe the purchase big data in real time and provide demand and business suggestions to merchants.

When Lang Xiaoming first joined Duoduo Cross-border, he communicated with buyers on WeChat almost every day, which helped him quickly get used to the platform. Later, their conversations mostly revolved around what to sell and how to sell it.

Buyers are always the first to perceive subtle changes in the consumer market. Through the sensitive and efficient information transmission of buyers, Lang Xiaoming learned for the first time that overseas consumers prefer simple black and white, rather than the fresh macaron color popular in China; the power of razors should be higher to better suit the usage habits of overseas consumers; shavers and hair clippers have their own peak sales seasons, which need to be in place in advance.

"The platform has much more big data than we do. The suggestions provided by buyers can help us understand consumption trends in a timely manner and help create periodic hot products. This also maximizes the advantages of the platform's big data and supply chain resources." Lang Xiaoming believes.

In addition, merchants can also actively understand market demand, improve product quality, and find the key to creating the next hit product on the platform.

Lang Xiaoming often reads buyers' reviews. He believes that doing business requires being close to consumers, and those reviews are the most authentic voices. "For example, if a consumer mentions that the shaver has a short standby time, we will immediately contact the factory and optimize the 400 mAh battery to 600 mAh. If a consumer mentions in the review that he is particularly concerned about a certain attribute of the product, I will consider magnifying this point in the main picture or title of the product."

In the eyes of Lang Xiaoming and Cheng Dahong, today, Duoduo Cross-border's huge user scale and rapid expansion in overseas markets are like replicating the growth myth created by Pinduoduo in the Chinese market.

It is precisely because of their optimism about the platform that they decided to work hard to optimize old products, develop new products, and conquer more overseas consumers with Chinese products.

"I am very motivated to do cross-border business now. I want to improve the quality and build a brand." In addition to his daily work in the factory, Cheng Dahong has recently been focusing on the update and iteration of overseas products. "The overseas pet products market is huge. I am discussing with Mr. Lang about developing new products for pet shaving."

Internet analyst Zhang Shule believes that the full trusteeship model promoted by Duoduo Cross-border is beneficial to factory-type and integrated industrial and trade businesses, empowering my country's high-quality industrial belts and further releasing the productivity of industrial belts. At the same time, Duoduo Cross-border has also enabled central regions such as Anhui and Hubei to give full play to their own resource and industrial advantages, promoting the economic development of central regions and becoming a powerful new engine for inland cities to develop an export-oriented economy.

"Going forward and going far", this long-termism that focuses on professionalism and creativity is not only the requirement of Cheng Dahong and Lang Xiaoming for the small razor in their hands, but also their expectation for Duoduo Cross-border. From a small county to the big world, from the old paradigm of going overseas to the new world of cross-border, Duoduo Cross-border and thousands of excellent manufacturers in China have told the story of Made in China in a new way and spread it further.

Reprinted from: Daily Economic News