Selling 60 billion overseas a year! Can new cross-border sellers copy its path?

      As we all know, the cross-border e-commerce industry has risen in the past two years, especially during the epidemic in 2020, the shopping habits of overseas consumers have accelerated, and everyone has shifted from offline consumption to online consumption. Taking the United States as an example, according to data from the U.S. Bureau of Statistics, the scale of e-commerce retail in the United States reached US$211.5 billion in Q2 2020, with a penetration rate of 16.1%, an increase of 4.8% from the e-commerce penetration rate in Q4 2019.

      This is just the situation in the United States, and the global situation is even more conceivable. The emergence of the epidemic has helped the cross-border e-commerce industry and made it a new trend. The performance of many cross-border e-commerce companies doubled last year, and the only impact of the epidemic on them is to boost their performance.

      Today I will introduce the clothing industry of cross-border e-commerce for domestic clothing sellers to refer to and think about it in order to make decisions on cross-border e-commerce!

Overall overview of clothing e-commerce

      When it comes to cross-border e-commerce clothing industry, the first thing that comes to mind is SHEIN (Xiyin). SHEIN is indeed a dark horse. Its revenue in 2020 exceeded 60 billion. Many people, including capitalists, knew about SHINE last year.

      Indeed, the epidemic has accelerated the expansion trend of the clothing line, the clothing industry has developed very rapidly , and China's export performance is also eye-catching. In 2020, the overall market size of the clothing industry was declining, but the global clothing e-commerce industry showed a double growth in market size and penetration. Before the epidemic, the clothing industry has maintained a rapid growth trend. From 2009 to 2019, the CAGR (annual compound growth rate) of the global clothing e-commerce industry market size for ten years was 17.8%, but in 2020, it increased by 21.7% year-on-year .

      According to statistics, in terms of market size, the global clothing e-commerce industry in 2020 was US$411.697 billion, an increase of 21.7% year-on-year compared with 2019. In 2020, the e-commerce penetration rate of the global clothing industry reached 28.7%, an increase of 9.6% compared with 2019.

      The epidemic has reduced the opportunities for outdoor shopping, but has developed the consumption habit of online shopping and accelerated the development of the clothing industry. In 2020, the penetration rate of China's clothing e-commerce was 35%. In contrast, there is still a lot of room for improvement in overseas markets, which also means that the clothing industry market of cross-border e-commerce is far from saturated.

Overview of the global clothing market space

      The current global clothing market structure is that the European and American markets are developing and mature, with outstanding growth rates in Southeast Asia, the Middle East and Latin America. The CAGR (annual compound growth rate) in Southeast Asia, the Middle East and Latin America from 2010 to 2020 were 36.4%, 30.58%, and 38.84%, respectively. These three major markets are in a stage of rapid development.

      In terms of specific regions, North America and Western Europe have the highest penetration rate and the largest market size . The penetration rate of clothing e-commerce in North America is 37%, and the penetration rate of clothing e-commerce in Western Europe is 29.5%, accounting for 27.93% and 21.31% of the global clothing e-commerce scale.

      By country, the demand for clothing e-commerce in developed countries is mature, while new developing countries are rising . Data shows that the penetration rate of clothing e-commerce in developed countries such as the United Kingdom, the United States, and Germany is above 20%, and consumer shopping habits in these three countries have basically formed. In emerging developing countries such as Vietnam, Mexico, and India, the CAGR (annual compound growth rate) of the clothing market remains at 30%-60%. If there are sellers who want to layout these three major markets, there is a great opportunity to enjoy the dividends of their rapid growth in the market.

The global clothing e-commerce market is in three major echelons

      In the global market competition, a group of brands have already led the way, divided into three categories - traditional brands, platform sellers, and independent websites. Traditional brands are top traditional fast fashion brands represented by ZARA, H&M, and UNIQLO; platform sellers are third-party sellers, sold through Amazon, Wish, Shopee, Libre and other platforms. Top sellers such as Zibuyu and Saiwei Times have hundreds of brands and stores on each platform; independent sites are mainly top brands such as SHEIN, Boohoo, and ASOS.

      Some institutions have counted the data on global market share. Currently, each clothing e-commerce brand is divided into three major echelons: the first echelon is SHEIN and Zalando , ranking among the top, accounting for 2.45% and 2.19% of the global market respectively, followed by traditional fast fashion brands Zara and H&M; the second echelon is Boohoo and ASOS , with ASOS accounting for 1.1% of the global share, while in the UK region is 7.29%; the third echelon is third-party platform sellers, taking Saiwei Times and Zibuyu as an example , its global market share is 0.09% and 0.07% respectively.

      The revenue scale of global clothing e-commerce companies is divided into three major echelons. The first echelon is SHEIN and Zalando . The revenue in 2020 exceeded 60 billion yuan, but there is still a certain gap between the traditional fast fashion clothing with a revenue of 10 billion yuan; the second echelon is overseas clothing e-commerce giants such as ASOS and Boohoo with revenue exceeding 10 billion yuan; the third echelon is Global Easygou (formerly Zaful parent company), Saiwei Times, Zibuyu, etc. , with revenues remaining at billions, mainly third-party clothing sellers in China's cross-border clothing vertical independent stations and platforms.

Different clothing supply capacity in each region

      Southeast Asia is within the radiation range of China's clothing industry chain, so its local clothing supply capacity is strong and its independent clothing brands account for a high proportion . Six of the top ten clothing brands in Vietnam are local clothing brands, and the proportion of independent clothing brands is quite high. According to statistics from the WTO, Vietnam and Indonesia's clothing export trade value in 2019 was US$31 billion and US$9 billion, accounting for 6.2% and 1.7% of global trade volume.

      The scale of local e-commerce in the Middle East is small, and the country has high per capita income and strong consumption capacity, but the local clothing production capacity is weak. Clothing demand mainly depends on imports, mainly foreign brands, and importing countries are mainly China and Türkiye. Data shows that China's net exports to Saudi clothing in 2020 were US$3.687 billion .

      In 2020, the e-commerce market size in the Middle East was US$7.94 billion, an increase of 54.08% year-on-year. The e-commerce markets of Saudi Arabia, the UAE and Egypt are the main core areas of the Middle East market, with the market share of the three countries being 83%. Among them, the UAE is the main market for clothing e-commerce in the Middle East, with local per capita spending on clothing at US$161, an increase of 101.60% year-on-year compared with 2019.

      Compared with the overseas clothing market space, the current domestic clothing market is full of red oceans, and most clothing companies are dying. In the past two years, many old clothing brands have gradually disappeared, such as some fast fashion.

      Looking overseas in a blink of an eye, the clothing market space is really attractive. SHEIN, a dark horse, not only grasps the trend of cross-border e-commerce, but also has its own strategies and tactics. Interested domestic sellers may wish to study SHEIN, and then combine the current global market situation and the advantages and disadvantages of their own companies to explore a path that suits them!