During the pandemic, thousands of aggregation shipping enterprises emerged, especially in the Fuyong Town area of Shenzhen. In this article, we will uncover the charm of the aggregation shipping industry and explore how these enterprises can break through the ceiling and achieve scalable growth.
The Allure of the Aggregation Shipping Industry:
In the past three years, the aggregation shipping industry has experienced unprecedented prosperity. Taking Fuyong Town in Shenzhen as an example, during the pandemic alone, thousands of aggregation shipping enterprises emerged in this area, thriving and expanding rapidly. Why are so many people rushing into the aggregation shipping track?
Looking back at the development history of the aggregation shipping industry, it was initially a relatively extensive industry in 2012, with a modest scale and scattered shipping demands.
The first breakthrough in the aggregation shipping industry occurred in 2014-2015, driven by the explosive growth of domestic online shopping platforms such as Taobao and Tmall. Astonishing figures, such as Taobao's Singles' Day sales exceeding 100 billion yuan in one minute and 1 trillion yuan in one hour, initially attracted the attention of overseas Chinese. Subsequently, the rise of payment apps like WeChat and Alipay redirected the focus of many overseas Chinese towards purchasing goods from China, opening up the demand for aggregation shipping.
The arrival of the pandemic gave the aggregation shipping industry a second wind. On one hand, pandemic control measures led to many overseas students and Chinese nationals being stranded abroad. On the other hand, even those who returned to China faced high time and economic costs, including quarantine policies such as "14+10," "14+7," and "21+7," and skyrocketing airfare prices for flights returning from the United States, reaching 70,000-80,000 yuan per ticket.
Unable to return home but craving hometown delicacies, overseas Chinese started shopping online from China and shipping goods through aggregation, converting their yearning for home into a demand for aggregation shipping. This surge in demand, coupled with three years of pandemic-induced habits, helped educate users and contributed to the rapid growth of the aggregation shipping industry.
Why Do Aggregation Shipping Enterprises Struggle Around 3 Million?
Despite two waves of explosive growth, the aggregation shipping industry remains highly decentralized, presenting challenges for centralized development. Although there seems to be a plethora of enterprises, most are small-scale operations. Many aggregation shipping enterprises, after reaching a certain stage of development, find it challenging to break through the bottleneck.
According to the current situation in the aggregation shipping industry, Rocky He, the founder of Aggregation Shipping Cloud Warehouse, divides the development process of aggregation shipping enterprises into five phases:
0-1 Million, Survival Line: In this stage, enterprises only need to focus on business marketing and warehouse operations. By excelling in these two aspects, breaking the 1 million mark becomes feasible.
1-3 Million, Development Line: The key to this stage is replication. Personal capabilities are limited, so continuous replication of corresponding talents and team expansion is crucial to reaching 3 million.
3-10 Million, Brand Line: After breaking the development line, enterprises need to build their own business system, including business systems, standards, processes, etc. They also need to clarify their business positioning, such as focusing on customers from a specific country.
10 Million-100 Million+, Domestic Ceiling: Beyond 10 million, enterprises have two main directions: building their own logistics or diversifying their business.
International Aggregation Shipping Ceiling: The final form of aggregation shipping, exemplified by the acquisition of the international aggregation shipping platform MyUS by Middle East courier Aramex for $265 million in October 2022.
In summary, different stages require different capabilities from companies and teams, and there are differences in resource matching. Enterprises in the 0-1 million and 1-3 million stages find it relatively easy to achieve, but breaking through beyond that point becomes challenging for many companies, which mostly remain around the 3 million mark, not to mention reaching the domestic ceiling.
The reasons behind this situation include the multifaceted nature of the aggregation shipping business, with various modules such as system, team, warehouse, operations, and logistics. While companies can afford to be less precise in these modules, they need all of them to break through. Additionally, the business is fragmented, with overseas Chinese scattered worldwide, each region having different demands, and the fragmented nature limiting user traffic.
Breaking Through the Development Bottleneck:
To break through the development bottleneck, Aggregation Shipping Cloud Warehouse focuses on several strategies:
Cost Optimization: New enterprises often face operational costs that lead to losses. By optimizing operations to the extreme and minimizing fixed costs, the survival line can be eliminated.
Experience and Expertise: Young enterprises may encounter regular problems due to their short operating history, requiring continuous payments to resolve. Providing expertise from a team with over a hundred aggregation shipping professionals reduces trial and error costs.
Enhancing Customer Experience: Visualizing and standardizing operational processes improves customer experience and reduces customer acquisition costs and turnover rates. Standardizing and refining information in the business operation process helps lower various costs, including business, system, and employee training costs.
Personalized Deployment: Offering independent deployment with a dedicated front-end mini-program and back-end providing marketing, information collection, and global logistics system pricing. This includes marketing logic from 0 to 50 million, such as coupon functionality and member distribution functionality, allowing enterprises to design personalized marketing.
Resource Integration: Aggregation of specialized aggregation shipping service provider resources with a dozen dedicated lines for sensitive goods enhances logistics efficiency and lowers logistics costs.
24/7 Operation: With over ten thousand square meters of warehouses operating 24/7 online to serve the operational needs of global Chinese users, enhancing user experience.
By integrating and optimizing high-operational and high-cost modules in the aggregation shipping process, establishing a cloud warehouse system, and empowering more aggregation shipping enthusiasts, Aggregation Shipping Cloud Warehouse aims to reduce costs, increase efficiency, and free up entrepreneurs from daily complexities to focus on customer acquisition and service.
In conclusion, the consumption scenario has shifted from Chinese people buying goods from abroad and pursuing foreign brands to overseas Chinese reversing the trend and consuming goods in China, especially with the pandemic making them accustomed to the consumption path of domestic aggregation shipping. This shift may lead to scenarios where people from developed countries such as the UK, the US, Europe, Canada, and Australia start purchasing goods from China in the future.
As the Chinese yuan digitizes and online payments become widespread globally, Chinese brands such as TEMU, SHEIN, BYD, Gree, etc., going global may deepen the recognition of Chinese products by foreigners. This could drive demand for purchasing from China, and new consumption paths and scenarios may emerge.
This could give rise to new aggregation shipping customer groups. Current estimates suggest that over 65 million overseas Chinese contribute to the aggregation shipping industry's scale of around 100 billion yuan. If the consumption path can be expanded to developed countries, the market size may increase by more than 10 or 20 times.
In the thriving development of the aggregation shipping industry, Aggregation Shipping Cloud Warehouse hopes to play the role of a catalyst by empowering more aggregation shipping enthusiasts through business systems. The aim is to find individuals interested in entering the aggregation shipping sector, forming aggregation shipping partners, and empowering the industry through resource sharing, pushing Chinese products further into the global market.
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