Going global is no longer an optional choice but a must-do task. Chinese cross-border e-commerce platforms led by Alibaba's AliExpress, SHEIN, Temu, and TikTok Shop have ignited a wave of "Made in China" trends worldwide.

In 2023, China's total import and export volume of cross-border e-commerce reached 2.38 trillion yuan, a year-on-year increase of 15.6%. Among them, cross-border e-commerce exports amounted to 1.83 trillion yuan, up by 19.6%.

With more and more industry giants entering the arena, the playbook of cross-border e-commerce is rapidly iterating. Last year, the hottest topic in the industry was undoubtedly full-service management (FSM), and just as the heat of FSM had not yet dissipated at the beginning of this year, the trend of semi-managed operations (SMO) emerged.

Full-Service Management (FSM) vs. Semi-Managed Operations (SMO)

Temu, launched in September 2022, pioneered the full-service management model in cross-border e-commerce, redefining the division of labor between platforms and merchants. Merchants only need to supply goods, while the platform takes care of store operations, warehousing, distribution, and after-sales service.

FSM not only further standardizes the platform's service level but also significantly reduces the threshold for going global, allowing merchants to focus on product design and production, enriching the platform's product offerings. Consequently, once introduced, FSM was quickly adopted by platforms like AliExpress, SHEIN, TikTok Shop, and Lazada, making FSM the hottest trend in cross-border e-commerce for a while.

However, enjoying convenience means relinquishing some bargaining power for merchants. Platforms need to maintain price advantages, compressing merchants' profit margins. From a formal perspective, FSM is more suitable for factories and integrated traders with strong supply chain capabilities, capable of making profits through low-margin, high-volume sales. For merchants specializing in differentiated products with accumulated strength, they hope to have greater bargaining space and retain more operational autonomy.

Recognizing this pain point, AliExpress took the lead in piloting Semi-Managed Operations (SMO) in August last year. Similar to FSM, SMO involves deep integration of the supply chain, redefining the division of labor between the platform and merchants. However, unlike FSM, under SMO, merchants have greater autonomy in certain aspects.

After six months of trial operation, AliExpress opened SMO to all merchants in January and rolled out multiple subsidies subsequently. Following suit, Alibaba's international platform initiated SMO recruitment and officially launched SMO in six countries including the United States, Canada, Mexico, the United Kingdom, Germany, and France after the New Year. Additionally, Temu's peer-to-peer SMO model also went live in March.

It's worth noting that although all three platforms adopt SMO, the aspects entrusted to the platform vary due to their differences. 

AliExpress and AliExpress:

Leveraging Logistics Advantage

Established in 2010, AliExpress is the longest-standing platform among the "four dragons" of going global, and its collaboration with Cainiao has enabled AliExpress to build its own competitive barrier in logistics.

In September last year, AliExpress officially launched the "Global 5-Day Delivery" international express service in collaboration with Cainiao. Consumers ordering items marked with "5-day delivery" on the AliExpress Choice channel can experience the service.

Before the official launch of the 5-day delivery service, AliExpress conducted several months of internal testing, which showed that the service greatly helped increase the volume of orders for full-service merchants and promoted consumer repurchases, forming a positive cycle of logistics driving order growth. The latest quarterly financial report released by Alibaba in February shows that Cainiao's "Global 5-Day Delivery" international express capability has expanded to 10 countries from two additional countries, achieving strong triple-digit growth in orders.

It's important to note that only full-service merchants in the Choice channel have the opportunity to enjoy this express service. As mentioned earlier, with over a decade of experience in going global, some merchants on the platform have accumulated rich operational experience over the years, making the all-encompassing full-service model less attractive to them. These merchants choose to stick to self-operation, envying the traffic and convenience of full-service.

AliExpress's introduction of semi-managed operations aims to empower self-operating merchants with the traffic dividend and its logistics advantages. Specifically, after joining SMO, merchants can continue their original operating methods, pricing, and marketing, while the platform provides warehouse/distribution (cross-border warehousing/JIT) management services and specific marketing activities. Semi-managed products will also be displayed alongside full-service products on the AliExpress Choice channel, benefiting from the platform's traffic support.

According to estimates, semi-managed operations can increase the average delivery time of cross-border small packet logistics for self-operating merchants at the same cost. In this way, merchants retain operational autonomy while enjoying faster logistics and more traffic, thereby improving operational efficiency. AliExpress is stepping up its investment in semi-managed operations. According to the IT Times, on March 6, AliExpress further upgraded its semi-managed operations, mandating that all products weighing below 2kg and hot-selling products weighing over 2kg be directly included

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