In order to welcome the overseas "Double Eleven" - "Black Friday" shopping festival on November 11, Liu Wenhai has been busy since August, and a batch of hats he participated in the design will fly out of the domestic Yiwu warehouse of the "Duoduo Cross-border" e-commerce platform and wear them on the heads of people of different colors around the world.

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In this season of cross-border e-commerce, Gong Zhihan is also "preparing". He looks forward to seeing the scouring pads he developed across the ocean and in kitchens around the world.

It's hard to imagine that scouring pads, thermos cups, and false eyelashes, which are commonplace in China, have become highly sought-after items abroad.

"In the first half of 2023, China's cross-border e-commerce import and export volume increased by 16% year-on-year to 1.1 trillion yuan. "At the 11nd Global Digital Trade Expo, which opened on November 23, the latest data was released in the "China Digital Trade Development Report (2022)".

Liu Wenhai and Gong Zhihan are not fighting alone. Like them, the "second generation of factories" has experienced the golden age of family factories, and with the gradual decline of traditional foreign trade channels and the transfer of domestic and foreign industrial belts, it has become more and more difficult to receive orders, production, and small profits and quick turnover. In the face of this new challenge, these "second generation factories" do not lie flat or retreat, they turn the bow of the ship, break through the trade model of "looking across the sea", and sail into the blue ocean of cross-border e-commerce.

If you don't go to sea, you may have to be "out"

From a distance, Gong Zhihan's factory has been around for some years, and the exterior wall has been rubbed off its original color by time. This factory, built in Yiwu, Zhejiang, was founded in the late 20s of the 90th century, specializing in the production of cleaning cloths, dishwashing mats, and kitchen towels. Gong Zhihan, who is 5 years older than him, spent his childhood with the roar of looms.

For a long time, these factories have enjoyed the dividends of low cost and high efficiency of labor-intensive enterprises, but with the rise in labor and raw material costs, the decline in orders, and the thinner and thinner factory profits, they have to face the pain of transformation when they are handed over to Gong Zhihan, the "second generation of factories".

In 2018, Gong Zhihan returned from studying abroad and took over the management of the factory from his father and became the head of the "second generation of the factory". Studying finance, he keenly discovered a problem that fell into a "dead loop": the single quantity is the blood flowing in a factory, and only a sufficient single quantity can support the healthy operation of the factory. After many traditional supply chains lose orders, they gradually lose the opportunity and ability to participate in product iteration, and are forced to stay away from consumer demand, and the final outcome is to have to "go out".

At the same time, Liu Wenhai is also looking for a way to transform, "cross-border e-commerce is a way to live, rather than internal friction entanglement, it is better to go to sea to explore a new way."

According to Liu Wenhai's observation, the gradual reduction of the quota for foreign customers is a red flag. In the heyday of foreign trade in the hat factory in his hometown in Shandong, his parents could straighten their backs and ask customers to pay the full deposit. Gradually, the deposit is reduced to 50% to 30% of the total amount of the order. In the end, his parents even had to pay for a smiling dinner to barely keep one or two customers.

As the state has successively issued guidance to support the development of cross-border e-commerce, some "second-generation factories" have seen a rare opportunity.

In 2017, the cross-border e-commerce platform became Liu Wenhai's "No. <> test field" for going to sea. He adopted a strategy of small batches and multiple batches to sell his own hats overseas, and harvested the "first pot of gold" worth one million yuan. But at that time, Liu Wenhai's parents, who were accustomed to the traditional foreign trade model, did not understand it very well, thinking that this was "just a sporadic business, and it is difficult to achieve any big climate".

Soon after, Gong Zhihan also settled in Walmart online mall, Amazon and other platforms, and took the factory to take the initiative to "grab orders", and began to transform from traditional foreign trade to cross-border e-commerce to test the waters.

At the initial stage, Gong Zhihan looked at the dense e-commerce data in front of the screen, and his father frowned: "How can you manage the factory well just by facing the computer?"

In the eyes of the older generation, the trade model of "first order, then mass production" is the most secure, while cross-border e-commerce does the opposite.

A new crown epidemic has broken this generational game. In the first three years, Liu Wenhai's parents' orders fell by two-thirds, and most of the employees who had no work to do could only stay at home, and the factory was struggling to maintain on the verge of shutting down. When the business was bleak, the hats in the factory were even sold on domestic platforms.

At a difficult moment, the "Duoduo Cross-border" e-commerce platform, which focuses on "empowering small and medium-sized businesses to go overseas with new technologies", stepped into Liu Wenhai's field of vision, and with the mentality of giving it a go, he became the first batch of sellers to settle in. The platform helped him reduce operating and logistics costs, and contracted intermediate links such as logistics, promotion, customer service, and after-sales to reach overseas consumers.

Liu Wenhai did not expect that not only the unsalable products in the factory were sold out, but even reached 10,<> orders per month, which was even more popular than before the new crown epidemic.

According to the preferences of foreigners, Liu Wenhai designed the "Pull Hat" and made two hairballs on the hat. Someone bought it back and removed the two hairballs and sewed them onto the shoes, setting off a trend. This hit once sold 10,<> orders a month.

Not only did the lost orders come back, but Liu Wenhai also found a new way to increase profits.

The sewing machines in the factory are "smoking", and millions of hats are sold across borders. Liu Wenhai became the "backbone" of the family business.

Take a "boat" to go to sea and break into a new world

So far, Gong Zhihan firmly believes that the "ToB+ToC" two-legged walking model is correct.

Today, the scouring pads produced by Gong Zhihan's family have more than 20,<> orders per day on the cross-border e-commerce platform, and even rank first in the scouring pad category on the "Duoduo cross-border" e-commerce platform. Consumers in more than <> countries, including the United States, Canada, and New Zealand, can easily purchase their products.

But looking back, it was not easy to take the "boat" to the sea. Over the years, Gong Zhihan has stepped on various "pits" large and small. When he first entered cross-border e-commerce, he habitually produced the same quantity of products in different colors. But who knows, the same gray, American consumers prefer blue gray, but other colors of products can only be backlogged warehouses.

In 2019, after a "hot order" printed scouring pad was replenished in batches in the factory, it was suddenly removed from the shelves by the cross-border e-commerce platform due to product compliance issues, resulting in an investment of more than 30,<> yuan.

During the new crown epidemic, Gong Zhihan did not expect the transportation capacity to be so tight, and in order to ensure the smooth overseas sales season of popular products, he gritted his teeth and paid an additional 40,<> yuan in air freight. "It's all a lesson learned with money. He said with a deep breath.

"Doing cross-border e-commerce is not about moving goods directly to the Internet, but about using order data and consumer evaluation on the platform to make special products to win. Wang Guoqing, the second generation of the post-90s "factory" in Dazeshan Town, Qingdao, Shandong Province, said with emotion. He took over the false eyelash business from his parents and sold them to the global market through the "Duoduo Cross-border" e-commerce platform.

In the past, it was difficult for Wang Guoqing's parents to understand the experience of foreign consumers, and when the platform had more messages and orders, "Some people commented that the false eyelashes were too single, so we produced a combination set with eyelash glue and tweezers." Now the set is a bestseller, he said.

"Cross-border e-commerce platforms provide a controllable trade channel for enterprises, helping brands and manufacturers better grasp and gain insight into customer needs, and adjust product and brand positioning in a timely manner. Zhang Jianping, deputy director of the Academic Committee of the Academy of International Trade and Economic Cooperation of the Ministry of Commerce, said that the ultimate value of cross-border e-commerce platforms lies in passing on market demand to manufacturers through their own advantages.

The story of the "second generation of the factory" going to sea has become a footnote to the rolling forward of the times. In 2022, China's cross-border e-commerce imports and exports reached 2.11 trillion yuan, accounting for 2015% of foreign trade, up from less than 1% in 5. In the first half of this year, China's cross-border e-commerce import and export reached 1.1 trillion yuan, a year-on-year increase of 16%.

Behind these digital growths is the continuous exploration of many "second generation factories" to seek innovation and change.

Now, Gong Zhihan's father's hanging heart has finally fallen, and he no longer "raids" what his son is looking at at work, nor does he assert that "if you don't move, you can't do business". He began to let go and let the juniors break new ground on their own.

Many old employees who watched Gong Zhihan grow up still don't know what this "little boss" is doing. But what they can see is that more and more people in the factory are driving private cars, dressing more and more decently, and living more and more affluent.

We don't have to jump on the trend because we can be it

There is a saying in the vacuum cup industry that among the world's 70 billion people, one out of every 3 people uses a vacuum cup made in Yongkang.

Wang Bowen, born in Yongkang, Zhejiang, after 95, returned to his hometown from the United States in 2021 and took over the company founded by his parents, Zhejiang Maibo Industrial Co., Ltd.

This company has been working for internationally renowned brands such as thermos and Starbucks all year round, and is a leader in the local enterprises of the same kind. However, as a foundry, not only is the profit still at the bottom of the U-shaped curve, but in terms of product design, it has no right to speak, and can only be an "unsung hero" hiding behind the scenes.

"Doing low-value-added OEM business is not a long-term solution. Wang Bowen knows that if you want to get rid of the trap of price involution and stand out on the crowded track, there is no choice from OEM to brand overseas. To this end, he recruited designers and began to independently develop thermos cups, hoping to outperform others in design and creativity.

Two years ago, he explored a VR real-life exhibition hall on a cross-border e-commerce platform, inviting foreign customers to "cloud explore the factory", so that they could see the strength of the factory without having to cross mountains and seas. This year, he led the team to settle in the "Duoduo Cross-border" e-commerce platform, which adopts a fully managed model, so that sellers do not need to worry about front-end traffic and store operation, and it is more beneficial for manufacturers to focus on product development and manufacturing.

According to Li Mingtao, president of the China International Electronic Commerce Center Research Institute, there are a large number of foreign trade enterprises in China, which have done many years of work for many brands, and have strong production and quality control capabilities, but lack the ability to sell and operate, and lack the ability to enter overseas markets. The fully managed model innovatively launched by cross-border e-commerce provides a new business infrastructure for enterprises with overseas needs.

With a broader vision, Wang Bowen's standards and requirements are more stringent. In the face of unsatisfactory cup design, it is no longer "with thin mud", but straight to the point and "no". In his view, in cross-border e-commerce platforms, docking user preferences and meeting customer needs is the first priority. "Young consumers in Europe and the United States prefer cool elements, and an orange-yellow thermos cup inlaid with rhinestones has become their favorite. With the rise of 'camping style', many foreign customers like to take their cups outdoors as accessories. Wang Bowen said.

Wang Bowen often gets encouragement from overseas buyers' shows. An American consumer who bought the "Shaker Cup" left a message: "This is the best I have ever touched, I bought 4 in one go!" Wang Bowen sighed, "I feel very happy to see that these cups can bring happiness to strangers in foreign countries." ”

"My fathers worked hard to complete their long march. As our new generation, we should not be willing to stay, so that 'Made in China' has an exclusive brand is our mission and ambition. In Wang Bowen's planning, "to be the first world-renowned Chinese thermos cup brand" has become his goal.

For a long time, Jin Weifeng, the "second generation of the factory", was engaged in the traditional foreign trade OEM business, processing and producing other people's goods. Duqiao Town, Linhai, Taizhou, Zhejiang, where he is located, is one of the four major glasses cities in the country, and 70% of the country's glasses come out of this town.

After testing the waters of "Duoduo Cross-border" and AliExpress, Jin Weifeng made a bold move to make his own brand. As a result of improved quality and packaging, both selling prices and margins have increased by nearly 50 percent. Jin Weifeng believes that the profit margin of the brand is larger, and the cost of improving the quality has become the first choice, while the products without the brand will fall into the price involution and will inevitably be eliminated.

Different from the traditional trade model of the alternate season, Liu Wenhai is currently making steaming seasonal models and has built his own brand. From "an idea" to "a sample", it can be completed in just two hours. Not long ago, in a short video of a foreign girl singing RAP, Liu Wenhai recognized at a glance that the girl was wearing a home-made "pile hat", and he cried out excitedly.

It was these moments of accomplishment that gave Liu Wenhai great motivation. "It doesn't have to be trendy, because we can be trendy too. Liu Wenhai has never worried that his creative inspiration will run out, and in the next step, he wants to use hats as a carrier to convey more creativity and aesthetics of traditional Chinese culture to the world.

At present, "Duoduo Cross-border", TikTok Shop, AliExpress and other "domestic products going to sea" platforms are in the limelight, and more and more "second generation factories" shoulder the expectations of the older generation, take advantage of the east wind of the new era, take advantage of the situation to go to sea, and highlight the encirclement.

The experience of going to sea has also made these "second generation factories" who have been questioned about "not doing their jobs" become the new generation who "can carry things" in the eyes of their parents.

China Youth Daily, China Youth Network reporter Huang Danwei Source: China Youth Daily