Those who are engaged in cross-border e-commerce should have a deep feeling in the past two years: the era of huge profits in the industry has come to an end, and the days of making money based on luck and extensive models are gone forever.
The rapid explosion of cross-border e-commerce in the early years is a typical dividend outlet.
At that time, the barriers to entry in the industry were extremely low. Platform traffic was rampant, exchange rate differentials were considerable, supply chain and labor costs were low, and the overall regulatory environment was loose. A large number of merchants relied on the model of product distribution, poor information, and low prices to increase volume, without the need for refined operations, and they could easily earn huge profits.
However, as the global cross-border market becomes saturated, the logic of industry competition has been fundamentally subverted.
In the past, the competition was about who could distribute goods quickly and have lower prices. Nowadays, the competition has turned to the comprehensive strength competition of brand strength, localized services and standardized operations.
The extensive model of barbaric growth can no longer adapt to the current pace of industry development.
To put it simply, cross-border e-commerce has completed a comprehensive switch from ‘opportunity dividend’ to ‘compliance dividend’.
Fiscal and taxation regulations, trade compliance, and risk control systems that were ignored by businesses in the past are no longer dispensable bonus items, but the basic threshold for enterprises to establish a foothold in the industry.
Under the new industry rules, compliance capabilities have become the core invisible competitiveness of cross-border merchants.
In the past period of opportunity dividends, many merchants poured into the cross-border e-commerce field and were able to make profits by relying on the market environment and simple business models at the time.
However, this model lacks sustainability. As the market develops and changes, its shortcomings gradually become apparent.
Today’s compliance bonus era has put forward higher requirements for merchants.
Merchants need to establish a complete financial and tax system to ensure the accuracy and compliance of tax declarations; during the trade process, they must strictly abide by the trade regulations and policies of various countries to avoid violations; at the same time, they also need to build an effective risk control system to deal with various potential risks.
What is clear is that the reshuffle of cross-border industries will continue to intensify in the future.
The era of relying on loopholes and gray space to make money is completely over. Only businesses that adapt to new regulations and adhere to compliance can maintain their foothold in the new round of competition and continue to make profits.
Those businesses that still rely on the old model will gradually be eliminated by the market.
For cross-border e-commerce practitioners, they must adjust their business strategies in a timely manner, strengthen their own compliance construction, and improve their comprehensive competitiveness in order to succeed on this new track.
