With these questions, the editor made a special interview with Mr. Wang Zhi, the founder of Shenzhen Xincheng Network Technology Co., Ltd., who has transformed from traditional foreign trade. Regarding cross-border e-commerce platforms, team building, and scientific management mechanisms, what unique insights does Wang Zhi have?

Wang Zhi

After graduating and coming to Shenzhen in 2006, after a few years of exploration, he founded Shenzhen Xincheng Zhanye Technology Co., Ltd. in 2010, focusing on foreign trade B2B; established the AliExpress team in 2012, still doing foreign trade B2B; until the establishment of ebay and eBay in 2014 The Amazon team has fully transformed into a cross-border e-commerce B2C; in 2015, cross-border e-commerce sales exceeded 100 million. In 2017, Wang Zhi made a major decision to abandon the traditional foreign trade business and focus on cross-border e-commerce. Such a choice may be more suitable for a "small company" like us that has started our own business in Shenzhen.

1. Which traditional manufacturing industries are more suitable for transformation into cross-border e-commerce?

Consumer products, platforms, mobile phones, home furnishings, small speakers, humidifiers, etc., as well as large pieces of furniture, office furniture, lamps, LED lights, and auto parts that are popular this year (eBay has a greater advantage)

2. What are the advantages and shortcomings of traditional manufacturing transformation to cross-border e-commerce?

They have a deeper understanding of the supply chain, including raw materials, intermediate processing, production, and cost control. They may have been more accustomed to "make-to-order" before, focusing more on cost control, expanding production scale, and relying on mass production to reduce product costs. These advantages are stronger. But correspondingly, the links of product development and design, marketing, etc. are relatively weak.

In addition, understanding and contact with the Internet may also be a shortcoming. If you do eBay or other non-Amazon platforms in the past two years, such as Lazada and Wish, you need to use third-party overseas warehouses. Overseas warehouses will be related to the entire control of logistics, transportation, customs, and delivery will also be a problem that needs to be learned.

Advantages: a deeper understanding of the supply chain, including raw materials, intermediate processing, production, and cost control

Weaknesses: R&D and design, marketing, understanding and contact with the Internet

3. What are the effective methods for marketing?

Marketing mainly depends on the market. The US market currently mainly uses YouTube and Facebook, mainly social marketing. How to do it depends on what your marketing purpose is, which is for brand promotion? Or is it to boost sales? Different purposes do different things.

4. Are there any precautions regarding brand, trademark registration, and infringement issues?

Amazon now requires that a trademark must be registered. Now that the registered trademark is very mature in China, this is easy to say.

Regarding product patents, if we develop a core product, we will go to the United States and Europe to register a patent. At least one appearance patent should be registered. Protect yourself on the one hand, and fight your competitors on the other.

Of course, the most important thing is to protect yourself: if the other party uses malicious patents to attack you, there is still a big difference between having a patent and not having a patent. If both parties are patent parties, at least the platform will not think that you are maliciously infringing on someone else's patent. If the other party complains to you, you do not have the corresponding patent in hand, then you will suffer more.

5. How to solve the follow-up problem?

Follow the seller to solve the problem, put your own brand and logo, the other party will generally not follow the seller, so that you can maintain an absolute advantage.

6. What do you think of VAT?

What I see is that VAT this year, everyone is slowly working on some plans, and there are some more compliant plans to solve them. Anyway, some of the people who were dealt with first were all Amazons. There was no VAT account on the eBay account, or a fake VAT account. I know that this is the case that is being dealt with. Many died in August and September. In the past, because I didn’t understand it, I felt that VAT would hurt my income, and I was afraid. Now I have a correct understanding of VAT and I am gradually compliant.

7. Which markets do you recommend for transformation sellers to enter?

Our experience is not too much, I can only talk about some experience from my own experience. How to choose the market to enter is related to the product and requires market research. This is also the biggest difference between many people in traditional manufacturing and those of us who have done a period of cross-border e-commerce. We have certain market research capabilities. We can use some data-based tools to investigate and judge. The future market and sales volume of the product.

8. What is the status quo of market competition in different countries?

Regarding the degree of competition in the German market, it is weaker than that of the United Kingdom and the United States, and it is better to do so. German, product quality requirements are also higher.

9. How to form a cross-border e-commerce team?

If the monthly sales is less than 300,000, it can be regarded as a small team with 3-5 people. Operation, customer service, and promotion by yourself. If you want to achieve a more stable state, you need at least 3 more capable people, respectively responsible for product, operation, and off-site promotion. At least it should be divided into three major parts: operation team, product team, and logistics team. Regarding the specific staffing and how to build a scientific management mechanism, I will share in detail at the conference.

10. How do you feel about Amazon's "mysterious" A9 algorithm?

I still have to use my own practice to simulate buyers, search for my own products, and continue to search. Search for your own products through various keywords and various search methods, and you will gradually gain a certain understanding of this algorithm. I don’t think there is a better way. It depends on experience, because Amazon’s algorithm is constantly changing. I haven't seen a so-called textbook to explain what Amazon's algorithm is, and Amazon will never publish this thing, so this depends more on the experience of the operators.

At the end of the interview, Wang Zhi said that the "financial process" and the "assessment of operating personnel" are the ones that he found in his exchanges with peers that everyone values more.