The landscape of cross-border e-commerce has witnessed a seismic shift as major players vie for dominance in a fiercely competitive arena. SHEIN, Temu, AliExpress, and TikTok Shop—the so-called “Four Little Dragons” of cross-border e-commerce—have been steadily challenging Amazon's long-standing supremacy. However, as the tides of competition rise, Amazon is retaliating with new strategies aimed at reclaiming its market share.

With the arrival of the overseas shopping event known as “Black Friday,” which rivals the Chinese shopping phenomenon “Double Eleven,” Amazon has rolled out its own low-cost platform, Amazon Haul. Designed to entice budget-conscious shoppers, this new marketplace features a price cap of $20. During this year's Black Friday, an array of products—ranging from $0.50 beauty brushes to $1.50 phone cases and $5 apparel—have been among the bestsellers, reigniting fierce price competition among e-commerce platforms.

A key battleground in this e-commerce war isn't just prices; it's also about acquiring more Chinese sellers. Reports suggest that Temu is contemplating a platform model similar to Taobao’s, which allows merchants to autonomously choose products, set prices, and manage their stores while shipping them internationally. This model would significantly shift the dynamics of competition as platforms compete not just for buyers, but also for sellers eager to tap into overseas markets.

As the Four Little Dragons battle for market presence, they are also battling increased regulatory pressures and changing compliance landscapes in foreign markets, which necessitate an accelerated localization strategy. By offering various forms of services—from full to semi-managed options—the four platforms are adapting to counter these external challenges.

The recent extension of promotional timelines has unsettled many international sellers as platforms step up their marketing strategies. For instance, AliExpress has ingeniously extended its promotional activities to mimic a second Double Eleven, starting from early November and overlapping with Black Friday. This provides a month-long window for promotions, catching many sellers off guard who are accustomed to the traditional five-day sale duration associated with Black Friday.

Longer promotional periods accompanied by a surge in the number of sellers has fueled a climate of intensified competition, pushing many merchants to rethink their strategies. Feedback from sellers on the ground indicates that those in the full-service model often find that pricing power is progressively shifting towards the platform. With extensive price comparison tools deployed by these platforms, pricing remains crucial in driving traffic.

A seller from SHEIN highlighted the challenges during Black Friday, particularly in getting new products listed as they frequently face rejection due to the increased scrutiny from the platform. Faced with a growing number of competing sellers offering similar products, the pressure to innovate and diversify continues to mount.

Lowest pricing has become a non-negotiable battlefield this Black Friday. This scenario is especially striking given Amazon's reputation for fast logistics and brand reliability, which faces new challenges as it allows the introduction of lower-priced products at Haul.

According to an Amazon seller, the Haul platform features various categories including fashion, home goods, and electronics, and is implementing additional discounts for purchases above specific price thresholds to entice consumers further. Furthermore, the appeal of Amazon’s return policy—free returns for items above $3 within 15 days—adds an additional layer of attractiveness for budget products where return shipping often exceeds the item cost itself.

This new strategy from Amazon is widely viewed as a counteroffensive against the Four Little Dragons. In the North American market—one of the primary battlegrounds—Amazon is exploring various strategies, including replicating domestic e-commerce strategies, implementing subsidies, and enhancing overseas warehouse accessibility.

Among the Four Little Dragons, sellers have noticed AliExpress's significant push in international markets, such as its preemptive marketing efforts prior to Black Friday. By aligning global campaigns and securing celebrity endorsements, it has increased its visibility. For example, in South Korea, AliExpress has exemplified aggressive marketing tactics, distributing substantial cash incentives to stimulate consumer engagement.

As Black Friday comes to a close, concrete results are still pending from both Temu and SHEIN. However, TikTok Shop has shown promising results, reporting sales of over $100 million on the day of Black Friday—triple that of last year—with the self-operated POP model showing a gross merchandise volume increase of 191% during this shopping period.

In this competitive landscape, the four platforms continue to invade each other's territories. Emphasizing their strengths in logistics, each company has adopted various strategies to enhance shipping and operational capabilities. An Amazon seller noted that the initial batch of merchants on the Haul platform were invited directly through Amazon’s outreach. They would send their products to a logistics center, while Amazon managed everything else, nearly mirroring the full-service model offered by Temu.

While Amazon sellers maintain the freedom to set prices, they must remain compliant with the $20 cap. This competitive edge focuses more on price competitiveness than on branding, benefiting generic brands that thrive under stringent pricing constraints.

As Amazon begins to encroach upon the domains traditionally dominated by the Four Little Dragons, these platforms are simultaneously focusing on attracting significant sellers from other e-commerce environments. Their operational shifts indicate a growing interest in varied fulfillment models to maintain competitiveness, allowing them to tap into burgeoning inventory while meeting budget-conscious consumer demands.

In contrast, TikTok Shop is leading the revolution in content-driven e-commerce, capitalizing on the booming popularity of short videos and live-streaming to pull in massive audiences. Merchants revel in the robust interactions generated by influencers under different market conditions, making TikTok a paradigm of shifting consumer engagement. However, the scale-up can present unique challenges as finding quality influencers becomes increasingly difficult.

As the Four Little Dragons seek to expand their reach into regions with lower e-commerce penetration, they are keenly eyeing Latin America and Asian markets in their quest for global market leadership. To this end, ambitious targets were set; Temu aimed for a noteworthy $60 billion in transaction volume, TikTok Shop for $50 billion, and SHEIN projected between $63-90 billion—a major leap in growth projections for all.

In pursuit of capturing market share, heavy investments in marketing initiatives have become crucial. Noteworthy is AliExpress's recent advertising in Saudi Arabia and securing high-profile partnerships with events such as the European Cup. Sporting events have become a lucrative avenue for e-commerce platforms to establish presence amidst the competition.

With the influx of sellers, platforms are now turning towards more refined operations to ensure long-term sustainability. Temu has transitioned from a quantity-focused approach to a gross merchandise value-driven strategy, trying to maintain relationships with existing sellers while identifying new partnerships. Past flows of subpar intermediary sellers are anticipated to diminish over time.

Moreover, to pre-emptively address potential risks, the emphasis on localization grows more urgent. Platforms like Temu are making concerted efforts to recruit local sellers, lowering the barriers to entry into the marketplace to onboard American sellers and brands, thus broadening their product offerings.

Likewise, TikTok is reducing its onboarding thresholds for sellers, strategically positioning itself ahead of regulatory scrutiny. These maneuvers reflect platforms' anticipation of evolving regulatory stances while locking in influencer collaborations to enhance their operational resilience.

As SHEIN continues to navigate the complexities of its IPO journey, its pivot toward focused fashion categories hints at a strategy to refine its offerings amidst the plethora of available services and operational frameworks. The future remains uncertain as the battle within e-commerce carries on; nonetheless, with Amazon striking back and the Four Little Dragons claiming their ground, the challenge is far from over.