Increment! Enhancement! What business opportunities has the upgraded Amazon SPN service network released?

[Ebrun Original] The rapid development of cross-border e-commerce has brought more business opportunities for Chinese sellers, but it has also brought more growth challenges, making refined operation and professional division of labor inevitable. Sellers are more focused on products, users, and brands, while various service providers help sellers improve efficiency in various links of the cross-border e-commerce chain, ultimately achieving an overall improvement in business operations.

However, how to quickly find the services needed at each stage of development and how to identify high-quality service providers are often time-consuming and costly for sellers. On the other hand, the vast number of service providers also face the pain points of difficult customer acquisition and intense competition.

Is there a reliable bridge that can meet the demands of these two groups, and help them connect and cooperate in a simple, direct, transparent, and standardized manner? The Amazon SPN (Service Provider Network) is the answer. Amazon SPN, the official certified service provider network of Amazon, rigorously evaluates and selects service providers to meet various shop operation needs of Amazon sellers, providing sellers with comprehensive and one-stop solutions.

With the increasing strength of Chinese sellers on Amazon and their growing differentiated needs at different operation stages, the Amazon SPN service network continues to optimize. Since its establishment in 2021, the Amazon SPN service network has gathered nearly 300 high-quality service providers, covering 7 major categories and 34 minor categories of mainstream service types needed by sellers, spanning 69 cities nationwide and covering 19 Amazon sites.

Furthermore, at the "Amazon SPN High-Quality Cross-border Service Providers Conference" held on July 19th, it explicitly outlined the new upgrade direction of the Amazon SPN service network, focusing on "increment and enhancement" to assist various types of service providers in the cross-border e-commerce ecosystem in boosting industrial transformation and supporting the transformation of manufacturing and trade-oriented companies for overseas markets.

01

Amazon SPN service network widens and deepens

In 2023, China's export-oriented cross-border e-commerce achieved a year-on-year growth rate of 19.6%, and the total number of cross-border e-commerce pilot zones increased to 165. More enterprises are venturing into the global market through cross-border e-commerce. The business of Chinese sellers on Amazon also maintains stable growth: the quantity of goods sold throughout the year increased by over 20% year-on-year; the number of sellers with annual sales exceeding 10 million US dollars increased by nearly 30% year-on-year; the number of sellers with annual sales exceeding 1 million US dollars increased by over 25% year-on-year; among the top 35 cities by total sales on Amazon, over 80% saw an increase of over 20% in sales.

On this basis, how can more sellers expand their businesses and maintain growth? Amazon Global Selling has proposed a 2024 strategic focus on five aspects: empowering brand building, simplifying global operations, strengthening global supply chain solutions, driving global expansion, and enhancing local services.

Among them, "enhancing local services" includes the upgrading of regional service capabilities, seller training capabilities, exclusive seller service capabilities, and third-party service capabilities in four major areas. In other words, besides enhancing its support for sellers from multiple dimensions, Amazon will also intensify its efforts in building the third-party service provider network.

"Increment + enhancement" has become the upgraded direction for the Amazon SPN service network in 2024.

In terms of increment, the Amazon SPN service network will achieve comprehensive expansion of service providers, expanding more service categories and targeting specific service categories and new regions and sites for targeted recruitment.

As seen in the first half of 2024, the number of Amazon SPN service providers is rapidly increasing, and there is further enrichment in service categories. In the second half of the year, this growth rate will further escalate, with the addition of brand building services and AI tool services on the basis of existing mainstream categories, and continuous expansion of corresponding service categories in response to the voices of sellers and the market, as well as the introduction of more service providers based on the growing demand of new sites and regions.

In terms of enhancement, Amazon will implement tiered management for service providers, co-create a fair and transparent market environment, and launch comprehensive empowerment for service providers to promote the development of high-quality service providers.

In terms of management, first, the entry examination process for service providers will be simplified. Second, comprehensive information on service provider service levels and quality will be collected. Additionally, a fair and transparent rating formula will be applied to service providers based on their abilities and performance, with regular updates of rating results to ensure timeliness.

For the empowerment of service providers, Amazon will create a fair and transparent business environment for a wide range of service providers, providing support from the Amazon SPN brand. Based on extensive seller traffic importation and exposure, different levels of support will be provided to service providers, including exclusive guidance and information sharing, more precise high-quality traffic support, and opportunities for in-depth project cooperation with Amazon.

For a wide range of cross-border service providers, the benefits of joining the Amazon SPN service network are obvious. As one industry insider put it: "Winning the support of the Amazon official brand, opening up a precise green channel for business expansion for oneself."

After rigorous evaluation and certification, Amazon SPN service providers can establish a more professional and reliable image in the market, thereby gaining the trust of sellers and attracting more potential customers. The series of training and support measures provided by Amazon can help service providers enhance their professional capabilities, grasp the latest industry trends and technological developments, and expand businesses and explore new areas.

Furthermore, the linkage of quality resources and efficient communication with sellers are unique advantages of the Amazon SPN service provider network. On the one hand, different service providers engaged in different businesses can establish contacts and share experiences in the Amazon SPN service provider network, jointly expanding the market. On the other hand, service providers can communicate directly with sellers online or offline, saving customer acquisition costs.

02

New business opportunities for service providers hidden in Amazon's strategic layout

To build a more complete cross-border e-commerce service system, provide service support in all aspects of seller business development, and reduce the threshold and cost of cross-border operations, Amazon needs more service provider partners. Through Amazon's strategic layout, service providers will also discover more business opportunities.

There are differences in development and the construction of regional service ecosystems in different regions, which is the current situation of China's cross-border e-commerce. As a result, Amazon Global Selling considers the expansion of new regions as a major focus, including the upgrading of existing four regional centers and the addition of a central region in China, and is focused on building local teams, improving localization services, extensively developing industrial belts, and expanding the network of third-party service providers in various regional centers.

For example, in the first half of the year, Amazon has officially established offices in Zhengzhou and Wuhan, extending localized services to the central region; carried out seller support plans in 10 provinces and cities including Guangdong, Zhejiang, Fujian, Jiangsu, Shandong, Henan, Hubei, Shanghai, Sichuan, and Chongqing; currently, it has 6 local full-functional teams in Xiamen, Hangzhou, Ningbo, Nanjing, Chengdu, and Qingdao, reaching over 80 industrial belts.

In the process of developing new regions, Amazon will fully integrate high-quality service provider resources inside and outside the regions, introducing a wide range of service providers in logistics, compliance consulting, operational support, digital marketing, and cross-border finance to enhance the cross-border service capabilities of various regions. Different stages of development in new regions also have different demands on service providers:

In the first stage, due to the early stage of development and incomplete ecosystem coverage, Amazon will regularly carry out seller promotion activities to enhance the enthusiasm of the local cross-border e-commerce industry. Therefore, there is a need to strengthen the coverage of basic service providers, especially in training and operational services types.

In the second stage, the focus is on accelerating seller onboarding and addressing seller operation pain points, so there is a need to strengthen the development of various types of service providers, including specific types of service capabilities and the coverage of logistics, payment, product certification, tax compliance, and ERP systems.

In the third stage, the emphasis is on helping sellers succeed, so there is a need to develop new types of service providers, including advanced and innovative services such as advertising optimization, brand building, and AI tools.

For all types of service providers, new regions are business growth points that cannot be ignored.

In addition to developing new regions, strengthening global expansion is also the direction indicated by Amazon for service providers. Amazon encourages sellers to expand globally through multi-station layouts to reduce reliance and risks on a single country and explore more growth opportunities. To do this, it will provide support through innovative tools, seller incentive projects, seller education and training, and third-party service provider solutions to help sellers improve the efficiency of their global market layout.

Taking Europe and Japan as examples, Amazon Global Selling has covered 9 major sites including the UK, Germany, France, Italy, Spain, the Netherlands, Sweden, Poland, and Belgium in Europe, where the e-commerce scale is expected to grow by over 30% from 2022 to 2025. The growth rate of the e-commerce scale in the five countries "UK, Germany, France, Italy, and Spain" and the four emerging site countries "the Netherlands, Sweden, Poland, and Belgium" has reached 46%.In Japan, the Internet penetration rate is as high as 90%, and the growth rate of online shopping is ten times higher than the overall expectation for the retail industry. Amazon has become one of the local consumers' preferred choices for online shopping. For Chinese sellers, it also has the advantages of proximity, low cost, and fast turnover. Therefore, in 2023, the overall sales of Chinese sellers on Amazon Japan site increased by more than 20% year-on-year, and the number of sellers with an annual sales volume exceeding $1 million increased by over 40% year-on-year.

These high-potential and rapidly growing markets are worth the participation of Chinese sellers with a strong supply chain behind them. At the same time, it also means that they provide new space for various service providers.

03

Focusing on the pain points of tens of thousands of sellers，Enhancing the professionalism of cross-border services

Sellers of different scales, types, and development stages have different operating methods; in different countries, sellers will also encounter different business development obstacles. Being in sync with the development pace of sellers, deeply understanding the needs and pain points of sellers, is where the business opportunities for cross-border service providers lie.

For example, according to Amazon's research, currently, the demands and pain points of cross-border sellers in the European and Japanese markets mainly focus on compliance, logistics, operational support, and brand marketing, which requires more service providers to provide high-quality services in the corresponding areas of demand to help sellers reduce the risks and challenges of global expansion.

With the rise of the Amazon Middle East site, sellers' demand for Saudi customs clearance and local compliance certification is growing, requiring more service providers to join the Amazon SPN service provider network to help sellers solve these problems.

As one of the fastest-growing sites in the Latin American market, Mexico has seen a rapid increase in business volume, leading to more demand from sellers for FBA service providers.

Australia, as the most mature market in the current emerging markets, is also a priority choice for a large number of brand sellers for global expansion, thus requiring more service providers that can help sellers achieve brand building to join the Amazon SPN service provider network.

In addition to seizing the pain points of sellers in the process of expanding to new sites, many sellers are pursuing lean management, providing more opportunities for professional service providers.

For example, warehousing and logistics are crucial links in cross-border e-commerce, which is related to whether sellers can better meet the needs of overseas consumers and provide value-added services beyond products. For this reason, Amazon provides sellers with a variety of logistics solutions, including Amazon Logistics (FBA), Seller Fulfilled Network (MFN), and other modes, and has launched the overall Amazon Supply Chain solution covering the entire process from product factory to delivery to overseas consumers.

How can better solutions be provided to address the pain points of sellers in terms of logistics timeliness, price, and service? How can professional upgrades be achieved in supply chain management for sellers? These are the challenges left to a wide range of service providers.

Furthermore, an increasing number of sellers are beginning to focus on brand building, and Amazon is also committed to helping sellers transition from "Made in China" to "Building Global Brands." Currently, Amazon has over 50 tools to help sellers build their brands, and has categorized more than 30 core tools into a systematic brand operation map based on the brand construction modules and application scenarios (brand registration, brand strategy, brand image, brand growth, brand loyalty and brand protection).

Astute service providers will readily find numerous business opportunities in the six modules of Amazon's brand operation map, but at the same time, they also need to have stronger and more professional capabilities to effectively help sellers build brands.

In addition, it is worth noting that as sellers' demand for "reducing costs and increasing efficiency" in their operations continues to rise, the use of AI tools has become a major trend. Especially, the leapfrog development of generative AI has found rich application scenarios in the cross-border e-commerce industry. Consequently, more innovative service providers have emerged, and all existing service providers need to accelerate the research and application of AI to optimize their own business and improve their service levels in various aspects such as product research and development, operations and marketing, and user experience, to assist sellers in managing their business more efficiently.

On the one hand, creating a positive and healthy environment for service providers, and on the other hand, providing high-quality and high-level services for sellers. As the Amazon SPN service provider network is undergoing a new upgrade towards increased quantity and quality, a more sound cross-border service ecosystem is gradually taking shape.