After fully managed services swept through cross-border e-commerce, semi-managed services are becoming popular. The fully managed model involves the cross-border platform taking charge of store operations, warehousing, distribution, after-sales service, and more, with merchants only needing to supply and stock products in the warehouse. The essence of this model is that the sellers only provide the goods while the platform handles everything else. As the name suggests, a semi-managed model means the platform is less involved than the fully managed model, allowing merchants more autonomy in decision-making. Since the beginning of this year, AliExpress and Temu have each launched their semi-managed models, reigniting hot discussions within the industry. How should we understand the semi-managed trend in cross-border e-commerce? Let’s take a closer look together.

Full and Semi-Managed Services as Work Reorganization

The cross-border e-commerce industry encompasses a lengthy supply chain, ranging from production and supply, product selection and pricing, domestic warehousing, international logistics, and overseas warehouse logistics to delivering goods to overseas consumers, marketing, customer service, and after-sales support. Each segment of the chain involves various forms of division of labour, with individuals exploring profit opportunities in every niche. The fully managed service model results from reorganizing this division of labour, while the semi-managed model represents a deepening of this logic. As for how to reorganize, different platforms make judgments based on their own needs. Temu’s semi-managed adjustment only affects the warehousing and logistics segment, with pricing control still remaining with Temu. Temu aims to attract sellers of goods stored in overseas warehouses to join the platform and improve its logistics efficiency and product variety. Currently, Temu’s semi-managed business is focused on attracting merchants in the home category, focusing on significant categories such as large and small household appliances, kitchen, dining, and bathroom products. AliExpress’s semi-managed model targets self-operated sellers under the POP model, with the platform mainly taking over warehousing and logistics while pricing control remains with the seller. AliExpress intends to utilize platform logistics resources (such as Cainiao Supply Chain) to help self-operated sellers streamline logistics processes and improve overall service quality. Sellers with product and operational advantages but lacking logistics advantages are AliExpress’s target audience. AliExpress’s logistics resources can complement these sellers’ critical capabilities—sellers stock goods in Cainiao warehouses, and the platform handles subsequent fulfilment, increasing efficiency while preserving sellers’ original advantages. Although the approaches differ, Temu and AliExpress adjust based on their needs. Temu is a dark horse in the cross-border e-commerce industry, with a fully managed service model suitable for establishing benchmarks. In contrast, the semi-managed model, which separates overseas warehousing and logistics, helps Temu expand its product range. AliExpress, on the other hand, has a foundation of self-operated sellers and taking over warehousing and logistics aligns with its growth needs. Therefore, fully managed and semi-managed services have demonstrated the value of reorganizing the division of labour in cross-border e-commerce. Each platform can adjust and decide which model to use based on its strengths, market demands, and the characteristics of its sellers.

New Challenges, New Models

There is no need to obsess over defining the semi-managed model. We should focus on reorganizing the division of labour and its value in new environments. Different platforms can optimize their long industry chains according to their specific conditions. Amazon does not endorse a fully managed model. According to Amazon’s philosophy, sellers should not regress to merely supplying products but instead enhance their operational capabilities, transitioning from manufacturers to brand owners. However, Amazon has adopted aspects of the managed model that are beneficial in attracting sellers. Facing formidable competition from Chinese contenders, Amazon has introduced initiatives for sellers’ transformation, released supply chain solutions based on their logistical advantages, and reduced fees and commissions on low-priced items in specific categories. These actions not only enhance the platform’s appeal to sellers in the Chinese industrial belts but also aim to increase the price competitiveness of products on the platform amidst waves of low pricing. Shein, which started with a self-operating model, pushed heavily for platform business last year. Currently, the core target for Shein’s platform business is industrial belt sellers, with fully managed services still being the primary model promoted by the platform. Although Shein has its brands and a clothing supply chain as its foundation, it must invest more in merchant acquisition and low pricing beyond its strong categories. TikTok Shop is promoting a fully managed model that simplifies sellers’ operations. Compared to other platforms, TikTok Shop distinguishes itself by capturing high traffic volumes and integrating robust content features, highlighting the connection between content and sales. This approach reduces operational burdens for sellers, freeing them up to focus more on inventory management and content creation. The complex industry environment, urgent market expansion needs, and cross-border e-commerce transformation challenges highlight the increasing demand for platforms to expand their roles in developing sales channels for sellers. This trend is underscored by the growing popularity of fully managed services. However, fully managed services are not the ultimate solution; there is room to refine platforms’ approach to managing operations further and reorganize the division of labour more intricately. Semi-managed services emerge as a nuanced outcome of this refined approach.

Summary

In the evolving world of cross-border e-commerce, fully managed and semi-managed services highlight significant labour division shifts. Fully managed services offer platforms like Temu and AliExpress complete control over operations, allowing sellers to focus on product development. In contrast, semi-managed services provide a balance, giving merchants more autonomy while still leveraging the platform’s logistical support. This model diversity caters to the varied needs of sellers, from those who seek operational simplicity to those who value autonomy but need support in specific areas like logistics. For instance, Amazon adapts managed service aspects to enhance seller competitiveness and transition them from manufacturers to brand owners. At the same time, platforms like Shein and TikTok Shop evolve their strategies to accommodate different seller preferences. These trends indicate a move towards more adaptable and nuanced e-commerce strategies, balancing efficiency with seller autonomy and redefining platforms’ roles in empowering global sellers within the digital marketplace. As Temu, AliExpress, Shein, TikTok Shop, and their sellers collaborate to form this new ecosystem, they encounter opportunities and challenges—how will sellers and platforms strategize against each other? How will ecosystem participants grow or shrink relative to one another? How can platforms find unique growth opportunities as fully managed services standardize? Addressing these questions is essential to sustaining growth.