Two years ago, a company specializing in computer peripherals decided to transform itself into AliExpress, focusing on cold countries such as northern Europe and Russia with differentiated intelligent temperature controllers.Unexpectedly, in just two years, the smart products made in China became famous in foreign countries, and the annual sales of the store exceeded 1.8 million dollars. Many of the products have unique functions, which cut into the blank market in the segment field.
Its name is AVATTO. Leo, the head of AliExpress operation in this store, summed up the secret: products follow the needs of the firm, and differentiation is carried out to the end!This year, AVATTO was named AliExpress's Top 10 Dark Horse Brand of the Year 2022, the first time Leo has won this award. Leo said that AliExpress is growing in volume, but its operations are becoming more and more sophisticated for quality merchants, which makes him very excited about the store's future growth.
（1）Do smart home in the rigid needs
The predecessor of AVATTO entered AliExpress in 2014 and originally focused on computer peripherals. In 2019, the company decided to transform itself after realizing the broad prospect of smart home.However, smart home as a cutting-edge category, covering many types, switches, audio, robots, monitoring... Different segments of the category, different market prospects, technical threshold is also high and low.
Having run a traditional business, Leo decides to start with the essentials.He chose a temperature controller for floor heating as the main product, with Europe as the main market. Leo said that in Russia, northern Europe and other cold weather places, the floor heating is standard, and the supporting temperature controller is also a kind of rigid needs. "Because energy is expensive in Europe and the floor is warm for months, you can use smart home programming to control the temperature and save energy. In many places, you can save money on equipment within a year or two."
In addition to the vast market, there is another reason for Leo to do floor heating controller: the product is relatively complex, and it is easy to establish technical barriers. "The controller is divided into electricity and water heating, which is divided into wall furnace control and water valve control. From circuit design to temperature control accuracy, AVATTO can deeply polish every detail."Thanks to product innovation, AVATTO has become one of the top three smart home products on AliExpress platform in less than two years, GMV in 2021 was over $1.8 million.
However, in the past year, the international situation changed dramatically, and AVATTO was inevitably affected. "Last year's European tax reform, then the chip price hike, and this year's big rouble devaluation, each of which has brought AVATTO's key national markets down sharply."Still, AVATTO continues to grow in this environment: its stores grew 140% in Brazil last year, making it the main source of GMV. To date, AVATTO has shipped its products to more than 50 countries on AliExpress, "actually more than a dozen places that you've never heard of before."
According to AliExpress, Brazil's smart home market grew at an annual rate of more than 160% last year, making it a blue ocean market with high potential.Leo said that smart home products belong to the kind of "no feeling when you are not using them, but once you are using them, you cannot leave them", which also means that with the popularization of market education in the future, the market of smart home will be bigger and bigger.Leo said that smart home products belong to the kind of "no feeling when you are not using them, but once you are using them, you cannot leave them", which also means that with the popularization of market education in the future, the market of smart home will be bigger and bigger.
（2）Made in China leads product innovation
AVATTO's products were initially positioned in the mid-range, focusing on cost performance. After the industry competition became fierce, Leo began to dig deep into product differentiation and hit the high-end market.
In the smart switch product line, Leo has keenly captured the customization needs of different countries. "For example, Middle Eastern countries like Israel like to have different types of switches on the same panel; Brazil likes to do switch integration, where five or six switches are squeezed onto a panel." For each niche requirement, AVATTO develops a separate product and localizes the details page.
Leo has his own knowledge of how to identify these needs. "First of all, by looking at AliExpress's background data, we can understand what users are searching for. Those features that are often found but are not available in the market are opportunities to classify the purpose. Secondly, I regularly collate customer inquiries and find the direction of product optimization iteration, such as improving the accuracy of temperature control and controlling the power consumption." Having found a need, Leo can customize almost any smart feature he wants, thanks to strong Chinese manufacturing. In his words, "If there's a need, there's a way to build it."
Leo has his own knowledge of how to identify these needs. "First of all, by looking at AliExpress's background data, we can understand what users are searching for.Those features that are often found but are not available in the market are opportunities to classify the purpose. Secondly, I regularly collate customer inquiries and find the direction of product optimization iteration, such as improving the accuracy of temperature control and controlling the power consumption."Having found a need, Leo can customize almost any smart feature he wants, thanks to strong Chinese manufacturing. In his words, "If there's a need, there's a way to build it."
"There is fierce competition in the industry now, and continuous innovation is needed to meet the needs of market segments." According to Leo, AVATTO is working with the factory to develop a new product that will be available only in the next few months. The core strategy of AVATTO is to lead product innovation with made in China.
（3）A sudden boom in sales
Russia, Brazil and Spain are consistently the top three countries in AVATTO's AliExpress global market. It's no surprise that the Brazilian market, which exploded last year and the ruble's depreciation this year, topped AVATTO's sales list. Leo said he had been focusing on Europe, and the explosion of the Brazilian market was an unexpected bonus.
Last year, AVATTO sold more than 2,000 units for the Brazilian market without attending any events. At first, Leo thought it was a BUG, but he didn't know it until he communicated with the Brazilian market girl. Because of the high cost performance of the product, it was actively recommended by the platform."Although I was concerned about AliExpress's operation in Brazil from the very beginning, and knew that Brazil was a blue ocean market, I was still shocked by the ability of Brazilian buyers to make orders." "Leo recalled.
Having identified the potential of Brazilian buyers, Leo launched a refined operation specifically for the Brazilian market. The team optimized the product details page in Portuguese, and combined with AliExpress platform to make profits and subsidies for users.In order to localize the store as soon as possible, Shen Tuping, the second primary student in the Brazilian market, offered three suggestions to AVATTO:
1.Refined operation, timely understand the needs of Brazilian users, and regularly communicate with AliExpress sales manager about the consumption trend in Brazil;
2. Seize small B customers, smart home decoration is a threshold industry, although the C end is the focus of demand, but there is also a lot of small B business space;
3. Seize the opportunity of AliExpress's platform activities in Brazil, and set coupons during the big promotion or small B activity period.
Thanks to the joint efforts of the team and AliExpress platform sales manager, AVATTO has achieved a breakthrough in the Brazilian market. Throughout 2021, AVATTO grew more than 140% in the Brazilian market, steadying overall store sales amid the turmoil in Russia at the beginning of the year.And small B customers, also became a long-term business for AVATTO. Leo says that although they are not like ordinary customers, they are not like ordinary customers who only place one or two orders. "Once you get a small B customer, it's a steady stream of orders."
Under the suggestion of AliExpress platform sales manager, Leo arranged the preferred warehouse and overseas warehouse early. "Before and after the layout of the preferred warehouse, the monthly sales of a product directly doubled, which is partly due to the platform subsidy, but more because of the virtuous circle brought by the quality logistics experience."When it comes to developing new countries, Leo says the only trick is to follow the platform. "No matter what new policies the platform will launch or what new markets it will focus on, it is right to follow up at the first time."
Looking back on the road of smart home over the past two years, Leo is quite impressed. The team has expanded from the original 3 founders to 15 people, and the sales of the store has also risen from obscurity to third place. He is very glad that he chose a blue Ocean track.With the rapid growth of its stores, AVATTO was awarded the title of "AliExpress 2022 Top 10 Dark Horse Brands" at the annual AliExpress Merchant Online Summit in 2022.
This makes Leo more confident about the future: "Smart home is a system category, and now he occupies a slice of the cake. In the future, he hopes to make all products into a whole, integrate functions, and realize intelligent customization of the whole house."