html On September 26, the cross-border e-commerce company Zibuyu Group (hereinafter referred to as "Zibuyu") submitted a prospectus to the Hong Kong Stock Exchange, and Huatai International and Agricultural Bank of China International served as contact sponsors. This is Zibuyu's third time applying for listing. The company previously submitted its forms to the Hong Kong Stock Exchange twice on June 30, 2021 and March 7, 2022, and both were "invalid" due to the expiration of the application.Reporter | Li Biao
Editor |
has completed three rounds of financing before its listing, with a total financing of over US$26 million (about RMB 200 million), and the last round of post-investment valuation is as high as US$516 million. Hua Bingru, chairman and founder of the company, and his wife Yu Feng are the actual controllers, and indirectly holds 55.47% of the shares through family trust . Another co-founder, Wang Shijian, holds a 9.45% stake.
prospectus disclosed that from 2019 to 2021, Zibuyu's annual revenue was 1.43 billion yuan, 1.9 billion yuan and 2.35 billion yuan, respectively, and net profit was 81.11 million yuan, 110 million yuan and 200 million yuan, respectively. The latest version of updated financial data shows that in the six months ended June 30, 2022, the company's revenue reached 130 million yuan, an increase of 15% over the same period last year; net profit was 61.31 million yuan, a year-on-year decline of 46%.
The core model of cross-border e-commerce mainly includes three major links: design, production and sales. Cross-border e-commerce companies are responsible for product design, domestic clothing factories and other raw material suppliers are responsible for OEM production according to the design drawings, and finally distribute overseas sales through cross-border logistics and online channels.
is similar to the emerging SHEIN. Zibuyu is also aiming at fast fashion consumer categories of clothing and shoes, taking female groups as core users, and entering the cross-border e-commerce track. The biggest difference between the two can be referred to as the "Taobao Store-Platform" model. SHEIN has launched the brand effect in the overseas consumer market , establishing a self-operated independent website, and its products belong to a unified brand. Zibuyu mainly joins , Amazon and Wish third-party e-commerce platforms, and assumes the role of a seller.
Zibuyu has incubated more than 300 sub-brands internally. In the interview, Hua Bingru said that he had previously tried the waters and made many tricks on independent stations, "The company's brand has not been well done, and it is essentially a seller." First of all, the fast-moving consumer goods product object represented by fashion. The standard product level is low and iterates quickly. A single version often needs to be hundreds of millions or even billions of dollars before it can become a brand. Secondly, it is difficult to develop a stable independent station. The website requires paid advertising, but the cost is high but the repurchase rate is not high. The lower APP download transaction rate may cause serious losses. Therefore, Zibuyu is more inclined to use existing platforms directly.
vs. SHEIN's annual revenue of 10 billion US dollars, the mobile APP is ahead of Amazon, Shopee and other shopping platforms. The official website traffic exceeds fashion brands such as ZARA, Nike, Adidas, lululemon, etc., and Zibuyuyu is far from the same scale and brand influence.
As a sales-driven business, the development path of cross-border e-commerce companies is highly consistent with the pace of sales channel expansion. In 2011, Zibuyu started his business in the country with Taobao stores. In 2014, the focus of business shifted to opening the first Amazon store overseas. At present, Zibuyu has opened 392 Amazon stores, which has become the company's largest sales platform. In 2021, sales revenue from Amazon accounted for more than 70%, and in the first half of this year, it was directly as high as 94%, far exceeding other online channels such as Wish and self-operated official websites. The regional distribution of
sub-speaking overseas markets reflects the deep binding with Amazon. prospectus book introduces Zibuyu's focus on the North American market through Amazon. Before 2021, Amazon and Wish are the two main sales platforms. Amazon is positioned as a product with higher unit price and higher profits. The products on Wish are relatively low. The two contribute about 30% of revenue respectively, and the North American and European market share is about 3:1. After 2021, as the company's sales are fully tilted towards Amazon, it consciously shifted its business focus to North America, and in the first half of 2022, the revenue in the United States alone reached 90%.
relies heavily on Amazon to make Zibuyu grow into a big seller quickly, but also brings the risk of relying on a single channel. The platform occupies an absolute dominant position, and a series of decisions such as service pricing and store closure will affect the survival of sellers at any time.The net profit of Zi Wuyu's speech in the past six months did not rise but fell as an example. There are two main reasons: First, Amazon has introduced a more relaxed return policy since August last year, which is facing the impact of the macro situation of high inflation on national consumption in the United States, which has made returns more frequent and the platform's return rate has risen sharply; second, because Amazon raised the price of advertising services, coupled with the platform's exposure, which has greatly increased marketing and advertising expenses.
Cross-border e-commerce should strive to ensure the normal operation of raw material supply, production and processing, overseas logistics and transportation, and operations. The macro environment has therefore become a major unstable factor challenging the resilience of the supply chain. For example, in February-March 2020, due to the impact of the new coronavirus epidemic, international freight flights were greatly reduced, resulting in delays in delivery in some markets. Zibuyu has also encountered supply shortages or delays in several product lines in the short term. About 13% of the products ordered by the company from domestic suppliers have encountered emergency outages, far higher than the annual average of about 3% under normal circumstances.
The trend of fast fashion trends is changing rapidly. In order to respond to customer needs in different seasons, merchants must maintain inventory turnover. From 2021 to the present, Zi Buyu has aggressively stocked up to resist supply chain risks. From 2019 to the first half of 2022, the total value of inventory products was RMB 231 million, RMB 277 million, RMB 694 million and RMB 802 million, respectively. The turnover days and the impairment of inventory in also increased exponentially.
The cross-border e-commerce industry is undergoing a reshuffle. Boston Consulting Research Report pointed out that on the one hand, the North American market is currently a must-fight place for cross-border e-commerce to deploy in the short term. Pinduoduo launched the cross-border independent fashion consumer brand "Temu", and chose North America for the first battle. IfYooou, a fast fashion independent station under ByteDance, was officially put into operation a few days ago. On the other hand, after experiencing the Amazon store closure storm in the past year, Chinese sellers have become more inclined to build independent stations from the perspective of cost, risk and customer. The proportion of independent stations expressed through interviews or has been built as high as 60%-70%. As competition escalates, the branding represented by independent websites will be the trend of cross-border e-commerce.
According to the future strategy, Zibuyu has not given up the independent website plan in addition to continuing to increase marketing expenses and upgrade warehousing around the Amazon platform center strategy, and is expected to invest funds to fight the self-operated brand again. As for whether we can find new brand opportunities in the North American market against the gap between front and back attacks, it will be a key challenge that Zibuyu needs to face.
