According to the disclosure of the Hong Kong Stock Exchange on March 7, the cross-border e-commerce sub-language group (hereinafter referred to as "sub-language") submitted an application for listing on the main board of the Hong Kong Stock Exchange, with Huatai International and ABC International as joint sponsors.
Founded in 2011, the domestic cross-border e-commerce company Zibu Yu focuses on the sale of apparel and footwear products through third-party e-commerce platforms and self-operated websites. At the end of June 2021, Zi Buyu launched the listing plan for the first time and submitted application materials to the Hong Kong Stock Exchange, but due to the large number of companies queuing up under the boom in listing in Hong Kong last year, the initial listing application materials of many enterprises, including Ru Zi Buyu, were invalidated 6 months after submission. Nowadays, Zi Wuwu re-submitted the application materials and continued to promote the listing process.
The second time the table is sprinted to the IPO, how confident is the sub-verbal? After in-depth analysis from the following aspects, we may be able to see the answer.
The trillion-level track has significant advantages and broad prospects for development
Industry capacity determines the company's development space and is one of the most important factors in predicting a company's growth space.
Generally speaking, cross-border e-commerce exports are divided into two categories: cross-border e-commerce export enterprises to enterprises, cross-border e-commerce export enterprises to customers (individuals), the latter is often referred to as B2C model e-commerce. According to the GMV calculation in 2020, the overall size of China's cross-border export B2C e-commerce market is about 2.29 trillion yuan, of which 75% comes from platform sellers (mainly including Amazon, eBay, AliExpress and Wish), 25% comes from self-operated websites, and the overall scale is expected to double to 4.6 trillion yuan in 2025.
From the perspective of the entire cross-border e-commerce subdivision category, the highest market share is clothing and footwear, from 14.6% market share in 2016 to 25.2% in 2020; it is expected to further grow to 29.5% in 2025, specifically, the current scale of apparel categories remains at about 500 billion, and shoes are about 100 billion.
A set of data facts is that the cross-border e-commerce clothing, footwear such a category market of nearly 600 billion yuan, according to the GMV generated through third-party e-commerce platforms in 2020, the top five generated GMV is only 7.8 billion yuan, accounting for only 1.7%, according to the GMV generated in North America in 2020, ZiBushu occupies 0.5% of the market share of 232.4 billion yuan in the overall market size of 232.4 billion yuan. Therefore, it is not difficult to see that Zi Buyu is standing on a track of high-speed growth.
According to Frost & Sullivan's data, according to the statistics of 2020, ZibuYu ranks first among all platform sellers in the Chinese cross-border export B2C e-commerce apparel and footwear market, and ranks third in the GMV of clothing and footwear products sold on third-party e-commerce platforms.
A senior investor told 36Kr that "this is a trillion-level market, the growth rate is very high, the most critical thing is that there are few leaders in the cross-border e-commerce industry, low penetration and high growth, which is a structural investment opportunity." ”
According to the "2021 China Cross-border E-commerce Investment and Financing Data Report" of the Network Economics Agency, the number of cross-border e-commerce financing transactions in China will exceed 70 in 2021, with a total amount of more than 20 billion yuan. The primary market's investment in the cross-border e-commerce track has maintained long-term enthusiasm, including many projects like Patpat, Cider and other projects with a single financing of more than 100 million US dollars. In 2021, Zibu Yu received investments of $21 million and $5 million from Calor Capital Kangxu Investment and Aloe Tower, respectively, which fully demonstrates the recognition of its performance, strength and prospects. Among them, Kangxu Investment mainly conducts private equity investment in the consumer market, which is founded and managed by Zhang Sijian, the former managing director of Sequoia Capital' main investment in consumers.
Strong brand incubation capabilities to create a highly competitive advantage
As we all know, it is not difficult to make a blockbuster in the e-commerce industry, but it is difficult to continue to play a blockbuster. When the trend of cross-border e-commerce industry is becoming more and more refined, and pawnshop sellers are moving towards brand sellers, enterprises must not only have the strength to expand categories, but also have the ability to create explosive models.
According to the prospectus, as of December 31, 2021, Zibu language has cultivated more than 200 brands, of which 64 are explosive brands with annual sales of more than 10 million yuan.
For example, dellytop, a womenswear brand launched in 2015, ranked in the top two of Amazon's best-selling list in 2020; Runcati, a casual menswear brand launched in 2017, ranked in the top three of Amazon's list of similar best-sellers as of December 2021; and the first women's clothing product launched by Women's Clothing Brandy Bell in December 2020 ranked first in Amazon's list of similar best-selling products.
If expanding categories and creating explosive models is a silent "relying on the heavenly sword", then reducing the dependence risk of a small number of third-party platforms, multi-platform expansion, and establishing self-operated brands are another "dragon slaying knife".
In addition to amazon and wish platforms, which account for the largest market share, Zibu has extensively expanded a number of other third-party e-commerce platforms including eBay, AliExpress, Tik Tok and Fanno, especially in 2021, according to market changes, the number of orders and sales revenue of online stores on such third-party e-commerce platforms have increased, mainly due to its continuous development since the initial stage of the business, maintaining a good and sustainable operational capability.
As early as 2018, Zi Buyu set up a self-operated website, focusing on the mid-to-high-end user market, taking advantage of other third-party platforms, meeting the diverse needs of users with more flexible and diversified product supply, and achieving 1+1>2 results. After three years of operation, the sales of the self-operated website have achieved good performance, with revenue generated through the sale of the self-operated website of RMB110 million, RMB360 million and RMB257 million from 2019 to 2021, accounting for 7.7%, 19.1% and 11% of the total revenue respectively.
As a brand seller, how to differentiate in different positioning categories and platforms, the most core asset behind the sub-word is the design team.
As of December 31, 2021, the designer team of Zibu Group has increased from 155 in 2019 to 297 people, and designers with more than three years of experience account for more than 48% of the design team. Total employee benefits increased from $18.9 million in 2019 to $46 million, accounting for 37% of total employee costs. For the 2022 plan, ZiBu yu plans to recruit 60-70 pattern designers (collecting fashion elements and new product designs) after raising funds, and 15-20 designers to focus on the development of facial accessories and raw materials.
Revenue and net profit grew steadily, and Amazon's platform exploded
In 2021, at the time of the global economic downturn, the cross-border e-commerce industry is a fusion of ice and fire. If performance is one of the important criteria for testing business, Zibu Group has given a report card of counter-trend growth.
The prospectus shows that from the performance of the last three years, from 2019 to 2021, it has completed revenue of 1.429 billion, 1.898 billion and 2.347 billion, with a compound annual growth rate of 28.1%. The corresponding net profit was 0.81 billion yuan, 114 million yuan and 201 million yuan, with a compound annual growth rate of 57.2%.
Although the reshuffle of Amazon sellers intensified in 2021, we have seen a large number of overflows from Amazon sellers. First, non-compliant sellers who are shuffled out, in order to survive, must find new markets and new traffic; second, sellers who still have continuous competitiveness on Amazon will also accelerate the layout of new markets and new traffic, and at the same time accelerate brand transformation and layout the brand operation of the whole network. Obviously, sub-languages belong to the second category.
Combining its own digital supply chain advantages, Zi Buyu timely and strategically adjusts its sales strategy according to the actual market situation. Amazon's platform revenue has exploded through increased investment to strengthen its business base at Amazon, and the increase in sales of hot products and new products launched through Amazon: The prospectus shows that the revenue from Amazon has increased from 615 million in 2020 to 1.672 billion in 2021, an increase of nearly 172% year-on-year, and the future revenue growth rate is expected to far exceed the historical level.
At the same time, due to the continuous increase in total assets, the asset-liability ratio of Zi Wu is showing a downward trend year by year, from 86.4% in 2019 to 73.2% in 2020, and further to 63.4% in 2021.
To be sure, with the further increase in revenue such as cash flow and sales of self-operated channels of Zibu Group, the asset-liability ratio of Ziwu Group has room for further exploration.
The essence of e-commerce is supply chain management in the final analysis, while maintaining the best cost control, it is crucial to quickly respond to changing market trends and customer preferences and synchronize production.
As early as 2017, Zibu Has begun to develop its own system, including ERP, SCM, GMS, warehousing system and email management system, to achieve effective control of the entire industrial chain from product design to warehousing and delivery, which greatly improves operational efficiency and economic benefits.
In order to reduce production costs and improve resource efficiency, the silent blockbuster products will contact third-party OEM suppliers through the company's ERP system to quickly place orders, mass production orders and achieve rapid delivery. At the same time, ZiBu will purchase inventory according to the sales plan and replenish products to meet sales expectations if necessary. Therefore, even at major promotional nodes such as Amazon Loyalty Day, Black Friday, and Christmas, you can keep the demand inventory for 2 months.
Therefore, the importance of the supply chain is not only in the word "supply", but also in this "chain" word. The mature supply chain capabilities are not only effective enough to meet the changing needs of customers, but also a good industry entry barrier to create.
It is worth expecting that according to the news of the Ministry of Commerce on February 23, the mainland will increase its support for foreign trade enterprises and encourage greater support for new formats such as cross-border e-commerce. Previously, the Ministry of Commerce has designated this year as the "year of consolidation and upgrading of foreign trade", and plans to implement cross-cycle regulation and stabilization of foreign trade actions, market diversification actions, foreign trade supply chain smooth actions, and foreign trade innovation and quality improvement actions to maintain the operation of foreign trade in a reasonable range throughout the year.
In summary, based on the trillion-dollar cross-border e-commerce track, deep ploughing the highest proportion of clothing and footwear categories, expanding diversified categories, and continuing to create explosive models of sub-non-verbal competitive advantage is significant, driven by a number of dividends in the cross-border e-commerce industry, the performance is expected to achieve higher growth in the next few years.