HIT alumni do e-commerce, three years of income of more than 10 billion, to IPO

Recently, the export cross-border brand e-commerce Saiwei Times Technology Co., Ltd. (hereinafter referred to as "Saiwei Times") updated the prospectus and intends to be listed on the ChiNext board of the Shenzhen Stock Exchange, with Orient Securities as the sponsor. The IPO is expected to raise 622 million yuan, which will be used for the construction of supply chain, logistics warehousing, brand channels and other aspects.

Founded in 2012, Saiwei Times was one of the representatives of the cross-border e-commerce multi-store shop model, nicknamed "The Four Heavenly Kings of South China City". The company mainly sells fashion and lifestyle products such as clothing accessories, sports entertainment, department stores and home furnishings to global consumers through third-party e-commerce platforms such as Amazon, Wish, eBay, Walmart, etc., as well as self-operated websites SHESHOW and Retro Stage, covering the United States, Germany, the United Kingdom and other countries and regions.

In recent years, cross-border e-commerce has developed rapidly. According to customs statistics, in 2021, the mainland's cross-border e-commerce imports and exports will be 1.98 trillion yuan, an increase of about 15%; of which exports will be 1.44 trillion yuan, an increase of about 24.5%.

Since the first "cross-border e-commerce" Anker innovation IPO, more and more cross-border e-commerce companies have also embarked on the road of capitalization, including the Sevy era of restarting IPOs.

Under the "Amoeba Model", 15 incubation brands have revenues of more than 100 million

Like the cross-border e-commerce companies that first entered Amazon, saiwei era adopts an agile organization, that is, the "amoeba" organizational structure of "small front end + large middle office".

In layman's terms, the "amoeba model" is that one or several people operate a brand, quick trial and error, and quickly increase the volume. As of the first half of 2021, Saiwei Times has incubated 43 private brands with revenues of more than 10 million, of which 15 brands have generated more than 100 million yuan in revenue during the reporting period, including homewear brand Ekouaer, men's wear brand Coofandy, underwear brand Avidlove, sports equipment brand ANONYMOUS, etc.

The "amoeba model" is one of the secrets of the early rapid development and expansion of "big sellers" (million-dollar sellers).

In terms of revenue, the prospectus shows that from 2018 to the first half of 2021, the revenue of Saiwei Era was 2.245 billion yuan, 2.878 billion yuan, 5.253 billion yuan and 2.906 billion yuan, respectively. The revenue of the apparel category accounts for about 50%, and the proportion of department stores, home, sports and entertainment has increased during the epidemic.

In addition, more than 60% of sales come from the Amazon platform. From 2018 to the first half of 2021, the sales revenue achieved by Saiwei Times on amazon's platform was 1.356 billion yuan, 1.967 billion yuan, 3.682 billion yuan and 2.447 billion yuan, respectively, and the gross profit margin was also above 65%.

Amazon is in a leading position in the cross-border e-commerce industry, with high popularity and market share, and is the main channel for many domestic sellers to sell across borders. According to Statista data in 2020, 26% of global consumers prefer Amazon as the cross-border e-commerce platform, 19% of consumers choose Alibaba's AliExpress, and 11% choose eBay.

In terms of expenses, during the reporting period, the total expenses of the company during the period were 1.471 billion yuan, 1.811 billion yuan and 2.88 billion yuan, of which sales expenses accounted for 50%-60%, including logistics costs, sales platform fees, business promotion fees, etc.

In terms of profitability, with the upgrading of overseas consumption and the expansion of cross-border e-commerce demand, the industry has shown a high boom, and the overall GMV of Amazon Chinese sellers has increased by 26.5% and 63.8% year-on-year in 2019 and 2020. Saiwei Times grasped the Amazon dividend, and with a net loss of 6.63 million yuan in 2018, it achieved a turnaround to a profit of 54.1 million yuan in 2019, and further increased its net profit to 451 million yuan in 2020, and a net profit of 256 million yuan in the first half of 2021.

In terms of shareholders, before the IPO, the company generated a total of 5 rounds of financing, with a cumulative financing amount of more than 300 million yuan. According to the equity structure, Chen Wenping, chairman and general manager of the company, is the actual controller of the company and indirectly holds 54.53% of the company's shares through Junteng Investment, Zhongteng Investment and Fujian Circuit. Among them, Zhongteng Investment, as a shareholding platform, is used to motivate executives and employees with equity, with a shareholding ratio of 25.83%.

According to Tianyan, Chen Wenping graduated from Harbin Institute of Technology and worked for Delta Electronics (Dongguan) Company, Founder Technology, emerson Network Energy Co., Ltd., and began to start a business in 2008. In May 2021, Chen Wenping donated 10 million yuan to the HIT Education Development Foundation.

His brother Chen Wenhui indirectly holds 16.58% of the company's shares through Junhui Investment. Other shareholders include: Xinrui Jitai holds 9.82% of the shares, Nut Capital holds a total of 2.94% through Nut Interconnection and Nut Brothers, and Fengyuan Capital holds a total of 0.97% through Fengyuan Departure and Fengyuan Departure.

"De-Amazonization", relying on independent stations to earn tens of billions of dollars a year

However, more than 60% of the sales of Saiwei Times rely on third-party e-commerce platforms, which also has certain risks.

Not long ago, Amazon's "store closure wave" spread to many Chinese "big sales." "Big sale" is very dependent on Amazon's sales channels, in order to build a brand matrix, usually multi-account stores, once blocked, involved in a wide range.

Third-party platforms have also begun to set limits on multi-account store openings, such as Amazon and Wish limiting the number of stores directly owned by a single entity, and Amazon needs sellers to have a reasonable reason to have multiple stores.

Therefore, cross-border e-commerce can not only rely on Amazon and other three-party platforms to create a burst in the station, but also accumulate brand equity outside the station.

In this regard, cross-border e-commerce "king" SHEIN is very forward-looking - to create an independent station ecology.

According to App Annie and Sensor Tower, SHEIN has replaced Amazon in 2021 as the most downloaded shopping app for iOS and Android platforms in the United States.

SHEIN is also the only one in the independent station ecosystem to achieve tens of billions of dollars in annual revenue. According to Bloomberg, SHEIN achieved sales of $10 billion in 2020, an increase of more than 250% year-on-year. SHEIN is valued at more than $50 billion, enough to rival internet giants — Kuaishou and WeWork were valued at just $50 billion before they went public.

The success of the SHEIN independent station ecosystem is also inseparable from the flexible supply chain system and social media marketing capabilities.

In terms of supply chain, in order to achieve "small single fast reaction", SHEIN spent three years helping suppliers upgrade digital and IT systems. The SHEIN team uses crawlers to quickly grab the hot products, popular styles, colors, fabrics and other information of Google hot words and competitive official websites, and immediately grasp the fashion trends, designers use this information to quickly complete the design, from plate, design, and then to production, it only takes 7 days.

With strong and stable supply chain management capabilities, even if the purchase price is low, SHEIN has also gained the following from suppliers - SHEIN averages 3,000 models per day on the new frequency, the overall purchase volume is huge and there is no arrears in payment.

In terms of marketing, SHEIN is deeply involved in private domain traffic, on the one hand, it has built its own independent website, on the other hand, it cooperates with Internet celebrity KOLs to step on the dividends of social media outbreaks.

Forbes described SHEIN as "like a sophisticated computer." For SHEIN's success, "it has to be said that it was a victory for the long-termists, full of the dual roles of the times and the pattern." Without the impetus of the low-cost traffic era, there will be no SHEIN's technology, experience, and capital accumulation. Without a high-profile brand transformation strategy, there would be no SHEIN today. ”

The sheIN independent station model is first, and cross-border e-commerce is also trying to get rid of the third-party e-commerce platform and build its own brand independent station.

Cross-border e-commerce financing continues, who can replicate the next SHEIN?

From Alibaba and Byte to start-ups, everyone wants to copy the next SHEIN.

In November 2021, Alibaba launched the fast fashion APP AllyLikes overseas, a SHEIN-like fast fashion online retailer platform, mainly targeting the European and American markets. At present, 500 new products are launched every week, including jeans and knitwear, underwear, sportswear, casual items, a variety of accessories and so on.

ByteDance's cross-border women's independent station, Dimestudio, which was only established for 3 months, recently announced its closure. As one of the important links in ByteDance's layout of cross-border e-commerce, Dmonstudio belongs to the S-level project, benchmarking cross-border e-commerce SHEIN - not only the business scope is highly overlapping, but also nearly 100 people have been recruited from SHEIN.

But this is only the tip of the iceberg of byte layout cross-border e-commerce. In 2021, Byte also invested in cross-border e-commerce Patoson and Star Link, and cross-border logistics companies Zongteng Group and iMle.

Clothing brands are also testing the waters. The "Antarctic E-commerce" established by the warm underwear brand "Antarctica" transformation e-commerce is developing cross-border business and establishing an independent station, Fommos. From the perspective of the Fommos beta version, whether it is a limited-time spike and the first discount and other preferential activities, or the overall page design, it is almost a pixel-level imitation of SHEIN, but the price does not have enough advantages.

Another cross-border e-commerce sub-word also submitted a listing application to the Hong Kong Stock Exchange on March 7, mainly through the third-party e-commerce platform for clothing and footwear sales, its own design of 151 brands, through OEM OEM production, the past three years revenue maintained at 1.5-2 billion yuan, gross profit margin of about 70%.

In addition to the Internet, clothing brands, cross-border e-commerce peers, new forces are also emerging. Start-up cross-border e-commerce Cider, full speed, unlimited heartbeat, two hydrogen and one oxygen, etc. have completed financing. Among them, Cider, founded in May 2020, is positioned as a "global fast fashion technology company" and is currently valued at more than $1 billion.

The popularity of cross-border e-commerce has also led to the rise of related SaaS service providers. Through the third-party plug-in service, the seller can achieve the most basic website construction with a few thousand yuan in phone bills.

Less than three months after the start of 2022, the financing news of cross-border e-commerce SaaS service providers has also continued.

In January, global e-commerce independent station SaaS platform Shopsmith Technology announced the completion of a $150 million C1 round of financing, which was led by SoftBank Vision Phase II Fund.

In the same month, JD Group announced a cooperation with Shopify, and JD.com will open up a pool of goods based on JD's supply chain network for Shopify's global merchants through the DTC independent station, which shows the support of SaaS tools on cross-border e-commerce platforms.

In February, the cross-border trade service provider "CoralGlobal Coral Cross-Border" completed a round of financing of more than 100 million yuan, led by Mingyu Venture Capital, and followed by the old shareholder Hua ou Venture Capital.

Overseas marketing service provider Titanium Technology completed hundreds of millions of yuan B+ round of financing, zhong ding capital investment. Founded in 2017, Titanium Technology is a corporate services company based on big data and BI, and has received financing from star institutions such as IDG, Jianfeng, and GSR Capital.

Cross-border e-commerce digital API platform Dowsure completed nearly $20 million Series B financing, led by an undisclosed top global strategic investor, with venturesLab, Qianhai and existing investors Plug & PlayChina participating.

In March, the cross-border e-commerce SaaS platform store Secretary completed a $100 million C round of financing, jointly led by Tiger Global Fund and Huaxing New Economy Fund, and followed by old shareholders GGV Jiyuan Capital, CDH VGC and Gaorong Capital. So far, the store secretary has refreshed the record of financing amount in the field of domestic cross-border e-commerce ERP. (Text/Zhang Junwen Editor/Cao Weiyu Source/Zhongzhong Network)