Text/Qin Yi Yang Song Editor/Jiang Yuyue
Global cross-border e-commerce has blown up the trend of fashion women's clothing, and tens of thousands of sellers in China have ridden the wind.
Interestingly, when exploring the history of these active players, people always go back to around 2010.
At that time, it was the golden age of China's cross-border sales, and among the young people who went to the sea to start a business, there were Wenxin, who founded Lanting Jishi, Chen Wenping, an e-commerce company, and Xu Yangtian, WHO, SHEIN... Hua Bingru, a post-85 male boss who started from Taobao Cottage and went to sea to sell women's clothing, is also one of them.
Recently, the cross-border e-commerce brand founded by Hua Bingru did not say a word and submitted a listing application to the Hong Kong Stock Exchange. Its family is not famous, the market share is only 0.4%, but by running a women's fast fashion business, it has mixed out of the circle in North America early, and its revenue will exceed 2.3 billion yuan in 2021, and its profit will reach 200 million.
1 Taobao cottage started
In 2008, when the annual GMV of the Taobao platform exceeded 100 billion yuan for the first time, Hua Bingru, a sophomore majoring in electronic science and technology at Chaohu College in Anhui Province, opened his own e-commerce road and opened an online store in Taobao.
The original is to do "cottage goods", on behalf of the guangdong, Fujian production of clothes and shoes, within two years rushed into the Taobao category of the current three.
Imitations are difficult to red for a long time. In 2011, Hua Bingru founded Zi buyu in Hangzhou with his friend Wang Shijian, selling self-designed women's clothing on Taobao.
In the early days, Zi Buyu mainly targeted the domestic market and opened a Youchu flagship store on Tmall. In 2013, Hua Bingru, who had accumulated experience in e-commerce operations, decided to transform, abandon the fiercely competitive domestic market, and open a store on Amazon, focusing on cross-border e-commerce business.
Interacting with users with feedback, on-demand customization, and quick moves, Hua Bingru is very good at it, and he quickly copies these experiences to overseas business.
However, there have also been some detours. Overseas consumers are not the same as domestic ones, such as some long-sleeved clothing, worn on tall overseas users, has become seven-quarter sleeves.
Hua Bingru immediately decided, introduced foreign models, adjusted with reference to their figures, and gradually understood the design styles suitable for different markets, "such as summer women's wear, Brazilian customers like bright, lace, European and American styles are more sexy." Hua Bingru said.
At a time when the unspoken overseas business was in full swing, the first batch of domestic Tao brands went into decline, and "Seven Grids" and other traditional clothing brands were acquired.
At present, the Tao brand has been silent. On the other hand, Hua Bingru led the team to retreat from the Red Sea market in time, but instead fought a greater opportunity overseas.
Hua Bingru once revealed that Zi Bu Yu achieved sales of 200 million yuan in 2014, and in the following years, the performance maintained rapid growth. A science and engineering man from The second book has brought Zi Wu to become one of the largest cross-border e-commerce companies in China.
2 2.3 billion yuan a year
How much money does Chinese make to sell women's clothing at sea?
From 2019 to 2021, the revenue of Zibu Whisper was 1.429 billion, 1.898 billion and 2.347 billion yuan respectively, with a compound annual growth rate of 28.1%.
The apparel category is its main source of revenue, with revenues of 1.121 billion, 1.147 billion and 1.338 billion yuan in the past three years, accounting for more than 70% of the total revenue. In a sense, Hua Bingru, who started by selling women's clothing, has reached the head position of the cross-border women's clothing track.
The capacity of the industry determines the development space of the sub-language.
The market size of cross-border e-commerce apparel and footwear remains at about 500 billion yuan, with a market share of 25.2% in 2020, and it is expected to grow to 30% in the next five years.
Zhang Zhouping, an analyst at the Network Economic Society, believes that as the mainstream category of cross-border e-commerce, the apparel category is currently fiercely competitive, and it is difficult for new entrants to break through. This means that sooner or later, the Matthew effect of the industry will come, and Hua Bing will choose the right time to go public.
From the perspective of market layout, Hua Bingru's business is mainly in developed countries such as the United States, and it sold 2.26 billion yuan in Europe and the United States in 2021.
Mainly rely on amazon, Wish, eBay and other third-party platforms to sell products. In the past three years, the revenue of Zibu whisper mainly comes from Amazon, generating revenue of more than 1.6 billion yuan in 2021, an increase of nearly 172% year-on-year, accounting for more than 30% of the total revenue.
In 2018, Hua Bingru built a brand independent station, but unfortunately the income was average, and after contributing nearly 20% of the revenue in 2020, it fell to only 11% in 2021.
It is precisely because of the single product structure and excessive dependence on third-party platforms that HuaBingru is facing the risks that "all eggs are in one basket".
After all, since May last year, the Amazon platform has been "banned" on a large scale, and China's top big sellers have been banned by the platform.
The business model of Sub-Whisper belongs to the typical traditional big sale, and in the past, it relied on the shop model to make the business bigger and bigger. By the end of 2021, Huabingru has cultivated more than 200 brands, of which 64 have annual sales of more than 10 million.
"(Overseas) consumers do not necessarily have strong brand loyalty to the brand, because the style is changeable, that is, to buy what they want." So, our core logic is design, coupled with cost-effective products. In the early years, Hua Bingru, who firmly believed in the shop model, had predicted it in this way.
In the long run, cross-border e-commerce is moving towards refined operation, on the one hand, it requires enterprises to have the strength to expand categories, and on the other hand, it can also create explosive models.
Hua Bingru is facing the pain of the entire cross-border industry, and likewise, it is also a new proposition that is silent.
3 Tortuous capital roads
The Hua Bingru family holds an absolute controlling stake, and family members are involved in daily operations.
Before the IPO, Hua Bingru held 50.14% of the equity. His wife Yu Feng holds 5.33%, ranking the fourth largest shareholder, and has held the second largest customer of Jiahe International in 2021.
The younger sister Huahui holds 2.23% of the shares, which is also among the major shareholders. She joined ZiBu whispering in the early days of her business as sales director, a non-executive director of the company, and the only woman among the directors.
What is surprising is that before, Zi Wu did not have any public financing news. Until the prospectus disclosed, the company received 39 million yuan of financing from Ningbo Zhongyao in March 2018 and a total of US$26 million from Kangxu Investment and Aloe Tower on the eve of the initial listing application in May 2021.
It is difficult for the above-mentioned institutions to find successful investment cases and have no overseas market resources. This is not conducive to the sub-words of focusing on overseas markets and promoting their own brands.
In contrast, SHEIN, which is on the same track, holds billions of dollars in financing from Sequoia China, IDG, etc., and is obviously more confident in the rapidly changing international situation.
Hua Bingru's hidden worries do not stop there.
Zi Buyu has repeatedly rushed to the market without success. In January 2017, the company hired an intermediary to counsel and set up a corresponding shareholding platform, but it was finally discontinued. In mid-2021, Zi Buyu submitted a form to the Hong Kong Stock Exchange, but it was later invalidated due to the expiration of the application.
Whether this time can successfully impact the IPO, Presumably Hua Bingru is playing drums in his heart.
From the perspective of financial situation, the assets and liabilities of Zi Mu have attracted much attention. The amount of current liabilities showed high growth, with the asset-liability ratio reaching 86% in 2019, and with the overall decline in the following two years, Hua Bingru still faced high financial pressure.
The high debt ratio is attributed to the slower collection speed of the third-party platform and the relatively heavy asset operation. Industry veterans believe that "this essentially confirms the logic of the clothing industry.".
"The clothing track needs real money and silver, and once the money is burned out, (the company) is gone." A cross-border industry insider said.
From 2018 to 2020, marketing and advertising expenses were 57.7 million yuan, 116 million yuan and 263 million yuan, respectively, and the proportion of total sales expenditure increased year by year.
Cross-border clothing sales have taken a similar path: burning money for growth. "In addition to winning with scale, it is difficult for the garment industry itself to have high-tech research and development investment." The above-mentioned cross-border industry insider said.
The cake is so big, highlighting the inner coil, there is always something outstanding.
Anker, which is also highly dependent on Amazon's platform, is a typical case. As the first independent listed company in the cross-border e-commerce industry, Anker grew up in the low-end manufacturing, over-internal volume 3C market, with the advantage of nearly 400 million yuan in research and development expenses in recent years and 520 domestic and foreign patents.
Jumping out of the dilemma of burning money marketing for growth, creating independent brands to become boutique, and doing a good job of differentiation in different positioning categories and platforms, Hua Bingru still has a long way to go.
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