Le Ge: From making a bracket that no one can see to building a ship and going to sea| crossing mountains and seas

The special feature of this issue of Case Music is that it started from a simple bracket and eventually became a single champion enterprise in China's manufacturing industry; it also has a prominent feature that in recent years, it has continuously explored the way of globalization, including the construction of infrastructure for foreign trade. In this sea where Chinese companies go to sea, Lege expands the blue ocean.

First, the foreign trade group portrait of China's private enterprises

They are indeed the most active part of the market economy.

From 1999, when China relaxed the restrictions on the import and export qualifications of private enterprises, to 22 years in 2021, the export trade volume of private enterprises has increased rapidly in the total export trade of China, becoming an important market player in the development of the "troika" of the mainland economy.

At the beginning of this year, Li Kuiwen, spokesman for the General Administration of Customs of China and director of the Department of Statistical Analysis, said at a press conference that in the past 20 years, the number of Foreign Trade Entities in China has doubled, private enterprises have grown into the largest operating entities, and the contribution of private enterprises has increased in the proportion of total foreign trade value.

From the data point of view, in 2021, China's private enterprises import and export of 19 trillion yuan, an increase of 26.7% year-on-year, accounting for 48.6% of the total import and export value, accounting for 2 percentage points higher than in 2020. In the same period, the import and export of foreign-invested enterprises was 14.03 trillion yuan, an increase of 12.7% year-on-year; the import and export of state-owned enterprises was 5.94 trillion yuan, an increase of 27.7% year-on-year.

And 2019, for private enterprises, is worth remembering.

In this year, China's private enterprises surpassed foreign-invested enterprises for the first time and became China's largest foreign trade main body. Later, after experiencing the epidemic in 2020, people initially felt that the future was bleak, and private enterprises were moving against the trend in this year. The global home economy has activated previously unseen consumer demand, which has further contributed to the growth of trade volume. Data show that in 2020, China has 531,000 import and export enterprises, an increase of 6.2%, of which the import and export of private enterprises is 14.98 trillion yuan, an increase of 11.1%, accounting for 46.6% of the mainland's total foreign trade. The total import and export value of trade in goods in that year was 32.16 trillion yuan.

No matter how big or small, there are too many samples worth observing: some are the "living fossils" of China's private enterprises along the way, which have been experiencing and evolving from the beginning to the present; some are new forces, jumping out of the original stage of development, from the beginning of the equipment, directly into the advanced stage.

Second, the music in it

In this issue, our enterprise globalization survey walked into Lege Ergonomics Technology Co., Ltd. in Ningbo, an enterprise that was rated as the single champion of China's manufacturing industry by the Ministry of Industry and Information Technology in the big health smart furniture industry.

Xiang Lehong, the founder of Lege, has completely experienced various stages and different forms of the development of foreign trade business of China's private enterprises after the reform and opening up.

Lege has gone through the form of "middleman" foreign trade companies, industry and trade integration, OEM OEM, and then to the brand to the sea, and then developed the construction of foreign trade infrastructure, providing logistics and warehousing services for other foreign trade enterprises - Lege's global genes are expressed explicitly and fully at different stages of its growth.

20 years later, Lege is gradually building a global industrial chain that runs through the upstream and downstream of foreign trade enterprises: transporting its own brand products to the public overseas warehouses it has established, and then sending the goods to thousands of households in overseas markets at a lower price through contracted logistics companies.

Lege has been exploring more optimized ways of globalization, both in the past and in the present of the pandemic.

1. Open an overseas warehouse

After the outbreak of the new crown epidemic in 2020, at a time when the real economy at home and abroad is struggling to survive and strive to resume work and production, Xiang Lehong wants to continue to expand the construction of public overseas warehouses, which can not only meet its own foreign trade business needs, but also serve more small and medium-sized enterprises going overseas.

Xiang Lehong therefore wrote a report. Later, he really did it.

In fact, as early as 2013, Lege's first overseas warehouse began to operate.

2. Buy a freighter

Earlier this year, Lege placed an order for a 1,800 TEU container ship at a shipyard in Weihai, Shandong Province. It is expected that after delivery in 2023, it will not only serve Lege itself, but also other small and medium-sized foreign trade enterprises.

At present, container ships are under construction.

3. Invest in the construction of cross-border logistics companies

Although the current national epidemic situation is spread at many points, on April 21, Ningbo Digital Wisdom Cross-border Logistics Co., Ltd., which was jointly funded by 7 Ningbo enterprises including Lege, was registered in Meishan Bonded Port Area. This cross-border e-commerce logistics industrial park project is to serve the local cross-border e-commerce infrastructure.

This is just the beginning.

A noteworthy phenomenon is that among these 7 funded enterprises, in addition to Lege, Ningbo Tag Heuer Import and Export Group Co., Ltd., a private enterprise with rich global business, is also involved. From this point, it can be seen that in Ningbo, a city with vigorous foreign trade business, some private enterprises themselves not only do producers of export products; when they reach a certain scale and volume, when they are "capable", they begin to get involved in infrastructure investment that serves cross-border e-commerce - "paving the way and building bridges" for products to go to sea.

From the production of products in the factory to some important links shipped overseas, Lege is becoming the main body as much as possible. The purpose of this is to enable Chinese enterprises to obtain higher added value in the creation of their own brands; they can have more voice and initiative by controlling logistics and other links, and enhance their ability to resist various market risks that may be encountered.

Xiang Lehong told us: "China's cross-border e-commerce has indeed reached the stage from 'OEM going to sea' to 'brand going overseas'. "The reason is also very simple: the quality of the product is good, the national strength is strong, this is an inevitable change." In fact, at the end of the day, "now you have the ability to do it all."

In China, from OEM processing to brand going to sea, this is the change process of different stages of China's foreign trade, and Lege is a representative and epitome of many foreign trade enterprises in the changing times.

Figure 1 Development of the song

Source: The company's official website, compiled by the First Finance and Economic Research Institute

Third, the bracket is a small object that others can't look at, but it can lead the world

From the perspective of the development process, this cross-border e-commerce road of Lege is divided into different stages.

1. The first stage: start-up trade to build factory OEM

A person's first job is often important.

Xiang Lehong completed his bachelor's degree in physics at Ningbo Normal University and went to Chengdu University of Electronic Science and Technology to study industrial foreign trade. After graduating in 1995, he entered China Electronics Import and Export Ningbo Company as a salesman. Since then, his career has been related to "foreign trade" until now.

In 1998, a new policy was introduced: companies based in the Ningbo Free Trade Zone were allowed to have a foreign exchange account – meaning that foreign trade business opened the door to private enterprises.

Xiang Lehong, who has long wanted to do something in the field of foreign trade, returned the houses assigned to him by the company and chose to go to the sea to do business, and the company was located in the bonded area. Naturally, he has a valuable foreign exchange account resource - he can do foreign trade business.

At the beginning of his business, he provided customers with lighting stands, stage speaker stands, microphone stands and other products. At that time, he was a bridge between the factory and the customer, and in order to more conveniently serve both ends of the bridge, he also built his own independent website to promote and acquire customers through faxes and websites. In this regard, Xiang Lehong's network thinking is similar to Alibaba's, which can be called the earliest batch of "cross-border e-commerce".

His foreign trade business is also doing well. But while doing so, Xiang Lehong realized that pure foreign trade is equivalent to "brokers and middlemen", and this way needs to be changed. He said: "It is certainly not enough to do this kind of middleman-style foreign trade, we must have our own factories and technologies." After working as a foreign trade company for more than a year, I wanted to open a factory. ”

If you have an idea, follow up on the action immediately - Xiang Lehong is an action faction driven by ideas.

In 2000, Xiang Lehong first set up a small factory. In 2004, Jiangshan factory was put into operation, covering an area of nearly 30 acres. At this time, Xiang Lehong began to transform into an integrated business model of industry and trade, involving the simple processing and export trade of metal structural parts of audio-visual equipment such as stage equipment brackets, tripods, and audio cables.

Soon, a chance encounter made Xiang Lehong make another change - turning his attention to products with higher added value and broader market prospects.

At the end of 2003, Xiang Lehong stumbled upon an Ionic TV hanging shelf on a shelf in a supermarket in the United States. In 2004, I paid attention to this product at the exhibition.

People who have been making shelves are particularly sensitive to all kinds of shelves.

After carefully evaluating his own design and production capacity, he decided to incorporate such products into the factory's product system.

Xiang Lehong said, "I am studying physics, others can't look at this small bracket product, but I understand, I can do it well."

It turned out that this decision allowed Lege to successfully catch the express train from CRT TV to flat-screen TV. Taking advantage of its first-mover advantage, Lege has gained a foothold in this narrow market.

By 2005, Lege began to fully develop, produce and sell large-screen display bracket products. At the same time, gradually exploring computer brackets, the product has produced higher added value.

2. The second stage: towards independent brands in the crisis

In 2008, the financial crisis known as the "Black Swan Event" began in the United States and suddenly began. Many companies have gone out of business, and many have found new opportunities in the crisis.

Xiang Lehong fell into anxiety at this time.

"Every day I am waiting for the OEM order, and if the overseas customers do not place an order, it will be finished." That year, sales of our products fell from 130 million in 2007 to a little bit of a few hundred million. ”

For manufacturers, no order is undoubtedly painful. But suffering in pain will prompt people to find another way out of survival, and the way will come out.

At the end of 2008, Xiang Lehong, who could no longer sit still, felt that Lege's products could not only be other people's "back kitchens", but also have their own names, go abroad independently, and at least decide their own production. He wrote about this experience of making a change into his 2009 graduate dissertation, "To sell your own things, to set up a warehouse in the United States."

In the process of seeking its own products, Xiang Lehong found a new blue ocean with the keywords of "health, comfort, safety and efficiency" - "ergonomics" related products.

Ergonomics is considered a discipline that studies the interaction between humans and machines and the environment. Foreign ergonomics, especially some developed countries in Europe and the United States, have been widely known and widely used in human activities, such as office supplies, furniture, clothing, hand tools, equipment, architecture and other fields are everywhere the shadow of ergonomics. However, for China, the ergonomics industry not only started late, but also the popularity of related concepts is not widespread, most of which only involve household products such as tables and chairs, home appliance carriers, beds, leisure and fitness equipment. With the continuous improvement of people's living standards, the requirements for a healthy, comfortable and safe living and working environment are also getting higher and higher, and the development prospects of this field in the future are very broad, and this industry will have a relatively rapid development in the future.

After research and analysis, Lege saw the needs of consumers to pursue healthy life and office methods, established the product logic built by the concepts of ergonomics and space optimization, and focused on product innovation and expansion. Since then, in addition to the bracket, Lege has begun to get involved in the field of ergonomic and healthy office.

In fact, ergonomic and healthy office products for Lege, is equivalent to upgrading the bracket: that is, the bracket is applied linear drive technology, becoming more intelligent, can automatically lift the table that is supported, and can automatically lift and lower the bed that can be supported.

The damage of the financial crisis to the economy has not yet dissipated, and Lege has found a new way, and the transformation occurred in the second half of 2009.

From the army of many domestic manufacturers doing OEM/ODM, Lege has begun to implement the independent brand development strategy with "Lege Loctek" as the core at home and abroad, and has carried out ergonomic application and patenting strategy transformation and upgrading of products and businesses, from "Lege Manufacturing" to "Lege Brand". While designing and developing ergonomic products, we apply for domestic and foreign patent protection to create barriers to competition. By 2016, Lege has expanded from a relatively single product structure based on large-screen display brackets and computer brackets to a diversified healthy office product system covering ergonomic lifting tables, lifting tables, and tableside exercise bikes.

At the entrance of the exhibition hall of Lege's headquarters, there are two rows of white linear columns, which can be controlled by algorithms, which can be lifted up and down with the rhythm, like dancing legs, which is the core technology of Lege's existing products - linear drive.

According to the report released by the third-party research company, in the global office furniture market, the penetration rate of ergonomic smart office furniture using linear drive technology is not high enough, and the penetration rate of developed countries in Europe and the United States is higher than that in China, and with the improvement of people's living standards, there is a large room for improvement. The global veteran linear drive enterprises include Danish LINAK (Linak), Germany DEWRT OKIN, etc., and there are several related listed companies such as Lege Shares and Jiechang Drive in China, with different business models and relatively fast development.

After product transformation, the way of selling needs to change; in order to sell, building an influential brand is a key part.

On the one hand, Lege maintains the stability of its own business with the help of the resources accumulated by overseas brand owners, large chain retailers, wholesalers, domestic home appliances/computer manufacturers, office integrators and other resources; on the other hand, it actively explores the sales of its own brand products and forms an M2C direct operation model, that is, the company as a manufacturer directly faces consumers, reduces sales costs by reducing circulation links, and enhances consumer purchase and after-sales service experience.

In the next 5 years, Lege made various attempts in the field of Chinese brands going overseas.

Nowadays, Lege has formed a business model based on its own brand and a small number of OEM brands, and uses online and offline channels for product sales at home and abroad. Its offshore income has always far exceeded its domestic income. In 2013, Lege's overseas sales revenue accounted for 81.14% of the main business income in the same period. In recent years, overseas income has accounted for more than 90%.

Previously, Lege focused on the "Lege Loctek" brand in China. Starting from 2022, with the advent of more products in more home scenes, Lege has also made corresponding adjustments to the brand logo. The logo on Tmall and Jingdong Mall was changed from "Le Ge Loctek" to "Le Ge | Smart Home". Li Miao, head of Lege's domestic sales division, said: "The adjustment of the logo reflects the expansion of Lege's linear drive products from healthy office to multi-scenario application products covering smart homes, which is also a major strategic deployment for the company to participate in the internal cycle. ”

Lege has been involved in cross-border e-commerce since 2011 and has experienced the early multi-brand and multi-category grocery shopping model. Around 2016, it gradually shifted to the vertical category and single brand model, and gradually focused on brands and products. The "FlexiSpot" brand, launched in 2016, now has a high reputation overseas, and its online sales scale is leading that of companies in the same industry. In Amazon, Home Depot, Walmart, Lotte, Yahoo and other e-commerce platforms to lift the table category sales ranking for a long time ranked first. The company's self-built independent website "flexispot.com" is in the first echelon of vertical independent e-commerce websites in the global linear drive application products.

The proportion of Lege's own brand sales revenue increased from 24.2% in 2014 to 51.34% in 2017; in 2021, the proportion of self-owned brand sales accounted for 64.66%.

Zhu Wei, secretary of the board of directors and financial director of Lege, told us that the company's sales model covers domestic, overseas, online and offline, and this multi-type, multi-channel diversified sales model penetrates all markets. Domestic sales, overseas offline sales, overseas online sales, and overseas warehouse sales accounted for about 7%, 34%, 53%, and 6% respectively. It can be seen that overseas online sales account for more than 50%.

The transformation of Lege's own brand is currently successful. In 2020, Lege achieved an operating income of 1.941 billion yuan, a substantial increase of 98.42% year-on-year. By 2021, Lege achieved operating income of 2.871 billion yuan, an increase of 47.95% year-on-year.

Objectively speaking, even today, the brands of China's manufacturing products are still growing, and compared with many international first-line brands that have long been formed, there is still a big gap in terms of popularity and category. However, many Chinese manufacturing companies are making up for this market gap: from scratch, from weak to strong. Chinese enterprises can build a global brand from scratch, which is a breakthrough in itself in the new historical stage of global development, and it is also happy to see more Chinese enterprises grow.

In terms of brand building, Lege will also use hot characters to promote. One of the most well-known brand influence events occurred on Last Year's B station. Station B UP master "He Classmate" led the stock price of Lege to rise by 13%.

Today, online sales have enabled Lege's products to be available in 75 countries and territories.

Table 1 Main sales channels of Lege products

Source: Company prospectus, compiled by cbn finance and economics research institute

In this time period, another operation of Lege's globalization method is to build factories overseas. For Lege to choose to establish a production base in Vietnam, Xiang Lehong believes that there are several main reasons: first, to avoid trade frictions; second, the supply of labor and cost problems, Vietnam is in a sense particularly similar to China in the 1990s, Vietnamese people are more diligent; third, tax considerations, less taxation; fourth, the company's overall energy level level of the improvement.

In 2015, the decision was made to invest in the construction of the factory, and the construction began in 2016. This production site has played a big role in smoothing Lege's business. The reason for choosing to establish a production base in Ho Chi Minh City, Vietnam, is that, in The view of Lege, Ho Chi Minh City is in the south of Vietnam, and the business atmosphere and port conditions are relatively better. Products produced in Vietnam are basically exported to the United States at this stage; products produced in the Ningbo factory are supplied to local, European and other countries.

Xiang Lehong believes that objectively speaking, a production line now makes about the same money in Vietnam as it does in Ningbo. The core components, such as controllers, algorithms, motors, etc. are all made in Ningbo, and what Vietnam does is more of an organic combination. Overall, the same thing, China is more efficient, the product is more stable; while the Vietnamese side, relatively speaking, the efficiency will be lower, but this is a climbing process. So the two together, not to pursue more money, but to pursue a sustainable development process.

In terms of the management of the Vietnamese factory, Ningbo will send some management and technical personnel to the past, and at the same time, it will slowly train technical employees in the local area, and the labor force is basically Vietnamese.

3. The third stage: transformation and foreign trade infrastructure

In the process of expanding overseas markets, Lege established a cross-border e-commerce industry chain, and initially rented Amazon's warehouse, that is, Amazon's FBA warehouse service.

However, as more and more cross-border e-commerce enters the Amazon platform, amazon's demand for warehousing resources is becoming increasingly strong, and the speed of warehouse construction has not kept up with the demand of sellers. As a result, the cost of Amazon's FBA warehouse service has risen, and a storage limit has been set for each seller. For merchants with large sales volumes, their own development is greatly restricted.

LeGe also suffered a dilemma.

In order to break through the restrictions, in 2013, Lege tried to set up its own overseas warehouse. Through the inspection, three warehouses have been set up in San Francisco, Memphis and Houston in the United States. Its own overseas warehouse balances the cost and speeds up the delivery to better meet the needs of customers.

Later, Xiang Lehong upgraded the operation of overseas warehouses. He said that in the increasingly mature environment of E-commerce in the United States, customers will have higher and higher requirements for delivery time. In the future, e-commerce is bound to need multiple places to store in order to achieve rapid transportation and distribution. Public overseas warehouses are an important way to break through Amazon's FBA restrictions. Small and medium-sized foreign trade enterprises cannot afford to build their own overseas warehouses, so the demand for renting public overseas warehouses will be very strong in the future.

Pushing himself and others, Xiang Lehong knows the difficulties of small and medium-sized enterprises in doing branding to go to sea.

"The leap from ODM to OBM requires many people to do user behavior insight analysis and research, understand the needs of information users, and develop procedural software, which is difficult." Xiang Lehong said that many of our small and medium-sized enterprises go abroad to go abroad alone, and these services such as legal affairs and transportation need to be done at a cost. The logistics, sales and other resources and experience accumulated by Lege in the past globalization process can help small and medium-sized enterprises to operate overseas. As a result, Lege started to provide infrastructure services for Chinese products to go to sea.

In this way, there is more than one Lege in Ningbo. Among the enterprises we investigated, Beifa Group, which is also located in Ningbo, also uses its advantages of becoming bigger and stronger to help more small and medium-sized enterprises develop overseas business.

What can the foreign trade infrastructure bring to Lege and small and medium-sized enterprises?

Xiang Lehong gave an example of price - to put it bluntly, everyone hugged together to let small and medium-sized enterprises that went to sea spend less money; at the same time, Lege can also get benefits in the process of serving small and medium-sized enterprises.

"I started working with logistics company FedEx more than a decade ago, trusting each other and giving me good prices. Now, some private enterprises like Anji, Zhejiang, are also cooperating with us. After the group, we can get a lower discount, which is very helpful for the majority of small and medium-sized enterprise brands to go to sea, spend so much less money. ”

Lege used its own capital strength and the layout of overseas warehouses in the early years to make efforts in building a public overseas warehouse platform. At the beginning of 2019, Lege cross-border e-commerce public overseas warehouse began systematic planning, and in the first half of 2020, it was fully promoted.

According to the Annual Report of Lege, as of December 31, 2021, the number of public overseas warehouses of Lege cross-border e-commerce has accumulated 15 in the world, with a delivered area of 260,000 square meters. Among them, 6 overseas warehouses were purchased in the core hub port area of the United States, and they were also established in Germany and Japan. At present, Lege gradually provides small and medium-sized foreign trade enterprises in Ningbo, Zhejiang, East China and other parts of the country with services including overseas warehousing, logistics and distribution, after-sales service, SaaS mode information services, high-level experimental testing services, rapid proofing and trial production services and scientific and technological research and development.

In addition to overseas warehouses, at the beginning of this year, Lege announced that it would spend 207 million yuan to build a container ship, which attracted widespread market attention and was also questioned - the public is full of questions and curiosity about cross-border e-commerce leading enterprises to enter the shipping industry with net profit funds equivalent to a whole year.

When we were investigating, Xiang Lehong analyzed the future development of logistics business of Lege: "Cross-border logistics is because we feel that we not only have to do intermediate warehousing and integrate tail delivery resources, but also try to do the first voyage shipping thing." For example, negotiating prices with shipping companies, but also to reduce the cost of towing cards from U.S. ports to warehouses, etc., can save money and trouble for many small and medium-sized enterprises. In the next step, we are also considering ecological help-selling services. For example, when we sell tables, we help others sell chairs; when we sell table legs, we help others sell desktops. We have already started to do this, but it is not very mature, so there is no large-scale promotion. ”

Spending money on shipbuilding should be able to lay the foundation for Lege's further development of overseas warehouse business in the future. Xiang Lehong explained to investors: "Not only to save freight, but more importantly, to support the overseas warehouse business open to third-party sellers." ”

Building its own ship allows Lege to achieve integrated operation from shipping to overseas warehouses. In the future, the products of cross-border sellers can be transported by Lege's ship to Lege's overseas warehouse for cross-border transactions, and Lege has also opened up a new business to provide cross-border logistics services for cross-border e-commerce enterprises.

Fourth, Xiang Lehong talked about business operation: everything is done according to local conditions

Starting from the small bracket, to the brand going to sea, to operating cross-border logistics infrastructure, Lege accurately stepped on the policy timing of the liberalization of private enterprises' foreign trade business and China's accession to the WTO and other national opening-up policies, and embarked on the upgrading of quasi-ion TVs and the popularization of ergonomics. It seems that there is a certain degree of serendipity, but it is precisely because of the promotion of the concept of global development that Lege can seize the opportunity again and again, reform sales channels, strengthen scientific research forces, and create china's foreign trade enterprises' own brands.

Xiang Lehong remains highly sensitive to the world. He is good at observing, analyzing and acting. For example, he found that China's demographics were changing, studied the statistics bureau data himself, and wrote a report on the structure of Chinese. He showed us the report and thought that the company could produce corresponding products in the direction of serving an aging society. The most direct thing is to produce beds with automatic lifting function, which will serve the lives of those elderly who may be bedridden. Lege really has such a product. Xiang Lehong said that he is the chief product manager of Lege.

Through his own observation and analysis, Xiang Lehong constantly adjusts the decisions of the enterprise, and also makes the logic of the production of the enterprise extremely simple - what the market needs, you can just do, then do. The same is true from the perspective of his corporate development context.

Fifth, Xiang Lehong talked about business operation: doing business has greater significance in addition to making money

I am an ordinary Ningbo person, Ningbo has a big port, there is advanced manufacturing, then I will do manufacturing, do foreign trade; I speak English well, then do internationalization; I am studying physics, then do brackets, make tables. Most people now sit at their desks and work for 8 hours, or even longer, with slow metabolism and slow blood flow, leading to a range of problems. If the lifting table of the song allows more people to get used to sitting and standing alternately, it may help to solve people's health problems. It is better to do what you are good at, like, have a future, and be able to serve society. So, actually everything I do is tailored to local conditions.

Whether it is a company or a person, there can be a "three M" strategy, that is: first, the Market size, market capacity; then the Market trend, the market trend; and the third is the Market competitiveness, market competitiveness.

What I do is an ordinary enterprise, which has made some achievements in the field of linear drive smart home, made some efforts for healthy China, and made some attempts in driving small and medium-sized enterprise brands to go to sea, which is the opportunity given by the times to Lege. We should also have a grateful heart, provide more high-quality jobs for the society, drive more enterprises to grow together, strive to achieve the common prosperity of more people, and strive to become the enterprises of the times that society needs.

All of the above is the greater meaning of my business in addition to making money.

Sixth, as a global company, for the current epidemic, Lege also said that it was affected

1. What has the epidemic affected?

1) From the perspective of the entire industry, the epidemic has lasted for nearly 3 years, and the current stage of global inflation is high, which inhibits the C-end of consumption, and the reaction is that the growth rate of the entire cross-border e-commerce industry is slowing down. From the perspective of profitability, shipping, raw materials and exchange rates still adversely affect profits. Many cross-border e-commerce companies reported that in the first quarter of 2022, the level of profitability showed a downward trend, and the cross-border e-commerce industry as a whole showed a situation of increasing revenue and not increasing profits.

2) The impact of the Shanghai epidemic on the supply chain and logistics in the Yangtze River Delta is relatively serious. On the one hand, the raw materials cannot be put in place in time, and the production progress is affected due to the shutdown and supply of raw material production enterprises; on the other hand, the logistics costs are pushed up.

2. What should I do?

1) From the perspective of boosting sales, continue to work product strength and brand power. Take advantage of the direct consumer (DTC) model to dig deep into customer needs, start from the research and development end, realize products to better solve customer blockage pain points, and tap rigid needs. At the same time, we enrich the product line, use linear drive core technology, and continue to innovate and apply in the field of healthy office and smart home. In view of the needs of home office, the intelligent electric lifting home table in line with the aesthetics of home decoration has been launched, and the music bed has also been launched to solve difficulties such as getting up, sleeping and snoring. Actively participate in the internal cycle, optimistic about the development prospects of the domestic market, and increase the construction of offline channels.

2) From the perspective of ensuring production: prejudged the epidemic situation, and made some reserves of stockpiles and raw materials in advance; secondly, the use of Vietnamese factories to reasonably allocate production tasks. In addition, some translations were made to orders, the orders in June and July were advanced to the present production, the inventory was appropriately increased, the workers had work to be done, and the layoffs and personnel were avoided as much as possible.

3) The company's public overseas warehouse business fully integrates resources such as future shipping and tail delivery to empower small and medium-sized cross-border e-commerce enterprise brands to go to sea.

(The text crosses the mountains and seas in the picture source: Visual China)

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Text | Yu Jian He Xiao Li Jiayi

Edit | Yu Ming Ma Shaozhi