In recent years, cross-border e-commerce can be described as the “red man” of capital, which has been favored.

According to e-commerce big Data of CnKI, a total of 33 platforms in China’s cross-border e-commerce sector obtained financing in 2020, with a total amount of more than 7.09 billion YUAN. This year has become a year of cross-border e-commerce IPO, cross-border e-commerce onion successfully landed on Wall Street in April, then Dunhuang Net, Yang Wharf, Saiwei Times have listed news.

Recently, the cross-border e-commerce big seller has also started to go public, to Hong Kong to submit a prospectus, to be listed on the Main board of Hong Kong.

So, as a B2C apparel and footwear market platform seller, in the end how good, the following is explained by IPO catcher.

The development of the child language

Founded in 2011, Zibo Is a cross-border e-commerce company from Hangzhou and is one of the largest cross-border e-commerce companies in China.

Through the independent research and development of ERP system and logistics storage platform system suitable for the company’s business model, the company deeply integrates the upstream and downstream of cross-border export trade business, relying on overseas online third-party sales platforms and self-operated independent stations mainly based on Amazon, Wish, Aliexpress, eBay, WalMart, etc. The company is an “Internet + industry” integrated company integrating product research and development, design, sales, supply chain management and service to sell popular clothing, shoes, hats and accessories to end customers in target markets.

Up to now, the company has more than 1,000 employees, more than 400 effective stores on overseas online sales platforms, more than 300,000 active SKUs, more than 240 overseas proprietary trademarks, and the annual average daily delivery of 60,000-80,000 pieces. It has four supply chain management companies, four domestic warehouses, two overseas warehouses, one training company, and hundreds of cooperative processing plants. It also sets up offline entity experience channels to achieve the depth and vertical of the industry.

Currently, its products are mainly sold to end customers in more than 80% of the world’s countries and regions, including the United States, Germany, France and Japan.

Sub-language business model

Like a lot of sellers in the industry, zi Not language in the layout of a number of e-commerce platforms at the same time, but also developed self-supporting independent station channels, two legs walking business model is now the most popular players.

In the footwear category of the main profitable business, we sell self-designed fashion apparel and footwear products, integrate relevant fashion elements into the design of new products, and conduct market research according to the sales data and sales preferences of different platforms.

In the layout of third-party platforms and independent sites, the proportion of sales through Amazon and independent sites is increasing. In 2020, the company ranked third by GMV of apparel and footwear products sold through third-party e-commerce platforms, according to Jon Sullivan. In addition, in 2020, the company ranked first among all platform sellers in China’s cross-border e-commerce export B2C apparel and footwear market in terms of GMV generated in North America.

To boost Amazon’s sales, the company’s design team has expanded into new categories such as outdoor wear, men’s yoga wear, baby wear and children’s wear. The selection of products is in line with the needs of people in the post-epidemic era, no wonder sales can steadily increase.

In addition, the company has fostered more products in Amazon’s top 100 best-selling list, which will lay the foundation for future growth.

As of December 31, 2020, We have designed and sold more than 2500 hot products. 151 brands have been cultivated, including 20 popular brands, with annual sales exceeding 10 million RMB. Currently, 453 of its apparel and footwear products are among amazon’s top 100 sellers, and Wish has 3,232 best-selling products.

In addition to third-party e-commerce platforms, the company established its own website in 2018. Sales have increased dramatically since then. From 2018 to 2020, GMV sales on its own websites grew at a cagR of 680.0%.

We sell our products through mainstream third-party platforms and our own websites, covering more than 80% of the world’s countries and regions. In 2020, major sales in the United States and Europe together accounted for 92.5% of revenue.

The IPO process is silent

Before the Hong Kong listing, In January 2017, Zi Muyu also hired an intermediary to help launch the listing plan, and set up a holding platform in April. After the plan failed, it launched an impact again now, showing the ambition of Zi Muyu’s advanced capital.

Financial data in a nutshell

According to the prospectus, from 2018 to 2020, The operating revenue of Zibuyu is 1.318 billion yuan, 1.429 billion yuan and 1.898 billion yuan respectively, and the corresponding net profit is 80.1 million yuan, 81.1 million yuan and 113 million yuan respectively. The gross margin was over 60% for three consecutive years. From 2018 to 2020, the company’s gross profit margin was 66.5%, 69.8% and 72.6% respectively. Net interest rates were 6.1%, 5.7% and 6.0%, respectively.

In terms of main business, from 2018 to 2020, revenue generated by Ziyu clothing products accounted for 85.1%, 80.3% and 70.5% of total revenue in the same year respectively. Revenue from footwear products accounted for 14.5%, 17.9% and 21.1% of total revenue in the same year respectively.

Third-party platforms also continue to increase revenue. From 2018 to 2020, the revenue generated by amazon sales accounted for 23.6%, 31.5% and 32.4% of the total revenue respectively, showing a trend of gradual increase.

Son silent competitor

As a competitor of Ziyu, FunMart is a cross-border export e-commerce platform, which is mainly engaged in cross-border e-commerce export business in the Middle East and India markets. Its products cover men’s wear, women’s wear, beauty, home decoration, electronic products and other categories. It provides users with $5 discount for the first time order and 24-hour customer service and other services.

Up to now, A+ round of financing has been completed, with investors including Zhong Ding Venture Capital, IDG Capital and other star institutions.

SHEIN, another competitor, is a cross-border B2C Internet company founded in 2008, mainly engaged in women’s fast fashion, providing cost-effective fashion products for global consumers. Headquartered in Nanjing, and in Guangzhou, Shenzhen, Foshan, the United States, Belgium, Dubai and other places to set up branches, has entered the North America, Europe, Russia, the Middle East, India and other markets.

SHEIN has established its own brand. Relying on China’s supply chain advantages, the company constantly integrates industry resources and establishes a complete supply chain system from design and development to paper pattern making, from fabric procurement to garment manufacturing, from e-commerce operation to after-sales service, realizing a one-stop process of production, research and marketing.

From the perspective of the above, although cross-border e-commerce is a tuyere in the early stage, it is not an industry that can be controlled without strength and strategic vision. Only by effectively serving the real economy and developing business and industrial chain around the real economy can it become the real winner of the cross-border e-commerce industry.

Sub-silent venture capital reminder:

**·** Discontinuation of relationships with third party e-commerce platforms (especially Amazon and Wish) and adverse changes in terms of arrangement may have a material adverse effect on business and operating performance;

**·** is unable to timely identify and respond to changes in fashion trends, consumer preferences and market demands;

**·** Any significant shortage or delay in supply from OEM suppliers, or instability in the quality of their products, and any difficulty in maintaining existing relationships with OEM suppliers or finding replacement OEM suppliers in a timely manner, will have a material adverse impact on business;

**·** failure to maintain optimal inventory levels may increase operating costs or result in unsatisfied customer demand, both of which could have a material adverse effect on the business, financial condition, operating performance and outlook;

**·** Business operations may be affected by risks related to logistics services provided by third parties.

Source: IPO Catcher