“Part-time” work in logistics, big sales and annual income of hundreds of millions!

Platform costs have risen in all aspects, but revenue and profits have both stagnated or even declined. In order to effectively control excessive costs, some sellers choose to enter the logistics field while maintaining their status as sellers. This not only keeps the initiative firmly in their own hands, but also makes a lot of profits from it. The well-known home furnishing giant Lejia Holdings, comprehensive giant Suntech Power Holdings, and Santai Holdings are among them.

In 2022, Lechuang Holdings' overseas warehouse revenue reached 671 million yuan

Recently, many big sellers have released their annual reports for 2022, and Lejia Holdings is no exception. The editor has also discovered many key points from them.

As we all know, Lechuang Holdings has several major businesses including smart home, healthy office, cross-border e-commerce, public overseas warehouses, etc., and products such as smart lifting tables, smart electric beds, smart lifting platforms and fitness chairs are the company's hot-selling products.

In the multi-channel diversified sales model of Lechuang Co., Ltd., e-commerce revenue accounts for nearly 70%, with Amazon accounting for the highest proportion of 29.18%, followed by independent stations at 18.04%. However, in comparison, Lechuang's independent stations have a higher customer unit price, among which the average per capita consumption unit price of Flexispot's independent station is 3,155 yuan, which is much higher than the 1,763 yuan of the Amazon platform. As of 2022, Lechuang has launched 10 independent stations, and it has dominated the online sales channels in more than 70 countries and regions around the world.

In 2022, Lechuang 's total revenue was 3.208 billion yuan, and its net profit was 219 million yuan , both of which increased compared with the same period last year. Among them, ergonomic workstations contributed the most revenue to the company, with revenue of 219 million yuan in 2022. Its brand Flexispot lifting table ranked first in sales of lifting tables on e-commerce platforms such as Amazon.

Of the total revenue of over 3 billion yuan of Leckey , 671 million yuan came from the company's public overseas warehouse service business, an increase of 129.99% compared with 2021. Among them, the revenue from providing services to third parties was 490 million yuan , and 171 million yuan in 2021. In other words, Leckey's overseas warehouse operation model has achieved phased success.

"The bigger your heart is, the bigger your stage will be." This sentence is the most appropriate to describe Lechuang Holdings. From making height-adjustable tables to shipbuilding, from traditional foreign trade to becoming a leader in smart homes dominated by height-adjustable tables, Lechuang Holdings' strategic plans have always been relatively advanced.

However, as a big seller that has invested huge amounts of money in shipbuilding and warehouse building, the logistics business that Legao has vigorously developed has also been subject to controversy among people in the industry.

At the beginning of 2022, Lejia Holdings issued an announcement stating that in order to further enhance its market competitiveness and accelerate the development of overseas business, the company invested US$32.6 million (approximately RMB 207 million) in shipbuilding. In October of the same year, its subsidiary spent over 100 million yuan to buy land in the United States to build a position.

In the eyes of many sellers, Legao's successive huge investments in shipbuilding and warehouse building would require huge expense support in the short term, which would to some extent drag down the company's performance. At that time, the employees within Legao Holdings were also not optimistic about this business.

But shipbuilding has been a long-term plan of LEAGOO. "The annual rent for leasing a ship is more than 10 million US dollars, and the high cost of leasing a ship is the key reason for shipbuilding," LEAGOO mentioned. Based on the cost of building a ship of 32 million US dollars, the three-year lease fee can buy the ship.

If there is a ship, there will be many benefits. It can protect the company from fluctuations in freight prices and reduce the risk of the company's goods being hard to find a warehouse after future increases in shipping prices. For Lege's customers and overseas warehouse operations, shipbuilding and warehouse building are undoubtedly an additional layer of protection.

In the long run, this move by Lechuang will easily build a barrier for the company, and the strong supply chain system is likely to become a strong competitive cornerstone for Lechuang in overseas markets. As of 2022, in addition to manufacturing bases in Ningbo, Guangxi, Vietnam and other places, Lechuang has also deployed 17 overseas warehouses around the world, with a total area of ​​nearly 350,000 square meters.

In fact, since cross-border e-commerce sellers themselves have a huge demand for logistics, it is easy to derive logistics module business. Many big sellers in the industry have shares or affiliated logistics companies. Not only Legao Holdings, but also Suntech Power Holdings and Santai Holdings are also planning to enter the logistics track.

SDIC, Santai and others are all planning to enter the logistics sector

The well-known comprehensive retailer Savi Times is also a rising star in the logistics field.

In addition to operating accessories and apparel, sports and entertainment, and home furnishing products, another important business of Savi Times is to provide logistics services to third parties based on a complete cross-border warehousing and logistics system. It is reported that since 2005, Savi Times has focused on providing export logistics solutions for cross-border e-commerce. The logistics products provided by the company include domestic direct mail, international dedicated lines, FBA forwarding services, and overseas warehouse comprehensive services.

From 2018 to 2020, the logistics service revenue of Saiwei Times was RMB 37.0765 million, RMB 97.1875 million, and RMB 295 million, respectively, with both revenue and proportion increasing year by year. However, the logistics service revenue decreased in 2021 and 2022, reaching RMB 223 million and RMB 144 million, respectively.

Overall, the proportion of logistics service revenue of Savi Times is relatively small, remaining around 5%. The company's logistics business may still have room for growth in the future.

Another comprehensive enterprise, Santai Co., Ltd., also has the dual identities of a seller and a service provider. However, unlike Savi Times, Santai Co., Ltd.'s logistics revenue accounts for a relatively high proportion, which can be said to be one of the important sources of the company's revenue.

From 2018 to the first half of 2021, Santai Co., Ltd.'s logistics and warehousing revenue was RMB 280 million, RMB 330 million, RMB 600 million and RMB 260 million, respectively, accounting for 23.71%, 21.18%, 30.21% and 21.59% of the company's total revenue, respectively.

It is reported that Santai Co., Ltd.'s cross-border e-commerce logistics business mainly serves cross-border e-commerce retail companies and independent site sellers, and mainly makes profits by providing customers with international dedicated lines, international postal services, commercial express delivery and warehousing services.

However, looking at the revenue data of LDK and SanTai, the editor found that their gross profit margins were not as high as expected. From 2018 to 2020, the gross profit margins of LDK's logistics services were 13.46%, 9.37% and 11.32% respectively. The gross profit margins of SanTai's warehousing services from 2018 to 2020 were also 13.25%, 11.43% and 12.39% respectively.

In fact, not only the well-known cross-border sellers in the industry, but also some small and medium-sized sellers who quietly make money in the industry have begun to enter the logistics industry. In their view, the logistics industry still has great development prospects, and it is relatively easy to get a piece of the pie, but with the gradual increase in competitors, the competition in the industry has entered a white-hot stage. In the future, sellers who want to deploy cross-border logistics still need to look at the market and do what they can.

logistics

Savi era

Lechuang Holdings