Shenzhen's popular Aoji brand has made another big move! Seller: The leeks are coming

For a long time, in the hearts of cross-border e-commerce sellers, the four young companies in South China City (Aoji Technology, Youkeshu, Tongtuo Technology, and Saiwei Times) have a special meaning. They are role models, goals, and motivation to keep moving forward . Today, with the emergence of big companies such as SHEIN and Anker Innovations, their brilliance has been slightly overshadowed, but their status remains unshakable.

Now they are taking different paths. Youkeshu and Tongtuo have gone on the road of backdoor listing, while Savitech and Aoji Technology are on the road of IPO . However, returning to their main business, they all face a common problem, that is, the increasingly fierce competition in the market, so they are all looking for their own way out. Youkeshu chose to transform into a boutique, while Aoji and Tongtuo chose to expand their own business segments, not just simply selling goods, but incubating new projects with other partners through investment and resource sharing with a win-win attitude.

After the account blocking last year, Aoji, one of the "Four Young Masters of South China City" and already preparing for IPO, became much more low-key. During this period, the industry had many questions about it, such as the losses and impacts of the account blocking, whether it had made any new arrangements, and whether the IPO plan was interrupted.

Aoji's silence did not last long. At the end of 2022 , it once again attracted the attention of many industry insiders with the news that "Aoji Technology is looking for brand partners worldwide in 2023. " In this latest news, Aoji also indirectly answered some questions in the industry.

New Year's Partner Recruitment, Support Product-oriented Partners

After the Amazon ban in 2021 , cross-border e-commerce sellers reached a consensus: return to products and operate in compliance. After this "catastrophe", sellers deeply realized that only products are the key to success, and the value of a company or brand ultimately lies in products.

Obviously, Aoji, which was also hit hard by the account blocking wave, also agrees with this. On December 13 , Aoji posted a tweet on its official WeChat account: "Aoji Technology is looking for brand partners globally in 2023. " In the article, for partners in the new year, Aoji clearly stated that the partners are product-oriented partners, that is, teams with product R&D and implementation capabilities and familiar with upstream and downstream supply chain resources.

Even if the partner only does R&D and design and finds a factory to process the product, Aoji is also acceptable , as long as the other party has strong R&D strength and supply chain control capabilities . Amazon operators who have good projects on hand are not considered.

It is not difficult to see from the above-mentioned standards for partners that Aoji places "product capability" as the primary prerequisite for whether the two parties can reach a cooperation.

However, not all product partners are partners of Aoji. In terms of categories, Aoji emphasizes that it avoids partners in the three categories of furniture, tools and small appliances.

Of course, for partners who meet the standards, Aoji will also provide various resources to support, including:

(1) Project funds (part of the start-up capital / fixed assets such as office space);

(2) Category planning (market insight / product definition / industrial design / project management / product iteration);

(3) Brand marketing (marketing planning / brand design / Amazon operations / customer service management);

(4) Data management (market insight data system / marketing data system / supply chain data system);

(5) Supply chain system (material control management / logistics distribution / quality management);

(6) Functional management (account management / human resources / financial management / intellectual property).

Regarding the cooperation model, Aoji pointed out that after the two parties sign the agreement, they will jointly invest in the establishment of a new company and distribute equity according to the investment ratio. According to the investment ratio, Aoji will account for about 30% to 60% , which can be adjusted according to the project situation. At the same time, they will also share profits and losses according to equity.

In addition, during the project incubation period, both parties need to jointly operate the company, and the new company will enjoy the same resources as Aoji. It is worth mentioning that when the project matures, Aoji will withdraw from the operation and the company will be fully operated by the partner.

In addition, Aoji is not only looking for product partners, but also focusing on the "brand". Therefore, it emphasizes in the tweet that it is looking for "brand partners". As we all know, branding costs money, so in terms of capital investment, Aoji also frankly admitted that the initial investment will be as high as one million to several million yuan. "Different categories have different capital requirements, and we adopt a rolling planning and small-step fast-running model."

In fact, this is not the first time that Aoji has worked with other partners to incubate new projects. As early as 2015 , Aoji established a project incubation center, hoping to incubate more star overseas companies by combining its own cross-border e-commerce resources and experience with entrepreneurs.

As of 2020 , Aoji has successfully incubated 4 projects, all of which have grown into medium-sized and large cross-border e-commerce companies. In 2021 , Aoji successfully carried out cooperation on 1 project , and plans to cooperate on 1~2 projects in 2023. Aoji's project incubation center is a long-term project, and the cooperation model is similar, but the requirements for partners may be adjusted every year.

For example, in 2022 , Aojie's target cooperation partners are mainly divided into two categories. One category is Taobao brand experts, including top sellers in subdivided categories on domestic e-commerce platforms such as Taobao / Tmall / JD.com, who have created at least one explosive product; the second category is product experts, who are required to have rich experience in product research and development, design, and production management, and sellers with their own factories are given priority.

However, the target partners in 2023 must be product-based partners .

Everyone in the industry knows that Aoji suffered a huge blow in the Amazon account blocking wave in 2021. It can also be seen from the fact that it did not announce the number of cooperative projects successfully carried out by the incubation center in 2022 that the impact of the account blocking wave is not weak. Now Aoji has chosen to announce the plan of the project incubation center for the next year at the end of 2022 , proving that it is gradually emerging from the shadow of the account blocking wave.

In this case, I believe many people are curious about its current situation.

The independent website has recovered significantly from the account blocking wave, with more than one million visits in three months

When the account suspension wave swept the entire industry, many people in the industry were closely watching the dynamics of the big sellers such as Aoji, and speculated that they would most likely be devastated by such a major blow, or even go bankrupt. However, as the saying goes, a broken ship still has three thousand nails. The reason why the big sellers became big sellers is naturally due to their own strengths. Therefore, Aoji was not only not defeated, but also quickly emerged from the account suspension wave.

In the global list of winners of the German iF Design Award announced this year, Shenzhen design is particularly dazzling, winning a total of 460 awards. Among them, Aoji won a total of 21 iF World Design Awards. With these awards , it successfully ranked among the top 25 Chinese companies in the iF World Design Index . These awards came from many different categories, including automobiles, storage, technology , kitchen appliances, etc. Products that won individual awards include Willsense Cold Pro , Moon Cake Gift Box, LC-Q11 Fast Wireless Charging Pad and OYeet Gopower .

Among the winners of this year’s iF Design Award are well-known domestic brands such as Anker Innovations , OPPO , Huawei, and TCL .

In the " 2022 Kantar BrandZ Top 50 Chinese Global Brands ", Aoki also proved its strength. In the list, Aoki ranked 46th . Even the popular Lechuang, which has already been listed, ranked behind it at 49th . And on the list with Aoki are well-known technology giants such as ByteDance, Alibaba, Huawei, Xiaomi, etc., as well as cross-border e-commerce big sellers such as SHEIN and Anker Innovations.

Moreover, returning to the cross-border e-commerce sellers themselves, we can also see the upward vitality of Aukey. According to the latest data report from SimilarWeb , Aukey's independent website ( aukey.com ) has risen from 167,412th to 131,249th in the world in the past three months , an increase of 36,163 places. The total number of visits in the past three months reached 1,103,000 , with the highest traffic in October , reaching 398,300 .

From a geographical point of view, the core countries that send the most traffic to aukey.com include the United States, Canada, Italy, Japan and Germany, among which the United States is the largest source of traffic, accounting for 31.36% . As a consumer electronics website, it is obvious that its male audience will account for the majority. Currently, among the market shares of various audiences, aukey.com 's male audience accounts for 71.08% and female audience accounts for 28.92% . The largest age of visitors is 25-34 years old.

From the perspective of popular marketing channels, the largest traffic source for aukey.com is search traffic , which delivered 56.71% of desktop visits last month, while direct traffic ranked second, delivering 20.18% of traffic. However, social channel traffic was not fully utilized, accounting for only 1.91% .

It is worth noting that unlike other independent websites that mainly obtain social media traffic from FB and INS , aukey.com gets the most traffic from Reddit , accounting for 46.52% , followed by Youtube and Twitter (on the desktop). FB only accounts for 1.35%, and a very small part comes from Pixiv (accounting for 0.58% ).

However, the removal of AUKEY and Tacklife from Amazon has had a huge impact on AUKEY, which is highly dependent on Amazon (49.02%, 63.39% and 72.94% of its sales from 2016 to 2018, respectively). The biggest impact is the obstruction to its listing plan.

The road to listing was full of twists and turns, and the coaching filing has been withdrawn

Before the brand was removed from the shelves, Huatai United Securities had helped Aoji complete two rounds of listing guidance. But before the publication of this article, Yien learned from the China Securities Regulatory Commission that Aoji had withdrawn its guidance filing.

After the account blocking wave swept through, the capital market's confidence in the cross-border e-commerce industry plummeted, and many sellers' listing plans were affected. Some completely gave up the plan to go public in the short term, and some withdrew their listing guidance filings. However, after a period of adjustment, some sellers returned to the capital market, but Aoji still has no relevant news, which shows that the aftermath of the account blocking wave is still there.

Aoji's road to listing was full of twists and turns. In 2015, Aoji successfully landed on the New Third Board, becoming the first cross-border e-commerce company to be directly listed in China. It was delisted from the New Third Board in April 2019 and switched to the A-share market in September of the same year.

However, on April 30, 2020, Aoji and its sponsor Huatai United Securities submitted a report, proactively requesting to terminate the review and withdraw the application documents. The Shanghai Stock Exchange terminated the review of Aoji's application for initial public offering and listing on the Science and Technology Innovation Board. Now, the coaching filing conducted on August 7, 2020 with the Shenzhen Securities Regulatory Bureau has also been withdrawn.

Public data shows that from 2018 to September 2020, Aoji's revenue was 5.109 billion yuan, 5.331 billion yuan, and 6.597 billion yuan, respectively, and its net profit attributable to the parent company was 199 million yuan, 178 million yuan, and 502 million yuan, respectively. In addition, after 2019, its cash flow from operating activities has improved significantly, from negative 208 million yuan in 2018 to 440 million yuan from January to September 2020.

However, during the first two phases of the listing guidance process , Aoji also exposed some problems. During the first phase of the listing guidance work in 2020, Huatai United Securities found that Aoji's business processes were highly dependent on its information system. The online store sales data, product procurement data, and inventory management data involved in its daily operations were all realized through the information system, and the amount of data involved during the reporting period was relatively large.

During the second phase of the listing guidance work, it was found that since Aojie is a leading domestic cross-border export company, its business model is mainly to sell products to overseas end buyers through online sales platforms such as Amazon, eBay, and Wish. Therefore, the legality and compliance of its overseas subsidiaries in conducting local business requires demonstration and endorsement by a professionally qualified overseas law firm.

The impact of Amazon's account ban is far more than just blocking the listing process. Recently, there was news that the homepage of AUKEY's Tmall flagship store officially posted a "store termination notice", and it plans to terminate its operations on December 24, 2022. AUKEY's JD flagship store also had abnormal sales.

Before the publication, Yien searched for the AUKEY flagship store on Tmall and found that it was no longer displayed. At the same time, many products of the AUKEY JD flagship store had been removed from the shelves, and only a few products were on sale.

Some media learned from the customer service of the AUKEY flagship store that the AUKEY Tmall flagship store is no longer selling products or shipping, and has officially ceased operations. The after-sales service of the products that have been sold before will not be affected, and if there are any after-sales problems, you can still contact the customer service for resolution.

It is undeniable that Aoji, which was founded in 2010 and has an annual revenue of more than 5 billion, is already a well-deserved leader among cross-border e-commerce sellers. Even if it suffers a heavy blow, I believe it can quickly find its own direction. "Looking for brand partners in 2023" may be one of the directions it has found.

In the industry, Aojie is not the only big seller engaged in investment and incubation of cross-border e-commerce team projects, but judging from many feedbacks in the industry, the reviews are mixed. Therefore, there are still many uncertainties as to whether Aojie can open up a new avenue with the help of this business layout.

Big sellers compete to be the mentors, is it a win-win situation or just a way to make money?

Tongtuo Technology, one of the "Four Young Masters of South China City", is also focused on investment like Aoji . As a pioneer, promoter and practitioner of the industry, in December 2021, Tongtuo Technology announced that it would become an "angel investor" and set up a cross-border e-commerce equity investment fund, focusing on the investment and incubation of cross-border e-commerce team projects.

Tongtuo Technology has two types of partners: one is innovative and entrepreneurial teams: small and beautiful vertical cross-border e-commerce operation teams; cross-border platform business has been opened and is operating normally ( Amazon and Walmart are the best); sales of 2-5 million RMB/month, team average output of 1 million RMB/month; large profit potential, good operating indicators. The second is potential star products: high quality, core competitiveness; high user satisfaction, good reputation; great market potential; able to respond and adjust quickly according to market and consumer needs.

Any one of the above conditions is sufficient.

For qualified partners, Tongtuo Technology also offers many resources as support: 1. Financial support ( sufficient financial support; can purchase services, equity or convertible bonds; independent investment, follow-up investment ) . 2. Group empowerment ( leading by 18 years of big sales; multiple empowerment support; brand planning and creation, supply chain development and management, logistics and warehousing, talent support ) . 3. Marketing promotion ( 110 million+ professional marketing resources support; big data intelligent guidance, precision marketing ) . 4. Supply chain docking ( for example: 18 years of cross-border production capacity opening, upstream and downstream high-quality supply chain resource sharing ) .

Both Aoji and Tongtuo Technology have clearly stated their attitude of "being a mentor to cross-border e-commerce companies".

In the cross-border e-commerce industry, leading companies like Aoji and Tongtuo Technology are rich in resources, generally have strong core R&D technology, rich overseas experience, and ample funds. It is said that "it is good to lean on a big tree for shade", and they are well-deserved big trees.

Some entrepreneurial individuals or teams do have problems such as lack of funds, lack of operating experience, lack of management ability, etc. Therefore, there is a basis for cooperation between the two parties . Bole and Qianlima, this seems to be a welcome thing, but the industry has mixed opinions on this.

Those who voted in favor unanimously believed that this was a win-win situation, in which the advantages of both parties were fully utilized, and the competitiveness in the market would be qualitatively improved.

However, those who voted against it had a different idea:

"——It's understandable to have money to invest, but many big sellers are obviously struggling to survive, and they want to cooperate to create new projects. It's obvious that they have other intentions and are definitely cutting leeks;

——The most important thing for a cross-border e-commerce seller is product capability. If the team has the ability to develop and implement products, and is familiar with upstream and downstream supply chain resources, wouldn’t it be better to do it yourself? Why bother to share a piece of the pie with others?

——It’s just a different name for agency operation. The purpose is still to transfer the company’s various management and resource costs, and finally cash out and leave.

Others said they were looking for someone to take over and pass on the losses to their partners. Others said it was just a different way of saying the payment terms.

At present, the feedback from the industry on the action of "jointly incubating overseas enterprises with entrepreneurs" by big sellers is more negative than positive. As for the real situation, we cannot judge it, and can only hope that they will disclose more successful cases in detail . At the same time, it will take some time to verify whether such cooperation is a win-win situation.

Aoji Technology