The bet almost won! Shenzhen sales made more than 50 million in one year

The bet almost won! Shenzhen sales made more than 50 million in one year

The bet almost won! Shenzhen sales made more than 50 million in one year

 

Behind the bet: will you laugh last or fall to the bottom?

 

Every move of the big sellers after the "bet" has become the gossip of small and medium-sized sellers. First, there was the mess between Jiazhilian and Xunxing Shares, and then Tongtuo failed in the bet and the parent company sent a letter of apology, which can be said to make people "full of food and full of gossip".

 

Of course, there are also successful big sellers behind the bet, such as the well-known Zebao and Yibai Network, which have successfully completed the performance bet. Nowadays, Shenzhen big seller Zhengniao Chuhai has also "married" a listed company, signed a bet agreement, and successfully completed the bet in the first year.

 

The bet was almost won, and Zhengniao made more than 50 million in one year.

 

For many companies, when they develop to a certain level, they will inevitably embark on the road of capitalization and strive to go public. Some of these companies will choose to strengthen their products and raise funds independently to achieve the purpose of IPO, but some companies will choose to go public through a backdoor listing, that is, sign a bet agreement with capital.

 

Shenzhen Zhengniao Chuhai Technology Co., Ltd. (hereinafter referred to as "Zhengniao Chuhai") has also signed a five-year gambling agreement with Guangdong Insai Brand Marketing Group Co., Ltd. (hereinafter referred to as "Insai Group"), requiring Zhengniao Chuhai's net profit after tax attributable to the parent company after deducting non-recurring gains and losses during the performance commitment period ( 2021-2025) to be no less than RMB 52 million, RMB 71 million, RMB 93 million, RMB 121 million and RMB 156 million respectively.

 

 

According to the announcement released by Insai Group a few days ago, Zhengniao Chuhai has fulfilled its performance commitment for 2021, with a net profit of 53.7 million yuan in 2021, a commitment completion rate of 103.31%, and a thrilling completion of the bet. It should be noted that in the performance of the first nine months of 2021 disclosed by Zhengniao Chuhai , its net profit was 46 million yuan, which is quite different from the performance commitment.

 

Judging from the performance commitment targets of both parties, if Zhengniao Chuhai wants to complete the five-year bet, it needs to achieve continuous growth in net profit. There is no doubt that in the ever-changing market environment, Zhengniao Chuhai needs to make great efforts to maintain strong profit growth every year.

 

It is understood that Zhengniao Chuhai was established in April 2020. It was formerly the platform division of Treader International, which focuses on operations. Like many big sellers who settled in Shenzhen, the company is also located in Longgang Bantian, the base camp of Amazon sellers. It mainly sells household products such as home lamps, home textiles and pet products. It currently has multiple platforms such as Amazon, eBay, Wish, AliExpress, etc., and its main markets are developed countries and regions in Europe and the United States such as the United Kingdom, Germany, Italy, and France.

 

In the financial data released by Zhengniao Chuhai for the first nine months of 2021, it can be seen that the largest revenue contributor to Zhengniao Chuhai is household goods, accounting for more than 70%, followed by sports and outdoor categories accounting for 10.34%, and finally beauty and musical instruments accounting for 5.84%. Among the company's employees, sales and operations personnel account for more than half, and the rest are warehouse personnel and product developers.

 

Looking at the revenue and profits of Zhengniao Chuhai in the past two years, it can be seen that the company's starting point is very high. The revenue in the year of its establishment reached 552 million yuan, and the net profit was 64.3 million yuan, but this figure fell back in 2021, with a net profit of 53.7 million yuan. According to the forecast of Zhengniao Chuhai, its net profit in 2022 is about 63 million yuan, an increase of nearly 10 million yuan compared with 2021.

 

That is to say, under this year's environment, Zhengniao Chuhai not only needs to stabilize its original profits but also maintain steady growth, which inevitably makes industry insiders worry about whether it can complete the bet. After all, the previous big sales bet cases are still vivid in their minds.

 

With multiple big sales bets failing, can Zhengniao break through the siege?

 

Initially, several cross-border e-commerce companies signed gambling agreements with listed companies and were acquired by the other party. At that time, many small and medium-sized sellers were very puzzled and said: "We have already reached this scale, wouldn’t it be good to slowly build our own golden house?" But when the problem of capital turnover came, small and medium-sized sellers also empathized with the situation of the big sellers.

 

When sellers are caught in the vortex of capital, they either have the last laugh or fall to the bottom.

 

Tongtuo failed to complete the bet for two consecutive years : A report from Huading shares showed that Tongtuo only completed the performance bet in 2017, and failed to complete the performance commitment for two consecutive years in 2018 and 2019. Behind the "sky-high" performance commitment, Tongtuo also needs to pay a huge amount of compensation to Huading shares.

 

Jiazhilian failed to complete the bet : In the bet agreement between Jiazhilian and Xunxing Co., Ltd., Jiazhilian was required to achieve a net profit of US$510 million within three years. However, the reality is that Jiazhilian not only failed to achieve the performance target, but also suffered a loss of 41.12 million yuan.

 

 

Zebao successfully completed the bet : The bet agreement required Zebao's net profit to be no less than 108 million yuan in 2018, no less than 145 million yuan in 2019, and no less than 190 million yuan in 2020. In the three years of the bet, Zebao exceeded the bet.

 

Yibai Network has completed the bet for three consecutive years : Yibai Network can be said to be the most successful case in the bet, with net profit exceeded for three consecutive years. The net profit in 2020 has even exceeded the estimated net profit in 2023. It has also single-handedly pulled Huakai Creative from an "environmental art design stock" to a "cross-border e-commerce stock."

 

From the above sellers’ cases, we can see that there are only two situations that buyers face after the bet: one is that the bet is successful, and the buyer is overjoyed; the other is that the bet fails, and in addition to huge compensation, the founder may also lose control of the company he founded.

 

Therefore, for sellers who want to expand their businesses, they should also formulate a series of revenue growth strategies after careful consideration. The following is a series of policies formulated by Zhengniao Chuhai, and sellers can refer to them according to their own selections.

 

1. Increase efforts in product development and innovation. For the main European and American markets, increase the speed and quantity of new product launches from the original 150 new products per month to an average of more than 300 new products per month this year; develop and launch creative household products for young users.

2. In terms of sales channels and markets, we will further increase investment in core markets in Europe and the United States, enter large local e-commerce platforms in Europe and the United States, such as Walmart, Wayfair, Allegro, Cdiscount, etc. At the same time, we will actively explore new markets such as Japan, South Korea, and Southeast Asia, and launch suitable products.

3. In terms of marketing model, new channels and new traffic are expanded through internet celebrities KOL, internet celebrities/virtual IP sales, TikTok short video e-commerce, etc. to cover more user groups.

 

There is no doubt that focusing on product development and deploying multiple platforms has become a commonplace topic, but for sellers, these measures are still effective measures to solve the bottleneck of profit growth. After all, for sellers, making good products, improving their own R&D capabilities, and strengthening their brands are the capital for them to gain a foothold in the e-commerce circle.


Shenzhen

Bird hunting at sea

Zebao

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