In the post-epidemic era, the dividends of the cross-border e-commerce industry have gradually faded, the difficulties and challenges encountered by domestic and foreign companies and brands in the development process have begun to emerge, and some platforms have also experienced sluggish growth.
Recently, LightinTheBox released its first quarter sales data. Affected by global inflation, consumers' shopping desire has declined and LightinTheBox's growth has shown a weak trend.
Lanting's first quarter report released, revenue fell 16.3%
According to the financial report, the total revenue of LightInTheBox in the first quarter was US$93.8 million , down 16.3% from US$112 million in the same period last year . At the same time, LightInTheBox had a net loss of US$5.5 million in the first quarter, compared with a net profit of US$1.4 million in the same period last year.
Judging from the financial report data, LightInTheBox's development momentum has shown signs of slowing down slightly. Affected by the ongoing epidemic and the global inflation effect, consumer confidence has continued to decline, and the development of the cross-border e-commerce industry has also suffered considerable challenges.
He Jian, CEO of LightInTheBox, also said that this year faces unprecedented challenges, and macroeconomic uncertainty will have a certain negative impact on the supply chain and consumer sentiment.
In response to recent development challenges, Lightinthebox continues to focus on higher-margin categories . In the first quarter, apparel became Lightinthebox's best-selling product, accounting for 71.7% of total revenue, reaching $67.2 million, up 13.7% from $59.1 million in the same period last year.
The popularity of high-profit clothing categories has also directly driven the increase in Lightinthebox's gross profit margin. In the first quarter, Lightinthebox's gross profit margin was 50.7%, while the figure for the same period last year was only 46.6%. This is enough to prove that Lightinthebox's move to concentrate resources on key categories is still very wise.
Due to the continuous increase in sales and marketing investment, the operating expenses of Lightinthebox are also rising. In the first quarter of 2022, Lightinthebox's total operating expenses were US$53.9 million, compared with US$50.9 million in the same period of 2021. Among them, sales and marketing expenses accounted for US$39 million, an increase of 9.55% compared with US$35.6 million in the same period last year.
As of March 31, 2022, Lazada had cash and cash equivalents and restricted cash of US$42.8 million, a decrease of 28.19% from US$59.6 million shown in the 2021 annual report.
Despite the impact of multiple unfavorable factors such as the global epidemic, supply chain restructuring, and inflation, Lightinthebox is still confident about its future development. Lightinthebox said that they have made great progress in overcoming various challenges and pressures, and will become stronger and more flexible in the future.
When it comes to future development plans, LightInTheBox said it will stick to its proven growth strategy and maintain competitive prices for a variety of high-quality products. At the same time, LightInTheBox will continue to invest in research and development, establish long-term close cooperation with suppliers, and provide value-for-money products for consumers on its platform .
In addition to LightInTheBox, some well-known foreign clothing brands have also encountered setbacks in their development in the post-epidemic era and are showing signs of weakness. On the contrary, national trend brands with cultural values as their foundation have sent positive signals to the market.
Foreign brands encounter setbacks amid the epidemic, while domestic brands face opportunities
In 2020, due to the impact of the epidemic, physical retail stores around the world were unable to operate normally, and some well-known foreign clothing brands faced challenges to varying degrees.
Zara's parent company Inditex's revenue in 2020 was 159.554 billion yuan, down nearly 28% year-on-year. Affected by policies such as home lockdowns caused by the epidemic, about 30% of Inditex's stores were permanently closed, and 52% of its stores were subject to operating restrictions; Adidas' sales in 2020 were 19.84 billion euros, down 13.81% year-on-year; Nike's revenue in North America, Latin America, Europe, the Middle East and Africa all fell year-on-year in fiscal 2020, with a decline of between 4% and 9%.
Against the backdrop of the third wave of the pandemic overseas, the slow online transformation of some foreign brands has also limited their ability to recover. Take Inditex as an example. Before the outbreak, online sales accounted for about 14% of the company's total sales. Even during the pandemic, the substantial growth of its e-commerce business was not enough to make up for the losses. Against the backdrop of the third wave of the pandemic overseas, the slow online transformation has constrained the future development of some companies.
At the same time, changes in consumer shopping preferences have also brought new challenges to the development of foreign brands. Consumption patterns in Europe and the United States have begun to shift to online shopping. According to Nielsen data, nearly 50% of consumer goods purchases in the United States in 2020 were completed through e-commerce channels.
In China, the popularity of domestic products has continued to rise in recent years, and the new national trend has also become a dressing style for the younger generation. The designs of many foreign brands are difficult to meet the needs of the new generation in the market, which to a certain extent also limits the recovery ability of these brands in the post-epidemic era.
Compared with foreign brands, domestic clothing brands are based on cultural confidence and are expected to usher in a new round of development opportunities by introducing new products through the old. As the influence of traditional culture gradually increases, representative designs such as national trend elements are gradually being borrowed by many domestic brands. In the future, the brand power and consumption power of domestic products will usher in a systematic improvement.
At present, many Chinese brands have gone abroad and shined on the world stage. Chinese local brands such as Li Ning, Peacebird, Bosideng and Semir have landed on the four major international fashion weeks to show the level of Chinese design to foreign consumers. The wide attention of domestic and foreign media and the favor of consumers have led to a significant increase in the sales of these brands.
According to the NPD report, 44% of American consumers are more concerned about their health than before the epidemic, and categories such as clothing, footwear and sports equipment rooted in comfort and outdoor lifestyle have seen growth.
In the apparel market , from January to April 2022 , U.S. sportswear sales revenue increased by 39% compared with the same period in 2019 , while non-sportswear only increased by 1%. Compared with three years ago, U.S. sales of running and hiking shoes in April increased by about 20%, and sales of walking shoes increased by more than 30%.
In addition to clothing and footwear , sports equipment products that allow consumers to enhance their outdoor experience are also popular. According to NPD retail survey data , the revenue of the US outdoor industry in 2022 is 25% higher than in 2019. Sales of products such as camping accessories, coolers, rock climbing equipment , team sports equipment and high-end bicycles have increased .
According to relevant institutions' predictions, the overall market size of China's cross-border export B2C e-commerce market will exceed RMB 4 trillion in 2025 , and there is still much room for improvement in the penetration rate of overseas e-commerce retail. In the current market trend, cross-border enterprises must clarify their own market positioning and actively seek new growth points. LightInTheBox Financial Report |
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