Revenue in 2021 is nearly 6 billion yuan, and profits of home furnishings sales have declined

Domestic cross-border e-commerce sellers are mainly concentrated in Shenzhen and Guangzhou. As a leader among sellers in central China, Zhiou Home Furnishing Technology Co., Ltd. (hereinafter referred to as Zhiou) , a home furnishing giant , has attracted the attention of many sellers since its listing. After several listing suspensions, Zhiou recently updated its prospectus. The impressive performance also shows the development prospects of furniture e-commerce.

With revenue of nearly 6 billion yuan in 2021, the road to listing in Europe is bumpy

As an outstanding representative of cross-border e-commerce sellers in Henan Province, Zhiou Company is mainly engaged in the research and development, design and sales of its own-brand home products. It is a well-known home furnishing seller in the circle. Its products include home furnishings, furniture, and pet home furnishings.

Zhiou owns three major brands, including SONGMICS, VASAGLE and FEANDREA, and has a presence on mainstream e-commerce platforms such as Amazon, ManoMano, Cdiscount and eBay, with sales covering Europe, North America, Japan and other countries or regions. In the online model, sales through Amazon's platforms account for about 80% to 90%, with Europe accounting for a higher proportion .

The epidemic has driven online consumption, and staying at home has also prompted demand for home furnishing products in Europe and the United States, which has driven the rise of home furnishing e-commerce. Zhiou's sales have also increased significantly in the past two years, but looking back on Zhiou's road to listing, it can be said that it has been full of ups and downs. This listing review is the fourth time.

On June 29, 2021, Zhiou's IPO was accepted. On September 30, 2021, Zhiou's listing was suspended due to the expiration of the financial information recorded in the IPO application documents and the need for supplementary submission. On December 22, 2021, after completing the update of financial information and resuming the listing review, Zhiou took the initiative to apply for suspension of listing on January 21, 2022. After the review was resumed on February 11, 2022, it was suspended again on March 31, 2022 due to expired information. On April 25, 2022, Zhiou updated its financial information again and continued its listing journey...

Multiple suspensions of listing have not affected Zhiou's outstanding performance. According to the latest financial data, its revenue in 2021 was approximately 5.967 billion yuan, and its net profit attributable to parent company shareholders was approximately 240 million yuan. Compared with 3.971 billion yuan and 380 million yuan in 2021, Zhiou's sales scale has increased significantly, but there are certain fluctuations in the profit scale.

Regarding the growth in revenue, Zhiou stated that the factors included the substantial increase in sales of the company's four major product series in the European and American markets, as well as the increase in sales prices of some categories, which led to rapid growth in overall business revenue.

Among the factors affecting profits, exchange rate fluctuations are also one of them. From 2019 to 2021, Zhiou's exchange losses were 3.2253 million yuan, 4.1423 million yuan and 71.7521 million yuan, respectively, accounting for 2.26%, 0.89% and 24.03% of the total profit, respectively. Among them, the amount of exchange losses in 2021 was relatively large, mainly because the exchange rates of the euro and the US dollar against the RMB generally showed a fluctuating downward trend.

In addition, due to the repeated impact of the global epidemic, shipping costs have risen sharply and the company's main business costs have increased accordingly , which have had a certain impact on Zhiou's profits.

In order to continuously increase profits and enhance its competitiveness in the market, Zhiou has also been increasing its efforts in product and technological innovation. As of December 31, 2021, the company has obtained 360 patents .

Based on insights and analysis of overseas consumers, Zhiou continues to improve and optimize its products and conducts multi-faceted integrated innovations, such as leisure lounge chairs with sun visors, portable hammocks with increased stability, etc., to meet the ever-increasing market demand.

Considering the industry downturn last year, many big sellers suffered losses, and Zhiou's performance this time was relatively good. In addition to Zhiou's own efforts, it is also inseparable from the good environment of the entire home furnishing e-commerce.

The scale of the home furnishing market will expand again, but consumption trends will change

As a leading seller in cross-border e-commerce in central China, Zhiou has caught up with the rapid development of the home furnishing e-commerce market. According to relevant surveys and estimates, global demand for home furnishings will exceed 850 billion by 2025. In overseas markets, the home furnishings markets in Europe and the United States rank first and second, with a difference of nearly 30 billion US dollars in market size in 2020, but the overall market size is further expanding.

In addition, affected by the epidemic, more consumers have continued to stay at home in the past two years, and the demand for beautifying home space has further increased, and the popularity of related products has also soared rapidly. The sales of sofas, mattresses, shelves, home desks and other products have continued to grow. Among them, the search volume for storage products has increased by nearly 400% in 2021.

However, the changes in consumption trends in the home furnishing category deserve the attention of relevant sellers.

Recently, Digital Commerce 360 ​​and an agency jointly surveyed more than 1,100 online consumers and found that consumers are continuing their previous home furnishing shopping trends. Due to the convenience of online shopping, online home furnishing platforms are still an important purchasing channel for buyers.

However, the market penetration rate of household products has declined, which is undoubtedly a potential risk for Zhiou and other similar companies.

In addition, according to the survey, as foreign consumers gradually return to offline physical stores, the scale and speed of online shopping in overseas markets will also face certain challenges. The trend of online and offline development is irreversible, and how relevant sellers can maintain their own advantages has become the key.

The survey also found that diverse family activities abroad may drive consumption of related categories. For example, consumers' interest in DIY and full-category purchases of home furnishings remains strong. In addition, incentive activities such as discounts and promotions by home furnishing sellers are also very attractive to consumers, and comments on product prices have become an important consideration for buyers.

Sellers can use the above trends as a breakthrough point, try to innovate in the home furnishing category, increase investment in scientific research, accelerate the "going out" of their own brands , and adopt appropriate incentives.

However, with regard to the above aspects, we have to admit that Zhiou's competitive advantages are still relatively obvious. It has a high market share in Europe, the United States and other markets, and its brand awareness has also been established. It can be said that it has established a firm foothold in overseas markets.

But being "stable" alone is definitely not enough. If Zhiou wants to win more recognition and praise from consumers, it must accelerate product innovation based on its existing strength, and at the same time prepare in advance for expanding larger overseas markets. After all, this track may usher in more intense competition in the second half of 2022.

To Europe

2021