The first quarter results were collectively handed in, and most of the big sellers increased revenue but not profit

Recently, Internet giant Amazon released its first quarter financial report for 2022. What is jaw-dropping is that this unicorn, whose performance has always maintained rapid growth, actually had the lowest growth rate since 2001, and its net loss reached 3.8 billion US dollars.

Amazon is in such a bad situation, and the situation of Chinese cross-border e-commerce sellers who rely heavily on Amazon is not very good either. Before the May Day holiday, various major sellers released their first quarter financial reports one after another, and as many people expected, the situation is not ideal. Judging from the financial reports, most sellers have increased revenue but not profit, and some even have both revenue and profit declines, or even losses.

Big sellers and net profits collectively suffered a "Waterloo"

Among those who released their first quarter financial reports, there are "big guys" who have been listed for many years, and "newcomers" who have just been listed on the A-share market, and there are big sellers on platforms, and there are "excellent students" who run independent websites. However, what is the same is that they all suffered a "Waterloo" in net profit in the first quarter.

Generally speaking, the first quarter is the off-season for the cross-border e-commerce industry, as various festivals at the end of the previous year overdraft consumer demand. During these three months, the number of orders will not be too large. However, in the first quarter of this year, the feeling of sellers is: "I know it is the off-season, but this year is too slow!"

The following is the first quarter financial report of some sellers collected and sorted by the editor:

Cross-Border Link: During the reporting period, operating income was 1.466 billion yuan, a year-on-year decrease of 51.01%. The net profit attributable to shareholders of the listed company was a loss of 10.16 million yuan, a year-on-year decrease of 121.21%.

Cross-border E-commerce, which entered the cross-border e-commerce market through a major asset reorganization in July 2014, is one of the earliest companies in the domestic cross-border e-commerce industry to enter the capital market. However, it has experienced several turbulences in the past year and its performance has also been affected to a certain extent. On April 30, Cross-border E-commerce released its 2021 financial report and the first quarter of 2022 financial report.

The 2021 financial report shows that during the reporting period, the company's cross-border export e-commerce business achieved operating income of 2.68 billion yuan, a year-on-year decrease of 73.41%. The revenue of both independent stations and third-party platforms plummeted, of which the revenue of independent stations was 609 million yuan, a year-on-year decrease of 84.99%; the revenue of third-party platforms was 2.07 billion yuan, a year-on-year decrease of 65.61%.

It can be seen that the downward trend in Cross-Border Communication’s performance continued from 2021 to the first quarter of 2022.

Rebecca : During the reporting period, operating income was 322 million yuan, a year-on-year increase of 4.55%, and net profit attributable to shareholders of the listed company was 12.78 million yuan, a year-on-year decrease of 28.33%.

Rebecca is a big seller of wigs. In Europe and the United States, wigs can be said to be a fashionable match and are deeply loved by consumers. On major cross-border e-commerce platforms, the sales of wigs have always been good. However, even for such a product that is so popular among consumers, it is difficult to maintain continuous growth in net profit in the first quarter of this year.

JMET: During the reporting period, operating income was 184 million yuan, a year-on-year increase of 16.78%. The net profit attributable to shareholders of the listed company was a loss of 9.08 million yuan, a year-on-year decrease of 165.71%.

Huading Holdings (parent company of Tongtuo Technology): During the reporting period, operating income was 1.569 billion yuan, a year-on-year decrease of 33.79%. The net profit attributable to shareholders of the listed company was a loss of 76.23 million yuan, a year-on-year decrease of 187.09%.

Tianze Information (parent company of Youkeshu): During the reporting period, operating income was 230 million yuan, a year-on-year decrease of 71.13%. The net profit attributable to shareholders of the listed company was a loss of 27 million yuan, a year-on-year decrease of 13.96%.

The oversales of the above platforms can be said to be affected by the platform policies and the European and American environment, but the performance of the "excellent students" of Southeast Asian independent stations is not very good. For example, Jihong Shares: During the reporting period, the operating income was 1.203 billion yuan, a year-on-year increase of 2.08%, and the net profit attributable to shareholders of the listed company was 42.87 million yuan, a year-on-year decrease of 53.56%.

Amazon and its sellers are in trouble, and their “suppliers” are certainly also affected. For example, the following two:

Besteck (Amazon supplier): During the reporting period, operating income was 270 million yuan, a year-on-year increase of 3.81%, and net profit attributable to shareholders of listed companies was 17.72 million yuan, a year-on-year decrease of 57.17%.

Xianying Technology (a major 3C supplier): During the reporting period, operating income was 132 million yuan, a year-on-year increase of 20.07%; net profit attributable to shareholders of the listed company was 10.87 million yuan, a year-on-year decrease of 13.88%.

Consumer desire decreases, and the European and American e-commerce markets shrink

Now that the epidemic has entered its third year, sellers are facing challenges not only from rising costs of logistics and raw materials that erode net profits, but also from consumers’ declining desire to shop. Today, factors such as inflation, the COVID-19 pandemic, supply chain disruptions, and the Russia-Ukraine conflict have reduced European and American consumers’ desire to “buy, buy, buy.”

In mid-April, data released by the U.S. Department of Labor showed that the U.S. Consumer Price Index (CPI) reached an annual rate of 8.5% in March, higher than 7.9% in February, the highest level in more than 40 years. This was the sixth consecutive month that the index exceeded 6%.

Under high inflation, more expenses need to be paid for housing, shopping, travel, etc. In addition, the epidemic has caused many people to lose their jobs. With rising prices, the shopping pressure of many people has doubled, and the desire to consume has naturally decreased.

This is also proven by a survey data recently released by JungleCout. The survey results show that among 1,000 American consumers, 38% of them reduced their overall spending in the first quarter due to inflation and personal savings. 70% of consumers said that inflation has reduced their impulse shopping behavior, and they save money mainly to prepare for buying a house and vacation expenses. In addition, they are more inclined to buy cheaper goods. The survey results show that nearly half of the consumers said they would only buy discounted products.

The decline in consumer desire has affected not only offline entities, but also online shopping. According to foreign media reports, global e-commerce revenue fell by 3% in the first quarter of 2022 compared with the same period in 2021, while online traffic fell by 2 percentage points and order volume fell by 12%.

The decline in European e-commerce revenue was much higher than the global figure, reaching 13%. At the same time, European e-commerce data showed that the volume of online sales orders in Europe fell by 17% in the first quarter of this year compared with the same period last year.

In fact, the shopping desire of European and American buyers has declined, which can be seen from the performance of logistics companies.

In the entire cross-border e-commerce ecosystem, the one that has the closest relationship with sellers is none other than logistics service providers. As we all know, Amazon is UPS's largest customer. Its performance in the first quarter can also reflect some of the sellers' situations.

UPS Chief Financial Officer Brian Newman said during the company's first-quarter earnings call that UPS's average daily volume in the U.S. fell 3% year-over-year as growth in commercial deliveries failed to make up for declines in residential deliveries. The decline, equivalent to 611,000 packages per day, exceeded the courier's expectations.

UPS Chief Executive Carol Tomé said the company planned for a slight drop in U.S. volumes this quarter but did not expect a drop of "about 500,000 packages a day."

Cross-border communication

Rebecca

JAMET

Jihong Shares