With a half-year revenue of 3.2 billion, Zhiou dominates the Amazon TOP list! Zhiou is about to go public

Recently, Zhiou restarted its IPO, submitted listing materials, and disclosed its prospectus. In fact, as early as June this year, Zhiou's IPO was accepted by the Shenzhen Stock Exchange, and it planned to raise nearly 1.5 billion yuan to strengthen research and development. However, in September, due to the expiration of financial information, Zhiou's IPO was forced to be suspended.

Half-year revenue of 3.2 billion, Zhiou restarts IPO

As a cross-border seller in central China, Zhiou has always been calm and low-key. This time, it restarted its IPO and announced its revenue from 2018 to the first half of 2021. The data is impressive. During this period, Zhiou's revenue was 1.595 billion yuan , 2.326 billion yuan, 3.971 billion yuan and 320 million yuan respectively , with an annual compound growth rate of 57.80% from 2018 to 2020 .

Among them, overseas online B2C platforms are Zhiou ’s main sales channels , including Amazon, Cdiscount, ManoMano, eBay and other overseas e-commerce platforms.

Data shows that during the reporting period, the sales revenue achieved by Zhiou's online B2C channels was RMB 1.506 billion, RMB 2.02 billion, RMB 3.29 billion and RMB 2.634 billion , respectively, accounting for 94.46%, 86.99%, 82.93% and 82.35% of the main business revenue, respectively .

Among them, the sales revenue realized through Amazon's B2C platform accounts for a high proportion of Zhiou's main business revenue , with proportions of 89.32%, 81.13%, 71.80% and 69.31% respectively .

The sales markets of Zhiou products mainly include Europe, North America, Japan and other countries and regions. Its subsidiaries in Germany, the United States and Japan mainly sell products to consumers through overseas e-commerce platforms , among which Europe and the United States are the main sales markets for Zhiou products .

As online platforms such as Amazon, Cdiscount, ManoMano, and eBay gradually develop into mature global open e-commerce platforms , Zhiou said that if there are major changes in the business models, operating strategies, or operating stability of these e-commerce platforms, it may have an adverse impact on the company's operating performance.

Previously, when Zhiou was planning to go public on the A-share market, it received support from Anker Innovations. Anker once stated that Zhiou, as a domestic cross-border seller, is one of the largest Amazon sellers in the home furnishing category, and Anker is optimistic about Zhiou's future development and growth potential.

As a major cross-border seller, Zhiou’s restart of its IPO has also attracted the attention of sellers in the industry.

Best-selling in Europe and America, the products dominate the top of Amazon's list

Most of China's cross-border sellers are located in Shenzhen, while Zhiou is located in Zhengzhou in the central region, becoming a representative of the successful cases in the central cross-border circle.

Zhiou is mainly engaged in the research and development, design and sales of its own home products. Its products mainly include furniture, home furnishings, garden, pets and other categories. It has three own brands: SONGMICS, VASAGLE and FEANDREA .

Among them, the SONGMICS brand is a home furnishing category , and its business categories mainly include storage, utensils and decorations; VASAGLE is a furniture category , including living furniture and office furniture, such as TV cabinets, dining tables, office chairs, etc.; FEANDREA is a pet home furnishing category , such as cat climbing frames, dog houses, pet mats, etc.

In the sales data for the first six months of this year, furniture series accounted for 50.59% of the total , and home furnishings accounted for 30.68%. During the reporting period, the four major product series of furniture, home furnishings, garden, and pets accounted for more than 98% of the total revenue, and sales continued to increase, becoming the main source of the company's revenue and profits. Furniture series and home furnishing series are the company's most important product categories.

In terms of business model, Zhiou has two models: online B2C model and cross-border export B2B model. The online B2C model accounts for more than 80% of sales. Online sales are mainly carried out through well-known e-commerce platforms such as Amazon, ManoMano, Cdiscount, and eBay. Products are sold well in Europe and the United States, of which Europe accounts for about 60% and North America accounts for about 39%.

According to the data in the prospectus, Amazon platform accounts for 69.31% of the total online sales . Many products are ranked at the top of Amazon's bestseller list all year round and have won many seller honors awarded by the platform. For example, it won the title of "Amazon All-Round Seller " in 2017 and was named " Amazon's Most Popular Brand Seller of the Year " in 2019. SONGMICS and VASAGLE were both selected as " Amazon Global Store China Export Cross-border Brands Top 100 ".

Zhiou attaches great importance to product research and development, and adopts two models: "independent research and development" and "cooperative development". Based on big data analysis of current trends and user preferences, the market direction and product and function gaps are clarified. Since 2020, many products designed by the company have won the China Design and Manufacturing Award, the Contemporary Good Design Award, the A' Design Award, and the German Red Dot Design Award. As of June 30, 2021, the company has 314 patents and 42 copyrights.

The good market reputation and brand image have not only made Zhiou popular among consumers, but also won praise from many parties and been recognized and recommended by many industry media magazines.

In view of the overall market trend, according to data from Statista, the sales of furniture products e-commerce channels in the United States will reach US$61.212 billion in 2025, and in Europe it will reach US$51.964 billion. In the long run, e-commerce channels will become a new growth point for the global furniture products market.

However, amid the turbulence in cross-border e-commerce this year, sellers face many uncertain risks.

Sales expenses for the first half of the year reached 1.264 billion yuan, and R&D investment was increased

Judging from the data released by Zhiou, Zhiou's expenditures on various expenses remained stable, some expenses increased, and its operating performance showed a rapid growth trend.

Data shows that in the first half of 2021, Zhiou's total sales expenses reached 1.264 billion yuan , and the sales expense ratio was 39.49%. As Zhiou continues to expand its business scale, its sales expenses have increased accordingly, but the sales expense ratio has generally shown a downward trend .

According to the data, Zhiou's current sales expenses mainly include transportation fees, e-commerce platform transaction fees, advertising fees, employee salaries, warehousing fees, etc. In the first half of 2021, these expenses were 560 million yuan, 440 million yuan, 70.9562 million yuan, 45.9933 million yuan, and 100 million yuan, respectively, including share-based payment expenses, accounting for more than 95% of its sales expenses in each period during the reporting period .

Overall, Zhiou's transportation cost rate increased slightly by 0.65 percentage points compared with last year . In terms of warehousing costs, due to the expansion of its inventory scale and the impact of the epidemic and other factors, its inventory warehousing in North America was affected, and its warehousing costs increased.

In terms of inventory , Zhiou's inventory consists of inventory goods, inventory in transit and shipped goods. At the end of each reporting period, the book value of its inventory was RMB 175 million , RMB 253 million , RMB 859 million and RMB 922 million , accounting for 41.58% , 38.68%, 47.83% and 34.54% of total assets, respectively .

It is worth noting that Zhiou’s R&D expenses in the first half of this year reached 11.5735 million yuan . Among the many R&D factors invested, Zhiou focused on increasing its investment in R&D human resources , which further verified what Zhiou’s brand director Zhang Liuming had said about Zhiou’s shaping of the spirit of craftsmanship.

However, under the overall environment of cross-border e-commerce in the past two years, Zhiou is also facing uncertain risks in operations, technology, accounting, internal control, etc., such as the platform adjusting its business model, operating strategy, or third-party seller policies and rates.

As multiple e-commerce platforms have upgraded their control over third-party sellers, many sellers are frustrated. In this regard, Zhang Liuming said in a previous interview that Zhiou welcomes compliance. In terms of compliance, Zhiou has always maintained a rigorous attitude, and compliance is conducive to the healthy development of the entire industry.

After the suspension, Zhiou has started the IPO again , which will also accelerate its capitalization process. After the successful listing, it will also have an important and positive impact on the development of cross-border e-commerce in the entire central region.

Zhiou is about to go public