With 20,000 active suppliers, Youkeshu is transforming into a high-quality supplier!

Recently, Youkeshu's parent company Tianze Information responded to the Shenzhen Stock Exchange's inquiry letter, disclosing Youkeshu's direction of transformation into a boutique brand, the number of stores, the number of suppliers, and its revenue in the first quarter of this year, with many highlights.

Youkeshu wants to transform from a general merchandise business to a boutique business, with more than 2,200 stores

In its annual report, Tianze Information said it would focus more resources on boutique e-commerce platforms represented by Amazon, transform into a boutique route, and increase the sales share of its own brands . Youkeshu also mentioned this issue in its inquiry letter, and stated the definition of boutique e-commerce and boutique routes and the specific direction of business structure adjustment.

Youkeshu defines the boutique route as the company's future focus on specific categories, streamlining the number of products, and carefully polishing product definition, industrial design, product research and development, quality control, engineering improvement, etc., developing its own brand, and forming a multi-brand matrix. In order to seek brand premium, extend the product life cycle, and share the long-tail benefits.

It also points out the company's current problems. At this stage, the concentration of cross-border sellers is low, the products are highly homogenized, and the traditional price difference arbitrage model cannot form a virtuous cycle in the long run. Only by gaining differentiated competitive advantages in product strength, channel strength, brand strength, etc. can we get out of the current homogeneous competition dilemma and achieve healthy and sustainable development of the company.

As for boutique e-commerce platforms, Youkeshu said that as traffic entrances are gradually occupied by boutique e-commerce platforms represented by Amazon, the cost of attracting customers for small and medium-sized platform e-commerce and brand independent sites will continue to rise, and the scale effect of boutique e-commerce platforms will gradually be reflected. In the long run, the overseas e-commerce market will further concentrate on boutique e-commerce platforms represented by Amazon, and more cross-border sellers will choose to achieve overseas sales by settling in the top e-commerce platforms. Therefore, in order to plan for the future, the company decided to follow the development trend of the cross-border e-commerce industry and focus more resources on boutique e-commerce platforms represented by Amazon. It seems that Youkeshu will focus on boutique types on Amazon.

The competition between boutique products and general merchandise has been going on for a long time. Last year, both general merchandise companies and boutique companies saw a significant increase in sales. However, the profits of general merchandise companies are still a little behind those of boutique companies. Selling more does not mean making more money.

Speaking of own brands, the revenue of own brands on the self-operated platform from January to March 2021 was relatively small, at 28,100 yuan. On the third-party platform, the sales of own brands from January to March 2021 were still relatively considerable, at 110 million yuan, accounting for 14.18% of sales. Compared with the sales share of 3.32% in 2020, Youkeshu has indeed made a wave of efforts in terms of performance.

Although Youkeshu has a clear intention to switch to high-quality products, it can be seen from this inquiry letter that Youkeshu still has a large number of stores. As shown in the figure below, there are 1,135 stores on Amazon , 214 on AliExpress, 879 on Wish, and 7 on Joom. Together, there are more than 2,200 stores. According to product categories, most of the products sold on third-party platforms are household items, daily necessities, sports toys, electronic products, etc., and most of them are purchased goods.

There are more than 20,000 active suppliers, and the number is increasing.

In the reply announcement to the inquiry letter, Tianze Information also disclosed the number of active suppliers and new suppliers of Youkeshu in the past three years.

It is reported that in 2020, Youkeshu had 23,729 active suppliers and purchased more than 160 million goods in total . From 2018 to 2020, the number of its active suppliers showed an upward trend.

Although the number of active suppliers has increased for three consecutive years, we can also clearly see from the above figure that the increase in 2020 is not large compared with 2019.

Tianze Information explained the reason in the announcement: "The number of new suppliers in 2020 has decreased compared with the previous two years. The main reason is that the comprehensive strength of existing cooperative suppliers in terms of business qualifications, financial capabilities, cooperation, prices and product services has improved. In order to improve the company's operating efficiency and reduce procurement risks, Youkeshu has gradually established a more stable long-term cooperative relationship with high-quality suppliers, so the demand for the development of new qualified suppliers has decreased. "

At this point, sellers are inevitably curious about the supplier selection criteria and management model of big sellers .

It is reported that for the purchase of regular goods , Youkeshu will give priority to selecting suppliers with the highest matching degree in terms of price, quality , supply volume, delivery time, etc. from the existing list of cooperative suppliers . For the purchase of new products , if the current cooperative suppliers cannot meet the procurement needs, Youkeshu will find multiple suppliers through different channels for evaluation, quotation and qualification review, and select the best supplier from them.

It is reported that Youkeshu mainly audits suppliers from the following four aspects:

1) Business qualifications: Check the company's business- related certificates and check whether it has any bad business records;

2) Product analysis: testing product quality and performance, examining customer satisfaction and market capacity, etc.;

3) Factory assessment: Inspect the factory's product development capabilities, production management order, warehouse supply capabilities, product quality, financial cash flow, etc.;

4) Other factors: Comprehensive analysis of the supplier’s delivery timeliness, settlement period, degree of cooperation, after-sales service, etc.

In addition, Youkeshu will regularly supervise and evaluate suppliers, select the best and eliminate the worst, and ensure that product suppliers are normal and stable.

The first quarter was bright! The parent company's revenue was nearly 800 million, of which Youkeshu accounted for 700 million

In recent years, Tianze Information's financial situation has not been very ideal, which can be seen from the fact that Youkeshu urgently provided it with 140 million yuan in working capital support in the second half of 2020 .

At the same time, as of the first quarter of 2021, Tianze Information's debt-to-asset ratio was 29%. Although it maintained a relatively good level, it also showed an increasing trend.

In this situation, there is a tree that seems to be the life-saving straw for Tianze Information.

This speculation is not without reason. Tianze Information's recently released first quarter report for 2021 showed that its operating income was 780 million yuan. The reply announcement to the inquiry letter showed that in the first quarter of 2021, Youkeshu's cross-border e-commerce export business revenue was 750 million yuan.

However, behind the impressive revenue, Youkeshu's high inventory balance also attracted the attention of the Shenzhen Stock Exchange. Youkeshu's individual financial statements showed that the inventory balance at the end of 2020 was 1.225 billion yuan, of which 1.224 billion yuan was inventory goods, an increase of 32.41% year-on-year. And as of the first quarter of 2021, Youkeshu's ending inventory balance had reached 1.495 billion yuan.

In response to this, Tianze Information stated in its inquiry reply announcement that in 2020, due to the impact of the epidemic, domestic material production and procurement and international cargo transportation were affected to a certain extent, and the industry's stocking difficulties increased. In order to prevent shortages, the company has made a large amount of stock in domestic warehouses, resulting in a significant increase in inventory balance, which is slightly faster than the revenue growth rate.

At the same time, compared with other comparable companies in the industry, the company's overseas warehouse inventory accounts for a relatively small proportion. In order to transform into a boutique route and focus more on Amazon FBA business, the company has also begun to strategically prepare overseas warehouses accordingly. Due to various factors, Youkeshu's inventory balance increased significantly at the end of 2020.

The first quarter is traditionally an off-season for cross-border e-commerce export industry, and inventory sales are not as good as in other quarters.

There is a tree

Tianze Information

supplier

Number of stores