Aosen E-commerce is suspended!

Recently, Aosen E-Commerce has been applying to be delisted from the New Third Board and is switching to the A-share market. Its net profit has increased by 1,288% from 1.2 billion yuan in revenue in 2018 to 3.45 billion yuan in 2020. Along the way, why has this Ningbo giant been so successful?

Aosen E-commerce applied for delisting from the New Third Board and switched to A-shares

Yesterday, Aosen E-Commerce (Aosen E-Commerce Co., Ltd.) issued another announcement on the progress of the stock suspension. The application for termination of listing is still progressing in an orderly manner and its shares will continue to be suspended.

On May 14, Aosen E-Commerce has disclosed the "Stock Suspension Announcement", but "suspension" is not a bad thing for Aosen E-Commerce, but the beginning of a new journey.

Because in early April, Aosen E-Commerce planned to issue shares for the first time and go public, and had accepted the guidance of China International Capital Corporation Limited . It had also received a confirmation letter issued by the Ningbo Regulatory Bureau, confirming that the guidance registration date was April 6, 2021.

As one of the major sellers in East China, Aosen E-Commerce was established in 2013 and was listed in November 2018. 2018 was called the "capital winter", but Aosen E-Commerce still went against the current, from listing to delisting, and experienced a revenue of 1.26 billion yuan in 2018 and 3.45 billion yuan in 2020. We look forward to its new highs in performance on the A-share market.

Revenue in 2020 was 3.45 billion yuan, and net profit increased by 1288%

From the New Third Board to the A-shares, Aosen E-Commerce has been full of confidence all the way. The financial report released not long ago showed that in 2020, Aosen E-Commerce's revenue was 3.456 billion yuan and its net profit was 284 million yuan, a sharp increase of 1288.25% compared with 20.47 million yuan in the same period last year. It can be said that it has achieved fruitful results.

Aosen E-commerce's financial report shows that: Revenue in 2020 increased by 109% year-on-year, because after years of strategic layout and continuous investment , the company's management and operational capabilities have been continuously strengthened. The marketing and product development teams at home and abroad have improved product competitiveness and enhanced the brand's reputation.

The digital operation of the supply chain has strengthened the control over quality, cost and delivery time. The overseas logistics layout ensures customer satisfaction. The independent website has improved customer experience and achieved rapid growth through technology investment. Combined with the irreversible trend of rapid growth of online retail in Europe and the United States, it has achieved a substantial increase in operating income.

To summarize briefly:

1. The marketing and product development teams are powerful, and the products and brands are getting better and better. As of December 31, 2020, there were 173 R&D and technical personnel, an increase of 101 people over the same period of the previous period. In addition, advertising expenses were 217 million yuan, an increase of about 140 million yuan compared with the previous period.

2. Powerful support from Zhejiang home furnishing supply chain. In 2020, the 4,000 furniture companies in Zhejiang Province are expected to achieve a total industrial output value of 250.2 billion yuan and exports of 12.8 billion US dollars. Affected by the epidemic, there has been a slight decline, but many listed furniture companies in Zhejiang have generally achieved year-on-year growth in revenue in the first three quarters.

As shown in the figure below, the outdoor series and home series account for the two largest revenue categories, with revenue of approximately 1.2 billion yuan each, followed by the health and leisure category.

3. Vigorous layout of overseas warehouses. In 2020, the number of overseas warehouses has increased from the original 11 to more than 20, with a total area of ​​nearly 400,000 square meters.

4. Independent stations "assist" order growth. The 2020 financial report mentioned that independent stations improved customer experience and achieved rapid growth through technological investment.

On the other hand, the gross profit margin of Aosen E-Commerce in 2020 was only 29.87%, compared with 45.33% in the same period last year. Compared with the companies that are planning to be listed on the A-share market, or the big sellers in the A-share market - Aokie and Anker, the gross profit margin of Aosen E-Commerce is indeed a bit low. From 2017 to 2019, Anker's gross profit margin was around 50%, Zebao also remained at 50%, and Aokie also remained at around 56%.

Regarding the gross profit margin in 2020, Aosen E-Commerce stated that it was due to the implementation of new accounting standards. It regarded the platform fees, express fees, and transportation fees incurred in fulfilling the contract as contract fulfillment costs, which were ultimately transferred to operating costs, resulting in an increase in operating costs that was higher than the increase in operating income. The gross profit margin declined due to the change in the year-on-year calculation basis.

Independent stations bring in a lot of orders, and overseas warehouses have invested more than 200 million yuan

Xiang Lehong, chairman of the big-selling Lege, once said in an interview with industry media: "Independent sites must be established, and overseas warehouses must be scaled up."

In fact, judging from the development of major sellers, independent sites are indeed an important part of their channel strategy layout. Whether it is Lechuang, ZEBO, Aoki, Patson, etc., they have all made significant investments in independent sites. For these high-level players, independent sites are like "assists".

Aosen is no exception. It is understood that Aosen has started to test the waters of independent stations since 2014. At the same time, independent stations have greatly benefited the increase in Aosen's overall order volume. Its 2020 annual report mentioned that the independent station has improved customer experience and achieved rapid growth through technological investment.

It is reported that Aosom, an independent station platform developed and built by Aosom at the end of 2015 , had exceeded one million users in early 2018.

The editor found through browsing that the platform covers almost all categories involved in Aosen, such as home, health and beauty, outdoor, pet supplies, sports, tools, toys and hobbies, as well as seasonal series of products.

The main colors of its website design are black, white and red, which is simple and elegant, very textured and in line with international aesthetics. At the same time, its pictures are also exquisite and the copywriting is emotional. For example, when introducing the discovery and inspiration of pet supplies, it wrote: Part of a loving home is to take good care of our furry friends. We have pet-sized houses to protect their safety, as well as kennels and crates that can be used to safely carry your companions on a trip ...

Indeed, independent websites are an effective channel for sellers to achieve more independent operations and reach users more deeply. In addition to the outstanding performance during the epidemic last year, Amazon's continuous tightening of policies this year has also ushered in a second outbreak of independent websites.

"I'm still afraid of having my account blocked by Amazon. Although independent sites also have the risk of being blocked, they are not as 'crazy' as Amazon." said a seller who recently attended the independent site special session of the China Cross-border E-commerce Online Marketing Conference held by En.com.

In recent years, capital investment in independent websites has been frequent, which also indirectly proves the correctness of big sellers' layout of independent websites. For example, the swimwear brand CUPSHE completed a financing of more than 100 million yuan from Jiayu Fund . Even the mysterious unicorn SHEIN's valuation soared to 300 billion yuan after receiving the latest round of financing.

In terms of overseas warehouse layout, Aosen's pace is also accelerating. In 2020, it has increased from the original 11 overseas warehouses to more than 20 now, with a total area of ​​nearly 400,000 square meters.

This layout also makes the distribution of Aosen's products smoother, with the overall stocking cost reduced by 15%. The delivery cycle is shortened from about 30 days for cross-border delivery to within 24 hours for local overseas delivery and delivery within 2 days.

While accelerating the layout, investment is also increasing. According to the 2020 annual report , Aosen 's fixed assets at the end of the period were 281 million yuan, an increase of 935.39% from the beginning of the period, and were mainly used to purchase warehouses and increase investment in storage facilities.

In terms of specific investment, Aosen's 2020 annual report shows that its capital investment in overseas warehouses in 2020 was 235 million yuan, a direct 4.7-fold increase compared to 50 million yuan in 2019.