The more you do your side job, the happier it is! A big seller has hoarded 5,000 acres of land in the United States

Levo is probably the most "unprofessional" one in the cross-border sales circle...

700 million, invest as soon as you say

On December 3, Ningbo home furnishing giant Lejia released a new announcement regarding its plan to invest in building overseas warehouses .

It can be seen from the announcement that Lance will invest US$97 million ( equivalent to approximately RMB 700 million ) to build an overseas warehouse in California, USA , and its wholly-owned subsidiary 6075 Lance LLC intends to serve as the investment entity for this investment.

Lechuang said that the promotion of this project is to further enhance the company's competitiveness and accelerate the development of the company's public overseas warehouse business, so it plans to sign a construction contract for the "Apple Valley Overseas Warehouse Project in California, USA" with ARCO National Construction Pacific Coast, LLC. The total construction price is estimated to be US$97 million.

The overseas warehouse has a land area of ​​approximately 77.11 acres ( approximately 312,100 square meters) and a building area of ​​approximately 1.2 million square feet ( approximately 111,500 square meters). Construction will begin after the contract is signed and is expected to be completed by April 2026 .

Among all the overseas best-sellers, Levo is the one that has been persistent in overseas warehouses and has achieved some results.

Data from the General Administration of Customs of China show that in 2023, China's cross-border e-commerce exports will reach 1.83 trillion yuan, an increase of 19.6%. According to Frost & Sullivan's analysis, the GMV of China's B2C export e-commerce market has accelerated from 1.32 trillion yuan in 2018 and is expected to reach 7.24 trillion yuan in 2028.

In addition to being beneficial to the export of products, a number of related industries can also take advantage of the opportunity to develop, such as overseas warehouses. Lechuang said that expanding and strengthening the public overseas warehouse business is an important strategy .

For Lechuang, building a new warehouse will not only further enhance its overseas warehouse service capabilities , but also achieve the coordinated development of the "dual wheels" driven by smart home business and overseas warehouse business , and ultimately promote the improvement of overall profitability .

Happy shopping, hoarding 5,000 acres of land in the United States?

The company started operating overseas warehouses simply because it needed to do so. After all, its main export product , the smart height-adjustable table, is a large piece of furniture, and this type of overseas expansion has always been more difficult and costly.

Therefore, starting in 2013, Leckey opened overseas warehouses in Silicon Valley, San Francisco, Memphis, and Houston in the United States.

It was not until 2019, when the cross-border e-commerce trend became increasingly popular, that Legao realized that overseas warehouses would become a new growth point in demand, so after 2020, it frantically bought land, warehouses and even ships.

In 2020, Leckey bought a warehouse in California, USA, with an area of ​​approximately 360,000 square feet (approximately 33,400 square meters), which was its largest warehouse in the western United States at the time.

In the past, it was buying warehouses. For example, as of September 2023, 4 of Legg's 10 public warehouses in the United States were purchased, covering the West, Central, South, and East U.S.

In 2021, Lechuang began to buy land directly. In California alone, it purchased five pieces of land for the construction of overseas warehouses. The land types include industrial land and agricultural land, totaling approximately 163.92 acres (approximately 663,400 square meters) .

In 2022, Lechuang issued another announcement stating that it would purchase two pieces of land in California, with an area of ​​approximately 74.46 acres and approximately 60 acres (approximately 242,800 square meters) respectively. However, due to environmental risks in the former land, Lechuang changed it to 77.11 acres (approximately 312,100 square meters) in the adjacent area .

In 2022 and 2023, the above two pieces of land were delivered, and Lechuang spent US$17.61 million and US$25 million respectively.

In 2023, Lejia spent US$11.4 million to purchase a 436-acre (approximately 1.7644 million square meters) of land in Virginia and US$23.01 million to purchase a 76.712-acre (approximately 310,400 square meters) of land in Georgia , and completed the transaction.

Later, due to business growth, Lejia’s “small warehouse” could not meet the demand, and it began to “exchange small warehouse for large warehouse”.

In September 2021 and February 2022 , Leckey sold two overseas warehouses in California and New Jersey for US$17.313 million and US$23 million , respectively.

In November 2022, it sold the largest warehouse in the Western United States at the time, which it purchased at the beginning of its overseas warehouse business, for US$120 million, and made a profit of US$77 million.

In 2023 and 2024, Leckey also sold two warehouses in California and Florida for US$15 million and US$37.95 million respectively.

Today, Leckey has purchased approximately 5,000 acres of land around the core ports in the United States , which can be used to build approximately 1.5 million square meters of overseas warehouses.

The more I do my side job, the more excited I am.

As of the first half of this year, Legg has 17 self-operated overseas warehouses around the world, covering an area of ​​482,100 square meters. It has handled more than 4 million parcels, an increase of more than 120% year-on-year. It has served a total of 778 foreign trade companies, including listed companies and leading sellers in vertical categories of medium and large items.

On the first day of this year, Leckey also announced that its 200,000 square feet (about 22,200 square meters) Tracy warehouse in the western United States was officially opened for operation.

Judging from Leckey's financial report, although its ergonomic lifting table is still the main source of revenue, for example, in the first half of this year, its smart home business, which is mainly based on ergonomic products, achieved revenue of 1.337 billion yuan, accounting for 55.07% of operating income .

However, the growth rate of overseas warehouse business is not inferior. As Lejia said, building its own overseas warehouses can effectively reduce operating costs, improve the company's performance and enhance profitability.

In the first half of this year, Leckey's overall revenue increased by 44.64% year-on-year. It said that this was mainly due to the increase in revenue from the development of its overseas warehouse business. Specifically, this business achieved revenue of 851 million yuan, a year-on-year increase of 129.88%, and the proportion of operating income increased to 35.07% .

Judging from the full-year results in 2021, 2022 and 2023, the overseas warehouse business has brought Leggau revenues of 171 million yuan, 488 million yuan and 951 million yuan respectively. Among them, 2023 saw rapid growth, with a year-on-year increase of 94.03% and a gross profit margin of 12.69%.

At the end of last year, when Lechuang was interviewed by an institution, it announced a series of business arrangements for 2024, but the focus was not on its home products, but on its overseas warehouse business.

At that time, Lechuang stated that in 2024, based on business development needs, it would rent another 100,000 to 150,000 square meters of new warehouses, and at the same time start construction of two warehouses in the east and west of the United States, which are expected to be put into operation in 2025.

In addition, in June last year, Lechuang began planning to raise 500 million yuan, of which 400 million yuan was used for the overseas warehouse project in Ellabell, Georgia, and 100 million yuan was used to supplement working capital. According to the fundraising announcement at the time, the total investment amount of the overseas warehouse project would reach 77,600 yuan.

If the above projects reach full production, the area of ​​​​Leckey's public overseas warehouses in the United States will reach approximately 339,300 square meters, including two warehouses in California in the western United States with a total area of ​​​​213,400 square meters, and two warehouses in Georgia and Florida in the eastern United States with a total area of ​​​​125,900 square meters. The cargo handling volume will reach more than 7 million pieces per year. It is estimated that the project will bring Leckey an annual revenue of 658 million yuan and a profit of more than 70 million yuan .

Not long ago, Leckey invested approximately US$78 million ( equivalent to approximately RMB 550 million ) in the above project, which is expected to be completed on December 31, 2025 .

Data from the U.S. Department of Commerce show that U.S. e-commerce sales reached $268.12 billion in the first quarter of this year. While Leckey is deepening its smart home product business, it is also continuously expanding its cross-border logistics business here.

According to Frost & Sullivan's estimates, the scale of China's cross-border e-commerce logistics market will be approximately 4.0 trillion yuan in 2024, a year-on-year increase of 11.1%; among them, the overseas warehouse model accounts for 45% of the B2C export market, and the market size will reach 203.8 billion yuan.

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