A Zhejiang couple is going global and is planning an IPO

The prospectus was submitted in March and the filing was approved in August . The brand can sell 1.4 billion yuan a year. The overseas brand founded by a young couple in Zhejiang may ring the bell as early as next month...

The OEM business is 200 million, and the self-branded products can sell 1.4 billion a year

On August 9, the China Securities Regulatory Commission's official website released the results of the public announcement, which included a filing notice for the overseas issuance and listing of Carote Ltd. ( hereinafter referred to as "Carote" ) .

According to the specific content of the notice, Carrot can issue approximately 155 million overseas-listed common shares and list them on the Hong Kong Stock Exchange.

According to the listing rules of the Hong Kong Stock Exchange, companies must submit a " Registration Notice " at least 4 business days before the hearing approval date . In other words, Carrot has obtained the pre-requisites for a Hong Kong listing hearing, and may soon conduct a listing hearing at the Hong Kong Stock Exchange.

On March 8 this year , Carrot submitted its prospectus to the Hong Kong Stock Exchange, with BNP Paribas Securities and CMB International as its joint sponsors.

Five months later, its filing was approved. IFR, a subsidiary of Reuters, quoted people familiar with the matter as saying that CAROTE will conduct an initial public offering ( IPO ) in Hong Kong as early as September , raising $100 million to $150 million .

Perhaps many sellers are still unfamiliar with Carote, but its brand CAROTE has already enjoyed considerable popularity overseas.

According to Qichacha data, Carrot’s domestic operating entity is Zhejiang Carrot Industry and Trade Co., Ltd., which was established in 2007. The company is located in Jinhua City, Zhejiang Province. The actual controller and legal person are a couple.

In 2016, Carote came up with the idea of ​​a brand, so it launched "CAROTE" and entered the overseas market with CAROTE.

Since then, through cross-border e-commerce platforms such as Amazon, Walmart, Rakuten, Qoo10, Shopee, Lazada, etc., CAROTE has established a huge sales network in overseas markets such as the United States, Western Europe, Germany, Italy, Japan, the Philippines, Singapore, etc. Now the brand's online business has expanded to 20 regional markets .

As one of the fastest growing kitchenware brands in the world , CAROTE's products cover cooking utensils, kitchenware, drinkware, tableware and small kitchen appliances . The company's own-brand SKUs have expanded from 520 in 2021 to 1,305 in 2022 and 1,374 in 2023. More than 190 new SKUs were launched in January and February this year .

In fact, before building its brand, Carrot followed the old path of most Chinese foreign trade companies, that is, OEM service; in 2013, Carrot began to turn to ODM business; it was not until 2016 that it established a brand and focused on brand business in 2021.

Unlike some big-selling brands, after 8 years, the brand business (hereinafter referred to as "CAROTE") has become Carote's most important source of revenue.

The prospectus shows that CAROTE has grown rapidly in recent years, with revenue increasing significantly from 283 million yuan in 2021, reaching 531 million yuan in 2022, and 1.38 billion yuan in 2023 , with a compound annual growth rate of 120.7%; its share of total revenue has also increased from 41.9% to 69.1% and 87.2%.

In contrast , the ODM business has seen a year-on-year decline in revenue, from 392 million yuan to 238 million yuan and 203 million yuan from 2021 to 2023.

In terms of total revenue, in the past three years, Carrot’s revenue has increased from 675 million yuan to 769 million yuan and 1.583 billion yuan.

From the market perspective, although CAROTE also relies on third-party e-commerce platforms such as Tmall and JD.com to sell its products in China, most of its revenue comes from overseas markets. Last year, due to outstanding sales performance in the United States and Western European markets and increased brand awareness, CAROTE's overseas revenue more than doubled .

From 2021 to 2023, overseas markets brought Carrot 504 million yuan, 492 million yuan, and 1.25 billion yuan in revenue, accounting for 74.6%, 64.0%, and 79.3% of its total revenue, respectively . Carrot also stated that its sales in the two months ending February 29, 2024 increased significantly compared with the same period in 2023.

Many products dominate the BS list, and the brand ranks TOP5 in major international markets

"Brand business is our strategic focus for future growth and development," Carrot stated in its prospectus.

From various dimensions, the CAROTE brand is becoming increasingly well-known in the international market.

If you search the brand CAROTE directly on Amazon , you can see that the market performance of its series of kitchenware product listings is very impressive. Not only does the total number of reviews exceed 10,000, but the monthly sales volume can reach thousands or even tens of thousands of pieces.

Taking one of the cooking utensils as an example, the single listing has accumulated more than 18,000 reviews and its monthly sales in July exceeded 10,000. The listing ranks third in the Amazon “ Kitchen Cookware Sets ” subcategory BS list.

At the same time, Yien.com noticed that in the above-mentioned product BS list, many CAROTE listings were on the list, occupying 5 seats in the TOP10 and 3 seats in the TOP5, ranking first, third and fourth respectively. The CAROTE product, which firmly occupies the first place, has received more than 23,200 comments since it was put on the shelves .

Whether it is "Block Knife Sets" or " Cooking Utensil Sets ", CAROTE has multiple listings online.

Of course, CAROTE also has its own independent website. According to Similarweb data, the number of visits to CAROTE's independent website mycarote.com has increased month by month in the past three months, among which the United States ( 47.45 % ), the United Kingdom ( 7.19% ), Mexico ( 6.2% ), Canada ( 5.97% ), and India ( 5.45 % ) are the main sources of traffic.

According to a report by Frost & Sullivan, CAROTE ranked among the top five in the online cookware industry in China, the United States, Southeast Asia and Japan in 2022 based on retail sales .

Specifically, in the 2022 online cookware industry retail sales ranking, CAROTE ranked fifth in China with a market share of approximately 1.1%; fourth in the United States with a market share of approximately 2.8%; second in Southeast Asia with a market share of approximately 6.6%; and fifth in Japan with a market share of approximately 3.9%.

In addition, as of the third quarter of 2023, CAROTE ranked third in online cookware industry retail sales in Western Europe, with a market share of approximately 1.4%.

According to Google Trend data, the search popularity of CAROTE in Google Shopping has been increasing since 2016, especially after 2022, when the popularity has remained high and reached peaks many times.

Although the brand is getting better and better, Carrot also has concerns. He admits that if the brand image and reputation cannot be maintained and enhanced, and negative news such as counterfeit products, product defects, product liability claims, consumer complaints, and intellectual property infringement claims appear, the brand will be adversely affected.

At the same time, in the huge global market, there are countless kitchenware brands and competition is becoming increasingly fierce, but CAROTE 's popularity is still limited.

But in general, with the increasing popularity of home cooking, the global online kitchenware industry has shown strong resistance to economic fluctuations and is expected to grow steadily. According to a report by Frost & Sullivan, the global online kitchenware market is expected to reach US$21.5 billion by 2027, with a compound annual growth rate of 8.3% from 2022 to 2027.

From the perspective of market size, although CAROTE faces various risks and competition in the future, it has unlimited potential. The huge increase in revenue in the past few years has given it the courage to sprint into the capital market, but how CAROTE will write its own history in the future remains to be seen.

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