In the first half of this year, cross-border sellers experienced multiple challenges.
On the one hand, Amazon has added warehouse configuration fees, low inventory level fees, return processing fees, and increased warehousing and other related fees, which has increased the operating costs of sellers who use the platform as their main sales channel. In addition, affected by the Red Sea incident and other factors, the shipping costs for export goods have continued to rise, directly increasing the first-leg costs and significantly increasing the cost of stocking.
On the other hand, under continued economic pressure, overseas consumers generally pay more attention to cost-effectiveness and reduce purchases of non-essential goods. Some categories are in a stage of reduced demand and price wars are intensifying.
With market competition becoming more intense and operating costs rising, it is not easy for cross-border sellers to maintain performance comparable to last year. At present, the first half performance forecasts of some cross-border companies have been released. From the sales data of the big sellers, we can get a glimpse of the battle situation in the first two quarters.
Stone Technology has been deeply involved in overseas development, with a net profit of over 1 billion in half a year
Stone Technology is a major seller of small household appliances. It mainly engages in the design, development, production and sales of smart hardware such as smart cleaning robots. Its main products include smart sweeping robots, floor scrubbers, washing machines and other smart appliances.
At present, Stone Technology has established overseas companies in the United States, Japan, the Netherlands, Poland, Germany, South Korea and other places, and opened online brand stores on online platforms such as Amazon, Home Depot, Target, Bestbuy, WalMart and other online platforms in the United States. In 2023, Stone Technology entered the US offline physical chain retail channel Target for the first time, and its sales channels were further expanded.
From January to June this year , Stone Technology's performance is expected to increase, and preliminary estimated data will be released soon.
In the first half of 2024, Stone Technology expects to achieve a net profit attributable to the owners of the parent company of RMB 100 million to RMB 120 million, which will increase by RMB 260.5798 million to RMB 460.5798 million compared with the same period last year, a year-on-year increase of 35.24% to 62.29%; the net profit attributable to the owners of the parent company after deducting non-recurring gains and losses will be RMB 800 million to RMB 950 million, which will increase by RMB 139.753 million to RMB 289.753 million compared with the same period last year, a year-on-year increase of 21.17% to 43.89%.
Stone Technology analyzed that the reason for the company's improved performance was the continuous implementation of the "going out" strategy. In fact, Stone Technology also implemented this strategy efficiently in 2023. At that time, the company's approach was mainly to continuously improve the competitiveness of its products and create a mid-to-high-end brand image. On this basis, Stone Technology's revenue in 2023 was 865,378.38 million yuan, a year-on-year increase of 30.55%; and the total profit was 231,978.32 million yuan, a year-on-year increase of 71.94%.
This year, Stone Technology continued to expand overseas. After improving the product price range, it further refined its channel layout and dug deeper into the global market share. Therefore, against the backdrop of the rapid growth in overseas demand for cleaning appliances, the company's overseas revenue has achieved rapid growth. In addition, Stone Technology's subsidiary has passed the national key software enterprise certification and obtained a preferential income tax rate, which also had a positive impact on net profit.
In the next few years, the development prospects of cleaning appliance companies represented by Stone Technology will remain promising, because consumers around the world are looking for ways to reduce their daily work, and sweeping robots are at the forefront.
IDC predicts that by 2027, the global smart home market will have a compound annual growth rate of 5.6%, with continued growth in North America, Europe, and Asia Pacific. By 2027, the global market capacity of sweepers will grow to 23.2 million units. Improvements in product functions and expansion of usage scenarios will drive the growth of the sweeper market, and the annual growth rate of the sweeper market will be higher than that of the overall smart home market.
Market competition intensifies, Jihong shares' net profit drops by 50%
Jihong Co., Ltd. is one of the top cross-border sellers, but unlike many sellers who rely on the traditional model of e-commerce platforms or self-built websites, Jihong is engaged in cross-border social e-commerce.
As one of the first B2C export social media e-commerce companies, Jihong shares mainly uses AI algorithms to analyze overseas markets, depict user portraits, conduct intelligent product selection, accurately locate customer groups, and accurately push independent station advertisements on foreign social platforms such as Meta, TikTok, Google, Line, YouTube, Instagram, etc., to conduct online B2C sales. This multi-platform delivery strategy avoids the risks caused by over-reliance on a single platform and can control traffic costs through multi-channel collaboration.
With the help of the social e-commerce model, Jihong Co., Ltd. sells cost-effective Chinese products to many countries and regions, including Southeast Asia, Japan, South Korea, the Middle East, Taiwan, China, Hong Kong, China, etc. The company implements a pan-category strategy, and its products cover household goods, clothing supplies, electronic products, footwear products, luggage products, beauty and personal care products, health products, maternal and child products, and watch accessories.
According to data from CSI Consulting, in 2022, based on the revenue generated by social media e-commerce business in Asia, Jihong shares ranked second among China's B2C export e-commerce companies, showing strong strength. In 2023, Jihong shares' revenue was 669,468.07 million yuan, a year-on-year increase of 24.53%, of which the operating income of cross-border social e-commerce business was 425,663.71 million yuan, a year-on-year increase of 37.02%; the net profit attributable to shareholders of the listed company was 34,509.86 million yuan, a year-on-year increase of 87.57%.
However, in the first half of this year, Jihong shares failed to continue its good performance.
According to its 2024 semi-annual performance forecast, Jihong Co., Ltd.'s net profit attributable to shareholders of listed companies is 66.3076 million yuan to 94.7251 million yuan, a decrease of 50%-65% compared with the same period last year; the net profit after deducting non-recurring gains and losses is 64.8076 million yuan to 93.2251 million yuan, a decrease of 47.10%-63.23% compared with the same period last year.
Jihong shares analyzed that there are several reasons for the decline in the company's performance. In terms of cross-border e-commerce business, due to the intensified market competition, the company has taken measures such as reducing the average customer price to cope with and make strategic adjustments. In some sales areas with large exchange rate fluctuations, such as Japan and South Korea, the scale of advertising has been moderately controlled, and the scale of business orders and revenue has declined. At the same time, it has further increased investment in brand building and sales area development, and the increase in costs has affected profits.
Affected by the overall economic environment, the sales growth of downstream customers of the company's other main packaging business slowed down, packaging demand weakened, and due to the decline in the price of raw paper materials, the product sales price was adjusted down accordingly, and the scale of operating income decreased. In addition, there are also share-based payment amortization generated by the company's third employee stock ownership plan and the 2023 restricted stock incentive plan, as well as losses from investments in some joint-stock companies.
Cross-border e-commerce contributes most of Jihong Co., Ltd.'s operating income, and the industry prospects remain broad.
In 2022, the market size of China's B2C export social media e-commerce industry reached US$39 billion, accounting for 12.1% of China's B2C export e-commerce market. By 2027, the market size is expected to expand to US$94 billion, with a compound annual growth rate of 19.2% from 2022. As a leading seller in cross-border social e-commerce, Jihong's performance will also rise. |
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