Another one! Cross-border e-commerce company starts IPO coaching

Home furnishing is a large category, including furniture, home textiles, kitchenware, lamps, decorations, building materials, etc. Many cross-border e-commerce sellers are involved, such as Aoji, Kuaiditong, Tongtuo, Zebao, Santai, etc., all of which sell home furnishing products on cross-border e-commerce platforms such as Amazon and eBay .

On Amazon, home furnishings are the second largest category after clothing, and have been the largest category on the platform for several years before 2021. Jungle Scout data shows that Home & Kitchen topped the list of Amazon's most popular product categories in 2020, and the largest number of sellers (45%) sell products in this category. Official Amazon data shows that online sales of home furnishings will increase by 31.1% in 2022 and are expected to increase by 37.4% in 2024.

Zhiou Home Furnishing and Lege Holdings are excellent representatives of this segment. Not only have they successfully listed on the A-share market, but their revenue has continued to grow. For example, this year's A-share "newcomer" Zhiou Technology, from 2020 to 2022, had revenues of 3.971 billion yuan, 5.967 billion yuan, and 5.455 billion yuan, respectively.

By 2022, the global home furnishing market has reached 1.42 trillion US dollars, and this market still maintains a compound annual growth rate (CAGR) of 6.4%. The home furnishing category still has great potential, so when the 3C category market is already saturated, the home furnishing market seems to have more opportunities.

In this context, more and more powerful companies focusing on this track have come into people's attention. At the same time, some of these "excellent students" have successively launched IPOs.

Another company has started IPO counseling, and a "newcomer" is needed to sell well on the market

Recently, the cross-border home textile giant Jessia Home Technology Co., Ltd. started IPO counseling, which attracted wide attention in the cross-border circle. Soon after, Yien.com learned that another cross-border home textile giant Yantai Mingyuan Creative Life Technology Co., Ltd. (hereinafter referred to as "Mingyuan Creative") has also started IPO counseling. The counseling institution is Minsheng Securities Co., Ltd.

Like Jesia, Mingyuan Creative, founded in 2008, is a veteran in the home furnishing industry. It owns brands such as PHF, David's home, David's kids, Davis, Youmian Yaju, Yilantu, Bosi Fike, and Zaobuji.

This old home textile company is rarely heard of in China because most of its sales are overseas (nearly 90%), with major export countries including Australia, the United Kingdom, the United States and Canada. Last year, its overseas revenue was about 1.062 billion yuan. Its pure cotton bedding exports have ranked first in the country for many years.

In 2020, the company began to expand its online sales channels by entering Amazon. Currently, it has been sold in multiple sites including the United States, Germany, the Middle East, and the United Kingdom. After the sales on the platform got on track, it also built its own independent site " Mingyuan International Station ". Currently, the website has launched nearly 100 products, and independent orders can be placed worldwide.

Wu Fengjin, deputy director of Mingyuan Creative Life's cross-border e-commerce department , said that the website can seamlessly connect to international e-commerce platforms, create an efficient digital supply chain, and provide strong support for "going overseas."

At present, some of its own brands are implementing the strategy of selling mainly on Amazon and supplemented by independent website sales , such as PHF . PHF is a brand under it that sells pillowcases, mattresses, quilt covers, baby sleeping bags, blankets and other products. On Amazon, a cotton waffle pillowcase from PHF won the top spot in the BS list of the pillowcase subcategory.

At present, this product has accumulated more than 7,000 reviews, with an overall rating of 4.5 stars, of which more than 70% of people gave it 5 stars. The comfortable color, good quality and affordable price are the reasons why most consumers choose it. A consumer from the United States commented: "This pillowcase is not only soft to the touch, but also has an eye-catching waffle pattern, which is worth the price. I will buy another one as a spare." Another consumer also said that overall this pillowcase is a good product , there is no "photo fraud", the color is very real, the cotton touch is also good, and the design is also interesting and transitional.

Due to its recent start, the proportion of cross-border e-commerce business in Mingyuan Creative's total business is not too high ( 10% : about 120 million yuan based on last year's revenue of 1.2 billion yuan ) , but relying on its production capacity and R&D capabilities, it can achieve a doubling of revenue every year by differentiating in fabrics, colors, styles and other aspects. The 2022 financial report shows that its cross-border e-commerce sales (RMB) increased by 127.05% year-on-year .

Therefore, Mingyuan Creative has repeatedly emphasized in its financial reports that it will focus on strengthening sales on cross-border e-commerce platforms such as Amazon on the basis of ensuring the stability of its overseas sales scale, accelerate the formation of a dual online and offline sales structure, and create a well-known private brand.

In fact, the home furnishing category has been a focus of the capital market in recent years.

For example, the DTC home furnishing brand Newme has won three rounds of financing in less than two years since its establishment, becoming the most popular player in China's overseas home furnishing track. In the same year (2022) when Newme won the third round of financing, Shenzhen home furnishing giant Zhengniao also received a "small goal (100 million yuan)" of financing from Insai Group. In addition, the storage bag giant Taili Technology has successfully passed the review not long ago, and Zhiou Technology, which has a deep accumulation in the home furnishing category, has successfully landed on the A-share Growth Enterprise Market.

Amazon is usually the preferred sales channel for these companies when they go overseas. Cross-border sellers such as Mingyuan Creative and Jessia also make the same choice when they start to develop online channels.

Brands continue to emerge, and Amazon has become a gathering place

Although clothing surpassed home furnishings to become Amazon's largest category in 2021, the home furnishings category still occupies a very important position on Amazon. According to the latest report from Kantar and Google, on Amazon's US site, the home furnishings category accounts for 9% of the market share, ranking third.

During this year's Black Friday promotion, home and gardening products in the US market were the best-selling categories on Amazon, accounting for 27.6% of sales, ranking first, outperforming 3C electronics (15.2%) and fashion (12.3%).

Usually, this category is also a hot-selling "frequent customer" on the platform, and some brands are beginning to emerge:

Home textile brand: Bedsure

The brand comes from Wuxi Shangbai Global E-Commerce Co., Ltd. Its products cover multiple categories such as bedding, blankets and shawls, bathroom supplies, and some pet supplies. Its products can meet the needs of most families for home textile products.

Amazon is the starting point for Bedsure to enter the overseas market. Since entering Amazon in 2015, the brand has maintained a high growth trend and has been ranked No. 1 in the bedding category. At present, its business has gradually extended from Amazon's US, European and Japanese sites to emerging sites such as India, Singapore and the Middle East.

Bedsure is now a top-level home furnishing brand, and has formed a certain brand effect overseas. In fact, Bedsure has always had a strong brand awareness. Because, in the process of going overseas, it is not just focusing on selling products on the platform, but also promoting through social media such as YouTube, Instagram, TikTok and KOLs, so that more overseas users can quickly recognize the brand and products.

Mattress brand: MOLBLLY/delandis

MOLBLLY comes from Foshan Aiyi Home Furnishing Co., Ltd. With just one mattress, the company's revenue this year is likely to exceed 3 billion yuan.

In 2022, Aiyi Home launched the mattress overseas brand MOLBLLY. Although it is a new brand, it has performed very well. Last year, the brand's omni-channel revenue reached 1.37 billion yuan, and in the first quarter of this year, it increased by more than 70% year-on-year. In the TOP10 of Amazon's mattress category BS list (as of October 26), MOLBLLY occupied two seats, and one of its 10-inch memory foam mattresses ranked fourth.

Now, in addition to platforms such as Amazon, Alibaba International Station and AliExpress, Aiyi Home Furnishing has also built its own brand independent website MOLBLLY.com. According to Similarweb data, the total number of visits to the website in the past three months was 264,600, with an average monthly visit of 88,200.

It is still outside the top 1,000 in the ranking of independent websites in the furniture industry, and half of its website traffic (47.55%) is paid, with less natural search (20.78%). This shows that MOLBLLY is not well-known yet, and its main influence is still concentrated on the Amazon platform.

Delandis comes from Quanzhou Xibao Home Furnishing Technology Co., Ltd. Xibao Home Furnishing was established in 2011. In 2018, it sold 51% of its shares to the listed company Gujia Home Furnishing for 424 million yuan. Xibao Home Furnishing is a leading domestic mattress exporter. Delandis brand products have been sold on Amazon US and UK stations and other channels.

Furniture brand: Costway/Homary

The Costway brand comes from the TAG Heuer Group. The TAG Heuer Group was founded in 1998 and launched the Costway brand in 2011. The brand covers dozens of product categories including furniture, outdoor products, kitchen equipment, electrical appliances, decorations, baby and children's products, health and beauty, etc., with more than 10,000 SKUs.

In the early days, Costway was mainly sold on large third-party platforms such as Amazon and eBay. Around 2017, the independent website began to operate. The current monthly visit volume is close to 800,000, ranking 50th in the home category.

Half of this traffic comes from direct visits, indicating that Costway already has a broad user base and high brand awareness in overseas markets. According to the latest Kantar BrandZ ranking, Costway was named one of the top 50 global brands in China, continuing to consolidate the brand's strong position in the market.

The Homary brand comes from Guangzhou Baomi Technology Co., Ltd. Homary's products cover multiple categories such as living room furniture, outdoor furniture, garden furniture, bathroom furniture, kitchen furniture, etc., and the fashionable living room furniture and outdoor furniture series are the best-selling categories.

Like MOLBLLY, Homery also makes large home furnishings, but it came to the fore earlier. In 2021, it launched an independent overseas website and entered online platforms such as Amazon and Wayfair. In 2023, the brand made its first appearance on the list of the top 50 Chinese global brands jointly released by Google and Kantar.

The epidemic has enabled the brand to develop rapidly, ultimately helping Baomi Technology achieve a 300% GMV growth in 2021. In 2022, Homary's global net sales reached a new high, totaling US$136.3 million.

After years of development, Homary has already gained considerable market share and popularity overseas. According to Similarweb, the monthly traffic of Homary's independent website is close to 4 million, and its category ranks 13th. Now, Homary's tentacles have extended to more than 10 countries and regions including North America, the United Kingdom, Europe and Australia.

Outdoor furniture brand: JARDINA

The brand comes from Ningbo Euro Creative Home Co., Ltd. Its main products include outdoor tables, chairs, tents, umbrellas and rattan leisure products. The products are sold to foreign markets such as Europe, America and Australia. At the end of last year, it was reported that Euro Creative had started the listing guidance.

JARDINA has opened a flagship store on Amazon, mainly selling outdoor modular sofas. Although there are not many reviews for the products, the ratings are surprisingly high. JARDINA has also established an independent website, but the traffic on the website is not large at present.

Smart home brand: Govee/eufy

Both brands are related to Anker Innovations. Among them, Govee comes from Shenzhen Zhiyan Technology Co., Ltd., which is invested by Anker Innovations. It is deeply engaged in the "scene adaptation" of smart lamps, develops related technologies for controlling atmosphere color light, and produces customized lamps that adapt to different scene requirements.

In 2018, Govee products were sold on Amazon US. In recent years, Govee's market share on Amazon has continued to increase, with a compound growth rate of more than 300% for three consecutive years. During the Black Friday promotion last year, Govee's products were favored by many overseas consumers, and sales achieved a breakthrough, with an increase of 117% in the US and 56% in Germany compared to the previous year.

eufy is a brand under Anker Innovations. eufy has two major product lines, one is eufyClean, which focuses on home cleaning products, and the other is eufySecurity, which focuses on home security products. eufy has performed well on Amazon. In 2021, one of its star products, the sweeping robot, had an average monthly sales growth rate of 137.5% from January to June.

The category has great potential, and smart and elderly-friendly products have become a hot business opportunity

Nowadays, people are paying more and more attention to the beauty and comfort of their home environment, so the home furnishing products market has great potential .

According to Euromonitor data, the global home furnishings market size was US$677.278 billion in 2020, and will reach US$851.984 billion by 2025. Europe and the United States are the main consumer markets, and data show that by 2030, the home furnishings market size in North America and Europe is expected to exceed US$1 trillion (approximately US$800 billion in 2023).

China is a major exporter of home furnishing products and has a complete industrial chain and industrial clusters.

Look to China for global home furnishings, and look to Foshan for Chinese home furnishings. Relying on its profound manufacturing base, Foshan has become the world's largest pan-home furnishing and building materials industry chain cluster manufacturing base, with the most complete home furnishing supporting industry chain. According to publicly available data, the total industrial output value of Foshan's pan-home furnishing industry has exceeded 1 trillion yuan, mainly from Shunde District, covering 26 sub-industries such as furniture and hardware.

Moreover, since home furnishings cover a wide range of products, each product has its own unique industrial belt. For example, home textiles in Nantong, Jiangsu, curtains in Shaoxing, Zhejiang, carpets in Tianjin, towels in Gaoyang, and furniture in Yiwu, Zhejiang.

In this context, Chinese home furnishing companies have great advantages in going overseas. However, at present, most of the top players in this category have been firmly occupied, and it is difficult for latecomers to compete with them. If they want to enter the market and share the cake, they have to find another way.

The following changes provide new market opportunities for home furnishing companies:

Green and environmentally friendly home furnishings: As people's awareness of environmental protection increases, the demand for sustainable, green and environmentally friendly home furnishing products is also increasing. In overseas markets, we can develop and promote home furnishing products that use renewable materials, have low carbon emissions, and are energy-saving and environmentally friendly to meet consumers' environmental protection needs.

Smart home products: With the rapid development of Internet of Things technology, smart home products have also shown a rapid growth trend in overseas markets. Smart home products with functions such as intelligent control, remote monitoring, energy saving and environmental protection can be launched to meet consumers' demand for high-tech life.

Customized home products: Consumers’ demand for personalized and customized home products is also increasing. Customized home products and services can be launched to meet consumers’ needs for unique and personalized home life by providing personalized design, material selection, style customization and other services.

Home products adapted for the elderly: With the intensification of the aging trend, the demand for home products adapted for the elderly has also increased significantly. Home products that are convenient for the elderly to use can be developed and launched, such as smart beds, toilets, barrier-free bathrooms, etc. suitable for the elderly, to meet the special needs of the elderly in their home life.

Rental of home products: The demand for rental of home products is gradually increasing among some people who live abroad for a long time. We can provide these people with flexible and convenient home solutions by providing home product rental services.

It is worth mentioning that the demands and trends of overseas markets vary according to different regions and cultural backgrounds, so it is very important to conduct market research and positioning for specific markets.

Moreover, the modern home furnishing industry originated in Europe, so Chinese home furnishing brands going overseas is like a student challenging a teacher. Before entering the global market, they must be prepared to compete with their competitors, and they also need to learn to adapt to different market environments and consumer demands.

Currently, the competition among sellers in this category is very fierce. Since last year, many well-known home furnishing brands have closed down one after another, such as Bed Bath & Beyond and Fully under Miller Knoll. At the same time, many home furnishing e-commerce platforms have also announced the cessation of operations, such as Made.com and Brosa. Even Amazon has announced the elimination of its own home furnishing brands.

Amazon has been expanding its home furnishing categories over the past few years and has launched a series of private brands, hoping to attract more consumers by offering cost-effective products through these brands. However, there are now a large number of competitors and brands in the market, which has resulted in its private brands being unable to gain sufficient market share and sales. In the end, they had no choice but to cut them off.

The reason why Fully stopped operating is roughly the same. Founded in 2003, Fully is the world's leading online sales platform for high-end home products, providing a variety of products from furniture to lamps, serving designers and consumers. However, under the influence of high inflation and the ongoing cost crisis, the demand for home products has continued to decline, and it finally had to leave the market in April this year.

There is no doubt that the home furnishing industry is undergoing a major reshuffle. The situation will be turbulent in this process, but it will also mean more opportunities.

Mingyuan Creative