|
Without a healthy profit level and the ability to generate self-sustaining income, going public is by no means a natural path to success for a company, but rather a dead end that is like drinking poison to quench thirst. After successfully knocking on the door of IPO, the clothing giant Bu Yu unexpectedly suffered a continuous decline in performance.
It is learned that on March 27, Zibuyu released its annual results ending December 31, 2023. During the reporting period, Zi Buyu achieved revenue of approximately RMB 3 billion (RMB, the same below), which was basically the same as the revenue in 2022; gross profit was 1.955 billion yuan, a year-on-year decrease of 16.7%; the annual loss and total comprehensive loss attributable to the company's shareholders were approximately RMB 266 million , while the annual profit and total comprehensive income attributable to the company's shareholders in 2022 was RMB 110 million. As for the reasons for the loss in this reporting period, in addition to the increase in employee expenses, Zi Buyu pointed out that it was mainly affected by inventory provisions. Inventory provision actually refers to "bookkeeping for inventory depreciation ." Generally speaking, if the inventory is not sold within a certain period of time, the value of the inventory will decrease, and the inventory impairment provision will increase. The financial report shows that in 2023, Zi Buyu concentrated its resources on popular products to improve inventory turnover, and cleaned up some slow-turnover inventories, resulting in a significant increase in the impairment provision for these inventories , with the amount reaching approximately 388 million yuan , an increase of approximately 333 million yuan compared to the 54 million yuan provision in 2022. This figure means that even though it has created a number of popular products, Zi Buyu still faces great inventory pressure, and its profitability is affected in the process of clearing inventory. Further digging into Zi Buyu’s inventory problems may reveal that they are closely related to its high reliance on a single channel and market. According to the financial report, as of December 31, 2023, Zibuyu's revenue in the North American market reached 2.949 billion yuan, accounting for approximately 98% of the total revenue. At the same time, revenue from third-party e-commerce platforms was 2.921 billion yuan, accounting for approximately 97% of the total revenue. Judging from the data disclosed in the past, the proportion of ZiBuYu's revenue generated from Amazon has increased year by year , and it is its main source of income through third-party platforms: from 2020 to the first half of 2022, ZiBuYu's revenue from the Amazon platform accounted for 32.4%, 71.2%, and nearly 90% of its third-party platform revenue, respectively. Due to the long shipping cycle of products sold on Amazon, Zibuyu tends to adopt a "volume-based" strategy for its products, so it needs to spend a lot of money to ensure sufficient inventory. However, the inventory of clothing categories is affected by factors such as the long-term high return rate, seasons, and fashion trends. This means that even if Zibuyu can continue to create popular products on the platform, it has to face the problem of unsalable inventory. It is worth mentioning that Zi Buyu pointed out in its performance report that from a long-term perspective, concentrating resources on popular products is conducive to brand building, enhancing core competitiveness, and promoting sustained sales growth. Therefore, the impact of inventory clearance on the company's performance is temporary. However, in view of the fact that Zibuyu's large amount of redundant inventory has not been resolved, some industry insiders analyzed that this actually reflects Zibuyu's lack of competitiveness in terms of brand and product differentiation, supply chain, platform, etc. Therefore, whether Zibuyu is "too optimistic" in its brand building remains to be observed by the market.
Zi Buyu, a cross-border clothing company founded in 2011, was formerly an online women's clothing store opened on Taobao by Hua Bingru, a post-85s founder. In 2014, Zibuyu officially transformed from Taobao e-commerce to cross-border e-commerce, and has achieved year-on-year growth in performance on third-party e-commerce platforms for the past seven years. According to the prospectus data, Zibuyu's revenue in 2019-2021 was 1.429 billion, 1.898 billion, and 2.347 billion, respectively. Behind the year-on-year growth in performance, on the one hand, ZiBuYu has made tremendous efforts to build a brand matrix in the women's clothing category; on the other hand, ZiBuYu entered the cross-border market at a time when the industry platform was experiencing a period of wild growth. Due to the obvious seasonality and relatively short life cycle of clothing categories, Zibuyu has established a huge product database and built its own brand matrix through this design library: as of the first half of 2022, Zibuyu has cultivated more than 300 brands, with a total of 1,089 clothing and footwear products ranked among Amazon's Top 100 Best Sellers. It was once called a "hit-making machine." However, while Zibuyu has achieved rapid growth with the help of platforms such as Amazon, its dependence on them has also deepened year by year. As the platform's product transportation cycle and payment cycle are relatively long, the high inventory pressure has further affected the company's cash flow , causing Zibuyu to record a negative net cash flow from operating activities for the first time at the end of 2021, hampering its business development. Perhaps influenced by this, Zi Buyu, after receiving two high-value investments in 2021 and signing a bet agreement, embarked on the long road to listing, hoping that the wealth effect after listing will be able to solve the urgent financial needs and expand the company's business scale. After two setbacks, Zibuyu was finally officially listed on the main board of the Hong Kong Stock Exchange on November 11, 2022. However, judging from the performance data disclosed recently, Zibuyu's net cash flow from operating activities was 77 million yuan, and its cash flow situation has improved, but it has not yet completely broken through the difficulties of inventory backlog and operating losses.
Based on this, industry insiders believe that although going public can bring in a large amount of funds and help companies alleviate cash flow difficulties to a certain extent, it is by no means a shortcut to solving operational risks that existed before the listing. For clothing categories with obvious seasonality and relatively short life cycles, inventory and return rates are the biggest risks hidden under high profits . Even if sellers can create many popular products, there will be more inventory. This is not a problem that can be alleviated simply by solving the funding problem. Therefore, if Zibuyu wants to restore growth in performance, it needs to develop the internal driving force for sustainable development of the enterprise - either strengthen the supply chain or transform into a brand. At present, Zibuyu obviously prefers the latter. Zi Buyu stated in its financial report that in 2023, the company will transform to brand operations, improve operational efficiency and optimize inventory structure. In 2024, the company will continue to cultivate its brand overseas strategy, establish a brand matrix, and strive to create a more differentiated and recognizable global brand. In the future, whether it can explore a new growth curve in its brand building journey remains to be seen.
What do you think about this? Welcome to discuss in the comment area~
|
