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As an evergreen category in the cross-border e-commerce industry, the 3C track has always been full of overseas companies that rush to go public. Recently, following Ruilian Technology, the IPO progress of Greenlink Technology, another Shenzhen 3C seller, has also taken a big step forward. It is learned that on February 26, the IPO review status of Shenzhen Green Link Technology Co., Ltd. (hereinafter referred to as "Green Link Technology") on the Shenzhen Stock Exchange's Growth Enterprise Market has been changed to "Submitted for Registration" and the latest prospectus has been submitted. According to the prospectus, UGREEN Technology was established in 2012 and is mainly engaged in the research and development, design, production and sales of 3C products. Its products mainly cover five major series: transmission, audio and video, charging, mobile peripherals and storage. It is a consumer electronics brand company. In 2023, UGREEN Technology's operating income and net profit attributable to shareholders continued the growth trend of previous years: operating income reached 4.803 billion yuan, a year-on-year increase of 25.09%; net profit attributable to shareholders reached 387 million yuan, a year-on-year increase of 18.27%. From the perspective of the IPO process, UGREEN Technology submitted its prospectus in June 2022, was approved by the Listing Committee meeting in January 2023, and submitted for registration in February 2024. Although it has not yet been officially listed, compared with other cross-border companies in the industry that have experienced many twists and turns in their IPOs, UGREEN Technology's IPO road appears to be smoother. In the face of fierce competition in the 3C market, how did UGREEN Technology, which started with "a data cable", start its IPO journey and get the IPO process "green-lit" all the way? The answer may be drawn from the three major brand growth logics of products, brands and channels. Products: Entering the 3C market with segmented categories Relying on product innovation based on user needs, UGREEN Technology successfully broke into the 3C market by entering the "data cable" segment . After gaining a foothold, it expanded into other categories and built a product matrix of its own brand. Taking TV data cables as an example, overseas, UGREEN's TV data cables are mostly 1.8 meters (1.8 meters = 6 feet), which is in line with foreign product habits; in China, UGREEN has identified the needs of domestic consumers and launched data cable products with more specifications such as 0.5 meters and 1 meter. Today, after years of product line extension, UGREEN Technology has expanded from the original "one data cable" to five major categories: transmission, audio and video, charging, mobile peripherals, and storage , including UGREEN mobile power bank, UGREEN wireless charger, UGREEN Apple Watch magnetic charger, UGREEN HDMI cable and many other products. According to the prospectus, in terms of products, in 2023, GreenLink Technology's charging products and storage products grew rapidly, increasing by 58.66% and 77.36% respectively over the same period last year . Among them, charging products have maintained a high growth rate during the reporting period, which is one of the main reasons for the company's continued growth in performance. Channel: Omni-channel layout increases product sales Channels are the key to increasing product sales. The prospectus shows that UGREEN Technology has adopted a combination of online and offline models and has achieved sales in many countries and regions around the world, including China, the United States, the United Kingdom, Germany, and Japan, becoming one of the leading brands in the field of technology consumer electronics. From the perspective of online channels, UGREEN Technology has achieved coverage of mainstream domestic and foreign e-commerce platforms such as Tmall, JD.com, Amazon, AliExpress, Shopee, Lazada , etc., and the brand's main products are ranked at the top in the mainstream platform lists. For example, the main products continue to be selected as the best-selling products (Best Seller) and Amazon's Choice (Amazon's Choice) on the Amazon platform. According to the latest prospectus data, in 2023, UGREEN Technology's sales revenue on Shopee, Lazada, and Amazon's sites in Mexico, Japan, the Middle East and other places all increased , which was a key factor in the rapid growth of its product sales. Brand: From OEM to TOP brand In 2009, relying on his experience in foreign trade, UGREEN founder Zhang Qingsen started his entrepreneurial journey.
At first, his main business was OEM for foreign customers, but as the number of 3C practitioners increased day by day, the problem of product homogeneity became increasingly prominent. Stimulated by the price cuts of foreign customers, Zhang Qingsen realized the limitations of this model.
Therefore, in 2012, in the environment of rampant public models and lack of brand awareness, UGREEN, which started out as an OEM factory, launched its own brand - "UGREEN". By creating a competitive barrier with data cable products and continuously increasing investment in on-site and off-site promotion channels, UGREEN's business revenue showed an overall growth trend, and it soon became one of the top 3C brands going overseas. Overall, products, brands, and channels together constitute the guarantee for the steady growth of UGREEN Technology's performance, allowing its IPO process to be "green-lit" all the way. However, faced with an uncertain market environment, there are still many hidden concerns about the future development path of UGREEN Technology. In the 3C red ocean market with short iteration cycles and strong substitutability, technological barriers are clearly the first wall for 3C brands to gain a foothold in the market. However, UGREEN Technology is still lagging behind industry leaders such as Anker Innovations in building a product technology moat. According to the prospectus, from 2020 to 2022, UGREEN's R&D investment was 95.127 million yuan, 157 million yuan, and 183 million yuan, respectively. The investment in R&D expenses increased year by year, but the proportion of operating income was only 3.47%, 4.54%, and 4.78%. Compared with Anker Innovations, whose R&D investment accounted for as high as 6.07% in 2020 , UGREEN Technology is obviously not yet among the companies that focus on R&D in the industry. At the same time, the prospectus also shows that based on its independent product research and development, GreenLink Technology currently still adopts a production model that mainly relies on outsourced finished product procurement and supplemented by independent production. During the reporting period , the proportion of the amount of independently produced products in the last three years accounted for approximately 24%. This production model that is overly dependent on outsourcing and lacks independent production capabilities has also caused UGREEN to be subject to multiple constraints from suppliers in everything from pricing, quality control, product delivery to overall supply chain management, and faces certain operational risks. In addition, behind UGREEN's steady growth in performance, there is also the hidden concern of a high degree of reliance on online platforms. According to the latest prospectus data, from 2020 to the first half of 2023, the proportion of revenue realized by UGREEN Technology through online e-commerce platforms to its main business revenue was 82.35%, 78.14%, 75.98% and 74.04% respectively , and the gross profit realized through online e-commerce platforms accounted for 88.48%, 84.31%, 81.94% and 80.56% of the gross profit of the main business respectively. It is obvious that UGREEN's sales on e-commerce platforms account for a relatively high proportion overall. If there are major adverse changes in the e-commerce platform policies in the future, and the company cannot respond to the relevant changes in a timely manner and take effective adjustment measures, it will also have a negative impact on UGREEN's revenue and profitability. For UGREEN Technology, the only way to go further in the future is to continue to build core competitive barriers and break through current constraints. Now, GreenLink Technology's IPO journey has come to an end. Whether it can successfully land on the Growth Enterprise Market will continue to be watched. What do you think about this? Welcome to discuss in the comment area~
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