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On the eve of May Day, Amazon released its first quarter financial report for 2023. Judging from the sales of $127.4 billion and the profit of $3.17 billion, its Q1 performance exceeded market expectations and successfully reversed the serious losses in the same period last year. However, at the same time, under the macroeconomic headwinds, the growth of Amazon's e-commerce business, which is the main source of revenue, has almost stagnated.
However, it is worth noting that, despite the bottleneck in performance growth, Amazon's third-party seller service revenue increased by 20% in Q1 to $29.8 billion. It is foreseeable that the operating costs of Amazon sellers are gradually rising.
The increasing service fees of the platform have been affecting the performance of cross-border merchants. Looking back at 2022, the annual performance of many sellers has fluctuated to varying degrees. Recently, another major seller disclosed last year's battle report, and the specific results were also unsatisfactory.
Tongtuo's revenue in 2022 is 3.29 billion yuan, but it is still trapped in the shadow of account suspension It is learned that last week, Tongtuo's parent company Huading Co., Ltd. released its 2022 financial report. Data showed that Huading Co., Ltd. achieved revenue of 6.548 billion yuan in 2022, a decrease of 24.33% from the previous year, and the net profit attributable to shareholders of the listed company was 429 million yuan.
▲ The picture comes from Huading Shares’ announcement Huading shares' business is mainly divided into two major sectors: nylon and cross-border e-commerce. In 2022, its nylon business operated smoothly, but the cross-border e-commerce business experienced large fluctuations, which caused the company's overall business to suffer a certain degree of negative impact.
Currently, Tongtuo mainly sells its products through third-party e-commerce platforms such as Amazon, Walmart, AliExpress, and Shopee. The deep integration with the platforms also makes its risk resistance ability have certain hidden dangers. Once there is a policy change, it is likely to affect the normal operation of cross-border business.
The financial report also disclosed the risks involved in Tongtuo Technology:
1. Suspected of violating Amazon platform rules and having funds frozen 2. The products sold on the independent website were sued for trademark infringement. 3. The bundled Paypal account was also frozen and deducted. 4. With the changes in tax policies of cross-border e-commerce platforms, the platform's VAT withholding policy has become stricter
Due to the combined effects of shrinking consumer demand, Amazon’s account suspension, and platform withholding, Tongtuo’s revenue has been declining and its profits have been showing a trend of continued losses.
The financial report shows that in 2022, the cross-border e-commerce business with Tongtuo Technology as the main body achieved revenue of 3.29 billion yuan, a year-on-year decrease of 38.47%. In terms of categories, digital products had revenue of 622 million yuan, a year-on-year decrease of 33.32%; home products had revenue of 2.578 billion US dollars, a year-on-year decrease of 40.87%; only clothing products grew against the trend, with annual sales revenue reaching 89.6296 million yuan, a surge of 66.67%.
Overall, since the outbreak of the large-scale account closure wave in 2021, Tongtuo's performance, including the failure of many stores, has been hit. Under the superposition effect of multiple negative buffs, how to usher in the dawn of growth is still a long way to go. After three consecutive years of losses, Guangdong Dama announced its delisting Since 2022 , affected by the continued high inflation, European and American consumers have been committed to cutting consumption of non-essential goods, and home furnishings are one of them. Due to the sluggish industry, the collapse of home furnishing giants has occurred repeatedly in the past two years.
As the industry's chill spreads, the road to overseas expansion for many home furnishing sellers has become increasingly bumpy. Recently, Baoxin Global, a major home furnishing seller in Dongguan, issued an announcement: the company held meetings on March 20 and April 6, respectively, and passed the "Proposal on Applying to Terminate the Listing of the Company's Stocks on the National Equities Exchange and Quotations". The company's stocks have been suspended since April 4, 2023. Baoxin Global stated in the announcement that the application to terminate the listing of its shares on the National Equities Exchange and Quotation System is mainly to cooperate with the company's future development strategy and its own business development needs, so as to improve decision-making efficiency, reduce operating costs, and better maximize the interests of the company and all shareholders.
On April 27, Baoxin Global forwarded relevant documents from the National Equities Exchange and Quotation Company and officially terminated the listing of its stocks from April 28.
Founded in 2012, Baosight Global is mainly engaged in cross-border export business of home furnishing products, and its sales channels include Wayfair, Walmart, Overstock and other third-party platforms in the United States. Its profit model is to master the two ends of the smile curve of the home furnishing industry chain, namely the design and development end and the operation and sales end. Relying on the solid supply chain advantages in China and the creation of its own product strength, Baosight Global was successfully listed on the New Third Board in 2017.
Then the listing curse seemed to have befallen Baoxin Global. After reaching its peak performance of 376 million yuan in revenue in 2017, its performance continued to decline until now, six years later, it was forced to announce its delisting.
Since 2020, Baoxin Global's performance has been in a state of decline, with revenue slumping and net profit in the red. In 2021, the situation was even worse, with revenue falling below the 100 million mark, down 53.08% to 53.4031 million yuan, and losses further expanding to 27.4347 million yuan, a year-on-year plunge of 376.53%.
▲ The picture comes from Baosight Global Announcement
In response, Baoxin Global stated that it has encountered unprecedented operating difficulties since its listing in 2021. Affected by the continued COVID-19 pandemic and the imbalance between supply and demand in the container shipping market, Baoxin Global had a serious shortage of saleable inventory during the reporting period and sales fell sharply.
Entering 2022, although the frenzied container shipping market has gradually cooled down and logistics costs have also decreased, the gap in losses has not been filled in time. The financial report shows that in the first half of 2022, Baosight Global's net profit attributable to shareholders of listed companies increased by 59.71% year-on-year, but still lost 2.4601 million yuan.
▲ The picture comes from Baosight Global Announcement
After three consecutive years of losses, Baoxin Global's delisting seemed to have been a foregone conclusion.
Just as Baosight Global announced the termination of its listing, Zhiou Technology, another furniture seller, was recently approved for IPO registration on the Growth Enterprise Market. The two companies were established at almost the same time, one was successfully listed after only five years, and now it has been delisted, while the other IPO road was full of twists and turns, and finally ushered in the dawn of victory. The completely different destinies are regrettable.
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