The net profit of billion-level sales plummeted! Is the blockbuster manufacturing machine facing a growth bottleneck?

It is learned that recently, some sellers reported that after the logistics delays of warehouses such as SMF1, SMF3, and SMF6 were previously reported, Amazon issued another notice: The AFW1 warehouse suffered structural damage due to severe weather and is expected to be closed until at least the end of April.

▲ The picture comes from the seller communication group

It is understood that the sellers who received the notice are all sellers who have inventory in the AFW1 warehouse. Although Amazon said it would compensate for damaged inventory that could not be sold, most sellers still suffered losses.

It can be seen that in 2023, cross-border sellers will still face many obstacles.

At the time of this change, another big seller released its performance forecast for last year.

It is learned that recently, Hangzhou cross-border clothing giant Zi Buyu issued a profit warning announcement.

The announcement shows that compared with the net profit of about RMB 201 million achieved in 2021, Zibuyu expects the net profit in 2022 to decrease by about 40%-50% . As for the reasons for the decrease in the company's net profit, Zibuyu pointed out that it was mainly affected by the combined impact of the following events:

▲ The picture comes from Zibuyu’s announcement

It is learned that from its establishment in 2011 to 2022, Zibuyu has cultivated more than 300 brands, with a total of 1,089 clothing and footwear products ranked in the Amazon Top 100 Best Sellers , and was once known as a hit-making machine. After two failures, on October 26, 2022, Zibuyu finally successfully passed the hearing and was listed on the main board of the Hong Kong Stock Exchange on November 11.

The prospectus shows that from 2019 to 2021, Zi Buyu's performance grew year by year, with revenue of 1.429 billion yuan, 1.898 billion yuan, and 2.347 billion yuan respectively, and net profit of 81.109 million yuan, 114 million yuan, and 201 million yuan respectively.

▲ The picture comes from Zibuyu's prospectus

However, behind the good performance of double growth in revenue and net profit, there is also the development risk of ZiBuYu's over-reliance on a single market and platform.

According to the prospectus, Zibuyu's sales revenue share in the US market has increased year by year. As of June 30, 2022, Zibuyu's revenue share in the US market has reached 95% .

Zibuyu's reliance on the US market means that if there is any disturbance in this market, the company's performance will be the first to be affected. For example, the slowdown of the US market economy and continued inflation mentioned in the above reasons for performance changes have had a significant impact on Zibuyu's performance.

▲ The picture comes from Zibuyu's prospectus

In addition, although Zibuyu has been working on establishing an independent self-operated website since 2018, this move has not yet been effective. According to the data disclosed by Zibuyu, the company's revenue still mainly comes from sales channels on third-party e-commerce platforms such as Amazon and Wish. For example, in the first half of 2022, about 90% of Zibuyu's revenue came from Amazon , while the revenue contribution from self-operated websites was less than 20%.

For now, Zibuyu's development is still relatively stable, but the disadvantages of its over-reliance on a single market and platform have begun to emerge.

For this reason, when it goes public in 2022, Zi Buyu also pointed out that one of the important uses of the funds raised from the IPO is to establish a large-scale independent self-operated website in order to form a higher barrier to widen the gap with latecomers and enhance the company's control over the channel.

Whether Zibuyu can explore a new growth curve in the future remains to be seen.

It is worth noting that a few days ago, another cross-border seller whose products also dominate the Amazon BSR list also released its performance report.

It is learned that recently, Shenzhen Damaidaotong Technology announced its 2022 annual performance report.

During the reporting period, Daotong Technology achieved operating income of 2.289 billion yuan , an increase of 1.58% over the same period last year ; net profit attributable to shareholders of the listed company was 105.7 million yuan , a decrease of 75.91% over the same period last year ; net profit attributable to the owners of the parent company after deducting non-recurring gains and losses was 92 million yuan, a decrease of 75.76% over the same period last year. It is almost the same as the performance forecast released in January.

▲ The picture comes from Daotong Technology Announcement

As for the reason for the decline in net profit, Daotong Technology said that it was mainly due to the company's substantial increase in investment in digital energy R&D and sales resources in 2022 to enhance the competitiveness of digital energy products, build sales channel capabilities and increase brand awareness. Data shows that as of the first half of 2022, the company's sales and R&D expenses incurred in new energy business totaled 78.224 million yuan.

It is understood that Daotong Technology's main business is the research and development, production, sales and services of automotive intelligent diagnosis, testing and analysis systems and automotive electronic components. Its products are mainly sold to more than 70 countries and regions including the United States, Europe, Japan, Australia, etc., and it always adheres to independent research and development and continuous innovation.

In recent years, many products of Autel, the main brand of Autel, have entered the Best Sellers list of Amazon's auto parts category. Based on good brand awareness, the AC charging pile products that landed on Amazon's US site in June 2022 also quickly entered the top 5 in this category in a short period of time.

It can be seen that Daotong Technology's net profit will decline in 2022, which is indeed mainly due to the large amount of funds invested in promotion and R&D. At present, it is still preparing for the outbreak of related auto parts products under the new energy trend.

Looking at the performance of the two big sellers in 2022, it is enough to find that in the face of the new pattern and new market situation, building a brand moat and increasing control over channels have become the future development strategy of many big sellers. I hope that in 2023, cross-border sellers will be able to create their own myth of getting rich!