From a loss of 2.7 billion to a loss of nearly 300 million, Youkeshu gradually emerged from the shadow of account suspension

In early January, foreign media reported that Amazon would lay off more than 17,000 employees worldwide, exceeding the initial plan of 10,000, completing the largest staff reduction in history. Now that the storm has not subsided, a new round of layoffs has surged again.

This week and last week, Amazon issued layoff notices to employees in New York, California and Washington state. It is reported that more than 3,000 Amazon employees received notices and were told that they would lose their jobs. This is just the beginning of Amazon's second wave of large-scale layoffs. In the cold winter of the market, e-commerce giants have laid off employees, reduced recruitment, and reduced business scale to cope with possible changes in the macro economy.

This is the case for the giants, let alone the cross-border merchants who are facing multiple challenges. Recently, many industry giants released their 2022 performance forecasts, and their report cards can be said to have increased and decreased, with some happy and some worried.

Recently, Shenzhen 3C retailer Youkeshu disclosed its 2022 annual performance forecast. The announcement shows that Youkeshu expects revenue of 710 million to 850 million yuan in 2022, a sharp drop from 1.764 billion yuan in the same period last year; the net profit attributable to shareholders of the listed company is expected to be a loss of 220 million to 310 million yuan, an increase of 88.42% to 91.78% over the same period last year.

▲ The picture comes from the Youkeshu announcement

Affected by unfavorable factors such as the slowdown in global macroeconomic growth, setbacks in overseas core consumer markets, and intensified cross-border industry competition, Youkeshu's revenue fell significantly in 2022. However, due to the timely reduction of business scale and continued implementation of stable operations, its performance losses have been significantly narrowed.

At present, some non-core businesses have become an invisible burden on Youkeshu's performance growth. Among them, the non-core businesses of listed companies such as Internet of Vehicles operations and software services have further shrunk, and there will still be a certain degree of losses in 2022.

Due to blind optimism about market expectations, Youkeshu has been stocking up a lot since the second half of 2020. However, in the second quarter of 2021, the policy environment of the Amazon platform changed, a large number of Youkeshu stores were closed, funds were frozen, and a large number of inventories were unsalable, which severely impacted its performance.

In order to curb the trend of accelerating performance decline, Youkeshu adjusted its operating strategy in many ways. On the one hand, under the premise of controlling inventory scale and reducing the risk of unsalable goods, it continuously strengthened the control of the front-end supply chain and strived to form a high-quality supply chain system. On the other hand, it closely followed the market hot spots, focused on developing specific categories of products, and continuously dynamically optimized pricing strategies, striving to ensure a reasonable profit level and capital turnover.

In addition, Youkeshu is also working hard to implement the policy of increasing revenue and reducing expenditure, and minimizing the scale of operations to match the scale of revenue. It is reported that the number of Youkeshu employees has been reduced from more than 3,000 in December 2020 to more than 500 in March 2022; the number of leased office spaces has been reduced from 24 in December 2020 to 4 in March 2022.

After the account was blocked, Youkeshu changed its business strategy in a timely manner and explored the best development model to reduce the risk of declining business performance. However, due to the large gap in performance losses, it is still a long way to go to successfully turn losses into profits.

Compared to Youkeshu, which is still struggling to narrow its losses, another major seller, Huakai Yibai, has successfully turned losses into profits.

According to the announcement released by Huakai Yibai, its net profit attributable to shareholders of the listed company is expected to be 209 million to 239 million yuan in 2022, and the net profit after deducting non-recurring gains and losses is about 190 million to 220 million yuan. In 2021, the above figures are all in a loss state.

▲ The picture comes from Huakai Yibai’s announcement

Yibai Network is undoubtedly the biggest contributor to this performance reversal. In 2022, the export cross-border e-commerce industry bottomed out and rebounded, and the industry's competitive landscape has improved significantly. Under this general environment, Yibai Network's sales resumed growth in the second half of 2022, and its profit margin increased significantly. During the reporting period, Yibai Network expects to achieve operating income of approximately 4.3 billion yuan and net profit of 270 million to 290 million yuan.

Another company that is also experiencing a surge in performance is Tianjin's popular iHealth. According to the announcement, iHealth expects to achieve a net profit attributable to shareholders of listed companies of 16.5 billion to 17.5 billion yuan in 2022, and a non-net profit of 16.6 billion to 17.6 billion yuan.

▲ The picture comes from Huakai Yibai’s announcement

During the reporting period, due to the repeated impact of the overseas COVID-19 epidemic, the demand for COVID-19 prevention products such as test kits sold by iHealth in the United States increased significantly, and it received a number of sky-high orders in succession, stimulating a substantial increase in revenue from related products.

At the same time, the hot sales of COVID-19 test kits, forehead thermometers and other products sold by iHealth, a brand under iHealth, on e-commerce platforms such as Amazon have further accumulated good brand awareness and user reputation, driving the sales of other products. With the double buff, iHealth continues to maintain a strong momentum of performance growth.

Overall, with the macroeconomic environment full of uncertainties, the cross-border e-commerce industry in 2022 has faced both arduous challenges and new opportunities. As a result, some companies are developing with great momentum and their performance is soaring, while others are struggling to operate and their profits are shrinking.

Now that 2023 has begun, we will have to wait and see what kind of sales results cross-border merchants will deliver in the new year.