The tragedy of account suspension? Shenzhen Dashao lost nearly 40 million yuan, while Anker made a huge profit of 3.6 billion yuan in the first quarter

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As 2022 is coming to an end and the Black Friday promotion is approaching, the third quarter battle reports of cross-border sellers have been released one after another.

Since the beginning of this year, due to adverse macro factors such as the Russia-Ukraine war and the continued soaring costs at home and abroad, the number of cross-border transactions has been exhausted. Now looking back at the performance ambitions set at the beginning of the year, it seems far from reality.

Even the top sellers who are the benchmarks of the industry are inevitably affected by the turbulent environment. Now that the Q3 financial reports have been released one after another, it can be seen that some are happy while others are sad, and the joys and sorrows of the top sellers are not the same.

During the account blocking shock last year, Amazon had a total of 367 sites closed by Zebao and a frozen balance of approximately 32.2301 million yuan; the losses were extremely heavy, making it one of the biggest victims of the account blocking wave.

It has been more than a year since the account suspension incident, and Zebao has also been committed to compliance operations and transformation after the accident. Now that the Q3 financial report is out, has it gotten rid of the shadow of the suspension and successfully turned losses into profits?

According to the third-quarter financial report released by Zebao's parent company, Xinghui Co., Ltd., Xinghui Co., Ltd. achieved revenue of 580 million yuan in Q3 2022, a year-on-year decrease of 1.12%; the net profit attributable to shareholders of the listed company was -20.9238 million yuan, a sharp drop of 85.00% year-on-year.

▲ The picture comes from Xinghui Shares’ financial report

In the first three quarters of this year, Xinghui Co., Ltd. achieved revenue of 1.836 billion yuan, a decrease of 39.08% compared with the same period last year; the net profit attributable to the listed shareholder company was -38.5252 million yuan, a slight increase of 9.83% compared with the same period last year.

It can be seen that the revenue curve of Xinghui Co., Ltd. has shown a significant decline since the beginning of this year, with a decrease of 48.26% in the first half of the year alone. However, as it entered the third quarter, the downward trend was obviously braked, and Q3 only fell slightly by 1.12% compared with the same period last year. Although the profit is still negative, the loss has narrowed to a certain extent, and the profit in Q3 has increased compared with the same period last year.

Xinghui shares' performance continued to decline, and the root cause was the account ban of its subsidiary Zebao. Although Zebao actively appealed and adjusted its business strategy, accelerating the promotion of multi-platform business strategies such as Walmart, eBay, and independent stations to get rid of its dependence on Amazon's single platform, it is difficult to see quick results in a short period of time, and it has not yet completely gotten rid of the shadow of the sequelae of the account ban.

On the other hand, factors such as the repeated outbreaks of the epidemic, geopolitical wars, and inflation that have led to a decline in consumer purchasing power since this year have also had a negative impact on Zebao's cross-border business.

However, there will be a rebound after hitting bottom. Although there is still a long way to go to turn losses into profits, Zebao's performance is steadily improving through the development of self-operated businesses, brand transformation and continuous internal optimization and construction.

Compared with the big sellers who were swept up by the account ban wave and suffered heavy losses in performance, Anker Innovations, which has adhered to the brand line since its inception, remained unmoved by the account ban wave. While many big sellers' performance declined due to internal and external shocks this year, it still maintained steady growth.

Financial report data disclosed by Anker Innovations showed that its Q3 revenue was 3.649 billion yuan, a year-on-year increase of 19.46%; the net profit attributable to shareholders of the listed company was 254 million yuan, a year-on-year increase of 7.24%.

▲ The picture comes from Anker Innovations’ financial report

In the first three quarters of this year, Anker Innovations' total revenue reached 9.537 billion yuan, an increase of 13.19% over the same period last year; the net profit attributable to the listed shareholder company was 830 million yuan, an increase of 28.60% over the same period last year.

Although the global economic situation continued to decline in 2022, and the complex and changing international environment, geopolitics, global inflation and other factors have brought multiple challenges to cross-border trade, Anker Innovations still relies on its brand strategy that has been deeply cultivated for many years to go against the current and achieve double growth in revenue and profits.

In the 3C category, a fast-growing and fast-dying red ocean, Anker Innovations has shown strong operational resilience, which is inseparable from its development strategy of focusing on product research and development and emphasizing technological innovation. In the first three quarters of this year, Anker Innovations' R&D investment was 699 million yuan, an increase of 40.10% over the same period last year; accounting for 7.33% of its operating income, which continues to be at a relatively high level in the industry.

During the reporting period, Anker launched new products in its three main product categories. In the area of ​​smart innovation, it has launched the high-end smart cleaning product "Mach Cordless Steam Cleaner" around cleaning scenarios; in the charging category, Anker released the Anker GaNPrime™ full gallium nitride fast charging family at the end of July, with a total of 7 annual flagship new products; in the wireless audio category, it launched the new soundcore Space series in August.

Zebao and Anker Innovations are on the same track, but have different fates. The former started out as a distribution model, believing in the tactics of piling up a large number of SKUs and expanding accounts. Eventually, a wave of account bans broke out, and the company was forced into a desperate loss. The latter, on the other hand, has established itself as a boutique brand, focusing on the building and accumulation of brand power, and has remained unscathed in the face of the wave of account bans.

The cross-border e-commerce industry has undergone continuous changes and evolution from the period of picking up money with a huge profit blowout, and has now entered the era of intensive branding. The top sellers are transforming in line with the main theme of the industry, and small and medium-sized sellers should not be limited to the narrow vision of making quick money. Only by building a long-term and stable competitive moat can they go further.