We are an online retailer specializing in quality furniture and home furnishings. We offer consumers an enjoyable lifestyle experience across a broad range of “home and life” scenarios, leveraging robust supply chain management and efficient logistics solutions. According to Frost & Sullivan, we ranked first in the B2C overseas e-commerce market for furniture and home furnishings by China-based sellers in terms of GMV in 2023; we ranked fifth in the global B2C e-commerce market for furniture and home furnishings in terms of GMV in 2023.
During the Track Record Period, we generated revenue primarily from sales of goods and provision of logistics solutions.
We specialize in furniture and home furnishing products under popular proprietary brands such as ALLEWIE, IRONCK, LIKIMIO, SHA CERLIN, HOSTACK and FOTOSOK. In 2023, 11 of our brands each had over RMB100 million and we ranked first in six categories in terms of GMV on the Amazon U.S. site, including bed frames, food cabinets, vanity tables and vanity benches, bookcases, buffet tables and sideboards as well as refrigerators, according to Frost & Sullivan. Our product portfolio also includes electric tools, home appliances, consumer electronics and sports and wellness products. We had a market share of over 10% in ten categories, namely bed frames, beds, refrigerators, dressers and chests of drawers, food cabinets, bookcases, vanity tables and vanity benches, buffet tables and sideboards, power screwdrivers and pressure washer hose reels, on the Amazon U.S. site, in terms of GMV in 2023. We primarily provide products to consumers via Amazon.com (“Amazon”), Walmart.com (“Walmart”) and Wayfair.com (“Wayfair”) in overseas markets, including the U.S. and Europe. These markets are well known for strong consumer purchasing power and high e-commerce penetration. Benefiting from diverse offerings, brand equity and strategic market positioning, we have continually enhanced our competitiveness.
Supply Chain Management and Product Development Capabilities
Our supply chain capabilities help us rapidly develop diverse products while maintaining product quality. In the four months ended April 30, 2024, we worked with 575 manufacturing partners. Such collaborations allow us to efficiently respond to the evolving market demand and offer diverse products across industries. Our digitalized supply chain management systems facilitate stringent quality control. As a result, we had an average return rate below 3.5% across all third-party e-commerce platforms in 2023, one of the industry’s lowest, according to Frost & Sullivan.
We are committed to addressing customer needs with continual product development efforts. As of the Latest Practicable Date, we held 630 patents, 154 patent applications and 172 software copyrights, with 72 international design awards received. Our industrial design innovation lab has been accredited as the National Industrial Design Center by MIIT since 2021 and the Guangdong Provincial Engineering Technology Research Center since 2020 in China.
Robust supply chain management and product development capabilities are integral to our cost management. We are committed to innovation in our product design and development. We explore the utilization of novel materials that are compatible with different types of furniture and optimize furniture structure to reduce package volume and weight, thereby reducing the procurement and logistics costs to sustain competitive pricing.
Logistics Solutions Focusing on Medium-to-Large Goods
In addition to providing logistics to our own e-commerce business, through Shenzhen Westernpost, a subsidiary of our Company, we provide efficient logistics solutions globally under the pre-sale stocking model to customers who are primarily e-commerce sellers. Our solutions include domestic consolidation in China, first-mile international freight services, overseas transit, overseas warehousing and order dispatch. During the Track Record Period, we provided logistics solutions to an aggregate of over 700 e-commerce companies, fulfilling over 3.2 million, 4.4 million, 6.1 million, 1.8 million and 2.5 million orders, respectively, in 2021, 2022, 2023 and the four months ended April 30, 2023, and 2024. In terms of the revenue generated from B2C export e-commerce logistics solutions adopting the pre-sale stocking model in 2023, Shenzhen Westernpost ranked fourth among all B2C export e-commerce logistics solutions providers in China, with a market share of approximately 1.2%, and first among all B2C export e-commerce logistics solutions providers in China focusing on medium-to-large goods, according to Frost & Sullivan.
Combining our industry insights and Shenzhen Westernpost’s experience in logistics solutions, we have established a global multi-tier warehousing and logistics network and developed proprietary logistics solution management systems. As of April 30, 2024, we operated 27 overseas warehousing facilities, with an aggregate GFA of over 5.5 million sq.ft. in main port cities in the U.S. (including Los Angeles, Houston, New Jersey and Chicago) and Europe (mainly Germany). Our proprietary logistics solution management systems include a smart restock and segregation system, a warehouse management system (“WMS”), a transportation management system (“TMS”) and an order management system (“OMS”), managing and optimizing all key stages of the logistics chain.
Leveraging an integrated supply chain, digitalized management system and extensive and sophisticated warehousing network, we have tackled the pain points of high costs and long delivery times associated with logistics solutions for medium-to-large goods. As a result, we are able to provide cost-effective logistics solutions for medium-to-large goods at a price 30% lower than that of Fulfillment by Amazon (“FBA”). In 2023, over 95% of orders fulfilled by Shenzhen Westernpost for medium-to-large goods such as furniture were delivered to last-mile fulfillment service providers within 24 hours after placement of orders, representing high logistics efficiency in the industry, according to Frost & Sullivan.
Proven Operational Capabilities and Strong Resilience
Founded in 2010, we rapidly emerged as a leading market participant in China’s B2C overseas e-commerce market with popular brands, according to Frost & Sullivan. We were primarily engaged in sales via third-party e-commerce platforms, including Amazon. In 2021, our business was negatively impacted by the Amazon Incident: certain employees of our Group had invited influencers to review our products or placed coupons in product packages as incentives to encourage ratings and reviews (the “Unofficially Promoted Ratings or Reviews”) primarily to increase exposure of our newly launched products to assess their market acceptance, and we were subject to the following actions by Amazon as part of its investigation: (i) deactivation or restriction of the relevant online stores or the associated accounts identified as having engaged in the use of Unofficially Promoted Ratings or Reviews; (ii) freezing of funds in such online accounts; and (iii) removal of product listings from these online stores. Primarily due to the Amazon Incident, our revenue decreased by 21.7% from RMB9,071.2 million in 2021 to RMB7,100.2 million in 2022. In 2021, we had a net loss of RMB589.9 million, primarily due to the write-down of inventories resulting from the Amazon Incident. After finding out about some of our employees’ involvement in Unofficially Promoted Ratings or Reviews, we promptly demanded the cessation of such practices, conducted inspections of our online stores and implemented enhanced internal control measures. See “Business — Marketing and Promotion — The Amazon Incident.”
To alleviate the impact of the Amazon Incident, we optimized our online store network and refined the brand strategy for better management and resource allocation, enhancing operational efficiency. Specifically, we have focused on furniture and home furnishings and devoted substantial time and resources to cultivating a diverse brand and product portfolio. We have also built our presence on other leading e-commerce platforms such as Walmart and Wayfair. This approach has resulted in a rapid recovery in overall financial performance. Our revenue increased by 22.3% from RMB7,100.2 million in 2022 to RMB8,683.0 million in 2023. Our revenue increased by 16.9% from RMB2,424.5 million in the four months ended April 30, 2023, to RMB2,833.5 million in the four months ended April 30, 2024. We had net profit of RMB223.2 million in 2022, RMB520.1 million in 2023 and RMB189.3 million in the four months ended April 30, 2024, signaling a robust rebound from the Amazon Incident.
Leveraging our established strengths in product development, supply chain management, efficient logistics systems and efficient operation, we aim to continually optimize our brand and product portfolio to respond to consumer demand under refined operation and management and let the world fall in love with our offerings.
Source: AuGroup (02519) Prospectus (IPO Date : 2024/10/31) |