Looking back at the trend of cross-border e-commence industry in the first half of 2023, the competition between major e-commerce platforms has become increasingly fierce. In a very short period of time, has captured territory in major markets around the world. It can be seen that cross-border e-commerce in 2023 is still an important means for Chinese enterprises to expand to the worldwide. While big firm's offshore business is booming, a number of global offshore enterprises have also shown excellent growth potential in the secondary market, have been listed one after another, injecting new vitality into the cross-border industry.

According to the “2023 China Export cross-border E-commerce White Paper” released by Amazon, China's export cross-border e-commerce accelerated in the first half of 2023, increased by 19.9% on the year-on-year basis, and the advantages and potential of export cross-border e-commerce continued to be released. With the continuous introduction of national supportive policies, the recovery of the shipping cycle and the repair of the profitability of the whole industry, the scale of cross-border e-commerce industry is expected to further improve.

Although the cross-border e-commerce industry as a whole shows an upward growth trend, but under the global macroeconomic growth continues to slow down, the instability of monetary policy rises, global liquidity continues to tighten, the escalation of geopolitical conflicts and other potential risks, cross-border e-commerce is affected by the macro environment, still need to meet various challenges and uncertainties.

Zibuyu (2420.hk) as one of the largest cross-border e-commerce enterprises in China’s apparel and footwear industry is also facing and solving related problems.

The cross-border e-commerce apparel and footwear represented by Zibuyu is still a promising track. According to statistics from Frost & Sullivan, the scale of the apparel category will grow from RMB 607.9 billion in 2021 to RMB 1,486.3 billion in 2026, and the footwear will grow from RMB 142.4 billion to RMB 341.3 billion. In addition, the GMV of apparel and footwear also increased from 17.4% of the market share in 2017 to 27.4% in 2021, and is expected to further increase to 33.2% in 2026.

On Aug 29, Zibuyu disclosed its 2023 interim results. According to the announcement, in the first half of 2023, Zibuyu's total revenue was approximately RMB 1,375.3 million, an increase of 7.7% on a year-on-year basis, mainly due to the growth of sales through third-party platforms and the expansion of new sales channels. In addition, with the scale effect of apparel and footwear product, the cost of inventory sold accounted for approximately 18% of the total revenue in the first half of 2023, and achieving a certain degree of cost reduction and efficiency improvement. According to the sales of its hot-selling products, its pricing ratio is more considerable, far beyond the offline physical stores.

The announcement also pointed out that the gross profit margin in the first half of the year was approximately 72.8%, down 3.1 percentage points when compared with the same period last year, the decline in gross profit margin is mainly due to the increase in inventory provisions, but the gross profit margin of hot-selling products reached 75% or above.

It is understood that Zibuyu (2420.hk) made further optimization and adjustment in the first half of 2023 mainly from the following four directions: In the core category, with the goal of cover the full category of apparel and footwear, determine the core brand direction, according to the category focus planning product design, and synchronously set up the offsite marketing team to revitalize traffic conversion; In the business organization structure, the team has realized the centralized management and allocation of resources to improve management efficiency and the professional ability of the team; In the information construction, established the new one-stop sales management system to improve the efficiency of operation; In terms of channel expansion, Temu and other third-party e-commerce platforms have been expanded to optimize the company's income structure and further explore a broader sales market outside of North America.

In the second half of 2023, Zibuyu plans to focus on promoting related businesses, including consolidating the advantages of existing platforms, opening up new sales channels, upgrading product portfolio, launching high-end brands, strengthening digital construction and optimizing inventory management.

It is reported that these measures are aimed at improving market coverage, premium ability of hot-selling products, create brand added value, operational efficiency, inventory turnover efficiency and improving inventory structure. At the same time, Zibuyu will also build a global supply chain platform oriented to customer demand to enhance the ability to be flexible, efficient and green digital system.

In fact, with the continuous development of the global e-commerce market and the continuous upgrading of consumer demand, cross-border e-commerce enterprises like Zibuyu will usher in more opportunities and challenges. Zibuyu will continue to optimize its products and services and enhance its brand and operational efficiency to cope with market competition and meet consumer demand. At the same time, Zibuyu will also continue to practice long-term doctrine and actively explore and innovate to achieve longer term development and greater business value.