Looking back at 2023, in the context of the Federal Reserve's unexpected interest rate hike and continuous geopolitical conflicts, the world trade situation and supply chain are facing major restructuring, and the global economy has experienced profound adjustments. Especially for the consumer sector, lingering inflation clouds as well as frequent fluctuations in supply and demand have made the recovery of the industry slow. During the period of economic adjustment, the fundamental resilience of enterprises is most tested at this time.

   Zhitong financial APP noted that a few days ago, Zibuyu (2420.hk) disclosed the 2023 annual result. According to the financial report, the income of Zibuyu in 2023 is 3 billion yuan (yuan, the same as the unit below), which is basically unchanged from the same period last year.

   As one of the largest cross-border e-commerce B2C companies in China, Zibuyu mainly sells apparel and footwear products through third-party e-commerce platforms such as Amazon. It is reported that Amazon is the largest online apparel retailer in North America, with a market share of up to 50%, and Amazon is also the main position for the sale of products.

   While consolidating the advantages of core channels, in 2023 the company also focused on developing new sales channels such as Temu and Tiktok, and has achieved outstanding phased results. Taking Temu as an example, when Temu launched the full hosting model in the United States, it began to provide a diversified supply of women's products for the platform, and the company's revenue from the new platform is continuing to grow.

   The performance of the core brand of Zibuyu is as good as ever. Data show that the sales revenue of the company's top ten brands in 2023 increased by more than 15% year-on-year, including a number of brands with annual sales revenue of more than 100 million. The increasingly diversified brand matrix is injecting a steady stream of new momentum into the sustainable growth of the company.
In terms of inventory management, the year 2023 has made drastic adjustments to the inventory. For some of the slow turnover of the inventory, Zibuyu was centralized cleaning, and the resources were concentrated on the hot-selling products, and the company's inventory turnover was further improved under multiple measures.

   Affected by the active optimization of inventory, the inventory impairment amount during the reporting period was about 388 million yuan, a substantial increase from the previous year's 55 million yuan, which also dragged down the profit performance to a greater extent. According to the financial report, the gross profit in 2023 is about 1.955 billion yuan, and the net profit of the mother is -266 million yuan. However, as the so-called "to understand thing well, should take a long-term view", the impact of clearing inventory on the company is only temporary, and the long-term focus on resources in the hot-selling product is conducive to brand building, enhance core competitiveness, and promote the sustained growth of sales.

   It is worth mentioning that despite the pressure on the profitability of the company, from the perspective of cash flow, the company's operating activities cash flow still maintained a good net inflow of 76.73 million yuan, which indicates that the operating condition of the company's business remains healthy, and the cash "hematopoietic" ability has not been affected.

   In addition, Zibuyu also attaches great importance to the use of scientific and technological means to empower their own development. Since 2023, AI is accelerating its penetration into all industries by leaps and bounds and driving a new productivity and creativity revolution. Zibuyu also keen to capture the wave of innovation in this era, and actively try to apply cutting-edge technologies to their own production and business activities. In the past year, through digital construction, we reshaped the front-end consumer trend insight, AI-assisted product design, intelligent advertising and commodity management, and the back-end supply chain collaborative management, and realized the fine management and intelligent operation of the whole business link, which significantly improved the operational efficiency.

   The clock turns to 2024 after organizational changes and inventory optimization, the company is also able to pack light. From the perspective of the industry, in recent years the scale of China's e-commerce market has accelerated to catch the peak, and the market growth rate has slowed down significantly; In contrast, the penetration rate of e-commerce in overseas markets is still at a low level, and the space for future development is still broad. Taking apparel as an example, according to industry consultant Sullivan's data, the GMV of China's cross-border apparel and footwear export B2C e-commerce market in 2021 is about 750.3 billion yuan (RMB, the same unit below), and is expected to expand to 1,827.6 billion yuan by 2026, corresponding to a compound annual growth rate of 19.5% during the period.

   In the highly imaginative industry circuit, it is expected that Zibuyu who has withstood the external stress test will start again after a short rest. Subsequently, focusing on the anchor of high-quality development, Zibuyu will continue to expand non-Amazon channels, offline channels, and markets such as Europe and Asia, increase brand investment, strengthen the overseas layout of the supply chain, and improve operational efficiency by relying on digital construction. Under the combination of many measures, the growth prospects of Zibuyu are still worthy of market expectations.