Have you ever dreamed of selling China's high-quality products globally and tapping into overseas markets? Cross-border e-commerce has become one of the hottest sectors today. In this competitive landscape, a company called Zibuyu Group is making waves with its persistent efforts to enter capital markets. Dubbed "China's answer to Zara," what makes this cross-border e-commerce powerhouse so compelling? And will it finally succeed in opening Hong Kong's stock exchange doors?
Persistent Pursuit: Zibuyu's IPO Journey
On September 28, 2022, Hangzhou-based Zibuyu Group Limited filed its prospectus with the Hong Kong Stock Exchange for the third time, seeking a main board listing. Previous attempts in June 2021 and March 2022 had lapsed, but the company's determination remains unwavering. This repeated push demonstrates Zibuyu's strong appetite for capital markets and confidence in its business model.
Impressive Performance: Growing Revenue and Market Share
Founded in 2011, Zibuyu quickly rose to prominence through its affordable fast-fashion strategy, becoming one of China's largest cross-border e-commerce companies. Its revenue primarily comes from apparel, footwear, electronics, stationery, and sports equipment.
The prospectus reveals that in the first half of 2022, Zibuyu generated 1.278 billion yuan ($178 million) in revenue, a 16.08% year-on-year increase. Gross profit reached 969 million yuan ($135 million), with operating profit at 79 million yuan ($11 million). These figures demonstrate steady growth and profitability.
More notably, Zibuyu commands significant market share. According to Frost & Sullivan data, by 2021 GMV (gross merchandise value), Zibuyu ranked third among all Chinese cross-border B2C apparel and footwear sellers, holding about 0.4% market share. In North America specifically, it ranked first among Chinese sellers in this category with approximately 0.7% market share, establishing clear leadership in this competitive market.
Business Model Analysis: Strengths and Risks
Sales Channels: Amazon dominates Zibuyu's sales, accounting for over 90% (1.157 billion yuan) of H1 2022 revenue. Self-operated websites contributed just 75 million yuan (5.8%), suggesting significant untapped potential in direct-to-consumer channels. Balancing third-party platforms with independent sites will be crucial for future growth.
Financial Performance: From 2019 through H1 2022, Zibuyu showed consistent revenue growth: 1.429 billion yuan, 1.898 billion yuan, 2.347 billion yuan, and 1.278 billion yuan respectively. However, net profits of 81 million yuan, 114 million yuan, 201 million yuan, and 61 million yuan during these periods indicate relatively thin margins that need improvement.
Key Risks: The prospectus highlights Zibuyu's heavy reliance on third-party platforms. Between 2019-2021, these channels accounted for 91.9%, 79.3%, and 87.5% of total revenue respectively, with Amazon and Wish comprising 86.0%, 76.7%, and 84.2%. This dependence means platform policy changes or relationship disruptions could significantly impact operations—a common challenge for marketplace-dependent sellers.
Cross-Border E-Commerce: A Sector on the Rise
Cross-border e-commerce continues attracting capital market attention, with frequent IPO and funding news. This reflects both global industry growth and China's strong manufacturing foundation. Driven by new consumption patterns and economic models, China's cross-border export sector holds tremendous potential.
Zibuyu's IPO journey, while challenging, sets an example for other cross-border players. It proves Chinese companies can compete globally and inspires confidence in future market entrants.
Navigating Opportunities and Challenges
Every participant in cross-border e-commerce faces unprecedented prospects and obstacles. Beyond major players like Zibuyu, countless SMEs contribute to sector vitality. As the ecosystem evolves, more Chinese companies will likely accelerate transformation, supporting economic development while gaining global influence.
For cross-border sellers, several strategies prove critical:
- Diversified channels: Reduce single-platform dependence by expanding to independent sites and social commerce
- Precision operations: Move beyond bulk listing models to focus on product quality, branding, and customer service
- Regulatory compliance: Adhere to international laws regarding intellectual property, taxation, and sustainability
- Innovation adoption: Explore emerging technologies and formats like live-stream commerce and short-video marketing
The future of cross-border e-commerce holds boundless possibilities. By seizing opportunities and overcoming challenges, Chinese companies can shine on the global stage.
Conclusion
Zibuyu's third IPO attempt demonstrates strong market confidence and self-assurance. Despite risks like platform dependence, its solid performance, market position, and sector potential make its listing prospects promising. Moreover, Zibuyu's experience offers valuable lessons for peers: channel diversification, operational refinement, compliance, and innovation adoption are key to sustainable success in this competitive arena.