Cross-Border E-Commerce Firm Zibuyu Listed in Hong Kong

Cross-border e-commerce company Zibuyu Group was officially listed on the main board of the Hong Kong Stock Exchange (HKEx) on November 11, with Huatai International and ABC International serving as co-sponsors. The firm is a major actor in China’s cross-border e-commerce industry, focusing on sales of clothing and shoes through third-party e-commerce platforms. According to data released by Frost & Sullivan, in terms of 2021 gross merchandise volume, it ranked third among all platform sellers in China’s B2C clothing and shoes cross-border market.

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Since its establishment in 2011, Zibuyu has established a matrix of several self-owned brands for different types of products, constantly releasing new brands and further enhancing the premium features of its products. The firm’s brands include women’s wear lines “Dellytop” and “Cicy Bell,” men’s wear brands “Runcati” and so on.

Zibuyu has developed a proprietary IT system to effectively control the whole industrial chain from product design to warehousing and delivery. This not only significantly controls costs, but also ensures the quality and efficiency of procurement. In addition, the company has cooperated closely with more than 200 suppliers and 81 logistics service providers in China and abroad, enabling the company to realize an integrated supply chain.

In terms of financial data, Zibuyu’s revenue in the first half of 2022 was 1,277.5 million yuan ($179.3 million), a year-on-year increase of 16.06%. In the same period, profits reached 61.3 million yuan, down 46.3% year-on-year, and the gross profit margin of the company reached 75.9%. The income of Zibuyu reached 1.429 billion yuan in 2019, 1.898 billion yuan in 2020 and 2.347 billion yuan in 2021. Meanwhile, profits were 81.109 million yuan in 2019, 114 million yuan in 2020 and 201 million yuan in 2021. Its gross profit margin reached 69.8%, 72.6% and 75.2% respectively.

Zibuyu plans to use about 37.5% of net proceeds from its listing to enhance sales and brand promotion capabilities, including ads, marketing solution procurement and other promotional activities. About 28.6% will be used to improve the group’s supply chain management system. About 23.3% is planned to be used to establish a large-scale self-operated website on the group’s proprietary website. About 5.3% will be used to enhance the group’s product R&D capabilities. Lastly, about 5.3% will be used to upgrade the group’s IT infrastructure throughout the next three years, including purchasing cloud services, firewall hardware and software, intelligent management systems and design management systems.