Good News on Listing | Frost & Sullivan Assists Aoji (Shenzhen) Cross-border Business Co., Ltd. to Successfully List on the Hong Kong Stock Exchange (2519.HK)

Aokji (Shenzhen) Cross-border Business Co., Ltd. (hereinafter referred to as 'Aokji Shares') successfully listed on November 8, 2024. The company issued a total of 29,894,700 H shares globally, including 8,968,500 H shares sold in Hong Kong and 20,926,200 H shares sold internationally. The issue price per share was HK$15.60, raising a net amount of approximately HK$466 million.

During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support and highlight the issuer's competitive advantages, assisting the issuer, investment banks and other intermediaries in completing the writing of relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business and other important chapters), helping the issuer complete communication with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and providing assistance to the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange, etc.

• The company is a top online retailer specializing in furniture and home products;

   

• The company develops products in a market-oriented manner and continuously innovates to empower diverse products;

   

• The company has a strong digital supply chain management capability to support efficient operations;

   

• The company has a diverse, high-quality product portfolio that is competitive;

   

• The company has global warehousing and logistics capabilities tailored for medium and large-sized products;

   

• The company has a visionary management team and an efficient organizational structure that drive the long-term development of the enterprise.

According to the Frost & Sullivan report, the company:

• Ranked fifth in the global B2C furniture and home goods e-commerce market by GMV in 2023;

   

• Ranked first in the B2C overseas e-commerce market for furniture and home goods based on Chinese sellers, by GMV in 2023;

   

• Based on the revenue generated by B2C export e-commerce logistics solutions adopting overseas warehouse models in 2023, Shenzhen Xyp Warehouse (a subsidiary of the company) ranks fourth among all B2C export e-commerce logistics solution providers in China.

As one of the trade activities, e-commerce breaks the traditional time and space limitations of offline trade, connecting sellers and consumers around the world to achieve digitalization of the entire trade process. E-commerce can be mainly classified into (i) B2B e-commerce and (ii) B2C e-commerce according to business models. B2C e-commerce refers to the transaction activity where individual consumers visit enterprise seller websites or online third-party platforms, select products, process payments, and receive goods from sellers through logistics. Generally speaking, such transactions involve a wide range of industry participants, mainly including sellers, third-party platforms, self-operated websites, third-party payment service providers, logistics solution providers, and individual consumers.

According to a Frost & Sullivan report, the global B2C e-commerce market has grown rapidly, with a compound annual growth rate of 16.0%, increasing from $2300.7 billion in 2018 to $4821.9 billion in 2023. After the outbreak of COVID-19, online shopping demand increased in several developed regions such as the United States and Europe, driving the development of the global B2C e-commerce market. The global B2C e-commerce market's GMV increased by 27.9% from 2019 to 2020. It is expected that the global B2C e-commerce market's GMV will reach $7712.5 billion by 2028, with a compound annual growth rate of 9.8% from 2023 to 2028.

The global B2C e-commerce market can be further divided into (i) the global B2C e-commerce market by third-party platforms and (ii) self-operated websites. Compared to self-operated websites, third-party platforms have successfully developed and achieved significant growth in overseas markets by taking advantage of the convenience of customer acquisition and warehousing management. The global B2C e-commerce market revenue of third-party platforms increased from $1238.7 billion in 2018 to $2.7631 trillion in 2023, with a compound annual growth rate of 17.4%. In 2023, they accounted for about 57.3% of the global B2C e-commerce market and are expected to further reach $4.4762 trillion by 2028, with a compound annual growth rate of 10.1% from 2023 to 2028.

Source: Frost & Sullivan report

The global B2C e-commerce market for furniture and home goods generally consists of two main categories: furniture and home decor. Furniture typically includes (but is not limited to) beds, bookcases, wardrobes, drawer cabinets, dressing tables and stools, food cabinets, side tables, sofas, and outdoor furniture. Home decor items are used for decorating and furnishing homes, including bedding sets, carpets, curtains, and other household textiles, as well as photo frames, wall decorations, vases, and other home furnishings.

According to a Frost & Sullivan report, the global B2C e-commerce market for furniture and home products has seen its GMV increase from $145.6 billion in 2018 to $325.8 billion in 2023, with a compound annual growth rate of 17.5%. The United States and Europe are the main regions in the global B2C e-commerce market for furniture and home products, accounting for 23.0% and 26.4% of the market in 2023, respectively. The GMV of the US B2C e-commerce market for furniture and home products increased from $28 billion in 2018 to $748 billion in 2023, with a compound annual growth rate of 21.7%, while the GMV in Europe increased from $38 billion in 2018 to $859 billion in 2023, with a compound annual growth rate of 17.7%. With the growth of online channels in the furniture and home products market, it is expected that the global B2C e-commerce market for furniture and home products will reach $588.5 billion in 2028, with a compound annual growth rate of 12.6% from 2023 to 2028.

Source: Frost & Sullivan report

The global furniture and home furnishings B2C e-commerce market is relatively fragmented, with over 200,000 market participants. Based on the 2023 global furniture and home furnishings B2C e-commerce market's GMV, the top five furniture and home furnishings B2C e-commerce sellers account for about 5.1%. According to the 2023 global furniture and home furnishings B2C e-commerce market's GMV, Aokai Co., Ltd. ranks fifth among global furniture and home furnishings B2C e-commerce market participants, with a market share of about 0.2%.

Source: Frost & Sullivan report

The furniture and home goods B2C overseas e-commerce market based on Chinese sellers is relatively fragmented, with over 150,000 market participants. In terms of GMV in 2023, the top five participants accounted for about 2.9% of the market share. Aokai Co., Ltd. ranked first among all market participants, with a market share of about 0.7%.

Source: Frost & Sullivan report

Competitive prices and uniquely designed high-quality productsWith the emergence of a new generation of consumers, the global demand for furniture and home products has undergone a transformation. Consumers now have expectations for various aspects of furniture and home products, including quality, design, and pricing. In terms of quality and price, consumers are increasingly seeking high-quality products at lower prices. In addition, consumers tend to choose innovative and unique design styles. Therefore, providing high-quality, cost-effective, innovative, and unique furniture and home products that balance consumer diversity will become a major development trend in the future.

Digitization and AutomationIn recent years, digitalization and automation have created strong growth potential for the global furniture and home goods B2C e-commerce market. Furniture and home goods B2C e-commerce sellers use various digital applications such as WMS, TMS, and MCOMS (Multi-Channel Order Management System) to simplify the supply chain and improve delivery efficiency. At the same time, as the furniture and home goods industry and its supply chain gradually adopt automated equipment, the cost of furniture and home goods products and logistics costs will decrease, which will drive the growth of the global furniture and home goods B2C e-commerce market.

Environmental protectionIn recent years, Europe and America have increasingly placed emphasis on environmental protection. At the same time, due to consumers' heightened awareness of environmental protection and sustainable development, environmentally friendly products will become an important trend in the furniture and home goods B2C e-commerce market. Consumers are paying more attention to the environmental credibility of products, including materials used, manufacturing processes, and sustainable packaging. In the future, green environmental protection and environmental sustainability will become the main trends in the furniture and home goods B2C e-commerce market.

In recent years, B2C export e-commerce logistics solutions using overseas warehouse models have become increasingly popular because they can provide individual consumers with faster and more predictable delivery times, thereby enhancing their shopping experience.

From 2019 to 2021, during the outbreak of COVID-19, not only did end consumers increasingly accept online purchases, but many e-commerce sellers also recognized the benefits of overseas warehouse models. As a result, the revenue from B2C export e-commerce logistics solutions using overseas warehouse models significantly increased from 2019 to 2021. However, in 2022, as the COVID-19 pandemic subsided and offline shopping gradually resumed, the revenue from B2C export e-commerce logistics solutions using overseas warehouse models slightly decreased. In addition, in 2023, benefiting from e-commerce development, the revenue from B2C export e-commerce logistics solutions using overseas warehouse models reached RMB 203.9 billion, and it is expected to reach RMB 387 billion by 2028, with a compound annual growth rate of 13.7% from 2023 to 2028.

Source: Frost & Sullivan report

The B2C export e-commerce logistics solution market in China is relatively fragmented, with over 4,000 market participants, including some that use direct mail and others that use overseas warehouses. In terms of revenue generated by B2C export e-commerce logistics solutions using overseas warehouses in 2023, the top five providers accounted for about 7.2%.

In 2023, Shenzhen Western Post Smart Warehouse (a subsidiary of Aok Group Co., Ltd.) achieved revenue of approximately RMB 24 billion (including the revenue of Western POST (SG) and its subsidiaries, as well as pre-group intra-company sales), adopting an overseas warehouse model. Based on the revenue generated by B2C export e-commerce logistics solutions using the overseas warehouse model in 2023, Shenzhen Western Post Smart Warehouse ranked fourth among all B2C export e-commerce logistics solution providers in China, with a market share of about 1.2%. In addition, Shenzhen Western Post Smart Warehouse ranked first among all B2C export e-commerce logistics solution providers focusing on medium and large-sized products.

Source: Frost & Sullivan report

Frost & Sullivan has extensive research experience in the e-commerce and logistics industries, assisting well-known enterprises in successfully listing on capital markets. Successful listings include: Yida Cloud (2505.HK), PanYuan International (2516.HK), Transcheng Global (LGCB.NASDAQ), Webuy (NASDAQ:WBUY), Liming Technology (2405.HK), Zibuy (2420.HK), Blibli (BELI.IDX), Starbox (NASDAQ:STBX), Dajian Cloud Warehouse (NASDAQ:GCT), Youhe Holdings (2347.HK), YesAsia (2209.HK), Huaxin Holdings (8442.HK), Shangjin International (2528.HK), Taobao International (6110.HK), Baby Tree (1761.HK), SeCO China (NASDAQ:SECO), Barbie Bebe (8297.HK), Jumei Youpin (NYSE.JME), Vipshop (NYSE.VIPS), and others.