Good News on Listing | Frost & Sullivan Assists EDA Group Holdings Limited to Successfully List on the Hong Kong Stock Exchange (2505.HK)

EDA Group Holdings Limited (hereinafter referred to as 'Yida Cloud') successfully listed on May 28, 2024. The company plans to issue 9,762.50 million H shares, of which 90% will be international offerings, 10% will be public offerings, and an additional 15% will be underwritten rights. The issue price per share is HK$2.28, resulting in a net proceeds of approximately HK$192 million.

During the Hong Kong listing process, 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 relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business, and other important sections), helping the issuer communicate with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing feedback from the Hong Kong Stock Exchange regarding various industry issues.

The company is a mature B2C export e-commerce supply chain solution provider in China, with superior conditions and a clear focus on future industry growth points;

The company's ability to provide end-to-end supply chain solutions globally with local expertise;

The company has a complete business management process supporting efficient and flexible execution capabilities;

The company has established long-term relationships with a large and high-quality customer base;

The company is led and managed by visionary founders with a strong management team.

According to the Frost & Sullivan report,

Based on 2023 revenue, the company ranks sixth among all major B2C export e-commerce supply chain solution providers in China that adopt overseas warehouse models;

The company owns one of the largest overseas franchise warehouse networks in the industry.

Since 2013, driven by the further improvement of payment systems, enhanced cross-border logistics delivery efficiency, the continuous increase in new B2C export e-commerce platforms, and the gradual formation of online shopping habits among global consumers, the B2C export e-commerce market has grown rapidly.

The GMV of China's B2C export e-commerce market has grown rapidly, increasing from RMB 1,318.3 billion in 2018 to RMB 3,850.3 billion in 2023, with a compound annual growth rate of 23.9%. In the future, the GMV of China's B2C export e-commerce market is expected to reach RMB 7,236.8 billion by 2028, with a compound annual growth rate of 13.5% from 2023 to 2028, mainly driven by (1) continuous global economic growth; (2) increased purchasing power of global consumers; and (3) further strengthening of international trade and economic cooperation among countries.

Note:

The market scale of B2C export e-commerce refers to the sum of all cross-border e-commerce platform GMVs.

2. GMV refers to the total merchandise transaction value, which is a method of measuring the total sales of all e-commerce businesses within a specified period.

Driven by economic growth, the logistics industry has achieved high-quality development. The market scale of cross-border e-commerce logistics includes the revenue generated by domestic and non-Chinese logistics providers for cross-border e-commerce logistics. The market scale of cross-border e-commerce logistics increased from RMB 1.5 trillion in 2018 to RMB 3.6 trillion in 2023, with a compound annual growth rate of 19.1%. After the outbreak of COVID-19, port congestion and extended unloading cycles occurred. In addition, in March 2021, the Suez Canal was blocked, leading to short-term insufficient capacity and a shortage of market supply, causing freight prices to skyrocket. The outbreak of COVID-19 and the blockage of the Suez Canal impacted the global shipping industry and affected other related groups such as domestic transporters, retailers, and manufacturers. Therefore, the market scale of the cross-border e-commerce logistics industry reached RMB 3.2 trillion in 2021. By 2028, this figure is expected to reach RMB 5.6 trillion, with a compound annual growth rate of 9.2% from 2023 to 2028.

In the past few years, the export e-commerce supply chain solution market has shown significant growth. In particular, the market size of B2C export e-commerce supply chain solutions has grown more rapidly, increasing from RMB 136.9 billion in 2018 to RMB 457.1 billion in 2023, with a compound annual growth rate of 27.3%. From 2019 to 2020, the outbreak of COVID-19 drove demand for online shopping and became a major driving force behind a significant increase in B2C export e-commerce supply chain solution demand. By 2028, the market size is expected to reach RMB 761.6 billion, with a compound annual growth rate of 10.7% from 2023 to 2028. Generally speaking, the B2C export e-commerce supply chain solution market can be divided into overseas warehouse models and direct mail models.

In recent years, the overseas warehouse model has become increasingly popular because it can provide individual consumers with faster and more predictable delivery times, thereby optimizing their shopping experience. From 2018 to 2023, the market scale of B2C export e-commerce supply chain solutions using the overseas warehouse model increased from RMB 486 billion to RMB 2039 billion, with a compound annual growth rate of 33.2%. Given the compound annual growth rate of 13.7% from 2023 to 2028, it is estimated that the market scale of B2C export e-commerce supply chain solutions using the overseas warehouse model will reach RMB 3870 billion by 2028.

From 2018 to 2023, the market scale of B2C export e-commerce supply chain solutions using direct mail mode increased from RMB 883 billion to RMB 2532 billion, with a compound annual growth rate of 23.5%. Affected by the decline in freight costs, the market scale showed a downward trend in 2022. However, due to the Israeli-Palestinian conflict that occurred in the second half of 2023 and extreme weather such as heavy rain and snow since October 2023 in the United States, air freight rates have risen. Therefore, it is expected that the market scale of B2C export e-commerce supply chain solutions using direct mail mode will reach RMB 3746 billion by 2028, with a compound annual growth rate of 8.1% from 2023 to 2028.

The market for B2C export e-commerce supply chain solutions in China is relatively fragmented, with over 4,000 market participants, including some who use direct mail and others who use overseas warehouse models. Sometimes, for convenience to customers, B2C export e-commerce supply chain solution providers use both direct mail and overseas warehouse models. Compared to industry participants mainly dealing with small items, B2C export e-commerce supply chain solution providers mainly dealing with medium and large items typically have higher gross profit margins and customer loyalty as differentiated advantages. Due to the larger shape and size of medium and large items, special attention is required, so delivery staff for these items usually charge an additional fee. In any case, e-commerce sellers are willing to choose B2C export e-commerce supply chain solution providers with industry expertise to handle medium and large items and ensure the efficiency of warehousing and outbound processes. Therefore, B2C export e-commerce supply chain solution providers mainly dealing with medium and large items usually have stronger bargaining power than other providers and achieve higher gross profit margins. In terms of revenue in 2023, the top ten B2C export e-commerce supply chain solution providers in China accounted for about 9.1%.

Based on 2023 revenue, Yida Cloud ranks sixth among all major B2C export e-commerce supply chain solution providers in China that adopt overseas warehouse models, with a market share of about 0.5%. In 2023, Yida Cloud accounted for about 0.1% of the entire export e-commerce supply chain solution market in China. Additionally, Yida Cloud is one of the largest B2C export e-commerce supply chain solution providers in China that adopt the overseas franchise warehouse model.

Note:

1. All B2C export e-commerce supply chain solution providers listed in the ranking are third-party companies.

• Government support

• The B2C export e-commerce market is growing rapidly

• The popularity of overseas warehouse model

• New technology application