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Tag: Jumei

  • Chinese cross-border eCommerce has peaked

    Chinese cross-border eCommerce has peaked

    Chinese cross-border eCommerce has reached a turning point, says new research from Oliver Wyman.

    Spending online offshore by Mainland Chinese reached RMB 120 billion (US$17.963 billion) in 2015 according to iResearch, and is expected to grow more than 60 per cent, reaching 7 per cent of total Chinese eCommerce value by 2018.

    However, Oliver Wyman warns increasing regulation may mean the industry has now reached an inflection point.

    “Chinese consumers are probably the most informed and digitalised in the world,” said Wai-Chan Chan, Oliver Wyman partner and author of the report. “As Chinese consumers travel abroad, they are increasingly aware of offline prices around the world.

    Exhibit 1

    Cross-border eCommerce provides Chinese consumers with access to the best products at the best prices without leaving home. At the same time, companies entering or currently in the market need to consider their positions.”

    The report, titled Shopping Without Boundaries found that one in five online Chinese shoppers made a purchase on cross-border eCommerce platforms in 2015, double the proportion in 2014. This represents more than 3 per cent of total eCommerce transactions in China including both B2C and C2C.

    Today’s cross-border eCommerce businesses expanded out of the Daigou model which involved small businesses abroad who brought or sent products back to China. In 2013, the Chinese government established experimental zones of cross-border eCommerce for better regulation. Shanghai was the first to be selected, followed by 11 further cities by June 2016.

    International brand owners and retailers are taking advantage of the new channels through different models. The most common are platform providers such as Tmall International and self-operated plays such as Jumei. JD Worldwide operates across both models. Vertical specialists have also emerged, including the rapidly-growing Xiao Hong Shu (Little Red Book) that has established itself as a challenger.

    Exhibit 2

    After a strong boom, the report finds that cross-border eCommerce has arrived at a tipping point.

    “The future now seems unclear to many players due to a series of government regulations,” concluded the report. “Covering a wide range of topics such as tax, product safety, manufacturing standards and logistics, these regulations have not been fully defined and leave room for speculation.”

    “While cross-border eCommerce still presents great opportunities, companies may want to have a Plan B in case the market dynamics change completely due to the new regulations,” added Chan.

    The full report details how both incumbents and new brands should review and adapt their strategic approach to China’s cross-border eCommerce market. For example, incumbents need to define what role cross border eCommerce should play in their overall Chinese business while ensuring global price harmonisation.  New entrants, need to select a product that appeals to online shoppers in China.

  • Jumei doubles sales, but still in the red

    Jumei doubles sales, but still in the red

    Jumei International, the Chinese online retailer of beauty products, has reported a sales increases of 99.9 per cent – but it still posted a quarterly operating loss.

    In the quarter to September 30, net revenue reached RMB1.9 billion (US$305.5 million). Total net GMV increased by 35.6 per cent to RMB2.3 billion (US$358.7 million), driven primarily by a 30.8 per cent rise in the number of active customers and a significant 89.5 per cent boost in total orders.

    But gross profit as a percentage of net revenues decreased to 26.2 per cent (from 38 per cent)in the same period of 2014, primarily due to the company’s shift in strategy from beauty product marketplace sales to merchandise sales that started in September 2014, and inventory optimisation activities for Jumei Global.

    The net loss attributable to Jumei’s ordinary shareholders was RMB86.9 million (US$13.7 million), compared with net income attributable to Jumei’s ordinary shareholders of RMB120.0 million in the same period of 2014.

    Leo Chen, founder and CEO of Jumei, appeared upbeat about the results however.

    “Our third quarter net revenue growth continues to be strong… driven by Jumei Global and rapidly shifting consumption patterns in China as consumers upgrade their tastes, preferences and expectations for products. We continue to strengthen our position as a leading import cross-border eCommerce platform in China and are pleased to see both active customers and number of orders grow rapidly while maintaining a high repeat purchase rate,” he said.

    “We continue to add world renowned brands such as Shiseido and KOS to our Jumei Global platform. This is the first time these Japanese beauty groups have directly authorised a cross border eCommerce company in China to carry their merchandise. This means that going forward, new products by both brands will be launched simultaneously in Japan and on Jumei Global in addition to those already on offer in Jumei’s domestic platform. Chinese consumers will now be able to access international beauty trends at the same time they take place in the brand’s home markets.”

    In the fourth quarter of 2015, the company says it expects total net revenues to be between RMB1.83 billion and RMB1.93 billion, representing a year-over-year growth rate of 80 to 90 per cent.

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  • Jumei sales double

    Jumei sales double

    Jumei, the Chinese online retailer, says its sales rose 99.5 per cent in the second quarter to June 30.

    The e-tailer achieved net revenues of US$308.1 million and its GMV rose by 30 per cent to $376 million as its customer base grew 28 per cent and orders by 58.2 per cent.

    But its gross profit as a percentage of net revenues decreased to 30 per cent from 46.3 per cent in the same period of 2014 reflecting the company’s shift in strategy from beauty product marketplace sales to general merchandise sales that started last September – along with promotional activities associated with baby and maternity products.

    Leo Chen, Jumei’s founder and CEO, said the company was “thrilled” with its quarter.

    “This very strong growth was driven by Jumei Global during what is typically a seasonally light quarter. We continue to strengthen our position as a leading import cross-border eCommerce platform in China – a milestone we achieved last quarter. We are pleased to see both active customers and number of orders grow rapidly while maintaining a high repeat purchase rate.”

    Chen said since transitioning into cross-border eCommerce during the third quarter of 2014, the frequency of customer purchases has grown significantly, increasing 34 per cent from the third quarter of 2014 to the second quarter of 2015, due primarily to Jumei’s diverse global product offerings and expansion into other women’s categories such as baby and maternity and health and wellness.

    “We are confident that our continued investment in category expansion will enhance the customer experience, increase user stickiness and strengthen loyalty to our platform,” said Chen.

    “We recently announced a strategic investment in BabyTree, the largest online parenting community in China and the largest globally as ranked by traffic volume, with daily active users (“DAU”) exceeding 10 million. By integrating Jumei’s supply chain and logistics expertise in cross border ecommerce with BabyTree’s large and growing user base, we believe we will be able to leverage the significant cross-selling opportunities across all Jumei categories to become the dominant female-focused ecommerce platform in China.”

  • Jumei buys into Korean cosmetics model

    Jumei buys into Korean cosmetics model

    Chinese language on-line magnificence merchandise retailer Jumei Worldwide has purchased a minority stake in Korean magnificence model It’S Pores and skin.

    It’S Pores and skin is described as “a status Korean magnificence model that has turn into very fashionable amongst Chinese language shoppers”.

    Leo Ou Chen, founder and CEO of Jumei, stated  the recognition of Korean magnificence merchandise in China has grown quickly over the previous few years.

    “With an in depth catalogue of status merchandise, It’S Sin is a perfect companion for Jumei to collaborate with as we construct Jumei International into the most important cross border eCommerce platform in China.

    “It’S Pores and skin will drastically profit from the rising measurement and scale of our platform,” he concluded.

    Jumei, listed on the NYSE, is China’s main on-line retailer of magnificence merchandise as measured by gross merchandise quantity, with a market share of 22.1 per cent in 2013.

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  • Jumei gross sales soar

    Jumei gross sales soar

    Jumei Worldwide, the Chinese language on-line retailer of magnificence merchandise, has revealed a 61.eight per cent improve in first quarter gross sales to US$250.6 million.

    Gross merchandise quantity lept 20.three per cent because of a 14.three per cent improve within the variety of lively clients to five.6 million, and an 18.four per cent improve in complete orders.

    Gross revenue was US$78.7 million, a rise of 15.2 per cent from the primary quarter of 2014. However expressed as a proportion of gross sales it decreased from 44.1 per cent to 31.four per cent, largely because of the firm’s shift in technique from pure play magnificence market to a broader merchandise supply.

    Founder and CEO Leo Chen stated the expansion price was stronger than anticipated for the primary quarter.

    “We efficiently accomplished our transition for magnificence merchandise from market gross sales to merchandise gross sales on the finish of 2014, and our new enterprise initiative – Jumei International, took off early this yr and skilled excessive progress when it comes to gross sales quantity. Jumei is at present one of many main gamers in cross-border eCommerce in China.

    “We expanded into cross-border child and maternity class in mid-April, 2015 and shortly achieved market main place on this new class in China. Our goal for 2015 is concentrated on prime line progress and enlargement into different cross-border classes as we glance to broaden our buyer base and considerably develop our order numbers. We’re assured that we will obtain our quarterly and yearly gross sales goal for 2015,” he concluded.

    For the second quarter of 2015, the corporate tasks complete internet revenues to be between US$270.1 million and US$277.eight million, representing a year-over-year progress fee of between 75 per cent and 80 per cent.

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  • Jumei online sales soar on new focus

    Jumei online sales soar on new focus

    Jumei International, the Chinese online retailer, says its 2014 net revenue increased by 31 per cent year-on-year to US$632.9 million.

    The increase reflects a change of focus away from its once core focus on own brand beauty products, to branded products and general merchandise categories and apparel.

    The total number of total orders increased 18.3 per cent year-on-year to 42.6 million, while the number of active customers increased by 26.7 per cent to 13.3 million.

    However in the last quarter of the year, Jumei online orders fell 5.9 per cent year-on-year to 9.6 million.

    For the full year, gross profit as a percentage of net revenues decreased to 39.5 per cent from 41.3 per cent in 2013. In the final quarter, it fell from 42.6 per cent to 30.4 per cent, primarily due to the company’s shift in strategy from beauty product marketplace sales to merchandise sales that started in September 2014.

    Gross profit increased by 25.3 per cent to US$250.2 million from US$199.7 million in 2013 and gross margin decreased slightly to 39.5 per cent from 41.3 per cent in the prior year.

    Jumei founder and CEO, Leo Chen, said the company had achieved “a solid recovery” of its business, recording its 11th consecutive quarter of profitability.

    “While fourth quarter 2014 was a full transitional quarter during which we no longer had beauty product marketplace business, we are very encouraged by the strong first quarter 2015 outlook.

    “The particularly strong sequential and year-on-year net revenue guidance indicates a strong recovery driven by Jumei Global which witnessed rapid growth from late December 2014. Not only were we able to fully replace former beauty product marketplace SKUs with Jumei Global, we were also able to achieve what we believe is best-in-class quality control and customer satisfaction.”

    By offering direct purchase from brand, competitive pricing and fast delivery speed, Jumei Global is now the largest cross border eCommerce platform in China, which is a crucial part of its growth strategy for 2015.

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