By 2024, cross-border consumer demand is thriving.

China's cross-border e-commerce industry is undergoing rapid digital transformation, including optimizing operations using big data and AI, while also facing challenges such as increasing demand for personalized products, supply chain management changes brought about by globalization, market diversification, and legal compliance.

Although the market potential is huge, there are significant performance differences between companies, and the key to success lies in deeply understanding and meeting the real needs of overseas customers. Zibuyu Group Co., Ltd. (referred to as Zibuyu (02420) hereinafter), as one of the largest cross-border e-commerce B2C companies in China, mainly sells clothing and footwear products through third-party e-commerce platforms and self-operated websites. As a leading enterprise in the industry, it is leading the development of the industry with its innovative business model and forward-looking strategic layout.

Mr. Chen Caixiong, Executive Director and CEO of Zibuyu Group, joined the Zibuyu family in March 2023 with rich experience in supply chain management and corporate management. In an interview with Intelligent Finance, he shared the company's development process and future plans in the cross-border e-commerce industry. He pointed out, "We have been cultivating our brand, product, and organizational strengths, and are committed to achieving great success in the cross-border e-commerce arena."

A leader's perspective: organizational structure reform and efficiency upgrade

Organizational strength is the cornerstone of business success. The company's implementation of the 6S standard, including organizational structure and personnel structure adjustment, process optimization, talent strategy for elite personnel, etc., greatly improves management efficiency and team collaboration.

He explained, 'We started adjusting the organizational structure in November last year, which is a reform of the superstructure.' The adjusted organizational structure is more refined, the processes are simplified, and the talent is more elite, thereby improving the overall operational efficiency of the organization. Of particular note, the core business departments of Zibuyu have established three major middle platforms, which means that the company integrates personnel, commodities, and financial information to form a unified and efficient operation system.

In addition, the company focuses on three core goals: sales, profits, and inventory, to ensure that all business activities revolve around these goals. This focus allows the company to concentrate resources and improve the precision and efficiency of business execution.

Product development: Data-driven innovation and supply chain transformation

Product development is the core of Zibuyu's technology innovation strategy. Through big data analysis, the company accurately captures market demand, promotes product innovation, and enables rapid iteration.

CEO Chen mentioned, 'First, we need to collect data, and then use digital construction such as intelligent product selection system to process and digest external demand.' Now, Zibuyu has significantly improved its decision-making capabilities through digital operation analysis and management decision-making system. Chen explained, 'Our design team continuously conducts market research and combines various information sources such as social media channels and fashion shows to ensure the fashionability and market adaptability of product design.'

In terms of product innovation, Zibuyu focuses on mining customer demand from data, and combines the creativity of designers with market trends to create products that meet market needs. CEO Chen mentioned, 'The intelligent product selection system can analyze the details of each style and select elements that fit the current trends, assisting designers in creating new styles.'

In addition, the company attaches great importance to product quality and customer feedback, and incorporates customer evaluations and suggestions into the process of product improvement and innovation. Chen said, 'There is detailed data analysis for after-sales evaluation. We gather feedback and analysis from all platforms for each style.'

In the construction of product capability, Zibuyu has also optimized logistics and warehousing management. Mr. Chen said: "Previously, there were about five or six warehouses in the mainland, and now it has been optimized to two." By reducing the number of warehouses, the company has improved logistics efficiency and significantly reduced costs.

How can we smoothly reduce reliance on domestic warehouses and reduce inventory risks without affecting the responsiveness of the supply chain? The secret lies in the direct delivery model promoted by Zibuyu. Mr. Chen explained: "We are promoting direct delivery by core suppliers in China. Why is it that direct delivery is generally slow in the domestic industry? This is actually related to the overall supply chain of enterprise suppliers." Only through deep cooperation with core suppliers can we achieve rapid conversion from production to delivery, reduce intermediate links, and improve overall efficiency.

Deep cooperation with core suppliers to achieve 30-50% direct delivery of stable categories (such as sweaters) is relatively challenging in practical operations, relying on excellent quality control system construction. Only when quality control is done well can we rest assured that the supplier's goods will be delivered directly to consumers. Therefore, it is not an exaggeration to say that "a stable quality control system is an important guarantee for the product capabilities of Zibuyu." The company has established a comprehensive quality control system, and adopts strategies of full inspection, different levels of sampling or exemption from inspection according to different suppliers, product difficulties, category characteristics, and human resource factors. Such a system ensures the stability of product quality and also improves supply chain efficiency.

In short, in the construction of product capabilities, Zibuyu not only focuses on innovation and market adaptability, but also ensures high product quality and fast market responsiveness through optimization of product structure, supply chain management, and quality control processes.

Upgrade of brand power: Focus on core and enter the high-end market.

The construction of brand power is an important part of Zibuyu's strategy. By focusing on brand building and concentrating resources on creating explosive products, the company has improved the market bargaining power and profitability of the brand. Mr. Chen mentioned, "In fact, organizational power and product capabilities ultimately need to build brand power." A brand is not only a commitment to consumers, but also a reflection of the company's external image.

Zibuyu has adopted a focus strategy in brand building, selecting and concentrating on building multiple core brands from the brand, and has established a brand department for unified planning and management. Mr. Chen said: "We have established a brand department, and we have sorted out all the core brands, from brand tonality to sign identification, and all series have been reviewed."

In the construction of the second growth curve, Mr. Chen emphasized the independent development of high-end brands: "The most important thing in the second growth curve is to build high-end brands." The company is actively expanding into the high-end market through independent platforms, opening up new growth points. This strategy not only broadens the company's market domain, but also enhances the international competitiveness of the brand.

While consolidating the advantages of the core channels, Zibuyu has also emphasized the development of new sales channels such as Temu and Tiktok, and has achieved outstanding phased results.

Summary

In the final interview, General Manager Chen said, "We will continue to deepen digital transformation, strengthen supply chain management, and meet the needs of global consumers through continuous product innovation to promote the long-term development of the company."

Through this interview, Zibuyu Technology's innovative practices and strategic layout in the cross-border e-commerce industry have been revealed. With an open mindset, innovative spirit, and firm determination, the company continues to explore and move forward, showcasing its heroism in global competition. These new initiatives have received significant response in the mid-term performance report for 2024.

According to the latest announcement from Zibuyu (02420), the mid-term performance for 2024 is as follows: the revenue for the first half of 2024 is approximately 1.462 billion yuan, a year-on-year increase of approximately 6.3%; the net income is approximately 91.365 million yuan, a surge of 789% year-on-year; the net cash generated from operating activities is approximately 0.13 billion yuan, a year-on-year increase of 126.95%.