Week#2: Alibaba's logistics arm puts HK IPO on hold | Lianlian wins China’s nod for HK IPO | J&T Express and Temu | TikTok Storefront | UGREEN IPO
Latest news and analysis on China's global e-sellers.
Last week, I visited Yiwu city, the world's capital of small commodities. I tasted desserts there from a Turkish cafe surrounded by restaurants from MENA region. It's an exceptional experience. While there are 1500 cities like Yiwu in China, it's only here that you can truly indulge in global cuisine. Yiwu's global presence is top-notch, even rivalling that of Shenzhen and Shanghai. The main reason why Yiwu has become where it is today is its small commodity markets, a symbol of Made-in-China being sold globally by international traders. However, when I strolled around the market, I didn't see many foreigners anymore. From Yiwu, we can tell clearly that small commodity sellers are shifting their business to e-commerce marketplace. Yiwu reveals a big picture in China today that traditional foreign trade sector is undergoing a transformation towards cross-border e-commerce.
Here’s our pick for last week’s news：
J&T, TEMU's logisitics partner, suspends cross-border small packet delivery
Huakai Yibai, a top seller from Shenzhen, acquires Haitu Tech to boost TikTok business
Alibaba's logistics arm Cainiao puts HK IPO on hold for better timing
TikTok tests Storefront feature in 8 countries
Lianlian, cross-border payment provider, wins China’s nod for HK IPO
Former eBay China executive’s branding agency SainStore prepares for IPO
UGREEN, Anker's rival, files the IPO registration
Michelin-Starred XIN RONG JI opens its first overseas store in Tokyo
Kua Food has raised $70 million
1. J&T, TEMU's logisitics partner, suspends cross-border small packet delivery
J&T stated that it’s normal adjustment with more focus on its core business like international freight forwarding, overseas warehousing and self-owned terminals.
With numerous partners including major cross-border eCommerce platforms such as Shein, TikTok, Shopee, and AliExpress, J&T is now negotiating a new collaboration with Temu, shifting its focus from an “end-to-end” full-chain solution to last-mile delivery services. The details are still being discussed. Earlier in October 2023, J&T concluded its small package collaboration with Temu. In a parallel move, J&T established a cross-border company in Singapore to explore other forms of cooperation with Temu.
Note: J&T’s growth owes much to its partnerships with Chinese e-commerce platforms, which started with Shopee's business in Southeast Asia and followed by TikTok Shop, Shein and Temu. Given its underwhelming stock market, it's a good choice to focus on core business like overseas warehousing and last-mile delivery services. Also it confirmed the rumor that J&T’s cooperation with Temu is not going well.
2. Huakai Yibai, a top seller from Shenzhen, acquires Haitu Tech to boost TikTok business
On February 27th, Huakai Yibai, a listed seller from Shenzhen, announced its acquisition of Haitu Tech. Haitu Tech is a business intelligence firm providing solutions for TikTok, Amazon and AliExpress. Yibai Network will integrate Haitu Tech's TikTok team and both parties will jointly implement the TikTok projects in the future. Haitu Tech team has already moved to the Yibai Building since February 23rd.
3. Alibaba's logistics arm Cainiao puts HK IPO on hold for better timing
On February 27th, Tsai Chongxin, Alibaba's board chairman, said that Alibaba has now made a comeback and has returned to the top e-commerce track in China after a period of pressure. He also responded to the IPO of Cainiao Logistics, Alibaba's logistics arm. He said the Cainaio is still waiting for a better time. Last year, Cainiao applied for listing on the Hong Kong Stock Exchange.
In terms of success of other rivals such as Temu, Shein, and TikTok in the US, Tsai Chongxin said these firms are doing very actively in providing consumers with high-quality products at reasonable prices, and Alibaba is watching closely and will figure out how to deal with it.
4. TikTok tests Storefront feature in 8 countries
TikTok Storefront allows merchants on third-party platforms to display their products on TikTok via API integration and direct potential buyers to their websites for sales. The countries in the initial testing phase include Germany, France, Spain, Italy, Canada, Australia, Japan, and South Korea. It is expected that more countries in South America, Central Asia, Southeast Asia, and New Zealand, could be expanded in the future.
5. Lianlian, cross-border payment provider, wins China’s nod for HK IPO
LianLian DigiTech which owns Lianlian pay has won approval from the Chinese securities regulator for the Hong Kong IPO, moving it one step closer to listing.
Founded in 2009, LianLian DigiTech is one of the first digital technology companies in China to provide one-stop payment solutions globally.
As of December 31, 2022, LianLian DigiTech had served accumulatively over 1.8 million merchants and enterprises globally from various industries, including e-commerce, service industries and manufacturing. Their total transaction payment volume (TPV) of digital payment services was RMB 1,153.0 billion in 2022. As of September 30, 2023, the number of merchants and enterprises they served had increased to about 3.2 million, with a total TPV of RMB 1,312.0 billion for the nine months ended September 30, 2023.
6. Former eBay China executive’s branding agency SainStore prepares for IPO
SainStore is a China-based leading branding agency to help clients expand their brands into overseas markets.
With its extensive service coverage in consumer electronics, home appliances, fashion, and innovative hardware, SainStore has established robust partnerships with global giants like Shopify, Google, and DHL.
SainStore was founded in 2011 by Damon Cheng (Chinese name: 程天乐), a former Key Account Manager Greater China of eBay.
7. UGREEN, Anker's rival, files the IPO registration
UGREEN officially filed the IPO registration, making it one step closer to be listed on the Shenzhen Stock Exchange. UGREEN plans to secure a financing of 1.5 billion yuan (about $208 million), of which 550 million (about $76 million) will be used for product research and industrialization, 110 million (about $15 million) for intelligent warehousing and logistics, 392 million (about $54 million) for headquarters operations and branding, and 450 million (about $63 million) for supplementing working capital.
Founded in 2012, UGREEN is a leading cross-border seller based in Shenzen. Its products include five main series: transmission, audio-video, charging, mobile peripherals, and storage.
8. Michelin-Starred XIN RONG JI opens its first overseas store in Tokyo
XIN RONG JI unveiled its first store outside of China in Tokyo, Japan on February 28. Founded in 1995, XIN RONG JI has opened 18 stores nationwide, 9 of which boast Michelin stars in 2023 alone with one of its branches in Beijing received three Michelin stars in 2019, making it the first brand of Chinese cuisine in mainland China to be given such rating by the prestigious guide.
Frost & Sullivan expects growing expansion of Chinese restaurants in global markets with an estimated market size of $409.8 billion, representing a CAGR of 9.4% from 2021 to 2026.
9. Kua Food has raised $70 million
Kua Food, operator of a Chinese restaurant chain focusing on fried skewers, announced the completion of its Series B financing. So far, Kua Food has nearly 500 million yuan in financing, making it the highest-funded brand in the snack chain industry in recent years. Established at the end of 2018, Kua Food currently has over 2,000 stores nationwide and nearly 25 overseas stores in the United States, Canada, Australia, Singapore, Malaysia, and Italy.