Week#4: Temu introduces a half-managed consignment model | Alibaba plans to invest $1.1B in South Korea | Carote IPO
Latest news and analysis on China's global e-sellers.
Last week, there was a great deal of buzz and speculation about the uncertain future of TikTok in the US. Besides this, there was also some less explosive news, for instance, Temu has quietly changed its full-managed consignment model to a half-managed one. Additionally, pretty much every week, we can hear about another Chinese e-commerce seller going pubic, and this week around, it was Carote's moment in the spotlight.
Here’s our pick for last week’s news:
Temu sales grow 840% in US
Temu introduces a new half-managed consignment model to TEMU US
President of Alibaba.com: B2B will continue driving China's exportation
Global e-commerce seller Sailvan Times earns $911.86M revenue in 2023
Almost 40% of MINISO's stores land overseas markets
Carote, a fastest-growing Kitchenware brand, is going public in HK
Alibaba plans to invest $1.1B in South Korea over the next three years
Aikai, a mobile fridge vendor, secures more than $14 million in Series B funding
Anker's TikTok followers hit 430K in US
1. Temu sales grow 840% in US
Earnest Analytics has released a case study report on Temu recently, and here are some of the key takeaways:
Around 18% of US households have shopped at Temu since its launch according to Earnest credit card data.
Temu sales grew 840% between January 2023 and 2024, topping 1100% during the holiday 2023 season.
Over 44% of Temu's sales came from earners making over $130k per year.
Over 28% of Temu customers made a transaction on the platform 16 months after first purchase.
Temu’s retention was nearly double Walmart and Target in the same period, but around half of Amazon’s.
Temu's multiple February 11, 2024 Super Bowl ads did not meaningfully boost sales to new customers nor existing customers, where Temu gets the majority of its sales growth.
2. Temu introduces a new half-managed consignment model to TEMU US
Temu has adjusted its operation style and launched a new half-managed consignment model in the US on 15 March, and such model will be expanded to Europe by the end of March. Previously, Temu attempted to implement a full-managed consignment style, but it proved to be ineffective.
Compared to Temu’s full-managed consignment model (where manufacturers agree on a price to supply goods to Temu, and the platform does all the rest from marketing, operations, fulfilment to customer service), this new model will increase customer satisfaction through faster delivery and alleviate merchants' pressure in marketing and customer service.
This half consignment model allows those merchants with goods outside China to process orders and arrange for fulfilment by themselves. To be more specific:
– Merchants will be in charge of: warehouse management, delivery, and reverse logistics (returns etc.)
– The platform will provide: flexible delivery options, including order stacking.
3. President of Alibaba.com: B2B will continue driving China's exportation
When the Alibaba group was launched 19 years ago, it was simply Alibaba.com, a B2B site connecting Chinese suppliers with businesses in the West. Recently, the emergence of Temu and SHEIN has changed the landscape of this industry.
Zhang Kuo, the president of Alibaba.com, underscored the essential role of B2B in driving China's exportation. At present, Alibaba International's annual online transaction volume is close to 50 billion US dollars, and the B2B export backed by this giant reached 350 billion US dollars last year.
According to Zhang Kuo, apart from current operations, Alibaba.com's half-managed consignment can tap into and bolster a spot wholesale market worth trillions of dollars.
Zhang Kuo further shared that Alibaba.com focuses on two key aspects: The first is to provide all overseas buyers with increasingly rich, cost-effective, reliable goods and services. Secondly, using technology to consistently lower the entry barrier for domestic sellers and enhance their operational efficiency.
4. Global e-commerce seller Sailvan Times earns $911.86M revenue in 2023
Amazon's top seller, Sailvan Times, has just released their fiscal report for 2023. The company’s revenue soared by 33.70% to ¥6,563.66 million ($911.86 million), accompanied by a staggering 84.47% surge in total profit, amounting to ¥338.55 million ($53.98 million).
The company attributes its excellent performance to two primary factors. Firstly, the company's apparel brand matrix is continuously improving. Notably, the company’s revenue from apparel and accessories surged by 41.49% to ¥4,671 million ($648.92 million).
Secondly, the challenges faced by the company's non-apparel and accessory categories are gradually reduced, such as the completion of inventory clearance and a decrease in first-mile shipping costs. The revenue from non-apparel/accessories increased by 19.48% year-on-year, totaling ¥17.36 billion ($2.41 million).
5. Almost 40% of MINISO's stores land overseas markets
MINISO is a Chinese low-cost retailer and variety store chain that specializes in household and consumer goods including cosmetics, stationery, toys, and kitchenware. Founded in 2013, MINISO has expanded outside of the Chinese market and by the end of 2023, it operates 6,413 stores in Asia, Europe, Oceania, Africa, North America, and South America.
On March 12th, MINISO released its financial reports for 2023. The report indicates that MINISO reached a record high of ¥3.84 billion ($533.6 million) in quarterly revenue, a year-on-year increase of 54%. Their annual revenue for 2023 exceeded ¥13.8 billion ($1.92 billion), a remarkable 40% year-on-year increase.
6. Carote, a fastest-growing Kitchenware brand, is going public in HK
The company is an emerging kitchenware brand. Initially, it provided OEM for overseas markets. In 2013, it transformed into an ODM business. In 2016, it ventured into online retail by launching its own brand Carote. The main revenue comes from the sale of its own Carote products.
Carote’s revenue surged from ¥675.3 million ($93.84 million) in 2021 to ¥1,583.1 million ($219.99 million) in 2023, representing a CAGR of 53.1%, with their net profit increased at a CAGR of 173.1% from ¥31.7 million ($4.41 million) in 2021 to ¥236.5 million ($32.86 million) in 2023.
Carote is also an Amazon top seller. With a footprint spanning China, the US, Europe, Southeast Asia, and Japan, Carote has emerged as one of the fastest-growing kitchenware brands worldwide.
7. Alibaba plans to invest $1.1B in South Korea over the next three years
A leaked document shows that Alibaba intends to invest $200 million in the construction of logistics centers this year in South Korea, alongside a $100 million initiative to support SMEs of South Korea in navigating global markets. Additionally, another $75 million will be directed towards consumer rights protection.
Alibaba-related personnel responded, saying: "We cannot disclose specific plans for the time being, but we will continue to expand our investment in South Korea. In the long run, we will cooperate with local sellers, protect consumers, and help SMEs enter the global market."
8. Aikai, a mobile fridge vendor, secures more than $14 million in Series B funding
Established in 2013 in Foshan, Aikai is a producer of portable refrigerators. It has its own brand Alpicool, and has independently developed over 200 models of in-car refrigerators. Alpicool refrigerators are sold in over 100 countries and regions, and it is a top seller on Amazon as well.
Aikai recently secured over ¥100 million ($14 million) in B-round financing. This is after completing an A-round financing of over ¥100 million ($14 million) in 2022. The latest funds will be allocated to expand production capacity for mobile refrigerators and promote their own brands overseas.
9. Anker's TikTok followers hit 430K in US
Anker is the global leader in charging technology, a top seller on Amazon. Anker's also riding the TikTok Shop wave. Anker currently boasts 431.6K followers on TikTok in the United States and operates a TikTok shop with a total of 90 SKUs, selling over 170,000 units in total.
The main products include power banks and chargers priced from $6.9 to $129, with the top-selling item being the iPhone magnetic charging bank, which has been sold over 120,000 units.