Key Takeaways:
Jihong Technology’s revenue fell 21.7% in the first half of this year to 2.45 billion yuan, while its profit plunged 62% to 66 million yuan
The company, which has filed for a Hong Kong IPO, gets about 85% of its cross-border social e-commerce revenue from Asia
By Ken Lo
Who needs people to discover your e-commerce goods when those goods can discover people?
That’s the business model being peddled by cross-border e-commerce company Xiamen Jihong Technology Co. Ltd. (002803.SZ), which hopes to soon peddle its stock to international investors with a Hong Kong IPO. The company filed a second listing application to the Hong Kong Stock Exchange late last month, after its original application in February lapsed.
The listing’s joint sponsors are Chinese majors CICC and CMB International, showing it plans to mostly target Chinese and Asia-based investors.
Starting out as a paper packaging business, Jihong initially focused on addressing the needs of end-consumers and piquing their interest using its creative packaging designs. That gave it the skills to attract consumers in its early years, leading it to seize on new business opportunities presented by the rise of the mobile internet and cross-border social e-commerce in 2017.
Unlike more mainstream e-commerce companies like Alibaba’s Taobao, whose business model centers on “people discovering goods,” Jihong flips the equation on its head to a model of “goods discovering people.” Using its experience in identifying what will attract consumers, the company specializes in guiding such buyers to goods they will want and purchase.
But since its business model requires steady investment in advertising, the company’s sales, marketing and distribution expenses have long taken up a considerable part of its spending. Jihong now mainly places its ads on major global online platforms such as TikTok, Facebook, Google, Line, Snapchat, X and Instagram.
According to its latest listing application, cross-border social e-commerce revenue has provided more than half of ...
