Based on the increase in disposable income in developed countries and the convenience of online shopping, furniture products are expected to become the fastest growing category in the global B2C e-commerce market.
According to Zhito Finance App, Haitong Sec released research reports stating that China's cross-border e-commerce scale continues to expand and has entered a new stage of standardized development. According to data from Frost & Sullivan cited in the prospectus of Aoki Technology, furniture products, outfits, footwear, beauty and daily necessities, and technology consumer products are the main categories in the global B2C e-commerce market, accounting for 6.8%, 26.4%, 16.6%, and 16.8% respectively in 2023. Based on the increase in disposable income in developed countries and the convenience of online shopping, furniture products are expected to become the fastest growing category in the global B2C e-commerce market.
The main points of Haitong Securities are as follows:
The global e-commerce penetration rate is rising, and cross-border e-commerce is enjoying a development tailwind.
According to the China Business Industry Research Institute, the global cross-border e-commerce transaction volume in 2023 is approximately 2.8 trillion USD, an increase of 16.7% year-on-year, and is expected to reach 3.3 trillion USD in 2024. The global cross-border e-commerce penetration rate has steadily increased, from 5.2% in 2019 to 8.0% in 2023, and is expected to reach 8.6% in 2024. The continuous increase in e-commerce penetration rates in overseas countries and regions will create good opportunities and growth space for the development of China's cross-border e-commerce industry. According to data from the General Administration of Customs cited by the China Government Network and the People's Daily, China's cross-border e-commerce export volume in 2023 is 1.83 trillion yuan, a year-on-year increase of 19.6%; in the first quarter of 2024, the export volume is 448 billion yuan, a year-on-year increase of 14%. China's cross-border e-commerce scale continues to expand and has entered a new stage of standardized development.
China's cross-border e-commerce is moving towards high-quality development, with significant results achieved in going abroad.
The main participants in the cross-border e-commerce industry include suppliers, cross-border platforms and service providers, and end consumers. In terms of transaction models, cross-border e-commerce B2B constitutes the majority of China's cross-border e-commerce, with a 70.2% share in 2023. The B2C model is developing more rapidly, with the B2C transaction scale increasing from 14% in 2013 to over 25% in 2021. Meanwhile, Chinese cross-border e-commerce platforms are rapidly emerging, with platforms like Temu, SHEIN, AliExpress, and TikTok Shop continuously capturing market share and attracting overseas users.
With the rapid development of cross-border e-commerce, the demand and importance of cross-border logistics services have gradually increased. According to Zhaoshang Consulting, the cross-border e-commerce export logistics market size in 2023 is 0.6 trillion yuan, with a CAGR of 18.8% from 2023 to 2027. The main models of cross-border e-commerce logistics include direct mail and overseas warehouses, with overseas warehouses serving as the foundation for integrated services of warehousing, distribution, and returns in the 'last mile' of cross-border e-commerce, becoming the infrastructure supporting a new round of growth in cross-border e-commerce.
In the B2C e-commerce market, furniture and home products are performing well, and the scale of Chinese export sellers is vast.
According to the prospectus of Aoji Technology, citing data from Frost & Sullivan, furniture and home products, outfits and footwear, beauty and daily necessities, and technology consumer goods are the main categories in the global B2C e-commerce market, accounting for 6.8%, 26.4%, 16.6%, and 16.8% respectively in 2023. Based on the increase in disposable income in developed countries and the convenience of online shopping, furniture and home products are expected to be the fastest-growing category in the global B2C e-commerce market. Chinese sellers are the largest export group for furniture and home products globally. The market size of B2C overseas e-commerce for furniture and home products from Chinese sellers reached 773.8 billion yuan in 2023, with a CAGR of 37.4% from 2018 to 2023.
Light industry export enterprises are competing vigorously to transition from manufacturing and processing to brand internationalization, with the following symbols recommended:
Henglin Home Furnishings (603661.SH): The company has established production bases in China, Vietnam, Switzerland, and other locations, achieving revenue of 1.686 billion yuan from its cross-border e-commerce business in the first half of 2024, a year-on-year increase of 241%. The effects of its manufacturing expansion and brand internationalization operations are gradually becoming evident.
ue furniture (603600.SH): The company has mostly achieved production and shipment in Vietnam for its U.S. business, with the first batch of factories in the third phase of the Vietnam production base currently under construction. Additionally, the Romanian base began production and shipment in the first half of 2023, establishing long-term strategic partnerships with several well-known purchasers, retailers, and brands.
Zhiyou Technology (301376.SZ): The company's products have entered over 70 countries and regions including Europe and North America, with cumulative services exceeding 20 million global household users, establishing a warehousing layout of 'self-operated warehouses + platform warehouses + third-party cooperative warehouses' overseas, ensuring efficient last-mile delivery.
Gigacloud Technology (GCT.US): The company has created a 'global home distribution backbone network' based on an innovative model of supply chain pre-positioning, a technology leading transaction system, and self-operated global warehousing logistics, achieving total GMV of 542 million, 636 million, and 999 million USD respectively from 2021 to 2023.
Loctek Ergonomic Technology Corp. (300729.SZ): As of the end of the first half of 2024, the company’s overseas warehouses have cumulatively served over 778 exporting enterprises, processing more than 4 million packages in the first half of the year, a year-on-year increase of over 120%. With the increase in the number of clients served and the total volume of shipments for the year, the scale advantage continues to become more apparent. By increasing the proportion of self-built overseas warehouses, profit margins are expected to improve.
Risk warning: global trade risks, terminal demand may fall short of expectations, significant fluctuations in raw material prices, exchange rate risks, intensified industry competition, and significant fluctuations in marine transportation costs.
