Cross-border e-commerce has maintained steady growth year-round, despite the slightly weak global economy. The Chinese government is encouraging the development of cross-border e-commerce with tax exemptions, which will drive domestic export business. GigaCloud has established itself as a prominent player in the large merchandise foreign trade industry with its self-built stations and AI algorithms for warehousing and logistics. Its unique strengths in the ecology have brought cost advantages to sellers. GigaCloud’s self-built station, GigaCloud Marketplace, has grown at a high rate of more than 50% in the past three years, and 3P Seller has become a profit growth point for the Company. GigaCloud has a cost-efficient share price and a unique advantage over competitors with its extensive self-built warehouse layout and cutting-edge digital technology. Meanwhile, global consumption is weak, while the China market has more development opportunities due to the high-quality transformation and upgrading of the domestic manufacturing industry. With the rapid recovery of cross-border e-commerce, GigaCloud will usher in a bright future.
GigaCloud Technology Inc (GCT), a leading B2B e-commerce solution provider, is poised to benefit greatly as China reopens its economy in 2023. The past three years have seen a significant shift in overseas shopping habits due to weak overseas consumption and the impact of the COVID-19 pandemic. Consumers are now shifting towards interest e-commerce and AI e-commerce, with cross-border e-commerce losing its appeal. However, with China’s reopening in 2023, thousands of buyers and sellers are expected to flock to the new cross-border e-commerce market, which is led by TikTok, Pinduoduo, and GigaCloud.
GigaCloud, which went public in 2022, has once again impressed investors with its remarkable financial performance, demonstrating its superior strength and unlimited potential. On March 17, the company released its financial results for Q4-22 and FY22, showing impressive growth in total revenue, net income, operating profit, and net cash flow from operating. Specifically, 3P seller GMV grew 64% YoY to US$258 million in FY22, and GigaCloud Marketplace GMV grew 25% YoY to US$518 million, with a steady growth trend in trading users.
GigaCloud’s success is due to its technology and scale effect, particularly in the large merchandise foreign trade industry. The company’s 3P seller GigaCloud Marketplace GMV was US$257.7 million in FY22, representing 50% of total GigaCloud Marketplace GMV in Q4-22, indicating a rapid growth trend.
With China reopening its economy in 2023, GigaCloud is expected to release its full potential and create a prosperous cross-border trade environment. The company’s strong financial performance, impressive growth, and proven track record make it an attractive option for investors looking to capitalize on China’s reopening. As a leader in B2B e-commerce solutions, GigaCloud is poised to take advantage of the changing consumer habits and the resurgence of cross-border trade in China.
GigaCloud Technology Inc is a leading B2B e-commerce solution provider that specializes in providing optimal cross-border solutions to customers worldwide. Using artificial intelligence technology, GigaCloud digitizes sellers’ credit profiles, which combined with the capacity of local warehouses, allows for the delivery of more goods than competitors. As a result, GigaCloud has become the world’s most advanced B2B e-commerce solution provider.
In August 2022, GigaCloud went public on NASDAQ, and its unique self-built stations, GigaCloud Marketplace, had 410 active 3p sellers and 3,782 active buyers as of March 2022. In the 12 months ended March 31, 2022, GigaCloud Marketplace GMV was US$438 million, showing that users are more willing to pay. GigaCloud’s logistics system is well-developed, with 21 large-scale warehouses operating in North America, Europe, and four Asian countries. The warehouses have optimized buyers’ shopping experience, reduced merchants’ logistics costs, and delivery time.
Overseas warehouses have emerged as a solution to the disadvantages of traditional cross-border logistics, which include slow delivery, slow customs clearance, lost packages, and difficulty in returning packages. With the establishment of local warehouses, goods can be dispatched directly after buyers place orders, reducing logistics costs, and avoiding long waiting times for buyers. GigaCloud’s total storage space of over 4 million square feet covers 11 destination ports, with more than 10,000 containers per year, giving it strong logistics and transportation advantages.
GigaCloud’s logistics and warehouse systems provide a favorable strength for cross-border e-merchants. With its advanced technology and logistics systems, GigaCloud is positioned to take advantage of the growth in cross-border e-commerce and become a dominant player in the global B2B e-commerce market.
GigaCloud Technology Inc has an advanced AI system that can generate seller ratings and credit profiles based on transaction volume, allowing for the reasonable allocation of warehouse delivery times and significantly improving warehouse utilization. The company also has an extensive shipping and trucking network, providing customers with fixed rates below market standards, despite high shipping rates running at high costs.
GigaCloud’s largest market is currently in the U.S., and the company has in-depth cooperation with Rakuten in Japan, Walmart and Amazon in the U.S., and Wayfair in the U.K. Its self-built station, GigaCloud Marketplace, has also been successful, with over 3,700 active buyers and GMV exceeding US$440 million as of March 2022. The average annual expenditure per buyer on GigaCloud was US$116,000, showing outstanding microtargeting.
GigaCloud currently has three main businesses, GigaCloud 1P, Off-platform e-commerce, and GigaCloud 3P, which account for 45.45%, 30.81%, and 23.74% of the company’s revenues, respectively. Its total revenues in the past three years were US$122 million, US$276 million, and US$414 million, representing a significant year-over-year growth in 2020 and 2021. Gross profits also showed significant growth, representing 18.1%, 27.3%, and 21.6% of total revenues, respectively.
As of March 17, 2023, GigaCloud’s share price was US$5.27 per share, and its P/B was 1.098X, making it cost-efficient compared to Amazon and eBay. From the perspective of the P/E, GigaCloud’s P/ETTM and P/ELYR are at the industry average level.
With weak overseas consumption and high shipping costs still running at high levels, most sellers have adopted a conservative stocking strategy in 2022. However, with China reopening in 2023, there are more development opportunities in the China market. GigaCloud is well-positioned to take advantage of the growth in cross-border e-commerce and become a dominant player in the global B2B e-commerce market.
The Challenges Faced by Cross-Border Logistics Enterprises
The cross-border logistics industry is currently facing several setbacks, including high inflation in Europe and the US, changing overseas tariff policies, and frequent overseas inspections and supervisions, all of which have resulted in damaged goods, logistics routes, and prices. The Shanghai Containerized Freight Index (SCFI) was over 5,000 points in January 2022, but it has now dropped to 1,031.42 points as of January 13, 2023. This significant decline in shipping prices is partly due to the rise in logistics and various labor costs.
Last year, several cross-border platforms raised the fees for related services, and logistics companies also increased their fees. Tiktok shop launched a cross-border store margin policy, Amazon raised FBA fees for multiple stations, and Pinduoduo’s TEMU reduced the proportion of shipping costs borne by the platform itself. Due to the dual pressure of platform and logistics, the number of containers in the US in December 2022 was 19.3% lower than in December 2021, with a significant surplus of shipping space. Although the liner transport companies took the initiative to reduce the actual capacity allocation, transport prices continued to fall as supply outpaced demand.
China’s Growing Importance in the Cross-Border E-Commerce Market
China is the world’s largest country in goods trade and is expected to bring extraordinary vitality to the global market as it reopens in 2023. The market size of China’s export cross-border e-commerce has remained stable at more than 75% from 2017 to 2022, while the market size of China’s imported cross-border e-commerce was RMB 3.2 trillion in 2021, accounting for 22.54% of the total cross-border e-commerce market size, according to Intelligence Research Group.
As global e-commerce continues to penetrate the market, China’s market will release significant potential. With the high-quality transformation and upgrading of the domestic manufacturing industry, the production quality and efficiency of domestic processing and manufacturing are significantly improved. As “Made in China” moves to the international stage, it will also drive the rapid growth of China’s cross-border e-commerce demand.
GigaCloud’s Bright Future
Despite the challenges faced by the cross-border logistics industry, GigaCloud is well-positioned for success in the future. GigaCloud has the best AI system currently available, which generates seller ratings and credit profiles through transaction volume and reasonably allocates warehouse delivery times based on credit ratings, significantly improving warehouse utilization. GigaCloud also has an extensive shipping and trucking network, providing customers with fixed rates below market standards (FedEx, UPS) despite high shipping rates running at high costs.
GigaCloud’s largest market is currently in the US, with in-depth cooperation with Rakuten in Japan, Walmart and Amazon in the US, and Wayfair in the UK. GigaCloud Marketplace, the company’s self-built station, has done quite well. In 2020, GigaCloud Marketplace had 210 active third-party sellers and 1,689 active buyers. Moreover, GigaCloud Marketplace GMV reached over US$190 million. As of March 2022, there were over 3,700 active buyers on the GigaCloud Marketplace, with GigaCloud Marketplace GMV exceeding US$440 million. The average annual expenditure per buyer on GigaCloud was US$116,000, showing outstanding microtargeting.
GigaCloud currently has three main businesses, GigaCloud 1P, Off-platform e-commerce, and GigaCloud 3P, which account for 45.45%, 30.81%, and 23.74% of the company’s revenues, respectively. According
Cross-border e-commerce poised for growth as China reopens
Cross-border e-commerce continues to be an important aspect of global economic trade. Despite a slightly weak global economy, the domestic market scale of cross-border e-commerce has been steadily growing. The Chinese government is also encouraging the development of cross-border e-commerce by introducing tax exemptions to increase business volume and drive domestic export business.
GigaCloud’s competitive edge in the cross-border e-commerce market
GigaCloud, a leading B2B e-commerce solution provider, has a specific brand effect in the large merchandise foreign trade industry. The company’s self-built stations and AI algorithms for warehousing and logistics bring cost advantages to sellers, establishing a unique strength in the ecology. In the past three years, GigaCloud Marketplace, the company’s self-built station, has grown its total revenue by more than 50%, demonstrating the company’s competitiveness. 3P sellers on the GigaCloud Marketplace have also become a profit growth point for the company, with GigaCloud Marketplace GMV representing 50% of total GigaCloud Marketplace GMV in Q4-22 for the first time.
GigaCloud’s cost-efficient value and future growth prospects
GigaCloud’s current share price is cost-efficient, with a P/B ratio of 1.098X, making it appear more valuable than its competitors like Amazon and eBay. With an extensive self-built warehouse layout and cutting-edge digital technology, GigaCloud is well-positioned to stand out from its competitors and bring long-term and stable investment returns to investors. As cross-border trade is expected to return to pre-epidemic levels in 2023, GigaCloud is poised for growth in the global market.
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