Is the furniture export market still profitable?
In the dynamic world of cross-border e-commerce, two Chinese companies, Aukey and Ziel, have made significant strides in recent years.
Aukey, known primarily as a consumer electronics and accessories brand, has expanded its business since 2021, operating 27 overseas warehouses with a total area of over 465,000 square meters. The company has also ventured into the logistics business, becoming 'landlords' of overseas warehouses by buying land overseas to build warehouses and selling land in the form of 'small warehouses for large warehouses.' As of the end of 2023, Aukey operates 12 self-owned overseas warehouses with an area of 289,600 square meters, serving more than 600 foreign trade companies.
Aukey's overseas warehousing business generated annual revenue of RMB 951 million (USD 131.6 million) in 2023, marking a year-on-year increase of 94.03%. The company has managed to reduce logistics costs significantly, with figures dropping from RMB 2.58 billion (USD 357 million) in 2021 to RMB 1.86 billion (USD 257.4 million) in 2023, thanks to the development of its own logistics system.
On the other hand, Ziel Home Furnishing Technology, a cross-border e-commerce company, went public less than a year ago. The company, often referred to as the 'online Ikea,' relies heavily on China's supply chain advantages and collaborates with numerous original equipment manufacturers (OEMs) to mass-produce at low cost. Ziel primarily targets overseas markets, with 62% of its revenue coming from Europe in 2023, marking a 21.6% increase from the preceding year.
However, logistical issues, including sea freight prices, shipping cycles, and warehousing costs, are significant challenges for medium and large cross-border e-commerce companies like Ziel. The Red Sea crisis and the Panama Canal drought have caused fluctuations in sea freight prices, which are a primary mode of transportation for large furniture exports.
Despite these challenges, Ziel achieved RMB 6.074 billion (USD 840.6 million) in revenue in 2023, marking an 11.34% increase year-on-year. North America accounted for 36% of Ziel's revenue in 2023, a 3.2% decrease year-on-year. The net profit attributable to Ziel's shareholders was RMB 413 million (USD 57.1 million), a 65.08% surge from the previous year.
Frost & Sullivan data indicates that Aukey ranks first among Chinese cross-border furniture sellers based on GMV calculations on Amazon's US site. Aukey can design and put new products into trial production within 40 days and deliver them to consumers within 50 days after trial production, exceeding industry norms. The company's return rate on all third-party e-commerce platforms averaged less than 3.5% in 2023, within the industry's lowest range.
While companies competing with Ziel Home Furnishing Technology in the USA are not explicitly listed in the search results, Aukey is not a direct competitor in home furnishing technology. There is no available data on Aukey’s market share among competitors in this sector from the provided information.
The recently listed Aukey is among the direct competitors of Ziel, having recovered financially through the furniture business. As both companies continue to navigate logistical challenges and adapt to market changes, they are poised to make significant contributions to the cross-border e-commerce industry.
