FAST NEWS: E-commerce Trader Zubuyu Takes Hit From Weak U.S. Economy

The latest: Cross-border e-commerce trader Zibuyu Group Ltd. (2420.HK) announced on Tuesday its net profit last year decreased by 40% to 50% from 200.5 million yuan ($28.9 million) in 2021.

Looking up: The company went public last October, and its profit decline would have been more modest excluding one-off listing expenses.

Take Note: The company’s profit was hit by the slowdown in economic activity and high inflation in the U.S., which resulted in more conservative consumer spending. Higher marketing and advertising expenses were other factors behind the big earnings drop.

Digging Deeper: Founded in 2011, Zibuyu started by selling women’s clothing from its flagship store on Alibaba’s (BABA.US; 9988.HK) popular Tmall online mall. It shifted its focus in 2014 to cross-border e-commerce, targeting buyers in Europe and America mostly using third-party e-commerce platforms such as Amazon (AMZN.US), Wish and eBay (EBAY.US). Since then it has grown into one of the largest cross-border e-commerce companies in China. It applied to list in Hong Kong as early as June 2021, and finally passed its hearing last year before successfully debuting its shares in October.

Market Reaction: Zibuyu’s shares were unchanged on Wednesday morning, closing at HK$4.71 by the midday break. The stock has lost 40.1% of its value from its IPO price of HK$7.86 five months ago.

Translation by Jony Ho

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