FinancialBuzz.com News Commentary
New York, NY (11/07/2022) – The e-commerce market continues to grow exponentially. According to data provided by Shopify, two years ago, only 17.8% of sales were made from online purchases. That number is expected to reach 21% in 2022, a 17.9% increase in e-commerce market share over two years. Growth is expected to continue, reaching 24.5% by 2025, which translates to a 6.7% increase in just five years. The number of active online stores around the world is rising in large part due to better internet infrastructure in emerging markets and thanks to an increasingly wide range of products that are now being sold exclusively online. And, according to research by eMarketer, online retail sales will reach USD 6.17 Trillion by 2023, with e-commerce websites taking up 22.3% of total retail sales. Jowell Global Ltd. (NASDAQ: JWEL), Etsy, Inc. (NASDAQ: ETSY), JD.com, Inc. (NASDAQ: JD), Shopify Inc. (NYSE: SHOP), Alibaba Group Holding Limited (NYSE: BABA)
By region, the Asian-Pacific region is expected to remain supreme as China’s online retail market industry is projected to continue its expansion. According to data provided by Forrester, China’s online retail market is expected to hit USD 1.8 Trillion in 2022, The Drum reported. “Alibaba, JD.com and Pinduoduo will command 83.6% of the retail ecommerce market in 2020, compared with 80.3% last year. This growth (including Alibaba’s first share increase in many years) can be traced to their diversified product offerings and resilient logistics, which enabled them to serve consumers during the pandemic better than their smaller competitors,” eMarketer indicates.
Jowell Global Ltd. (NASDAQ: JWEL) just announced breaking news regarding its, “unaudited financial results for the third quarter ended September 30, 2022.
The Company cautioned that these financial results have not been audited or reviewed by the Company’s independent registered public accounting firm and may have discrepancies in connection with further reviews by the independent registered public accounting firm of the Company.
Third Quarter 2022 Financial and Operational Highlights
● Total revenues were $51.4 million, an increase of 17.2% from $43.8 million in the same period of 2021.
● Net loss was $2.0 million, compared to a net loss of $2.1 million in the same period of 2021.
● Total GMV (Gross Merchandise Value) transacted in the Company’s online shopping mall was $66.8 million, an increase of 7.8% from $61.9 million in the same period of 2021.
● Total VIP members1 as of September 30, 2022 were 2.4 million, an increase of 14.4% compared with 2.1 million as of September 30, 2021.
● Total LHH stores2 as of September 30, 2022 were 26,300, an increase of 1.6% compared to 25,888 as of September 30, 2021.
Mr. Zhiwei Xu, Chief Executive Officer and Chairman of Jowell Global Ltd., commented: ‘Despite the adverse COVID impact in most of the cities in China, we continued to deliver another solid quarter with sustained topline growth. GMV in Q3 were $66.8 million, up 7.8% year over year, while total revenue grew by 17.2% year over year reaching $51.4 million. We are confident that our growth strategy plan not only has generated strong revenue growth but also will provide sustainable profits for us in the future due to the increased investments in customer engagement and conversion, enriched product offerings and partnerships, and the expectation of macro recovery.’
Mr. Xu continued: “Additionally, we remain committed to collaborate with top global talents and companies to diversify our product offering and introduce premium international brands to Chinese consumers. In September, we announced strategic partnership with Italian based So.Di.Co Group to promote the sales of its organic and natural personal care products in China. In October, we announced another cooperative partnership with a leading European pharmaceutical company STADA,in which Jowell will be the exclusive distributor to sell its Zoflora products on Jowell’s e-commerce platform and accelerate its outreach in the cleaning and consumer products market in China. Looking ahead, we will continue to execute our growth strategies with a focus on optimizing our platform through product offerings catered to consumer needs, as well as acceleration of our partnerships with leading domestic and international brands.”
Ms. Mei Cai, Chief Financial Officer of the Company, added: ‘In the third quarter, we achieved healthy topline growth through a series of strategic promotional activities. Total revenue grew by 17.2% year over year to $51.4 million, with sales of our cosmetic products and household products achieved 24.7% and 89.4% year-over-year growth, respectively. The number of LHH stores and total number of VIP members continued to see steady growth, up 1.6% and 14.4% year over year respectively. We maintain our commitment to address our customers’ diverse and growing needs by further expanding our product offerings with strategic brand awareness promotions.’
Impact of COVID-19 Pandemic – Due to the outbreak of Omicron variant in China, many cities in China have imposed new restrictions, quarantine and testing requirements and office closures during the first nine months of 2022, including Shanghai, where the Company’s headquarters are located. Employees of the VIE in Shanghai office worked from home from March 30, 2022 to June 1, 2022.
Although COVID-19 has been generally under control in most parts of China, there are still outbreaks and controlling measures imposed by local government in various cities. It is hard to predict the impact of the COVID-19 pandemic on the business operations and financial results for the remainder of 2022, which is highly dependent on numerous factors beyond the Company’s control, such as the duration and the spread of the pandemic, COVID-19 resurgence or new variant outbreak like Omicron, COVID-19 vaccine efficacy and distribution, and COVID-19 containment actions implemented by government authorities or other entities and the implementation of zero COVID policy in China, including restrictions and office closures in Shanghai and other cities in China, almost all of which are beyond the Company’s control.”…
1 “Total VIP members refers to the total number of members registered on Jowell’s platform as of September 30, 2022.
2 LHH stores: the brand name of “Love Home Store”. Authorized retailers may operate as independent stores or store-in-shop (an integrated store), selling products they purchased through Jowell’s online platform LHH Mall under their retailer accounts which provides them with major discounts.
Etsy, Inc. (NASDAQ: ETSY) announced back in June the launch of Etsy Purchase Protection. Starting August 1, buyers will receive a full refund for purchases on Etsy.com in the rare cases that they don’t match the item description, arrive damaged, or never arrive. Etsy is focused on generating more value and opportunities for sellers by creating a trusted shopping experience that brings more buyers to the marketplace, all while investing in crucial areas to scale seller support. The company plans to invest at least $25 million per year into the purchase protection program to cover refunds on behalf of sellers for qualifying orders up to $250, enabling them to keep their earnings from sales when things happen outside of their control. “Easy issue resolution is a critical part of the e-commerce shopping experience, and our new Etsy Purchase Protection program aims to help make shopping on Etsy even more worry free,” said Raina Moskowitz, Etsy’s Chief Operating Officer. “This program will help buyers feel more confident when they shop from small businesses on Etsy, while we invest directly in our sellers to provide them an important layer of assurance.”
JD.com, Inc. (NASDAQ: JD) announced earlier this summer that it renewed the strategic cooperation agreement with Tencent for a period of three years. Tencent will continue to offer the Company prominent Level I and Level II access points on its Weixin platform to provide traffic support, and the two parties also intend to continue to cooperate in a number of areas including communications, technology services, marketing and advertising, and membership services, among others. The value of such cooperation is expected to be paid or spent in cash and in the form of the Company’s shares combined over the next three years. As a part of the total consideration, the Company will issue to Tencent a certain number of its Class A ordinary shares for a consideration of up to US$220 million by reference to prevailing market prices at certain pre-determined dates during the three-year period. The two parties will leverage this mutually beneficial partnership to provide better and more convenient shopping experience for users.
Shopify Inc. (NYSE: SHOP) reported back in July the availability of the all-new Shopify POS and integrated hardware, Wisepad 3, to merchants in Singapore. With things nearly back to normal, Singaporeans are returning to physical stores, even as they continue to do some of their shopping on marketplaces, social media platforms and mobile apps. The only point-of-sale system that seamlessly connects to Shopify stores and helps merchants sell everywhere their customers are, Shopify POS will enable Singaporean merchants to better connect with their customers in Singapore and elsewhere.
Alibaba Group Holding Limited (NYSE: BABA) announced last month is helping to close the digital divide with artificial intelligence (AI) that aides the elderly and visually impaired gain access to daily services, from transport to online shopping. The Hangzhou-based company is making its platforms more inclusive with options featuring larger fonts, simplified navigation and voice assistance. Its research and innovation institute the DAMO Academy also launched tools powered by AI to close the gap for people in need. More than 85 million disabled and 260 million people over the age of 60 live in China, according to a report published this year by the science and tech research institute China Academy of Information and Communications Technology. By 2050, close to one third of China’s population will be seniors aged over 60, according to the research agency China Development Research Foundation.
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