On November 1, Baozun inc. announced that the Company’s voluntary conversion of its secondary listing status on The Stock Exchange of Hong Kong Limited (SEHK) to a primary listing on the Main Board was effective immediately. In other words, Baozun is now a dual primary listing on the SEHK and NASDAQ.
Shanghai Baozun E-commerce Inc.’s (Baozun) American Depositary Shares (ADSs) listed on NASDAQ and ordinary shares listed on the SEHK are interchangeable and investors may continue to hold their shares in either the ADSs traded on NASDAQ or the ordinary shares traded on the SEHK.
Baozun, founded in 2007 and headquartered in Shanghai, is an e-commerce service company specializing in providing IT solutions, store operation services, and digital marketing services for brands and retailers. In the field of beauty, cooperative clients include Estee Lauder, Nivea, Clinique, MAC, and other well-known beauty brands
According to Baozun’s previously announced second-quarter financial results, its GMV achieved a significant and solid growth of 38.4% to 40.084 billion yuan (about $5.5 billion) in the first half of the year, with total net revenue of about 4.106 billion yuan (about $564.2 million), down 5.1% year-on-year, of which service revenue was 2.732 billion yuan (about $375.4 million), up 14.7% year-on-year. And revenue from the beauty category was 193 million yuan (about $26.5 million), down 11% year-on-year.
In fact, after the U.S. Holding Foreign Companies Accountable Act (HFCAA) came into effect, a number of Chinese stocks began to return to the Hong Kong stock market for listing, including Alibaba, which voluntarily converted to the dual main board listing on the Hong Kong Stock Exchange in July this year.
How big is the demand for the Chinese brand operation market? Data from Intelligence Research Group showed that in 2019, the transaction size of the e-commerce agency industry was 1407.6 billion yuan (about $193.4 billion), with a compound annual growth rate of 44% over five years. Currently, the brand agency operators are mainly concentrated in 3 major platforms Ali, JD, and Pinduoduo.
With the catalyst of the pandemic in 2022, the online channel ushered in another period of incremental development, and the digital transformation of the brand of e-commerce has accelerated. Guoyuan Securities released a report estimating that the size of the branded e-commerce service industry is expected to reach 2.04 trillion yuan (about $280 billion) in 2025.
International big brands have a higher demand for brand agency operations. According to the data of iResearch, the current demand rate of international brands for agency operators is 80%-90%. And with the continuous rise of innovative Chinese brands, traditional local brands in the channel change in the rapid transformation, accelerate the construction of online channels, and the demand of local brands for brand service providers will also rise.
With this listing, Qiu Wenbin, the Founder, Chairman, and CEO of Baozun, said that through its primary listing on the Hong Kong Stock Exchange, Baozun expected to further expand its investor base, provide more liquidity for its company’s securities, and bring more convenience and flexibility to its company’s investors and stakeholders.