eCargo Holdings Limited (ASX: ECG) (ECG, eCargo or the Group) today announced its interim financial results for the six months ended 30 June 2023 (1H FY23).
1H FY23 Results Overview1:
- Revenue from continuing operations2 of HK$67.5 million (A$12.9 million), up 44.4%, (1H FY22: HK$46.8 million)
- Gross Margin down to 31% (1H FY22: 39%) as a result of offering discounts on products to enhance sell-through rate due to the more challenging market conditions in China
- Operating expenses up 12%, primarily due to elevated marketing costs, stemming from introducing new brands to the Chinese market and the launch of two innovative platforms: Flow, a B2B eCommerce platform, and Hype, a microinfluencer platform
- Net Profit from continuing operations of HK$2.2 million (A$0.42 million) increased 64.3% (1H FY22: HK$1.4 million), driven by revenue growth
- The Group is transitioning its core focus from B2C eCommerce to B2B eCommerce to focus on a longer value chain and capitalise on the lucrative potential within the B2B ecosystem
Commenting on the results, eCargo Chief Executive Officer Lawrence Lun said:
“We were able to drive revenue and net profit growth in our business against the challenging backdrop of a tough Chinese market where consumer demand growth has not returned to pre-pandemic levels, compounded with a weakening Renminbi. We benefitted from our company strategy of shifting focus from B2C eCommerce to B2B eCommerce, as international trade became more complex. This transition has been a year-long endeavour, and I am pleased to share that we have not only navigated through these challenges, but we have also prospered.
“Our proprietary B2B eCommerce platform, Flow, saw a tremendous increase in sales, providing support to brands and retailers engaged in international trading within the Asian market through supply chain, buyer and supplier management, and credit management solution provision. This success underscores the essential role of Flow in a market grappling with supply chain disturbances, geopolitical tensions, and continuous changes in import regulations.
“We also launched Hype, a digital platform connecting brands with microinfluencers across Asia. This technology development is in harmony with our overarching mission to help brands sell more. While microinfluencers play a pivotal role in driving brands’ visibility and building trust with the local demographic in this digital era, we help brands take it a step further by leveraging our supply chain capabilities to drive eCommerce sales through partnering with microinfluencers.
“These factors led to a noticeable growth in all segments of our business, including profitability, despite making the strategic decision to invest in marketing our B2B eCommerce offering in the half, which we expect to drive continued growth going forward.”
For more such updates, follow us on Google News Martech News