Currently, the cross-border e-commerce industry is undergoing a profound transformation from extensive expansion to intensive cultivation. The past model of relying on traffic dividends and single-market hot products is unsustainable. High platform fees, fluctuations in shipping costs, and uncertainties in overseas policies collectively constitute industry-wide profit squeeze. Against this backdrop, even Zhongyuan Home, a listed cross-border home furnishing giant, recently disclosed performance forecasts that deeply reflect this common predicament: the company expects a net loss of 24.5 million to 36 million yuan for its parent company in 2025, marking its fourth annual loss in the past five years. Particularly noteworthy is that this loss occurred while its revenue scale significantly grew - revenue increased by 45% year-on-year to 1.6 billion yuan in 2024, with cross-border e-commerce business surging by 55%, accounting for more than 57%. This phenomenon of "increased revenue but not profit" or even "increased revenue but increased loss" reveals the structural challenges faced by cross-border e-commerce companies at present.

The case of Zhongyuan Home clearly shows multiple paths of profit erosion. The primary pressure comes from soaring operating expenses to support growth. Its sales expenses jumped from 114 million yuan in 2022 to 264 million yuan in 2024, a growth rate far higher than revenue growth, among which advertising promotion on platforms such as Amazon, overseas warehouse storage and last-mile logistics costs are the main components. This reflects that in the highly competitive home furnishing track, traffic costs have become unbearable. Secondly, over 80% of its revenue is concentrated in the US market, which although created explosive growth in the early stage, also makes its performance highly bound to US tariff policies and shipping prices, with weak anti-risk capabilities. The company once tried to diversify risks and reduce costs by building overseas production bases in Mexico and Vietnam, but both projects have been terminated, indicating that its global supply chain layout is hindered and its strategic execution capability is under test.

Deeper problems lie in the imbalance between business model and cost structure. Zhongyuan Home mainly operates large furniture such as functional sofas under the "CANMOV" brand. Although these products have high unit prices, they also come with extremely high first-mile sea freight and last-mile delivery costs, and extremely strict requirements for warehouse and logistics management. In an environment where market price wars are fierce and consumers are price-sensitive, continuously rising full-link costs can easily erode the already limited gross profit. In addition, the behavior of the company's actual controller to reduce holdings and cash out more than 44 million yuan during the period of low stock price and performance loss also shook the market's confidence in its long-term strategic determination to some extent.

Source: Cross-border E-commerce Cross-border House