1. Sell Less, Earn More

In cross-border e-commerce, selling more does not necessarily mean earning more. Huakai Yibai's latest results illustrate exactly that.

Before this report, look back a year: Huakai Yibai was in a different position. In the first half of 2025, revenue reached RMB 4.538 billion, up 28.97% year-on-year, but net profit was only RMB 36.74 million, down 72.69% year-on-year. Sales scale increased, but profit actually fell.

By the first half of this year, the situation completely reversed. Financial data shows that Huakai Yibai achieved revenue of RMB 3.976 billion in the first half, down 12.38% year-on-year; net profit attributable to the parent reached RMB 165 million, up 349.09% year-on-year. Compared with the same period last year, the company sold about RMB 562 million less but earned about RMB 128 million more.

Breaking it down by quarter, performance continued to improve. Second-quarter revenue was RMB 2.052 billion, up 6.67% quarter-on-quarter; net profit attributable to the parent was RMB 93.45 million, up 30.63% quarter-on-quarter. Profit grew faster than revenue, meaning the company kept more money from each item sold.

Specifically, this improvement first came from reducing inventory burdens. At the end of 2024, inventory was as high as RMB 1.819 billion; by the end of June 2025 it fell to RMB 1.266 billion, and by the end of 2025 it fell further to RMB 956 million. At the end of June this year, inventory stood at RMB 1.017 billion. Although slightly higher than the end of last year, it was still down 19.66% year-on-year.

As large amounts of backlogged inventory were cleared, warehousing fees declined, and pressure from inventory write-downs and other asset impairments eased. However, lower inventory only explains part of the profit change. Another part comes from Huakai Yibai adjusting how it sells.

The company has long relied on its general merchandise business as its foundation, covering more than ten categories including home and garden, industrial supplies, auto and motorcycle parts, outdoor sports, and 3C electronics. It is characterized by a large number of SKUs, low prices, and broad coverage, earning money mainly through scale and operational efficiency.

In the first half of this year, Huakai Yibai's general merchandise business had about 1.05 million SKUs on sale and generated revenue of RMB 2.657 billion, accounting for 66.81% of total revenue, down 19.24% year-on-year, with an average order value of about RMB 114.56. In comparison, the boutique business had only about 16,500 SKUs on sale, but revenue reached RMB 996 million, up 11.56% year-on-year, with an average order value of about RMB 307.19, nearly 2.7 times that of general merchandise.

More importantly, by adjusting its product mix and improving operational efficiency, the boutique business turned losses into profits in the first half, becoming a major source of profit improvement.

In the past, the company cast a wide net with millions of SKUs. Now it is putting more resources into categories such as pet supplies, furniture and home goods, and maternal and baby toys. Huakai Yibai proactively reduced some low-margin promotions and inefficient sales, trading them for higher average order values and profit margins.

This also explains why revenue fell while net profit grew several times.

2. After the Surge in Net Profit

Although Huakai Yibai's profitability has recovered, the 349% increase should be viewed calmly.

This change is largely because the company was in an inventory-clearing phase in the same period last year, when net profit was only RMB 36.74 million. The low base magnified this year's growth. Declines in warehousing fees, asset impairments, and share-based payment expenses will not contribute the same profit increase every year.

Going forward, sales performance remains key. The general merchandise business still contributes about two-thirds of revenue, but declined 19.24% year-on-year; the boutique business grew 11.56%, but its scale is not yet large enough to fully fill the gap. After the inventory-clearing dividend fades, whether profit can continue to grow will depend on whether the boutique business can expand and whether the general merchandise business can stabilize revenue.

In addition, Huakai Yibai also faces platform and market concentration issues: in the first half, Amazon contributed about RMB 2.719 billion in revenue, accounting for 68.39% of total revenue; North America and Europe accounted for 50.49% and 32.64% respectively, totaling more than 83%.

This structure allows the company to concentrate resources and improve operational efficiency, but it also means that when Amazon fees, European and American consumer demand, tariffs, and platform rules change, the impact will be transmitted more quickly to revenue and profit. If inventory planning goes wrong, overseas warehouse fees can easily swallow already thin margins.

Overall, Huakai Yibai sold RMB 562 million less and earned RMB 128 million more in the first half, indicating that it has emerged from the trough of inventory clearing and begun to focus on profit quality.

The next earnings report should focus on whether general merchandise revenue can stop falling, whether the boutique business can continue to be profitable, and whether inventory, which has rebounded to RMB 1.017 billion, will again become a burden. Only when revenue and profit grow together again will Huakai Yibai's operational recovery truly be complete.

Seller's Home Review

Huakai Yibai's net profit surged 350%, confirming the "profit first" logic of cross-border e-commerce. Sellers should focus on refined operations and cost control rather than blindly chasing volume. Its model offers direct reference value for optimizing category structure and improving gross margin. It is recommended to pay close attention to its supply chain integration strategy.

Source: E-commerce Pai
Original link: https://www.pai.com.cn/p/01m13k7n7xqgx3mvbbp08db500