Jumei online sales soar on new focus

Jumei International, the Chinese online retailer, says its 2014 net revenue increased by 31 per cent year-on-year to US$632.9 million.

The increase reflects a change of focus away from its once core focus on own brand beauty products, to branded products and general merchandise categories and apparel.

The total number of total orders increased 18.3 per cent year-on-year to 42.6 million, while the number of active customers increased by 26.7 per cent to 13.3 million.

However in the last quarter of the year, Jumei online orders fell 5.9 per cent year-on-year to 9.6 million.

For the full year, gross profit as a percentage of net revenues decreased to 39.5 per cent from 41.3 per cent in 2013. In the final quarter, it fell from 42.6 per cent to 30.4 per cent, primarily due to the company’s shift in strategy from beauty product marketplace sales to merchandise sales that started in September 2014.

Gross profit increased by 25.3 per cent to US$250.2 million from US$199.7 million in 2013 and gross margin decreased slightly to 39.5 per cent from 41.3 per cent in the prior year.

Jumei founder and CEO, Leo Chen, said the company had achieved “a solid recovery” of its business, recording its 11th consecutive quarter of profitability.

“While fourth quarter 2014 was a full transitional quarter during which we no longer had beauty product marketplace business, we are very encouraged by the strong first quarter 2015 outlook.

“The particularly strong sequential and year-on-year net revenue guidance indicates a strong recovery driven by Jumei Global which witnessed rapid growth from late December 2014. Not only were we able to fully replace former beauty product marketplace SKUs with Jumei Global, we were also able to achieve what we believe is best-in-class quality control and customer satisfaction.”

By offering direct purchase from brand, competitive pricing and fast delivery speed, Jumei Global is now the largest cross border eCommerce platform in China, which is a crucial part of its growth strategy for 2015.