While most cross-border e-commerce sellers struggle with product selection, marketing, and logistics, Zhejiang Zhengte Co., Ltd. has been quietly making millions on Amazon with seemingly "unsexy" products like patio umbrellas and outdoor furniture. The company, with over 20 years of experience in the outdoor sector, reported revenues exceeding 1 billion yuan ($140 million) in the first three quarters of 2023, with net profits reaching significant targets. What's the secret behind this success?
Financial Performance: Slower Growth but Solid Fundamentals
Zhengte reported 1.109 billion yuan ($155 million) in revenue for the first three quarters of 2023, representing 18.05% year-over-year growth. However, non-GAAP net profit declined 36.18% to 104 million yuan ($14.6 million). The third quarter showed noticeably slower growth compared to the first half, when revenue grew 31.04% to 882 million yuan ($124 million) and non-GAAP net profit surged 56.66% to 78.87 million yuan ($11.1 million).
The company's operating cash flow stood out at 192 million yuan ($27 million), marking an impressive 1015.23% increase. Despite pressure on the cross-border e-commerce sector in the second half, Zhengte maintained revenue growth and strong cash flow, demonstrating remarkable resilience.
Business Model: From ODM to Branded E-commerce
Originally operating primarily as an ODM manufacturer for major retailers like Walmart, Costco, and Wayfair, Zhengte strategically pivoted to capitalize on cross-border e-commerce opportunities. Through agency operations, the company successfully launched its own brands in international markets.
Its Abba Patio brand has become a top seller in Amazon's patio umbrella category, with flagship products accumulating over 11,000 reviews and regularly appearing as Best Sellers and Amazon's Choice selections. The company also operates its Sorara brand, which has achieved notable success on Amazon.
Competitive Edge: Product Specialization and Channel Diversification
Zhengte's success stems from its long-term focus on shade products, generating nearly 1 billion yuan ($140 million) in shade product sales alone over the past year. The company raised 375 million yuan ($53 million) through its A-share IPO, primarily to expand production capacity and improve product quality.
Beyond product excellence, Zhengte has strategically diversified its sales channels. While maintaining partnerships with major distributors in Shenzhen, the company has successfully established direct-to-consumer sales through Amazon and other platforms. This multi-channel approach reduces risk and enhances market penetration.
Data Insights: The Anatomy of a Best Seller
The success of Abba Patio's umbrellas isn't accidental. With over 11,000 ratings, these products demonstrate substantial market acceptance and customer satisfaction. The consistent Best Seller and Amazon's Choice badges indicate strong competitive positioning within the category.
Interestingly, these umbrellas don't feature groundbreaking designs, proving that functionality and value ultimately drive consumer decisions. Zhengte's understanding of these fundamental purchase drivers has been key to its Amazon success.
Strategic Lessons for Cross-Border E-commerce
Zhengte's case offers valuable insights for cross-border sellers:
1. Specialization: Focus on market segments where you have expertise and growth potential
2. Product Quality: Prioritize product excellence and customer experience
3. Channel Strategy: Diversify sales channels to reduce platform dependence
4. Market Adaptability: Maintain flexibility to adjust to market changes
Risk Considerations
Despite Zhengte's strong performance, potential risks include:
- Policy changes affecting cross-border e-commerce
- Raw material price volatility impacting margins
- Intensifying competition compressing profit potential
Continuous market monitoring and strategic adjustments remain essential for sustainable growth.