The e-commerce operation service industry continues to evolve rapidly, with companies striving to achieve sustainable growth through business cycles. Ruoyuchen's (003010.SZ) 2021 financial report provides valuable insights into how one company is navigating these challenges, showing 13.4% revenue growth driven by expanding retail operations and emerging private label brands.
Financial Performance: Steady Growth with Profit Pressure
Ruoyuchen reported 2021 revenue of 1.288 billion yuan, representing 13.4% year-over-year growth. While this growth rate slowed from 18.5% in 2020, it demonstrates continued stability. Net profit attributable to shareholders declined to 29.2 million yuan, reflecting increased investment in private label development and operational capacity building.
The company maintained growth momentum in both domestic and international markets, suggesting successful geographic diversification that enhances overall risk resilience.
Core Business Structure: Online Operations Drive Growth
Ruoyuchen's business comprises three main segments: online operation services, channel distribution, and brand strategy services. Online operation services generated 802 million yuan in 2021 (62.3% of total revenue), growing 24.1% year-over-year.
Within online operations, the retail model (where Ruoyuchen operates stores directly) grew particularly fast at 31.3%, now representing 50.8% of total revenue. The service fee model (supporting brand-owned stores) remained stable at 147 million yuan (11.4% of revenue).
Channel distribution revenue declined slightly to 398 million yuan (30.9% of revenue), reflecting strategic reallocation toward higher-margin online operations. Brand strategy services grew 10.8% to 88 million yuan (7% of revenue).
Competitive Advantages: Full-Chain Services and Precision Operations
Ruoyuchen's core strengths lie in its comprehensive service capabilities and data-driven operations. The company integrates marketing, media, store traffic, consumer purchases, logistics, and customer service data into a sophisticated analytics system covering traffic management, product management, user experience, and customer relationship management.
The company operates across multiple platforms including Tmall, JD.com, Pinduoduo, and Vipshop, as well as cross-border channels like Tmall Global and Kaola. Ruoyuchen has also strategically expanded into emerging social commerce platforms like Xiaohongshu and Douyin.
Ruoyuchen has developed particular expertise in fast-moving consumer goods categories including maternal & infant products, beauty & personal care, and health supplements. In 2021, the company established partnerships with international brands including GNC, FANCL, and Doppelherz, while deepening collaborations with existing partners like Bayer and Swisse.
Profitability Analysis: Private Label Investments Impact Margins
The profit decline primarily reflects upfront investments in private label development and operational capacity building. Online operation gross margin declined to 41.8% (from 47.05% in 2020), while channel distribution and brand strategy services maintained margins of 10.8% and 32.5% respectively.
Operating expenses grew significantly, with sales expenses increasing 36.5% to 275 million yuan (21.4% of revenue) due to higher personnel and marketing costs. Administrative expenses grew 16.1% to 74 million yuan, while financial expenses more than doubled to 13 million yuan due to foreign exchange losses.
Competitive Positioning: Efficiency at Smaller Scale
Compared to peers Youquhui and Yiwangyichuang, Ruoyuchen maintains comparable gross margins despite smaller scale (total assets of 1.237 billion yuan). The company leads in R&D investment (22 million yuan in 2021, about 2% of revenue) and international operations (314 million yuan in overseas revenue).
Ruoyuchen's global supply chain capabilities enable comprehensive solutions covering general trade, cross-border trade, and domestic trade. The company's IT systems support demand forecasting, inventory management, and efficient global procurement and distribution.
Strategic Outlook: Private Label Development and Capability Building
Ruoyuchen plans to accelerate private label development through internal incubation and external investments, focusing on "technology + consumption" opportunities. The company's NZ-born home care brand Zhanjia has shown particular promise, generating over 80 million yuan GMV in 2021 and achieving profitability in Q1 2022.
The company will focus on three key capability areas: warehouse management, digital operations, and content marketing. Ruoyuchen recently launched an automated smart warehouse using robotic picking systems, while planning significant investments in data platform development to enhance operational insights.
Content marketing capabilities will be strengthened across live streaming, short videos, and social content, aiming to provide brands with comprehensive solutions from content creation to conversion.