Secoo Attracts More Users as It Pivots Toward Diversification

Chinese luxury e-commerce company Secoo Holding Limited released its fourth quarter 2018 and full-year 2018 earnings results on April 4, and expectations were low based on previous financial results from competitors Alibaba Holdings and, both of which announced slowing revenue growth. While Secoo works in a crowded marketplace, as a more niche luxury company, it has shown potential for growth because of its strategic partnerships and customer loyalty (the company claims to have a 51 percent customer retention rate.)

Since the start of the fourth quarter, the company has added 100 brands to its e-tail portfolio, including Michael Kors, Marni, Trussardi, Rene Caovilla, Jason Wu, and MSGM, and recently, Secoo has teamed up with Italian luxury fashion online retailer to offer products from their platform. And in December, in an effort to diversify its product offerings, Secoo partnered with Chinese online travel agency Caissa Travel to promote luxury tours to consumers.

For Q1 2019 the company targets revenue to total between RMB 970 million and RMB 1.07 billion, which would represent an increase of 21-33 percent year-on-year. It also noted that its changing revenue mix could improve overall earnings in the coming quarters.

Here are 4 highlights from Secoo’s earnings results:

  • Revenue increased to $260.7 million (RMB 1.7926 billion) in Q4 2018, a rise of 27.0 year-on-year. Though strong, that number was much slower than the 60.1 percent year-on-year growth from the previous quarter.
  • Number of active users grew 79.9 percent year-on-year to 406,000 in Q4, and total orders in the quarter increased by 72 percent year-on-year to 945,200.
  • Net profit increased by 2.8 percent year-on-year to $7 million (RMB 48.3 million) in Q4, and 16.6 percent in 2018 to $22.6 million. The company noted that Q4 profit was impacted by significant increases in marketing expenses as well as new technology and content development expenses.
  • Gross margin improved to 18.7 percent in Q4 2018 from 15.5 percent in Q4 2017. It also improved for the full-year 2018 to 17.8 percent from 16.4 percent in 2017.


Earnings Brief