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211. Bull, Bear & Beyond – LightInTheBox Holding: executive interview
14 Plays24 days ago
In our interview with Suhai Ji, CFO of LightInTheBox Holding, he provides an overview of the company and explains how management’s change in strategy has led to an inflection in revenue growth and profitability. The company is now benefiting from two more positive trends following the successful launch of a number of new proprietary apparel brands and a refocusing of the legacy website to customisable and event-driven products. Regarding the proprietary brands, Suhai discusses the ambitions for future growth and how they will be scaled while managing profitability. With respect to the legacy website, he highlights how the change of focus provides a competitive edge in a highly competitive e-commerce market.
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Transcript
Introduction to Suhai Ji and Light in the Box Holdings
00:00:08
Speaker
Hello, I'm Russell Poinsman from Edison Group. Today I'm speaking to Suhai Ji, who is the Chief Financial Officer of Lighting the Box Holdings. Thank you for taking the time speak to me today, Suhai. Thank you.
Founding and Business Model of Light in the Box
00:00:21
Speaker
So, Suhai, why don't you start with a brief introduction to Light in the Box? There have been quite a few changes over the last couple of years. So could you talk about those changes and how that's being reflected in the financial performance?
00:00:35
Speaker
Sure. Thanks, Russell, for the opportunity. And it's a pleasure to discuss our company with you. Well, ah Light in the Buck as a company has had a fairly long history dating back to 2007 when it was founded as probably the first cross-border e-commerce company out of China.
00:00:56
Speaker
We provide a wide range of products from apparel initially to expanding into other general merchandise categories such as electronics, beauty and hair, home and garden, et cetera.
00:01:10
Speaker
So global consumers can purchase directly through our websites and the mobile applications available in multiple major major languages.
Public Listing and Market Challenges
00:01:20
Speaker
So from day one, we deployed direct-to-consumer dropshipping model, and 100% of our revenues are generated from sales outside of China, mostly in North America and Europe.
00:01:35
Speaker
In June 2013, we went IPO on the New York Stock Exchange and have been a publicly listed company since then. I think the most significant changes in the last couple of years are twofold, mainly in response to the intense market competition from a much larger and deeper pocket players.
Transition to Consumer Lifestyle Focus
00:01:58
Speaker
First, we're transitioning from an online dropshipping retailer to a more consumer lifestyle focused company. We aim to offer more differentiated products by capturing consumer preference and drive consumer engagement through emotional resonance.
00:02:16
Speaker
For example, we focus on highly customized non-standard products. during Western festivals and holidays and special occasions, meeting consumers' emotional and lifestyle needs.
00:02:31
Speaker
In other words, we're positioning our online platform away from commoditized products and towards more bespoke offerings and greater focus on holiday events such as Christmas, Halloween, Oktoberfest, and St. Patrick's Day.
00:02:49
Speaker
So such events-driven positioning allows us to address the sentimental rather than purely functional needs of our consumers and it enables us to command premium pricing.
Launch of Proprietary Brands and Profitability
00:03:02
Speaker
And secondly, To further complement and strengthen our positioning as a consumer lifestyle company, we adopted a brand metric strategy by launching three proprietary apparel brands successively since 2024 in women's fashion, golf apparel, and light party dress.
00:03:24
Speaker
So those brands, they build around social attributes of women aged 30 and above, delivering emotional value and a more relaxed, enjoyable lifestyle experience across scenarios such as vacations, social golf, and the parties.
00:03:42
Speaker
So such two-pronged, unified approach has resulted in a much improved financial performance. We have achieved seven consecutive profitable quarters since the second quarter of 2024. Our latest quarter, the fourth quarter of 2025, delivered a record profit of 3.3 million since 2022.
00:04:04
Speaker
sings twenty twenty two We also regained positive revenue growth last quarter, up 9% year over year. And for the full year of 2025, we had a profit of $8.3 million, also a record level since 2022, compared to the loss of $2.5 million a year before.
00:04:26
Speaker
So clearly, you know, we're glad we we had a really great business turnaround.
Scaling New Brands with AI and Market Focus
00:04:31
Speaker
So Suha, you've had you've obviously had great success with those early brands. Could you just talk about how you expect to meaningfully scale that and what are the geographic priorities for those new brands?
00:04:43
Speaker
Yeah, well, you know, we're not launching those new brands for the sake of launching them, right? The new brands, they really need to complement and strengthen our positioning as a consumer lifestyle company.
00:04:54
Speaker
For example, one of our brands in sports apparel really brings joy to our customers in social golf, and the three-month repeat purchase rate is above 30%.
00:05:05
Speaker
So after a little more than two years of launching, this brand already has an annual run rate of close to $40 million. So being our own brand, we also have the total control of the supply chain and the quality of the products.
00:05:21
Speaker
We're also using AI tools to assess market potential and to get the feedback from consumers to continuously improve the product. We want to replicate that success onto other brands, and so far it has worked pretty well.
00:05:37
Speaker
So in terms of geographic priorities, we still see North America as our most important market, followed by Europe. And how are you going to scale up those brands without a significant step up in customer acquisition costs or diluting returns?
00:05:55
Speaker
So any new brands would require upfront investment and also ramping up period. So they do incur step up customer acquisition cost, but it is more than compensated by the high growth that they generate.
00:06:11
Speaker
We make real time assessment on the progress or the traction of the new brands in terms of consumer perception, reception, and ROI on advertising or customer acquisition.
00:06:25
Speaker
So the learning curve at the beginning is always high, and it usually takes more than two years for a new brand to become profitable. And we already have a proven model in one of our brands.
00:06:38
Speaker
And so you have three brands. What are the aspirations for further brand launches in the future? Well, as I just mentioned, we already had a good tractor track record in launching new brands, and three of them actually.
00:06:53
Speaker
And the doing the first time is always more difficult than having done it already. With company now already profitable, I believe we have less constraints, at least financially, to achieve the goal of launching at least one to two brands each year.
00:07:12
Speaker
We just need to identify a good segment and try to replicate the rest from the more established brands. Okay, that's ah been the focus on the new proprietary
Shift in Product Focus and Supplier Optimization
00:07:23
Speaker
brands. Looking back at the what we consider the the legacy websites, can you give some insight into how how by how much the the offer has changed there? One from ah an SKU perspective in terms of the number and perhaps the type of products that you've sold.
00:07:43
Speaker
So let me address this more from the supply perspective, the SKU. So as disclosed in our annual report, we have reduced our number of suppliers from around 1,000 in 2023 to about 450 last year, so which is quite a steep drop as we eliminated suppliers with less quality or with products that we don't focus on.
00:08:09
Speaker
As mentioned earlier, we now focus more on festivals and holidays and events-driven sales. We will try to gradually retrench from those long-tail products.
00:08:21
Speaker
For example, close to 80% of our product sales are now on apparel. But a few years back, electronics are also important category, given its higher price, but the margins on electronics are much lower.
Competitive Edge through Agility and Customization
00:08:40
Speaker
and So as as you've already highlighted, you you do compete against ah larger, well-funded competitors. So perhaps it's worth just talking about why you think the move to customizable products gives you a competitive advantage versus those companies.
00:08:57
Speaker
We are actually much more agile and nimble. So the kind of customization that we do is essentially untouched by those larger competitors.
00:09:10
Speaker
So imagine we can just tailor make one T-shirt for you with a picture of your family, yeah of course, that you have to send to us, with that picture imprinted on the T-shirt.
00:09:21
Speaker
Our much larger competitors will probably never bother to do that. So for events-driven products that have very short shelf life, it is also very difficult for the much larger competitors to stock and manage.
00:09:38
Speaker
And we excel on those areas. And in addition, for event-driven and customized products, consumers are also less sensitive to the price, which enable us to have a higher margin on those products.
00:09:53
Speaker
So it's clear that the event-driven and the customizable products are are the growth going to be the future growth driver of the the legacy website. Would it be possible to give some idea of um the scale of the other products you feature on the website and whether they're actually going to continue to become less important as time goes by?
00:10:13
Speaker
So instead of giving you a breakdown, let me put it this way. Almost 80% of our profit are already coming from event-driven and customized products.
00:10:25
Speaker
And yes, we will continue to retrench from those long-tail commodity products sourced from third-party suppliers that do not generate robust sales or carry good margins.
00:10:38
Speaker
And for the event-driven areas like festivals, holidays, special occasions, where we sell more custom-made products with higher margins. And this is the part of the business that we want to grow and is indeed growing.
00:10:52
Speaker
And you've had a significant improvement in profitability already. So perhaps we're touching on the key drivers to profitability going forward in terms of gross margin.
AI Integration and Future Growth Plans
00:11:03
Speaker
Marketing es expense remains high relative to sales, as it does for a lot of e-commerce players.
00:11:08
Speaker
So could you just talk about those drivers going forward and how sustainable the profit is, please? ah Yes, of course. ah Our own proprietary brands and the product mix towards the higher margin products, those two factors, we continue to drive the overall gross margin.
00:11:28
Speaker
Marketing or advertising will continue to be important for customer acquisition, but we are mindful of the ROI on that. And the future of AI will also change the game.
00:11:41
Speaker
So talking about ai here, it is already playing a big role in our company and contributing to higher operating margin. We have fully embraced AI to drive operational efficiency across all aspects of our business, such as product design, photography style, marketing channels, and customer service.
00:12:05
Speaker
end-to-end AI automation has also contributed to a workforce optimization of thus further improving and sustaining our operating margin.
00:12:21
Speaker
Good. and And so my final question is, what are the key milestones that investors should be looking at in the next 12 months? Well, I think financial results are really the best proof.
00:12:33
Speaker
First and foremost, we try continue to be profitable. And second, in addition to profit growth, we aim to achieve full-year revenue growth as well in 2026, with new brands being the growth engine.
00:12:50
Speaker
So please stay tuned for our first quarter 2026 results, which should come out next month in May. Well, Suhai, that's been great as an introduction to the business and for for the things for investors to look forward to in the next 12 months. so thanks for taking the time to speak today.
00:13:12
Speaker
Thank you very much, Russell. It's been a pleasure.