At the end of every year, many brokerages and investment institutions look for suitable investment, financing, and acquisition targets. After several years of development, the cross-border e-commerce logistics industry has significantly increased both its revenue and scale. As a trillion-dollar market, the cross-border logistics sector has seen the emergence of leading companies with revenues exceeding 10 billion RMB, as well as hundreds of mid-sized companies with revenues reaching billions.

Currently, in China, there may be 500 to 1,000 cross-border logistics companies with annual revenues exceeding 100 million RMB. In such a vast market, when companies reach a certain scale, many business owners begin to focus on the compliance and capitalization of their companies.

Like the development path of the cross-border e-commerce industry, cross-border logistics is still a rapidly growing sector. At present, the industry has yet to establish a unified and clear set of standards and regulations, and the overall compliance of the industry is an ongoing process. This is especially true for cross-border logistics companies, as much of their investment and infrastructure is overseas, and most of the service fulfillment and delivery processes also occur abroad.

Therefore, how to reasonably assess these overseas investments and whether they comply with local business, legal, and tax regulations becomes a key concern for the capital market. Currently, there has been no successful case of a cross-border e-commerce logistics company listing on China's A-share market. The typical route seen is that overseas warehouse companies or cross-border logistics firms first list in Hong Kong and later return to the A-share market when the timing is right. This is closely related to the regulatory framework in the A-share market, where cross-border logistics companies still face many institutional challenges when attempting to list in China.

For some cross-border e-commerce logistics companies that have not yet started their capitalization journey, it is necessary to assess their current business models, team conditions, and future plans in a reasonable and rational manner. Capitalization should not be pursued simply for the sake of capitalization. After comprehensive evaluation, if there is a suitable opportunity and the company’s team can handle the expected high growth in the coming years, then capitalization could be considered.

If the team or company lacks sufficient understanding of capital markets, or if the team is not yet prepared to take on future growth, at least for now, they can focus on becoming a sustainable and profitable company. This approach allows for both expansion and defense. Once a company starts the capitalization process, investment institutions typically have a 3 to 5-year exit timeline. If the desired results are not achieved, investment institutions may exit via the listing process, or existing shareholders may need to buy back shares from the investment institutions, which will involve a financial cost.

Thus, the capitalization of cross-border logistics companies is not an overnight process, and even if a company successfully lists, it will still need to address long-term performance stability and sustainable development issues.

For cross-border logistics companies looking to understand how to capitalize and which models to adopt, there is no need to rush into the process of going public. If the timing is right, it can be pursued, but if the conditions are not ideal or the team is not ready, it might be better to wait and focus on building a continuously profitable company. At present, the cross-border logistics industry in China is still in a favorable cycle.

We believe that with the continuous improvement of national policies and regulations, the cross-border e-commerce and logistics industry, as a pioneer in global expansion, will receive adequate attention and support from the capital market. The future of cross-border logistics companies’ capitalization looks promising, but in the short term, we must wait for more refined industry regulations and a better understanding of the sector’s value by regulatory bodies.

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Official Account: Cross-border E-commerce Logistics Baixiaosheng