Under the support of 290,000 small town maternal and infant stores, Haipaike "incurs debt" to challenge the Hong Kong Stock Exchange

In the once-thriving vertical e-commerce sector for maternal and infant products, a rare IPO has emerged.

Yangtuo Technology Inc. (Haipai Ke), which has been engaged in maternal and infant B2B e-commerce for many years, recently submitted its listing application to the Hong Kong Exchanges and Clearing (HKEX), with CITIC Securities as the sole sponsor.

In 2024, Haipai Ke's total transaction volume on the platform reached 11 billion yuan, making it the largest B-end e-commerce platform in China's low-tier market for family care and nutrition products, with a market share of 10.1%.

As a former star project in the industrial internet and maternal and infant e-commerce category, Haipai Ke completed a total of six rounds of financing in less than five years since its establishment, with investors including Shunwei Capital, Fosun International, and Hillhouse Capital.

Accompanying the intensive financing rhythm was an explosive growth in GMV.

From 2017 to 2019, Haipai Ke's platform transaction volume surged from 5 billion yuan to 15 billion yuan.

The last round of financing was in December 2019, with Anchor Equity Partners leading and Hillhouse Capital participating in a hundred million dollar Series D financing.

However, the capital's glory did not last long.

In 2024 and 2025, due to failing to meet the performance targets set with investors, Haipai Ke spent 11 million USD and 24 million USD respectively on share buybacks and issued 158 million USD in promissory notes to shareholders.

Haipai Ke issued a large number of convertible redeemable preferred shares in early financing.

By the end of 2024, the book value of these preferred shares reached 2.4 billion yuan, fully accounted for as financial liabilities, resulting in a net debt of 2 billion yuan for the company.

The changes in its fair value also brought over 70 million in book losses to the company in 2023 and 2024.

If excluding the impact of the aforementioned preferred shares, Haipai Ke's adjusted net profit was 19.3 million yuan and 25.77 million yuan.

Only by successfully completing the IPO can it be liberated from the pressure of "debt."

The Illusion of Scale in the Lower-tier Market

Haipai Ke was founded in 2015, during the rise of cross-border e-commerce.

The founding team has a strong "Alibaba system" background: the CEO is Zhao Chen, the founder of Tmall International, and the COO is Xu Hong, the founder of Taobao Coins; partner Wu Tao previously served as the regional manager for Alibaba's Chinese suppliers.

At the beginning, the industrial internet empowered by digital technology was at its peak.

At that time, many maternal and infant stores located in lower-tier cities needed to go through layers of distributors in the procurement process, with limited product choices and unstable supply.

First-tier international brands also faced issues of market fragmentation, inefficient manpower, and differentiated demand during their descent into lower-tier markets.

Haipai Ke quickly targeted this supply-demand gap.

By integrating brand owners with mid-to-late department stores, Haipai Ke provided many maternal and infant stores with a multi-category supply of "direct supply from manufacturers + cross-border purchasing," allowing suppliers to ship with one click, bypassing redundant procurement, warehousing, logistics, and other links.

With a ground team of thousands, Haipai Ke established a retail network covering 290,000 registered maternal and infant stores across more than 3,000 counties and villages in 31 provinces, municipalities, and autonomous regions in just ten years.

Under the platform logic, Haipai Ke is positioned similarly to a large distribution platform, but its real customers are not the maternal and infant stores, but the upstream brands and manufacturers. In the sinking market, maternal and infant stores serve both information dissemination and product sales functions, wielding strong appeal among their customer base.

By establishing links with end-users, Haipai Ke has formed partnerships with giants such as Procter & Gamble, Unilever, Danone, Abbott, Nestlé, and Wyeth, helping them achieve deep distribution in third-tier cities and below.

Such integration also provides offline channel resources for small and medium-sized brands, enabling them to rapidly expand their offline market in a short period.

In terms of revenue model, Haipai Ke charges sellers a commission ranging from 2.3% to 2.6% based on platform transaction volume; on the other hand, it provides marketing services to brands and manufacturers, charging a commission rate of 5% to 10%.

In Haipai Ke's vision, the company will leverage data advantages and efficiency improvements in the sinking market to provide upstream brands with more refined data analysis and marketing services.

The issue is that, compared to strong store alliances formed through franchising and mergers, Haipai Ke's integration efforts for individual maternal and infant stores are limited.

Song Liang, head of the industry expert group of the China Agricultural Reclamation Dairy Industry Alliance, told Xinfeng that Haipai Ke's attractiveness to maternal and infant stores heavily relies on low-priced commodity products, but the channel stickiness established this way is inherently weak. In recent years, controversies over product diversion have persisted.

For example, Beichan China's agent Youchang Maternal and Infant announced the termination of its partnership with the Haipai Ke platform, pointing out that the merchants on the platform had not obtained brand authorization, and their claimed "legal source channel proof" was inconsistent with the facts.

To enhance channel stickiness, Haipai Ke once implemented a "Family Plan," intending to deepen the interest binding with small and medium-sized maternal and infant stores.

They offered options worth 50 million yuan for free to cooperating maternal and infant stores, promising to conduct reverse acquisitions of some cooperating stores after going public.

Even so, they still failed to penetrate high-margin non-standard products on a large scale into the channels.

More than 75% of the products sold on the platform are still infant formula, followed by diapers, which account for about 10%.

With the birth rate hitting a low in 2023, Haipai Ke has begun to face a bottleneck in revenue growth.

In 2024, Haipai Ke's revenue was 1.023 billion yuan, a year-on-year decline of 3.3%.

Over the past three years, the number of registered buyers on Haipai Ke increased from 240,000 to 290,000, but the actual number of trading buyers remained around 170,000, with no further breakthroughs.

Transformation Quagmire

From 2019 to 2023, the number of newborns in China decreased from 14.7 million to 9 million, marking the maternal and infant industry entering an era of stock competition.

At the same time, comprehensive e-commerce platforms continue to increase their focus on maternal and infant categories, compounded by a white-label price war, further squeezing the survival space of vertical categories.

In recent years, many maternal and infant e-commerce platforms, such as Miya and Baobei Gezi, have successively shut down, and Haidai Wang has also faced a broken capital chain.

In response to changes in population structure and competitive landscape, Haipai Ke has focused on developing its self-operated business in recent years, shifting its strategic focus from scale expansion to profit quality.

It no longer insists on a completely light asset operation but maintains price advantages through bulk procurement from upstream suppliers.

In 2024, Haipai Ke's basic self-operated business on the platform achieved a transaction volume exceeding 700 million yuan, with the number of SKUs for sale exceeding 1,000, contributing 56% to overall revenue However, due to the upgrade of its identity from information intermediary to distributor and limited markup space, the gross profit margin is only 7.4%, far lower than the 91.5% commission-based business.

Another direction for transformation is to create its own brand through a private label model.

The children's supplementary food brand "Meow Xiaoxia" launched in 2021 initially leveraged the company's advantages on offline platforms, spreading its products to 15,000 stores within six months.

The following year, an online team was formed, allowing the Meow Xiaoxia brand to achieve first place in the rice cake category during major promotional events on Douyin and Tmall.

However, the current operational status of Haipaike is unable to support its investment of more resources in the fiercely competitive children's snack market and the expensive traffic costs of third-party platforms.

Over the past three years, the total transaction volume on the Haipaike platform has decreased from 15 billion yuan to 11 billion yuan, with the average transaction amount per order dropping by 70 yuan, and the number of core buyers shrinking by 10%.

The shrinkage in transaction volume has shaken the company's profit foundation.

From 2022 to 2024, the gross profit of Haipaike's "digital platform business," primarily composed of commissions, decreased by nearly 100 million yuan.

The gross profit margin fell from 43.9% to 32.5%, a significant year-on-year decline of 11.4 percentage points, with operating cash flow remaining negative.

Haipaike has to reduce costs and increase efficiency to maintain operations.

In 2023, employee welfare expenses under sales, administration, and R&D categories decreased by 23.5%, 49.3%, and 45.6% year-on-year, totaling a reduction of 123 million yuan.

In 2024, marketing investments in non-core platforms were further cut, with advertising and promotional expenses reduced by 60% year-on-year to 22.44 million yuan.

However, the adjusted net profit only increased by 6.47 million yuan to 25.77 million yuan, and operating cash flow has not turned positive.

In the long term, 85% of newborns in China come from lower-tier cities, highlighting the increasing value of the maternal and infant store ecosystem in the sinking market.

The integration speed in this field is accelerating.

For example, Kid King premium acquired Leyou International, Aiyingshi merged with Beibeixiong, Yunyuan World integrated local chain brands in Sichuan and Chongqing, and local chain leaders like Nanguo Baby were integrated into Hainan Baby World.

The growth space in the single maternal and infant store market that Haipaike focuses on is increasingly narrowing, prompting the platform to devote more energy to strengthening its positioning as a distributor and service provider in the sinking market.

In this IPO, Haipaike plans to use the raised funds to deepen cooperation with top infant formula brands and expand procurement scale; and improve IT infrastructure to provide personalized data analysis and business insights for brand owners.

The hope of creating blockbuster products is placed on the higher-margin dietary supplement sector.

In 2024, with the sales increase of dietary supplement brands like Doctor Jepson and Prospace, the gross profit margin of Haipaike's own brand business rose from 30.1% to 36.5%.

From January to April 2025, revenue from its own dietary nutrition supplement brand grew by 85% year-on-year.

In response to the sluggish birth rate in mainland China, Haipaike also plans to expand its own products to Southeast Asia, seeking acquisition and investment opportunities within the industrial value chain All strategic visions are currently still hanging over a somewhat fragile capital chain.

Although the expansion of self-operated businesses has filled the gap in platform revenue, it has failed to achieve effective "blood production."

In the past three years, Haipai Ke has cumulatively seen a cash outflow of 250 million yuan from operating activities, and the company essentially relies on investment and financing to maintain turnover.

In 2024, Haipai Ke added 115 million yuan in interest-bearing bank loans to supplement working capital, significantly increasing short-term liabilities.

The success of the Hong Kong stock IPO will directly affect Haipai Ke's subsequent strategy and survival prospects.