ZKH Group Ltd (NYSE: ZKH)

ZKH Group Ltd, also known as ZKH, is a prominent player in the Maintenance, Repair, and Operations (MRO) procurement industry in China, operating under the ticker symbol ZKH. The company's primary business activities revolve around providing digital and fulfillment solutions for participants along the industry value chain. These services are offered through two main platforms: ZKH, which serves large to mid-size enterprise customers, and GBB, which caters to micro businesses.

ZKH's revenue generation is primarily centered around two models: the product sales model and the marketplace model. Under the product sales model, ZKH purchases products from suppliers and sells them to customers. Under the marketplace model, suppliers sell products to customers over the platform, and ZKH earns commissions on their sales. As of December 31, 2023, ZKH offers approximately 17.1 million SKUs, covering all major MRO product lines, procured from over 22,000 suppliers.

The company's digitalized MRO procurement solutions and end-to-end servicing capabilities set it apart from its competitors. Its key competitors include other MRO procurement platforms, manufacturers, wholesalers, and distributors that sell MRO products. ZKH's competitive advantages include a strong product selection and recommendation capabilities, a transparent and efficient process, and a professional fulfillment service.

ZKH's customers are diverse and include large to mid-size enterprise customers and micro businesses across various sectors. In 2023, the company served over 66,000 customers, with a GMV breakdown by industry of 25.2% from energy, 20.9% from resources, 19.4% from machinery, equipment, and electrical goods, and 15.5% from manufacturing.

ZKH's digital and intelligent management services include the development of a ZKH MRO Dictionary, which covers all of its product offerings, and the deployment of EVM smart vending machines to provide order-on-demand delivery in customers' facilities. The company's fulfillment network consists of distribution centers, transit warehouses, and onsite locations supported by fulfillment service managers and EVM smart vending machines.

ZKH's specialty warehouses cater to specific product lines, such as common chemicals, hazardous chemicals, and fasteners. The company has a team of approximately 250 fulfillment service managers to provide end-to-end services to its customers, and has deployed over 4,000 EVM smart vending machines to realize order-on-demand delivery in customers' facilities.

ZKH's transaction services can be accessed through various interfaces, including its official websites, mobile apps, and Weixin Mini-Programs. The company provides digitalized MRO procurement solutions, including one-stop MRO procurement and management services, digitalized MRO procurement solutions, and end-to-end servicing.

ZKH's customers include industry-leading corporations, small and medium-sized enterprises, and micro businesses. The number of ZKH's customers increased from over 52,000 in 2021 to over 58,000 in 2022, and further to over 66,000 in 2023. ZKH has identified approximately 1,100 industry leading manufacturing enterprises in China as its potential key accounts, and over 630 of these group enterprises transacted on ZKH's platform in 2023.

The company's position within the industry is strong, with a large customer base and a wide range of products and services offered. Its digitalized MRO procurement solutions and end-to-end servicing capabilities set it apart from its competitors.

ZKH's product and service offerings include a broad range of MRO products, digitalized MRO procurement solutions, one-stop MRO procurement and management services, digitalized MRO procurement solutions, end-to-end servicing, a ZKH MRO Dictionary, EVM smart vending machines, distribution centers, transit warehouses, onsite locations, and fulfillment services.