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Next-generation lifestyle brand platform, Onion Global has applied to list the American Depository Shares representing its Class A ordinary shares on the New York Stock Exchange under the symbol (NYSE: OG). Onion Global estimates that the net proceeds from the IPO will be approximately $90.9 million.
Onion Global’s financials portrayed a solid performance during fiscal 2020 and the stock seems like a bargain. Investors looking to gain exposure to China’s fashion-oriented e-commerce market should pay attention. Our guide will help you learn how to buy stocks, including Onion Global.
Onion Global Financial History
Onion Global was founded in 2015 with an objective to search for and create the next generation of fresh, fashionable and future brands (known as 3F brands) and bring them to the young consumers in China and across Asia. Its founder Cong (Kenny) Li is an 18-year veteran at a Fortune 100 multi-national consumer goods company.
Today, the Onion Global brand family aligns with what its founder initially set out to build. The platform now offers 4,001 brands, including 86 brand partners that work directly with the company. Onion Global offers 23 lifestyle product categories, including beauty products, baby products, fast fashion and wellness products, and food and beverages.
Trusted by millions of users, the platform spans 43 overseas countries, has 14 warehouses and over 130 authorized resellers and distributors worldwide. Over the years, Onion Global has portrayed a solid track record of high performance:
- The GMV (Gross Merchandise Value) generated by the sale of products from its brand partners on O’Mall — its self-operated retail platform — increased by a staggering 125.5% from RMB 428.8 million ($66.2 million) in 2018 to RMB 966.8 million ($149.3 million) in 2019, and a further by 35.5% to RMB 1,309.9 million ($202.3 million) in 2020 from 2019.
- Onion Global has achieved rapid profit growth at scale. Within 5 years since commencing operations, OG achieved RMB 3,810.7 million ($584.0 million) revenues in 2020. Its net income increased from a net loss of RMB 94.8 million in 2018 to RMB 102.8 in 2019 and further increased by 102.3% to RMB 208.0 million ($31.9 million) in 2020.
- Through its advanced technology and global supply chain capabilities, Onion Global enables seamless delivery of products sourced and manufactured around the world to Chinese consumers at competitive prices. The company has processed 5.5 million 10.3 million and 15.8 million orders for the years ended December 31, 2018, 2019 and 2020.
Onion Global Potential
Sure, you want to be extremely cautious when dealing with IPOs — the newness factor and a myriad of unknown variables can be a caveat for rookie buyers. However, it’s hard to write off Onion Global’s potential viability.
The global ecosystem of lifestyle brands presents tremendous opportunities and OG is still in the early stages of building its global brand platform. For starters, Onion Global boasts a high-performing brand portfolio. As of December 31, 2020, the company cooperated with 86 brand partners to develop a deep understanding of young consumers’ tastes and preferences, through which it can accurately predict consumer trends and incubate fresh, fashionable brands.
Onion Global also adopts effective monetization strategies that enable it to benefit throughout a brand’s lifecycle and across the brands it offers on its platform. For any 3rd-party brands OG promotes on its platform, the company is able to purchase them at discounted prices either directly from brand partners or product resellers.
Onion Global also believes that the following competitive strengths contribute to its success and differentiate it from its competitors:
- One-of-a-kind brand portfolio with fresh, fashionable and future product offerings.
- Unique, high-performing and profitable lifestyle brand platform
- Fully integrated and efficient supply chain operations.
- An empowering, entrepreneurial culture steering its people to innovations
As Onion Global continues to help its brand partners achieve greater success, it believes its partners’ growth and profitability will improve and incentivize them to increase their reliance on the platform. The end result will be improved profitability for Onion Global.
How to Buy Onion Global (OG) Stock
The IPO market has been extremely hot in 2021, with new debuts going mainstream each month. No worries if you’ve never bought or sold an IPO stock before. Follow these 4 simple steps to start the journey to becoming an Onion Global shareholder.
- Pick a brokerage.
The first step toward participating in the potential Onion Global IPO is picking a brokerage with which you’ll do business. A broker is a licensed financial service provider authorized to buy and sell stocks on your behalf. Most brokers provide a unique, intuitive trading platform that you can log in to and instantly place a buy or sell order.
Most online brokers now allow for commission-free trading, so you should buy Onion Global IPO stock without incurring additional fees. Be sure to meet your broker’s minimum account requirements otherwise you’ll be locked out of the buying spree. Check whether your broker offers access to additional markets if you want to explore jurisdictions that are beyond the New York Stock Exchange and the Nasdaq. - Decide how many shares you want.
Next, you need to decide how many shares of Onion Global stock you want to own. Your investment goals, investing time horizon and risk tolerance should guide your decision. OG estimates its opening price will be between $7.25 and $9.25. Assuming OG pursues a traditional IPO listing of $8 per share and you’re willing to invest $1,000, then you’ll own 125 shares of the stock.
IPOs can display erratic price movements, so be sure to invest only what you can afford to lose. Don’t break a sweat if your investment limit doesn’t even out to a whole number of shares — most brokers let you own fractional shares, which is a great bargain if you want to invest in bits. - Choose your order type.
Different order types will result in incredibly diverse outcomes — it’s crucial to understand the distinctions among them. We like to view each order type as a distinct tool suited to a unique purpose, and which should align with your primary goal. Whether you’re looking to have your order filed quickly or control the price of your trade, here are order types you can execute:
• Market order: A market order is an instruction to buy a security for your account at the next available price. A market order ensures an execution, except it doesn’t guarantee a specific price. A market order is a perfect play when you think a stock is priced right, when you want an immediate execution or when you’re certain you want a fill on your order.
• Limit order: When you place a limit order to buy, you’re simply placing a restriction on the maximum price you’ll pay to own the share. The stock is eligible to be purchased at or below the limit price you set — never above it.
• Stop order: A stop order instructs your broker to buy a stock at the market price once it has traded at or through a specified stop price. The order becomes a market order once the stock hits the stop price. Besides establishing a position in a security, a stop order is also used to protect a profit or prevent further loss if a stock’s price is moving against you.
• Stop limit order: This order type automatically becomes a limit order once the stop price is reached. Similar to any limit order, a stop limit order may fill in whole, in part or not at all, depending on the number of shares available for purchase or sale at the time.
You may also access advanced orders that specify other conditions that affect an order’s price constraints, volume or time in effect. - Execute your trade.
It’s time to hit the buy button and let your broker process your order. Depending on the order type and prevailing market conditions, your order may fill immediately or take longer. Altogether, your shares will reflect in your account and you’ll be a proud shareholder.
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A Lifestyle Brand Revolution
The lifestyle brand industry — and precisely combined with e-commerce — is subject to rapid technological changes and innovations. Onion’s online platform is disrupting the conventional lifestyle retail landscape in China and the larger Asia through the incubation, marketing and distribution of the world’s fresh, fashionable and future brands.
And with the global ecosystem of lifestyle brands presenting numerous opportunities, Onion Global is certainly setting the pace.