Midodo Cross-border E-commerce Gross Margin Analysis Report

Based on the collected information, I provide you with professional financial analysis and profit improvement plan research.

Midodo Group Co., Ltd. is a service platform focusing on cross-border e-commerce digital marketing, with three major business divisions: Gu Duoduo, Ke Duoduo, and Ju Duoduo [1][2]. Its main businesses include

(core business, accounting for 98.7% of revenue), digital exhibition services, and overseas e-commerce operation services [2].

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Indicator	2022	2023	2024	2025 H1
Revenue (USD 10,000)	6,517	7,085.1	7,113.2	5,577.9
Gross Profit (USD 10,000)	518.2	293.1	311.9	268.1
Gross Margin	7.95%	4.14%	4.39%	4.81%
Net Profit (USD 10,000)	164.1	-1,641.3	-16.3	-1,985

: Gross margin decreased from 7.95% in 2022 to 4.81% in H1 2025, a drop of 39.6%.

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Midodo’s main profit model relies on platform rebates, but rebate rates remain low:

• According to industry analysis, rebate rates below 4% directly pressure performance [3]
• The company turned from profit to loss in 2023, with a loss of USD 16.413 million
• Highly dependent on rebate policies of leading platforms such as Google and TikTok for Business

• Serves over 1,800 customers, mainly small and medium-sized cross-border e-commerce enterprises [1]
• Downstream customers are fragmented, leading to weak bargaining power against upstream platforms
• Customer Acquisition Cost (CAC) continues to rise

####3.

• Fierce competition among cross-border e-commerce digital marketing service providers
• Policy changes of leading platforms (Google, Amazon, TikTok) affect revenue sharing
• Increasing number of industry participants, price wars compress profit margins

####4.

• Overseas marketing services account for as high as 98.7% [1]
• New businesses (overseas e-commerce operations, digital exhibitions) have not yet formed scale effects
• Became an official Amazon advertising agent in 2025, requiring time to release synergies

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#####1.

• Increase the proportion of key customers
  : Provide customized services and exclusive rebate negotiations for customers with annual consumption exceeding USD 500,000
• Establish customer tier system
  : Class A customers (annual consumption > USD 1 million) enjoy VIP services; Class B customers (USD 500k-1 million) receive value-added services
• Improve Customer Lifetime Value (LTV)
  : Enhance customer stickiness through SaaS tools

#####2.

• Technology-driven cost reduction
  : Increase investment in AI and automation tools to reduce the proportion of labor costs
• Operational efficiency
  : Optimize advertising delivery algorithms to improve ROI conversion rate
• Supply chain integration
  : Negotiate bulk discounts with logistics service providers

#####3.

• Fully utilize the
  official Amazon advertising agency qualification
  obtained in 2025 [1]
• Expand partnerships with independent site ecosystems such as Shopify and WooCommerce
• Reduce dependence on a single platform (currently over-reliant on Google and TikTok)

#####4.

New Business Direction	Target Gross Margin	Development Path
Overseas E-commerce Operations	15-20%	Enter from Southeast Asian markets, gradually expand to Europe and America
SaaS Tool Services	60-70%	Develop a one-stop cross-border e-commerce management platform
Data Analysis Services	50-60%	Provide value-added analysis based on accumulated customer data
Brand Incubation Services	25-30%	Help customers with full-case planning for brand globalization

#####5.

• Build media resource procurement capabilities
  : Establish direct partnerships with overseas KOLs and influencer agencies
• Build own traffic pool
  : Develop self-owned traffic acquisition channels to reduce platform dependence
• Technology output
  : Productize advertising delivery algorithms and operational experience

#####6.

• Scale effect
  : Increase bargaining power with platforms by expanding customer scale
• Deeply bind with platforms
  : Become a core partner of Google and TikTok to obtain higher rebate rates
• Policy insight
  : Establish a dedicated platform policy research team to pre-empt policy changes

#####7.

• Platform transformation
  : Evolve from a service provider to a platform-type enterprise
• Establish industrial fund
  : Set up a cross-border e-commerce industrial fund to invest in high-quality cross-border brands
• Global layout
  : Upgrade from a Chinese overseas service provider to a global cross-border marketing platform

#####8.

• Build industry influence and host cross-border e-commerce industry summits
• Publish industry white papers and research data to enhance brand premium capability
• Apply for high-tech enterprise qualification to enjoy tax incentives

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Based on the above strategies, Midodo can set the following profit improvement targets:

Time Node	Gross Margin Target	Net Margin Target	Key Initiatives
End of 2025	6.5%	-5%	Cost optimization + Amazon agency business contribution
End of2026	10%	5%	Business diversification + SaaS tool launch
End of2027	15%	10%	Ecosystem formation + Brand premium

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1. Platform Policy Risk
   : Changes in rebate policies of platforms like Google and TikTok may directly affect profits
2. Macroeconomic Risk
   : Fluctuations in global consumer demand impact the prosperity of the cross-border e-commerce industry
3. Intensified Competition Risk
   : Industry integration may lead to further price wars
4. Exchange Rate Risk
   : Cross-border businesses involve multi-currency settlements; exchange rate fluctuations affect profit margins

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Midodo’s 4.8% gross margin reflects the common dilemmas faced by cross-border e-commerce digital marketing service providers:

. Through four paths—, , , and —the company is expected to increase its gross margin to 10-15% within 2-3 years and achieve sustainable profitability.

: Focus on cost control and platform resource integration in the short term; prioritize the development of SaaS tools and overseas e-commerce operations in the medium term; and build a cross-border e-commerce service ecosystem in the long term.

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[1] Sina Finance - “Midodo Group Co., Ltd. submits listing application to HKEX as China’s fifth-largest cross-border e-commerce…” (https://finance.sina.com.cn/stock/hkstock/ggscyd/2025-12-10/doc-inhahhpk2033405.shtml)

[2] Sina Finance - “Cross-border marketing service provider Midodo submits listing application to HKEX; H1 revenue reaches USD 55.779 million” (https://finance.sina.com.cn/tech/roll/2025-12-10/doc-inhaiqhx0318302.shtml)

[3] East Money - “Rebate rate below 4% pressures performance; new businesses struggle to support the overall situation” (https://biz.eastmoney.com/a/202512233599911271.html)