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We came across a bullish thesis on GigaCloud Technology Inc. (GCT) on Substack by Hidden Market Gems. In this article, we will summarize the bulls’ thesis on GCT. GigaCloud Technology Inc. (GCT)'s share was trading at $13.77 as of April 3rd. GCT’s trailing and forward P/E were 4.51 and 5.13 respectively according to Yahoo Finance.
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GigaCloud Technology Inc., founded in 2006 and based in El Monte, California, has emerged as a prominent B2B e-commerce platform specializing in large parcel merchandise. Through its flagship offering—the GigaCloud B2B Marketplace—the company connects Asian manufacturers with resellers in the U.S., Europe, and Japan, streamlining cross-border commerce across categories like furniture, fitness equipment, and appliances. With a unified platform that integrates logistics, payments, and product discovery, GigaCloud enables frictionless global distribution. Its business model reflects a blend of recurring service fees from third-party (3P) sellers and direct sales, with 3P transactions now accounting for over half of GMV, signaling strong platform adoption and seller engagement. In 2024, GigaCloud posted $1.161 billion in revenue—a 65% year-over-year increase—while GMV hit $1.34 billion, driven by a 36% increase in active sellers and an 85.7% jump in active buyers.
The company's revenue stream is diversified across three major segments. Off-platform e-commerce generated $409.6 million, or 35.3% of total revenue, through third-party websites. Its 1P sales within the marketplace added $400.5 million (34.5%), while logistics and fulfillment services—including warehousing, last-mile delivery, and packaging—contributed nearly 28.5%. This diversified model has supported GigaCloud’s profitability, with a 24.6% gross margin and 10.8% net margin in 2024, even as margins slightly contracted from the prior year due to cost pressures. Despite this, the company remains financially robust, ending 2024 with $303.1 million in liquidity, a 64.5% increase, supporting its aggressive expansion and capex plans without external funding dependency. Its warehouse footprint has grown to over 10 million square feet globally, reflecting its emphasis on logistics as a competitive moat.
GigaCloud is investing in technology to sustain its momentum, with R&D spend at $9.8 million in 2024, targeting platform improvements and operational efficiencies. Its market opportunity is vast, with the global B2B e-commerce sector projected to grow at an 18.2% CAGR to $57.6 trillion by 2030. GigaCloud’s niche in large parcel logistics positions it strongly within this expanding market, particularly in verticals like furniture e-commerce, which alone is forecasted to exceed $436 billion by 2029. Its logistics capabilities align well with the broader $25.9 trillion e-commerce logistics market, which is expected to grow nearly 19% annually.