Amazon’s title, Shenzhen sellers lost 1.6 billion!
38-year-old Xiao Siqing, to the dark moment.
The chairman of this Tianze Information (300209), formerly an international freight forwarding staff, in 2010, he founded Youkeshu, plowing cross-border e-commerce, quickly made a fortune, the peak of Youkeshu net profit of 416 million yuan.
In 2017, Tianze Information acquired Youkeshu, paying a consideration of 3.4 billion, Xiao Siqing cashed in about 50 million and received a market value of more than 1 billion in shares.
Three years later, Xiao reversed his position and became the beneficial owner of Tianze Information. After that, he didn’t have much good news.
In the first year of taking over, Tianze Information lost 870 million yuan. In the second year, it suffered a series of major changes such as Amazon’s “title”, rising shipping prices and raw materials, and stricter tax compliance, resulting in more losses.
On the evening of April 28, Tianze Information announced its financial report. The annual revenue dropped by more than 60%, the loss was as high as 2.676 billion, and the loss of Youkeshu was as high as 1.671 billion yuan.
Xiao Siqing was one of the first to catch up with the cross-border e-commerce market. He started a business in 7 years and has a net worth of 1 billion. Now, he is feeling the bitterness of the great change, and the market value of his equity has shrunk by 800 million.
There is a tree decline in speed, Xiao Siqing was also caught off guard.
In 2020, the huge loss of tianze information, concentrated in the IT business far river information.Youkeshu is still growing rapidly, with revenue of 4.749 billion and net profit of 417 million.
In 2021, Shenzhen Youkeshu’s operating income will be 1.575 billion yuan, a drop of 66.84% ,more surprised, net profit turned to a loss of more than 1.6 billion, the single impairment, accrual, a loss of 1.724 billion yuan.
2020 huge losses at the juncture, Xiao Siqing originally intended to divest Yuanjiang information, focus resources, focus on cross-border e-commerce, now cruel dream shattered.
The public explanation is that the main business of cross-border e-commerce has been hit by a big change: since the second quarter of 2021, Amazon mass closure.
In July, Tianze Information issued an announcement, due to alleged violations of Amazon platform rules, there are about 340 sites blocked or frozen, accounting for about 30% of the actual number of operating sites, the funds involved amounted to 130 million.
In September, Youkeshu again issued a notice, the new 60 blocked sites. The number of sites blocked for the year is about 400, accounting for 12% of the total number of active Amazon sites at the end of the period. The performance has taken a sharp turn for the worse. From January to June alone, the revenue of Amazon’s platform has decreased by 448 million yuan, a drop of more than half. As of the end of 2021, Xiao Siqing’s store funds on Amazon have been frozen, amounting to about 100 million yuan.
Youkeshu is a big-selling complex, Xiao Siqing has been using an integrated store strategy, with the help of Amazon, Speedy, Shopee and other third-party platform channels, upstream connection to suppliers, downstream connection to consumers, to the middleman to earn the difference.
He holds a number of subsidiaries, operating different brand store accounts, and from 2017 to 2019, the number of stores is 569, 1,043 and 3,873, involving seven categories, with the name of “cross-realm account king”.
In 2019, Xiao Siqing built an independent station in Shopify and established a set of advertising and bidding promotion model, which is essentially a way to store for goods.
In 2020, the revenue of the Amazon platform in Youkeshu is only about 32%. The annual sales of AliExpress, Shopee, and Wish are basically around 600 million to 700 million, and the rest of the revenue comes from independent stations.
According to the 2021 annual financial report, not only Amazon, but also Youkeshu’s sales on platforms such as AliExpress and Wish could not stop falling sharply.
In 2020, the housing economy has exploded in an all-round way, and home building materials commodities have exploded. In Youkeshu, the home furnishing category has also exploded, increasing by 1.16 times over the previous year, making it the first category with 44% of the total.
There are cross-border sellers who broke the news that there are home building materials sellers around them, and their sales on the Amazon platform are running smoothly, and they can earn 100 million per month during the peak period. Sellers stocked up in large quantities, and the market was saturated with supply, and soon this category was collectively cold.
In such an industry environment, big sellers can’t maintain stable profits,a lot of competition towards a variety of subterfuge, such as “brush single”, and eventually incur closure.
The big loss is not Xiao Siqing alone. In 2021, Zebao, Patosun and other top sellers have made huge losses, and they have all suffered titles.