Image source: @VisualChina
Looking back on 2022, the e-commerce industry is still "cold".
Under the influence of multiple factors such as repeated epidemics, sluggish consumption, and peak traffic, the industry has stalled, the growth rate of enterprises has slowed down, and the powerful have continued to "down" and "outward" to find new stories, and many players have fallen.
According to incomplete statistics from Titanium Media App, there are 14 e-commerce platforms that will fall in 2022 (Note: the definition of "fall" covers company bankruptcy, bankruptcy, runaway, platform shutdown, shutdown, etc.), including Daily Youxian, Secoo that were once popular with capital, Ten Clubs and Little Goose Pinpin, which have long existed in name only.
Fall on the list of Chinese e-commerce platforms in 2022
In terms of types, cross-border e-commerce has the most, with 5, accounting for 35.7%; followed by social e-commerce, with 3, accounting for 21.4%; There are 2 fresh food e-commerce, and 1 luxury e-commerce company, 1 mother and baby e-commerce, 1 cultural play e-commerce and 1 comprehensive e-commerce e-commerce.
Looking at the reasons for its fall, the epidemic only played a catalytic role, and the problems of products, organizations, and models in the company's own operation are the root, and this also confirms to a certain extent the situation of some segments of e-commerce, and in 2023, pendant players will be more difficult.
Yang Wharf owes 200 million, cross-border e-commerce "ice and fire"
In September 2022, the crisis at the Yang Wharf, a "ten-year old player" who imported overseas amoy, broke out in full force: cash flow deteriorated, and the payment owed to merchants reached 200 million yuan, and buyers came to ask for debts; Employees left on a large scale, and the headquarters was "empty".
Its founder, Zeng Bibo, blamed this on the epidemic and returning home from red chips. On the one hand, the number of flights affected by the epidemic has been greatly reduced, and goods cannot come in; Several core ports have a 14-day standstill period for imported materials, and the cancellation rate has increased. On the other hand, when the red-chip structure was dismantled in 2021, a lot of funds were refunded from the stock withdrawal, including more than 100 million yuan from Sina Weibo and nearly 80 million yuan in bank loans.
In fact, the platform's C2C model naturally has the drawback of "lax review", resulting in frequent quality control and reputation problems such as "receiving fake goods" and "no refund", which is the culprit of Yang Wharf's loss of consumers.
In addition, Ali and Jingdong entered the game with huge traffic and merchant resources, which seriously squeezed the survival space of independent overseas shopping platforms. With the growth of China's import cross-border e-commerce market, independent overseas shopping platforms have almost "disappeared".
According to NetEconomics, from 2018 to 2022, a total of 18 enterprises in the field of cross-border import e-commerce disappeared. Among them, SF Investment's self-operated cross-border e-commerce platform "Fengqu Haitao" was filed for bankruptcy in November 2022, according to its legal person and CEO Ren Xiaoyu, the company has long been dissolved, the platform has long ceased operations, and the employee resettlement compensation has basically been completed.
Even Kaola Haigou, which once topped the market share, will encounter difficulties in 2022. According to sources, as of July 2022, the Kaola overseas shopping business team that was pocketed by Ali has shrunk from more than 400 people in 2021 to less than 20 people, focusing only on the membership e-commerce business mainly in the categories of mother and baby, and beauty, and the products and technologies are only maintained and no longer upgraded.
In addition to imported overseas shopping, there is no shortage of people who have fallen in the past year when cross-border overseas has gone overseas.
On January 21, 2022, the business of JollyChic, a Middle East e-commerce platform under Zhejiang Zhiyu, came to a standstill, and the official website products could not view details, App orders could not be fulfilled, and the seller's login page could not be opened. It is reported that since the outbreak of the epidemic, affected by the lockdown policy of the six Gulf countries, the order completion rate of JollyChic has plummeted, and before that, the big strides and heavy investment in payment, warehousing and other aspects have made it unbearable.
On February 11, ByteDance's cross-border women's independent website Dmonstudio was suspended, just three months after its launch. For the sudden shutdown, the official did not give a specific explanation. The market generally believes that ByteDance lacks e-commerce genes and insufficient supply chain capabilities are the main reasons for its cross-border e-commerce process.
As a part of JD.com's overseas expansion, JOYBUY has experienced several twists and turns, and has not escaped the fate of shutdown: in December 2021, it shut down its English and Russian station businesses, removed all products in February 2022, relaunched its B2B model in June, and announced business upgrades and transaction suspension again in November. Behind this, under the pressure of growth and profitability, JD.com's overseas business has entered a period of strategic contraction.
Nevertheless, as the domestic Internet traffic dividend further dissipates, and overseas e-commerce represented by Europe, the United States and Southeast Asia continues to release potential, coupled with the frequent favorable policies in the cross-border e-commerce field during the year, in 2022, the overall domestic e-commerce overseas ushered in a small climax.
From the perspective of mode, after experiencing the wave of Amazon bans, "independent station" is highly respected, and the most menacing is Pinduoduo and ByteDance.
In September, Pinduoduo's cross-border e-commerce platform Temu was officially launched in the United States, consistent with the early stage of domestic development, adopting a high-subsidy discount method, mainly promoting women's clothing and daily necessities. According to the latest media disclosure, Temu's daily average GMV has exceeded 1.5 million US dollars, and Temu has entered the African market and opened for download in the Canadian market.
In addition to the closed Dmonstudio mentioned above, the independent e-commerce platform Fanno, which was launched at about the same time, also "opened high and went low", and was reported to be disbanded in May, but the official denied it; In September, a new fast fashion independent site IfYooou was launched, learning from Dmonstudio's failure experience, taking the low-price route, focusing on the European market.
Even Alibaba, which has already entered cross-border e-commerce, has put overseas business in a more important position after the adjustment of its business structure. In 2022, under the leadership of the newly appointed Jiang Fan, Alibaba increased its capital in its e-commerce platform Lazada twice, and also announced the OKKI independent website solution.
With the influx of the above large platforms, the competition of cross-border e-commerce will become more intense.
The daily fresh business has stagnated, and fresh food e-commerce has "broken arms" to seek profits
In 2022, Daily Youxian, one of the "double heroes" of the front warehouse, will step by step on the "end road". In March, it was reported that the payment was owed to suppliers, and in May and June, it successively cut business in Tianjin and other places, and also received "delisting" warnings due to difficult production in annual reports and stock prices that continued to be below US$1; On July 28, the Speedy business was shut down nationwide, and the next-day delivery business was unable to operate in many places, and internal layoffs began, leaving only 55 full-time employees by November 14.
Although it has been trying to sell assets to "survive", at present, the daily fresh business is still stagnant, and it is still facing nearly 1,400 debt disputes between employees and suppliers, totaling about 812.7 million yuan, and its performance in the secondary market once "no longer meets the US$10 million shareholder equity requirement required to continue to list on the NASDAQ global market".
The asset-heavy and investment-heavy front-end position model is considered the "culprit". Including the construction cost of the warehouse, the labor cost of the rider, etc., the performance cost of the front warehouse model is high, Northeast Securities Research Report data shows that it is about 3 times that of the traditional central warehouse e-commerce, about 2 times that of platform e-commerce, and about 6 times that of community group buying, and because the front warehouse store does not have a drainage function, sales and marketing expenses are also higher.
From 2018 to 2021, the performance expenses were RMB1.239 billion, RMB1.833 billion, RMB1.577 billion and RMB2.121 billion, respectively, accounting for 34.9% of total revenue and up to 59.6% of operating expenses. From 2019 to 2021, the selling expense ratio was 12.3%, 9.6% and 13.0%, respectively.
This has made it difficult to make a profit. According to the daily Youxian prospectus and financial report, from 2018 to 2021, the net losses were 2.232 billion yuan, 2.909 billion yuan, 1.649 billion yuan and 3.850 billion yuan, respectively, and the cumulative loss in four years exceeded 10.5 billion yuan, burning up the money raised in the capital market.
However, fresh food retail itself is a difficult business. Due to the characteristics of easy corrosion and high arrival loss, the gross profit itself is low, and even the gross profit margin of the fresh category of offline supermarkets in 2021 is only about 15%. The supply chain is very complex, and there are many non-standardized factors that need to be controlled in everything from the field to the table.
After several years of development, domestic fresh food e-commerce has been subdivided into different operating models, but has not yet created a stable and profitable business model.
The fall of Daily Fresh is only a microcosm of the current development of the industry. In 2022, with the increasingly cautious external capital and fierce market competition, fresh food e-commerce has frequently heard the sound of "contraction".
In May and June 2022, Dingtone Grocery withdrew from Xuancheng, Chuzhou, Tangshan, Hebei, Zhongshan, Zhuhai and Tianjin in Guangzhou, and closed the Xiamen market in October.
Under the community group purchase model, Shihuituan has become the second platform among the "old three groups" to fall behind. In March 2022, it was revealed that Shihuituan had shut down all its businesses in cities across the country and entered the aftercare stage, mainly dealing with the settlement of supplier payments and the settlement and compensation of employee wages. At that time, the WeChat Mini Program of Shihuituan was no longer accessible, and the APP was blank after opening.
The only survivor of the "Old Three Groups", Xingsheng, Preferred, withdrew from the five provinces of Shanxi, Jiangsu, Zhejiang, Hebei and Anhui in August, and closed the business of Henan, Shandong, Sichuan and Chongqing in October, and currently only retains a small number of advantageous provinces such as Hunan, Hubei and Guangdong to maintain regional operations.
Even the giants are busy withdrawing and transforming. JD.com's Jingxipinpin underwent two rounds of contraction in March and June 2022, shrinking from 20 provinces to only Beijing and Zhengzhou. After closing many markets one after another, Meituan Preferred announced its transformation into "Tomorrow Supermarket" in October, further expanding daily necessities and other categories in addition to the previous main fresh food, complementing the instant retail positioning of Meituan Flash Sale and Meituan Grocery Shopping.
Hema in the integrated model of stores and warehouses is adjusting its multiple formats. In March 2022, Hema Fresh closed 5 stores in 4 cities at the same time; In August, several Hema mini stores in Beijing and Shanghai were either closed or transformed; In April and October, Hema Neighborhood withdrew from four cities, Beijing, Xi'an, Chengdu and Wuhan, as well as two markets in Hangzhou and Nanjing, leaving only the Shanghai market.
On this basis, it is expected that fresh food e-commerce will still achieve profitability as the main strategic direction in 2023.
The honeybud APP was discontinued and removed, and the vertical e-commerce of mother and baby fell en masse
On July 1, 2022, the honey bud of the long-disappeared mother and baby e-commerce announced its "fall": it will stop the APP service and shut down the shelves on September 10, 2022.
The official reason given is that "users' shopping habits have changed", which is due to their lack of hematopoietic ability and fierce competition in the industry.
Since the Taobao store, honeybuds have caught up with the boom in mother and baby e-commerce, and have obtained 5 rounds of financing in two years, with a total of more than 2 billion yuan, including many well-known venture capital companies such as Sequoia Capital, Zhen Fund, and H-Capital, and the company's valuation was once close to 10 billion yuan.
With this, honeybuds started to develop rapidly. In order to seize the market, it launched a price war and marketing war, and also implemented a horizontal development strategy, expanding from vertical cross-border e-commerce for mothers and babies to offline experience and franchise, private brands and infant industry investment.
However, when the capital did not continue to provide support since 2016, honeybuds immediately reported that the funds were tight.
Since then, although some self-help measures have been taken, Honeybud not only failed to save the situation, but also fell deeper and deeper by itself. For example, in September 2017, Honeybud launched the PLUS membership service, which was suspected of being suspected of pyramid schemes; In September 2020, founder Liu Nan entered the live broadcast with goods, allegedly losing more than 8 million yuan.
Looking at the entire mother and baby e-commerce track, honeybuds are not alone. As early as 2016, the industry entered a reshuffle period, and many well-known players have left the market so far.
In August 2016, the mother and baby sale e-commerce "Lotus Parent-Child", which started as a group buying and was pocketed by the Hot Mother Gang, announced its closure, less than two years after its establishment; In August 2019, the first maternal and baby e-commerce "Mother and Baby Home" listed on the New Third Board was exposed to abnormal operation, the registered address went to the empty building, and no one answered the online and offline contact channels; In August 2021, Beibei Group, which once became the largest in China and was considered the ultimate in maternal and baby e-commerce, reported that the capital chain was broken, the payment of suppliers was arrears, and the founder ran away, and then the Beibei APP was suspended and removed.
The performance and market value of the listed companies BabyTree and Child King that remained at the table are also not very optimistic.
BabyTree has been losing money for years. According to its past financial report data, from 2019 to the first half of 2022, BabyTree's revenue was 357 million yuan, 212 million yuan, 282 million yuan and 137 million yuan, with a net loss of 494 million yuan, 470 million yuan, 387 million yuan and 197 million yuan, and a cumulative loss of more than 1.5 billion yuan in three and a half years. The company's share price has fallen from the issue price of HK$6.8 to HK$0.31 at the close of trading on January 12, 2023, a decline of more than 95%, leaving a market value of only 515 million.
The profitability of the child king is also not as good as before. According to its financial report for the first three quarters of 2022, the company achieved revenue of 6.384 billion yuan in the first three quarters, down 3.23% year-on-year, and net profit of 152 million yuan, down 35.89% year-on-year. The stock price has fallen sharply from 25.20 yuan at the peak of the listing to 13.06 yuan now, and the total market value has shrunk by about 11 billion yuan.
In contrast, after Alibaba, Jingdong and other comprehensive platforms developed the maternal and infant market, with their mature brand co-creation capabilities and new product growth system, they quickly occupied the first echelon position in the maternal and infant e-commerce track, and the frequency of user purchases was much higher than that of other types of platforms in the industry.
Secoo was bankrupt three times, and the concept of second-hand luxury is still thriving
In 2022, Secoo fell into bankruptcy three times. On January 5, Chai Chenxu applied for a bankruptcy review of Beijing Secoo Trading Co., Ltd., but the application was withdrawn the next day; On August 10, Zhao Dongping filed another bankruptcy review application against Beijing Secoo Trading, but this time Secoo did not respond; On August 25, Shanghai Secoo E-Commerce Co., Ltd. added a bankruptcy review case, the applicant is Shanghai Weiqi Trading Co., Ltd.
Also in mid-August of this year, the news of "people going to empty buildings and suspected of running away" came out of Secoo Beijing headquarters, although the relevant person in charge denied it, but the company's "collapse" was a fact.
According to the data of the Black Cat Complaint Platform, there have been more than 18,300 complaints related to Secoo, most of which are due to non-delivery and non-refund. At the same time, on the China Judgment Document Network, there have been more than 130 public cases related to Secoo since 2022, almost all of which are sales contract disputes and loan contract disputes.
Performance also continued to decline. According to financial report data, Secoo's annual revenue in 2020 fell by 12% year-on-year to 6.02 billion yuan, with a net loss of 71.86 million yuan, turning from profit to loss year-on-year; in 2021, the operating situation was "worse", with a net loss of 566 million yuan, an increase of 6 times year-on-year; and the net loss in the first half of 2022 expanded sharply to 820 million yuan.
In the secondary market, investors are gradually losing confidence. Since the beginning of 2019, Secoo's share price has fallen in shocks, falling below US$1 for the first time on November 4, 2021, and then received a delisting warning letter, which was lifted on December 9, 2022, and is currently trading at US$1.74, more than 86% lower than the US$1.3 billion issue price at the time of listing.
In this regard, Secoo bluntly said in a statement that the epidemic has brought an unprecedented impact on the luxury consumer industry, and its (2020 Q1) revenue performance has also been affected by the slowdown in discretionary spending and the reduction of public activities brought about by the epidemic. However, the epidemic has not dampened the enthusiasm of luxury consumption in China, with Bain data showing that luxury consumption in China bucked the trend in 2020 and is expected to become the world's largest luxury market by 2025.
The analysis believes that one of the most important strategic mistakes of Secoo to this day is category expansion, including from second-hand luxury products to new luxury products, from luxury goods to wine and tourism, catering, fresh food, luxury cars, as well as globalization, finance, intelligence, community, etc., burning a lot of money, but did not achieve actual results, but made the business sector not clear, aggravated the difficulty of "public domain traffic" to obtain customers, "private domain traffic" monetization difficulty.
It is worth noting that before Secoo, too many luxury e-commerce platforms have fallen.
For example, after 2012, the first luxury e-commerce platforms such as Huha.com, Pinju.com, Zunku.com, and Jiapin.com were shut down, and during the same period, NetEase Shangpin and Sina Luxury also fell into a shutdown; On July 30, 2019, Shangpin.com, which climbed to the top of the luxury vertical e-commerce industry, also announced the suspension of services due to poor financing restructuring and hindered operations; In March 2020, the catwalk also issued an announcement of the suspension of business in the center of the homepage of its website.
In fact, in the early years, luxury e-commerce has been questioned as a false proposition, because the high-end positioning of luxury brands and the low-price attributes of e-commerce are contradictory, and then, with the trend of e-commerce, luxury brands have built their own channels, such as Prada, Armani, LV, etc., after the outbreak of the epidemic, they began to live broadcast goods and build their own mini program mall. This leads to the problem of the supply of brand authorization becoming a long-term hidden danger.
When pendant luxury e-commerce fell one by one, the concept of second-hand luxury goods continued to be hot, and Feiyu's live broadcast room was hot, Fat Tiger completed $45 million in C+ round financing in January 2022, and Red Bulin received $100 million in November C round financing, second-hand luxury e-commerce may accelerate its rise.
(This article was first published on Titanium Media App, author| Liu Mengmeng)