Author 丨 Ren Qianwen
Edited by He Yang Shi Wanjia
【Ebang Power News】"Settle the payment at a 20% discount price!" A few days ago, a supplier in the debt collection group posted a screenshot of the one he had just signed with the executive, and there was an uproar.
"The fryer is frying pan again." A merchant told Ebang Power.
It has been three months since late July this year, when suppliers collectively "collected debts", and the dispute over the arrears of suppliers by e-commerce companies in the Middle East has not yet been resolved.
Some of the determined suppliers and executives are still in a stalemate. In the face of the supplier's explanation that "this payment has been delayed for more than two years", "can't eat and then toss", and "withdraw first", the discussion and controversy in the group have been pushed up again.
"Negotiations have failed", "legal channels are being taken", "there is no further solution" In a rights protection group, there are many news that suppliers only want to scold their mothers.
Ebang Power tried to contact the official spokesperson of the executive to find out whether the dispute over the arrears of payment to suppliers had been resolved, but had not received a positive reply before press time.
Another industry insider said that in mid-October, when he passed by the Jinhua operation center where he was in charge, he found that "a red cloth for rent was hanging on an upper floor."
The former "unicorn" is facing unprecedented challenges and crises.
01
The supplier panicked
Rush from Shenzhen to Hangzhou
The result was liquidated by a one-fold discount
Back on July 20, more than 100 suppliers who had been owed money gathered at the headquarters building of the imperial company in Hangzhou's Gongshu District to "collect debts".
40,000, 100,000, 300,000, 1 million, 3 million... These suppliers are from Shenzhen, Guangzhou, and Hangzhou. They hope that the executive can give a reasonable solution, rather than the repeated "cut-off" payment collection, the requirement of account period instalment, and the proposal of "one discount" for the goods.
However, after fierce negotiations, the two sides still failed to reach an agreement.
This is not the first time that the executive has encountered a situation of being collectively "blocked" by suppliers. Since the beginning of last year, the negative voice of suppliers going to collect debts has begun to revolve around the emperor. Li Haiyan, the founder of the imperial government, also issued an open letter last year, saying that due to the epidemic and other factors, the company temporarily had difficulties in operating, and hoped to use financing, government relations, construction companies and other measures to gain the understanding of suppliers and tide over the difficulties together.
However, more than a year has passed, and the administration does not seem to have improved.
A supplier said that it was still shipping normally in June this year, and received a "one-fold liquidation" plan from the emperor in July. This caused "public outrage".
Some suppliers also said that they received "continue to cooperate, the account is divided into 12 installments; non-cooperation, 24 installments, two years later to pay the full amount, a discount" and other programs. According to the suppliers, the latest development is that "the previous settlement plan is all void, all historical arrears are settled at a 20% discount, if the contract is signed, it is settled in one go; if it is not signed, it will not be paid." ”
The so-called "20% off liquidation" means that for all suppliers who do not continue to cooperate with the emperor, the platform will settle the payment at a price of 20% off the historical value of the goods owed to each supplier.
"My 2019 payment has not yet been settled, and the 2020 payment has now stopped, and the hole is getting bigger and bigger." One supplier said this is a common situation.
A seller who claimed to have been owed 320,000 yuan in arrears came to Hangzhou from Shenzhen when he defended his rights in July. He said that when the original business was good, the monthly GMV could reach about 1 million yuan. The situation of default encountered began in the second half of 2019.
"At the beginning, the emperor said that the payment was deferred, and by the end of 2019, it said that the platform had operational difficulties and could not pay the loan, and proposed to pay in installments, but by February last year, there was a problem of account extension. From one month to two months to indefinite arrears. He said.
A big seller of ka swimwear also said that it was pressed more than 3 million yuan of payment, "the reason given by the platform is poor management, there is no money for the time being."
Another seller of the top 2 of the royal clothing category also said that when he was first owed the payment last year, he had sought out the relevant person in charge of the platform to understand the situation and expressed his support and understanding, but then the emperor did not pay according to the plan promised by the agreement, which has been delayed until now.
"When the epidemic broke out, they pleaded with suppliers to support themselves together, but there should have been some problems in the capital chain long ago." Before the epidemic, every month I would give a little (payment), and then I didn't give it directly. The clothing seller said.
According to the above-mentioned merchants, even in the most difficult time last year, suppliers are mostly continuing to supply, hoping to usher in a turnaround, but now people are no longer willing to believe in the staging agreement of the emperor.
"It's not that we don't tide over the difficulties together, but that we don't talk about credit." Suppliers say they are dissatisfied with the strategy and rhetoric of the back-and-forth shift, such as lowering prices, requiring suppliers to stock up against the final purchase volume, and "ignoring" the supplier's difficult situation. At the same time, they never found anyone who was really responsible for this matter.
Supplier Zhang Yu told Ebang Power that when Li Haiyan, the executive CEO, spoke last year, the industry public opinion was basically positive, but then the change in the industrial and commercial information of the company caused many suppliers to worry. It is understood that the legal person currently in charge has been changed from Li Haiyan to Wang Ruihan, and many directors have also withdrawn, accompanied by the resignation of many executives.
According to suppliers, as of July, the executive owed a total of about 140 million yuan in payment, ranging from tens of thousands of yuan to millions of dollars per company.
All these signs make the supplier wonder whether the emperor is still the one he knew before?
02
The peak company has more than 3,000 people
Purchasing managers are like marquees
I was asked to stock 10,000 pieces, and in the end I only received 3,000 pieces
Who is in charge? And who is the ruler today?
Founded in 2012, known as the "Middle East Taobao", it took only two or three years to become the most well-known mobile e-commerce platform in the Middle East and the first in the GCC countries, and by the end of 2017, its platform Jollychic had more than 35 million registered users, covering nearly 80% of Internet users in the Middle East. Subsequently, the emperor began to accelerate in the Middle East market.
"When they were at their strongest, they could have 500,000 tickets a day, which was very exaggerated." A person who was close to the imperial court also corroborated the glory of the imperial family.
Today, judging from the supplier's description, the executive has exposed some problems since 2019, and this is precisely the key year for the development of the executive. In September of that year, Yuhao threw 100 million US dollars and announced that the strategic positioning shifted from self-operation to pop platform.
Turning to an open platform is a major problem that many independent stations face when they develop to a certain scale. In the face of the upwardly tactile ceiling of the self-operated model, if you want to maintain faster growth and achieve large-scale development, the open platform undoubtedly has more imagination space. This can refer to the domestic e-commerce giant Jingdong, and the current red shein is also practicing this path.
The original self-operated model is a consignment model, the seller only works as a supplier to supply the platform, and the right to goods (pricing, logistics, etc.) is in the hands of the platform. However, this platform buyout model will become heavier and heavier with the growth of scale in the later stage.
At the same time, the most difficult thing to do in the Middle East market is logistics and customs clearance. In the past, it was a centralized shipment to the Middle East in the form of b2b. After the opening of the platform, from the domestic order, domestic delivery to overseas order fulfillment, overseas stockpiling, sellers can choose whether to bundle platform logistics, which is undoubtedly a great relief from the previous pressure.
"However, not any independent station can succeed in going to the platform. Going up, what you have to face is competition with e-commerce platform giants, and it involves the construction of the entire ecology, which needs to be done very heavily. Especially in such a complex market as the Middle East, there are extremely high requirements for the platform's own capabilities and funds. An industry insider said.
In fact, the complexity of the Middle East market, one of the most intuitive challenges for e-commerce platforms to develop the market, lies in the backwardness of e-commerce infrastructure, so that the package delivery rate is very low, and the COD (cash on delivery) rate in some countries is as high as more than 70%. To this end, the executive has also invested heavily in the construction of the e-commerce ecology of the Gulf market again and again. For example, the construction of an overseas warehouse of 150,000 square meters in Saudi Arabia, the investment in the Middle East logistics company Fetchr, and the acquisition of payment licenses in Saudi Arabia and the United Arab Emirates are like laying out the territory of the "Middle East version of Ali".
But "the foundation is not stable" and "if you want to be fast, you can't reach it" - these are the comments of the industry on the implementation of rapid expansion actions.
"The rapid pace of expansion has laid hidden dangers for its subsequent development." According to a former employee of the executive, due to the large external competition, the company was eager to absorb elite soldiers, and in the case of only one or two hundred other competitors at that time, the team size of the executive at the end of 2019 expanded by nearly 10 times to about 3,000 people.
Another supplier revealed that in order to win cooperation, the executive sent several investment managers to lobby themselves, but then these docking people have left within half a year. A number of sellers also said that the procurement team they docked with often changed.
Supplier Li Jian began to be in charge in 2018. In his view, 2018 is an explosive growth period for the imperial government, but since 2019, the operation strategy of the imperial government has undergone many changes, and the growth rate has begun to decline.
For example, the original emperor found his own stock of 10,000 pieces, but when he actually purchased, he only received 3,000 pieces, and the rest became his own inventory. After several times of this reciprocation, many suppliers can't eat it, resulting in the money earned before being pressed on the inventory. At that time, Li Jian decided to reduce the amount of stock.
"Later, we also joined the Open Platform. At the beginning, the traffic was still relatively considerable, and the growth rate was relatively fast. But after catching up with the epidemic in early 2020, the subsequent payments were stuck. Li Jian said.
03
Shein tripled in the Middle East
Amazon has also been growing
What's the problem?
The epidemic may only be the last straw for the hidden dangers of the regime to erupt.
Last year, the executive issued an open letter due to suppliers' reminders for payment, saying that due to the sharp rise in the epidemic in Saudi Arabia, the platform operation was difficult and the financial pressure increased, and there were even voices of disappointment in the Middle East market in the industry. Many people sighed: "As the leading big brother, you can't sit on the Diaoyutai steadily, and the unknown difficulties can be imagined!" ”
But in fact, other e-commerce platforms in the Middle East, under the epidemic last year, the development momentum is a good one. Amazon Middle East sales rose 26 percent to $76 billion in the first quarter of last year, according to Keamey Analysls; Mumzworld's sales rose 800 percent over the same period; instashop's app downloads grew 70 percent and orders increased 53 percent; and Shein Middle East's sales nearly doubled year-over-year last March. Last year, the overall growth rate of e-commerce in the Middle East exceeded 20%, and the market value of e-commerce reached $69 billion.
"As the first Chinese e-commerce company to eat crabs in the Middle East market, the dividends in the first few years were good, but with the entry of local companies and various overseas giants, its life was difficult." Some insiders said, "After all, it only does the Bay Market, the market plate is only so big, and a few more monks really have no water to eat." ”
The turnover soared from 100 million yuan in 2014 to 5 billion yuan in 2017, and later with Amazon and noon, it was called the troika of middle east e-commerce, and its e-commerce platform jollychic became the first in Saudi Arabia. By 2019, the three major platforms of Jollychic, Markavip and Deally had reached 50 million users in the Middle East.
However, after seizing the first-mover advantage, the executive has faced the pinch of various competitors in recent years.
An industry insider living in the Middle East said that most middle Eastern consumers are more receptive to local e-commerce. For example, noon's operation in the UAE is already very mature, and it will arrive in the afternoon when it places an order in the morning. Then, it is becoming more and more difficult to maintain the confrontation with these local platforms.
At present, the competitive landscape of e-commerce in the Middle East is "how strong and standing side by side". According to Simalarweb's data in April this year, six of the seven e-commerce platforms with the largest average monthly traffic in the Middle East have reached the level of tens of millions of visits, such as trendyol (80.2 million), n11 (76.9 million), gittigidiyor (46.6 million), souq (25.9 million), Amazon (22.5 million), and noon (20.7 million).
Among the top 5 middle Eastern popular apps recently inventoried by middle eastern media al bawaba, shein from China topped the list, followed by Amazon Middle East, noon, namshi, and ounass.
Judging from the list of a number of data research institutions, there is no longer a position in the top few of the middle East rankings.
(According to the data of the three major platforms under the jurisdiction of Simalarweb monitoring from October 2020 to September 2021)
On the other hand, the problem of holding the throne may also reveal the development bottlenecks that regional independent stations may encounter. Whether this model can be passed is still inconclusive, but at least, the dilemma of enforcement has raised a warning for all independent stations that try to platform, or independent stations that are dead in a certain regional market.
(Note: The interviewees in this article are pseudonyms)