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Benefiting from the explosive growth boosted by the early stage of the epidemic, the cross-border e-commerce industry has created countless wealth myths of "getting rich overnight". But today, the frenzied market demand has returned to rationality, and the sluggish consumer power caused by the downward global macroeconomic situation has not only caused cross-border sellers to suffer from declining order volumes and rising costs, but even e-commerce platforms have been unable to escape the black swan and are now in a desperate situation. Zilingo enters bankruptcy liquidation
It is learned that on January 20, Bloomberg reported that Zilingo, a Southeast Asian fashion e-commerce startup headquartered in Singapore, will enter the bankruptcy liquidation stage. On January 30, according to the Singapore Business Times, Zilingo's board of directors has officially confirmed the liquidation and appointed Aaron Loh Cheng Lee and Ee Meng Yen Angela from EY Corporate Advisors as provisional liquidators. In a statutory declaration filed by Zilingo, its board said the company could not continue as a going concern due to its debts and a meeting between Zilingo and its creditors would be held on February 10. It is learned that Zilingo was founded in 2015 and is a fashion e-commerce platform for the Southeast Asian market. Its business has expanded to many countries and regions such as Bangkok, the Philippines and India . It has about 600 employees and tens of thousands of platform sellers. After receiving US$226 million in Series D financing in 2019, including investments from Temasek and Sequoia Capital, Zilingo's valuation once reached nearly US$1 billion. But the good times did not last long. The outbreak of the epidemic caused Zilingo to suffer a sharp drop in revenue. To alleviate this predicament, in 2021, Zilingo closed offices in many countries and regions and laid off a large number of employees . Unfortunately, this downsizing move seems to have little effect. As of May 2021, Zilingo has laid off about 12% of its employees, but the cracks in its performance are still getting bigger and bigger. In April 2022, the relationship between the company's CEO Bose and the head of Sequoia India deteriorated, which became the last straw that pushed Zilingo to bankruptcy and liquidation. The Zilingo board of directors finally fired Bose in May 2022 for "disobeying orders". Until entering the bankruptcy and liquidation stage, Zilingo did not have a new CEO. From a valuation of nearly $1 billion to today’s bankruptcy and liquidation, Zilingo’s decline is inevitably regrettable. However, Zilingo's bankruptcy is not an isolated case in the global macroeconomic downturn. At the end of 2022, home furnishing e-commerce platforms Brosa and Made.com also fell into bankruptcy. Among them, although Brosa was acquired shortly after entering the voluntary administration procedure, the thousands of unfulfilled orders it left behind became a major problem. Brosa still has thousands of unfulfilled orders
It is learned that according to foreign media reports, the Australian home furnishing e-commerce platform Brosa has officially entered the liquidation stage on January 31. At the same time, the thousands of unfulfilled orders left by Brosa before bankruptcy have caused heated discussions on overseas social platforms. It is understood that Brosa was founded in Australia in 2014 by Chinese David Wei and Ivan Lim, and its main products are light luxury furniture. Under the boost effect of the early stage of the epidemic, Brosa once achieved explosive growth that was enough to double its scale. However, after the epidemic restrictions were relaxed, the offline real economy recovered. Due to the failure to make timely adjustments to products and traffic strategies, Brosa's growth began to slow down in 2022. Severe cash flow pressure eventually prompted Brosa to embark on the path of bankruptcy management: - On December 14, 2022, home furnishing e-commerce platform Brosa entered voluntary bankruptcy procedures and held a "bankruptcy sale" on its official website. There were still about $10 million in unfulfilled orders;
- On December 21, 2022, Brosa was acquired by Australian e-commerce platform Kogan at a low price of only A$1.5 million;
- On January 31, Brosa's creditors voted to close the company and Brosa was officially liquidated.
It is worth noting that Brosa still had about $10 million of unfulfilled orders when it entered the voluntary administration bankruptcy process. These orders have not been fulfilled until the liquidation stage. About 5,290 Brosa customers paid for the goods, which have not yet been delivered, according to people familiar with the matter. Typically, when a company goes into insolvency, secured creditors such as banks and key suppliers are paid first. Customers are considered unsecured creditors and often receive only partial repayments or nothing at all. Accordingly, these customers expressed their dissatisfaction with Brosa's irresponsible behavior on multiple social platforms. This situation is undoubtedly a major hidden danger for Kogan, which acquired Brosa at a low price of A$1.5 million. However, in a recent message, Kogan stated that it would contact Brosa customers who paid for goods that have not yet been delivered. It remains to be seen what the subsequent developments will be. Overall, affected by factors such as sluggish market growth and the fading of the epidemic dividend, the wave of bankruptcies and closures of e-commerce platforms in 2022 seems to be particularly turbulent. However, while this wave is regrettable, it also serves as a wake-up call for many sellers that may lead to the failure of their companies. A towering building rises from the ground, and a thousand-mile long dike collapses due to a single ant hole.
In the process of iteration in this industry, cross-border sellers can only lay a solid foundation for their future high-rise buildings by being cautious from beginning to end.
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