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As the No. 1 cross-border e-commerce stock in the past, its market value once soared to 35.6 billion yuan at its peak. Cross-border Link’s position in the cross-border circle is second to none. However, since 2020, the business of its subsidiary Global Easy Buy has declined sharply. Affected by inventory backlogs and multiple lawsuits, Cross-Border Link has gradually entered the dilemma of plummeting performance, and to this day, it has not been able to escape from the swamp. Recently, an announcement from Cross-Border Link once again broke the tranquility of the cross-border circle. The original founder of Global Easy Shopping was investigated It is learned that on December 3, Cross-Border Link issued an announcement stating that the company recently learned from the public security authorities that the company's former chairman and general manager Xu Jiadong has been investigated by the Wanbailin Branch of the Taiyuan Public Security Bureau on suspicion of embezzlement. At present, the company’s production and operation activities are normal, and the impact of this case on the company is not yet certain.Cross-Border Link stated that after Xu Jiadong stepped down in May 2021, the company discovered that he had committed criminal acts that infringed the company's interests during his tenure. This has been investigated and verified by the public security organs. The specific amount and persons involved are still subject to final confirmation by the relevant departments. According to the analysis and explanation of professional legal expert @大信(京师)老杨, the "crime of embezzlement" mentioned in the announcement determined that the nature of the incident was a criminal offense . Not only was the starting point for sentencing low, but once the evidence was conclusive and the arrest was approved by the procuratorate, the punishment would also be more severe: the judicial interpretation clearly stated that if the amount is more than 30,000 yuan, a case should be filed for prosecution. It is understood that Xu Jiadong founded Global Easybuy in 2008, joined Cross-Border Link in 2014, and then served as Chairman and General Manager of Cross-Border Link from the end of 2018 to May 2021. He can be regarded as a veteran in the cross-border e-commerce industry. According to insiders, shortly after the announcement was released, the person involved, Xu Jiadong, allegedly posted a WeChat Moments post in response: The accusation in the announcement that I embezzled huge amounts of company assets was a complete false accusation and frame-up, and it was a mistake to elevate an economic dispute to a criminal case. I will use all legal means to fight for fairness and justice.However, as of now, there is no conclusion as to whether the news is true or not . We also have no way of knowing the specific amount involved in the case and the progress of the case. We will continue to pay attention to the follow-up progress and release the latest news in a timely manner. At the end of September this year, Cross-Border Link released an announcement that "its wholly-owned subsidiary Global Easybuy has entered into compulsory liquidation procedures, and its bankruptcy will no longer have a negative impact on its subsequent operations." Many industry insiders believe that after successfully removing the hat and eliminating the risk of delisting, it will see the light of day. However, this recent announcement has plunged the future development of Cross-Border Link into a confusing quagmire. Why did the once prosperous cross-border seller fall to this point? Here, we review its cross-border development path, which may give sellers a glimpse of the situation. The Pandora’s Box of Distribution Model
In 2014, Cross-border Communication, which started out in the clothing industry, was formerly known as Baiyuan Pants Industry, and acquired Global Easybuy, founded by Xu Jiadong, for 1.032 billion yuan, thus officially entering the cross-border e-commerce industry. The following year after the transformation, it was renamed Cross-border Communication, and its revenue soared from 842 million yuan to 3.961 billion yuan, becoming the first cross-border e-commerce company listed on the A-share market. In 2016, having tasted the sweetness of success, Cross-Border Link acquired several cross-border e-commerce related projects such as Paton, Youyi E-Commerce and Bailun Technology, which took its cross-border business to a higher level. In 2018, its revenue reached 21.534 billion yuan . However, while Global Easybuy's high revenue gave Cross-Border Link the confidence to aggressively acquire cross-border e-commerce businesses, its excessive stocking model also laid an invisible landmine for the subsequent collapse of the company's business. At the beginning of 2020, the news that Cross-Border Link expected a loss of 1.43 billion to 1.13 billion yuan caused a turmoil in the stock market. This turmoil reached its peak at the end of April when it was officially announced that the actual loss had doubled to 2.686 billion yuan . According to the 2019 annual report of Cross-Border E-Commerce, the net profit loss of its subsidiary Global Easy Shopping reached 2.65 billion yuan in 2019, mainly due to the sharp decline in Global Easy Shopping's sales business in Europe and the United States, as well as the impact of clearing unsaleable inventory and making provisions for inventory impairment. ▲ The picture comes from the 2019 annual report of Cross-border Communication In March 2021, due to the pressure of capital chain, Cross-border Communication planned to transfer 100% equity of its wholly-owned subsidiary Paton for 2.02 billion yuan. In December of the same year, Shenzhen Global, another powerful arm of Cross-border Communication, officially announced bankruptcy liquidation. Since then, Cross-Border Link, which has lost its left and right arms, seems to have hit rock bottom. From the perspective of its cross-border history, it is not difficult to find that the merger and acquisition agreement signed by Cross-border Link with Global Easybuy in 2014 is like Pandora's box: the distribution model that initially seized the overseas market did bring it unlimited glory, but what caused its gradual decline and even the collapse of the building was the inventory management drawbacks caused by the massive distribution model. It can be said that: success depends on distribution of goods, and failure also depends on distribution of goods. But as mentioned in "Zi Zheng Xin Pian": Things are constantly changing, and principles have their limits. In the ever-changing cross-border e-commerce industry, assessing the situation is the key hub for sellers to adjust their overseas strategies. Looking back at the cross-border memoirs, based on China's supply chain advantages, the distribution model has indeed created a pair of wings for many cross-border sellers to go overseas. However, with the increase in cross-border players and increasingly stringent platform regulations, this wing has obviously been overwhelmed and is prone to breaking. Cross-Border Link, which has been stuck in the quagmire due to its massive distribution model, has obviously realized this. Since 2021, while optimizing the inventory management process , Cross-border has also gradually shifted to refined operations around the branding strategy . Among them, the achievements in the construction of self-operated brands such as ZAFUL and Rosegal are particularly impressive. In 2021, ZAFUL once again made the list of the "BrandZ™ Top 50 Chinese Global Brands" with an overall ranking of 43rd. In the global online fast fashion list, ZAFUL ranked second, second only to SHEIN.In the future, whether Cross-Border Link can find a turnaround through ZAFUL's operations and regain its overseas glory remains an unknown. What do you think of the future development of Cross-border Link? Welcome to discuss in the comment area~ |
