Hit hard by account suspension, Shenzhen Dashao suffered a loss of 1.6 billion in one year! Did this giant make tens of billions in Q1?

The May Day holiday passed in a flash. I still remember that at this time last year, an unprecedented storm of account blocking was quietly brewing, and many top-selling products were swept away one after another.

Now, a year later, the big sellers have disclosed their 2021 report cards one after another. Some of them have not yet recovered from the aftereffects of being banned after suffering severe damage, some have seized the turning point of turning losses into profits in the turmoil, and some have remained unmoved despite the wave of bans and successfully achieved counter-cyclical growth.

In the account blocking wave last year, Shenzhen-based Youkeshu had 400 sites blocked and 128 million yuan of funds frozen, while another major seller, Tongtuo, had 54 stores blocked and more than 41.43 million yuan of funds frozen. These two billion-level sellers suffered varying degrees of losses under Amazon's iron fist.

According to the 2021 annual financial report released by Tianze Information, during the reporting period, its subsidiary Youkeshu achieved revenue of 1.575 billion yuan and a net profit loss of 1.673 billion yuan.

It is learned that Youkeshu's revenue from online channels is 1.536 billion yuan, accounting for 96.69% of its total revenue. Among them, Amazon's sales in 2021 reached 521 million, a year-on-year decrease of 25.86%.

▲ The picture comes from Tianze Information Announcement

As for the main reasons for the decline in performance and losses, Tianze Information stated that it was mainly due to adverse effects such as changes in the policy environment of the Amazon platform and fierce competition in the European and American markets. The cross-border e-commerce export industry suffered a short-term haze, and many big sellers in the industry suffered losses to varying degrees. Youkeshu's performance declined sharply, with revenue down 66.55% year-on-year.

On the one hand, there is inventory pressure. During the reporting period, the sales volume of Youkeshu's cross-border business inventory was lower than expected, and the large amount of inventory piled up further led to a cash flow crisis. On the other hand, the progress of unfreezing the funds frozen by Amazon was slow.

Although Tianze Information stated that its ability to continue operating has not been greatly affected, according to the first quarter financial report of 2022, the loss will still not be closed in a short period of time: revenue was 230 million yuan during the reporting period, a year-on-year decrease of 71.13%; net profit attributable to shareholders of listed companies was -27.0014 million yuan, a year-on-year decrease of 13.96%.

▲ The picture comes from Tianze Information Announcement

In 2021, Tongtuo's parent company Huading Holdings achieved revenue of 8.654 billion yuan, a year-on-year decrease of 11.36%; the net profit attributable to shareholders of the listed company was -607 million yuan, a year-on-year plunge of 208.78%.

▲ The picture comes from Huading Shares’ announcement

Huading Holdings stated that the main reason for the huge losses was that its cross-border e-commerce business was affected by multiple factors such as Amazon's account suspension and the platform's VAT withholding policy.

Under the double impact of the above-mentioned negative factors, Tongtuo Technology will likely continue to face operational risks brought about by inventory discounts, warehouse returns, and platform policy adjustments.

Not only that, since the outbreak of the epidemic, the situation of container shortages, warehouse overflows, and crazy increases in freight rates has continued, and the cost of the cross-border e-commerce industry has increased rapidly. The combination of many effects has posed another challenge to Tongtuo's profitability.

As we enter 2022, Tongtuo still has a long way to go to return to its former glory. As of now, there are still 21.36 million yuan of funds frozen by Amazon. In early March, the independent station business suddenly experienced fund deductions and account freezing.

However, on the basis of stabilizing its cross-border business, Tongtuo is also seeking new breakthroughs through model innovation and entering the "platform service e-commerce" module, which may bring about a new starting point.

As a once powerful distribution giant, Cross-border E-Commerce has repeatedly encountered freezing points in the past two years. At the beginning of last year, Cross-border E-Commerce announced the sale of its subsidiary Paton, which is known as one of the three Amazon giants. Soon after, another powerful arm, Global Easy Shopping, was repeatedly exposed to be on the verge of bankruptcy.

Faced with the loss of its right and left arms and heavy debts, the industry has voiced pessimism. However, as the saying goes, one must face danger in order to survive. After several times of operating difficulties, Cross-border Communication seems to have successfully grasped the hope of a desperate counterattack.

Recently, Cross-Border Link disclosed its 2021 financial report and the first quarter financial report of 22. The financial report shows that Cross-Border Link achieved revenue of 8.818 billion yuan in 2021, a year-on-year decrease of 46.31%; the net profit attributable to shareholders of listed companies was 674 million yuan, a year-on-year increase of 132.69%, of which the cross-border export e-commerce business achieved revenue of 2.679 billion yuan.

▲ The picture comes from the announcement of Cross-border Communication

It can be seen that after a period of low performance, the series of strategic adjustments made by Cross-border Link achieved good results and successfully turned losses into profits. However, its export e-commerce business is still facing severe challenges. Due to the sale of Paton and the bankruptcy of Global Easybuy, its revenue has plummeted.

Cross-border Communication said that it will focus on its core business in the future and change its strategic focus from scale expansion to consolidation of profitability and profit quality. The global fast fashion brand matrix represented by ZAFUL continues to seize the fast fashion clothing market and expand the third-party open platform business.

Looking at the performance reports released by the big sellers, some have both declining revenue and net profit, some have increased revenue but declining net profit, and some have seen a significant slowdown in performance growth. However, Jiuan Medical has become a clear stream among them, with rocket-like high-speed growth in performance that is enviable to everyone.

▲ Video account focuses on cross-border navigation

According to the latest disclosed financial report, iHealth achieved revenue of 21.337 billion yuan in the first quarter of 2022, a year-on-year surge of 6,646.79%; the net profit attributable to shareholders of the listed company was 14.312 billion yuan, a year-on-year surge of 37,527.45%.

▲ The picture comes from Jiuan Medical’s announcement

Since early December last year, subsidiaries of iHealth and the U.S. Department of Health and Human Services represented by the U.S. ACC have signed a number of "Purchase Contracts" for iHealth's COVID-19 Antigen Home Self-Test OTC Kits.

These sky-high orders worth over 10 billion yuan also helped iHealth successfully reverse the downward trend in the first half of 2021, and now it has achieved an astonishing net profit growth of nearly 40,000%.

Looking at the performance of the top sellers one year after the account ban wave, some were pushed downhill by the ban and are struggling to find growth points in their performance; some survived and reversed their losses; and some rode on the rocket of explosive growth and ushered in new breakthroughs.

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