Tongtuo also suffered! 54 stores were closed and 41.43 million yuan of funds were suspected of being frozen!

Yesterday, there were reports about two Shenzhen sellers with annual sales of billions having their accounts blocked, which caused countless Chinese sellers to sigh.

Little did people know that this storm of store closures sweeping across the border showed no signs of easing, but instead intensified.

Previously, there were many rumors about Tongtuo Technology’s store closures. Until last night, an announcement from its parent company officially announced that Tongtuo Technology was also caught up in this wave of account closures.

It is learned that last night, Tongtuo Technology's parent company Huading Holdings issued an "Announcement on Major Matters of the Company".

The announcement stated that since mid-to-late July, the stores involved in multiple brands of the wholly-owned subsidiary Shenzhen Tongtuo Technology Co., Ltd. (hereinafter referred to as "Tongtuo Technology") have been suspended from selling by Amazon and their funds have been frozen. After investigation, it was found that the reason may be inappropriate reviews of some products, which are suspected of violating Amazon platform rules.

As of the announcement date, Tongtuo Technology had a total of 54 stores that were banned from selling and closed, and was suspected of freezing funds of RMB 41.43 million, accounting for 4.27% of the company's cash and cash equivalents at the end of 2020.

In addition to publicizing the relevant circumstances of Tongtuo Technology's store closure, the announcement also explained the impact of the incident on the company and the measures to be taken.

It is understood that Amazon is Tongtuo Technology's largest third-party sales platform . The sales of the above-mentioned affected stores account for approximately 18% of Tongtuo Technology's total sales from January to June 2021 , which will have a certain degree of adverse impact on the development of cross-border e-commerce business this year.

ST Huading stated that stores on other platforms and self-operated websites of Tongtuo Technology were not affected and sales were normal. Production and operation of other business units of the company and its subsidiaries were normal.

In response to the above-mentioned industry-wide problems of cross-border e-commerce, Tongtuo Technology has filed a complaint with the Amazon platform, striving to resume sales of related brand stores and lift the fund freeze as soon as possible, and has hired professional lawyers to prepare for arbitration. At the same time, it will increase the sales share of other e-commerce platforms such as eBay, Walmart, AliExpress, Lazada, etc., increase investment in Tongtuo Technology's self-operated websites, and actively expand offline physical store channels in Europe and the United States.

This announcement by Huading Holdings also means that three of the four largest sellers in South China City have fallen into Amazon’s “jaws” of ban.

From Huading's announcement, we can also see that after this platform cleanup, Tongtuo Technology will also start to diversify risks, increase sales on other e-commerce platforms and investment in self-operated websites, in order to avoid the tragic scene of one store being closed and the whole army being annihilated. If the account cannot be restored, then the big sellers will face the loss of all funds and goods, and the loss is unimaginable.

We don’t know what the fate of Chinese cross-border sellers will be in the future, but what is certain is that more and more sellers will join the ranks of operating in compliance and abiding by platform rules.

What do you think about this? A discussion group on the ban of big sellers has been set up. Interested sellers can scan the QR code to join the group discussion.

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