Another cross-border e-commerce platform closed down, more than 100 employees lost their jobs

There are news reports of cross-border e-commerce platforms going bankrupt every year, and this year there are especially many. Recently, another e-commerce platform was reported to have gone bankrupt, and suppliers are already lining up to claim compensation!

Another cross-border e-commerce platform has closed down

Recently, Middle Eastern e-commerce Sprii announced that it had appointed Grant & Thornton as liquidator due to its failure to raise more funds and failed to sell the company. This move made it difficult for suppliers to turn around because there were hundreds of thousands of dirhams (1 dirham = 0.27 US dollars) of outstanding invoices since the end of August this year .

Regarding Sprii's liquidation, lawyers warned that Sprii's cash flow problems caused by the amount of money owed to suppliers would make the liquidation of the e-commerce platform a long process, and collecting the money might be an even longer process, or even impossible .

It is reported that Sprii was founded in 2014, then called Mini Exchange, and changed its name to Sprii in 2017. This platform takes the high-end European and American route, catering to the Arabs' "pro-European and American" preferences. The products are mainly high-end European imported products, focusing on the UAE, Kuwait, Oman, Bahrain and Saudi Arabia markets. According to LinkedIn data, Sprii has more than 100 employees.

In the Middle East, Sprii ’s maternal and infant e-commerce market is competing with Mumzworld for market share. In fact, Sprii has raised nearly $15 million in funding, including an $8.5 million Series A announced last June, making it the second-highest-funded startup in the category (Mumzworld is the highest-funded).

According to an Arab supplier who wished to remain anonymous, “These companies are asset-light, so even if there is a liquidation, I don’t know what assets Sprii has and what the liquidator will use for liquidation, because it is not like a company with factories, equipment or inventory, which they can sell. I think most suppliers hope to get at least some compensation, which is better than nothing.”

This year, many e-commerce platforms have closed down due to various reasons. We often see the positive side of cross-border e-commerce. Now Xiaohei will take stock of the cross-border e-commerce platforms that have closed down this year and the risks involved. It is very important to choose the right cross-border platform. Sellers, hold on!

Lotte Germany closed on October 15

Lotte Group has decided to stop accepting new orders from October 15, 2020 as part of a strategic review of its business in Europe and Germany.

The announcement stated that the platform will serve merchants similar to those in the UK and Spain through an open e-commerce model. At the same time, Rakuten will continue to strengthen its advertising and digital content strategic focus in Germany, which will not be affected by the closure of the site.

It is reported that Rakuten Deutschland is the third largest online e-commerce sales platform in Germany after Amazon and eBay. Its predecessor was Tradoria, which was acquired by Rakuten Group in 2011 and renamed Rakuten De in 2012. It has more than 7,000 sellers and 80 million annual visits.

In this regard, industry professionals analyzed that the main reason why Rakuten Germany closed its site was that its market in Germany was constantly being eroded, and it had to adjust its e-commerce business . In addition, the epidemic has led to sluggish market demand, and the pressure on the platform from German VAT tax compliance is also one of the factors that led to its closure.

Indonesian e-commerce platform Blanja also announced that it would stop operating

Blanja, the e-commerce website under Telekom Indonesia, was officially closed on October 1, 2020, and Blanja’s official website also announced the suspension of operations at the same time.

In the announcement, Blanja stated that due to strategic changes, sales activities on Blanja have been stopped.

Awok, an e-commerce platform in the UAE, has shut down and owes its employees millions

In early September, Awok, an e-commerce platform based in the United Arab Emirates, was shut down. Its website has long been inaccessible, and its social media has not been updated since May. At the same time, many posts about unpaid wages have appeared online.

In a statement posted on its homepage, Awok cited the current global instability as the reason for the closure, saying the company had no choice but to permanently shut down the platform.

It is reported that the company was founded by Kyrgyz entrepreneur Ulugbek Yuldashev in 2013, with an average of more than 10 million visitors per month. At that time, it could provide about 300,000 products and had as many as 700 employees.

According to relevant information, Awok completed its first round of financing of approximately US$30 million in April last year. Yuldashev said at the time that the funds would be used for the platform's promotion and growth plan.

However, according to Omar Kassim, an influential figure in the Middle East venture capital circle, many Middle Eastern e-commerce companies are having a hard time due to the head effect brought about by the global epidemic and the increase in consumption tax . The most important reason for Awok's closure is that the 30 million yuan it raised did not arrive immediately, but was paid in stages according to the target.

Zhiyu was also reported to be bankrupt

As early as April, a seller broke the news that the Middle Eastern unicorn Zhiyu was about to go bankrupt and even owed 900,000 yuan in loans. Suppliers were complaining because they had not received repayments for more than half a year. An insider even posted a letter from Zhiyu CEO Li Haiyan to suppliers.

Regarding the failure to pay suppliers on time, Li Haiyan said in the letter that it was mainly due to the sharp rise in the epidemic in Saudi Arabia, which squeezed cross-border logistics channels and caused abnormally high costs. The local martial law and city closures caused local logistics efficiency and receipt rates to decrease, resulting in a decline in sales of some non-essential goods , making it difficult for the platform to operate and increasing financial pressure.

In fact, since last year, Zhiyu employees have been lamenting the current situation of the company. Some said: "As a unicorn e-commerce company in the Middle East, I didn't expect it to decline like this. 2,500 people were cut to only about 1,000 people. Some old employees who were doing things left. A good game was played badly. In the past few years, the income and expenditure were balanced, but in 2018, the expansion was too fast, and the GMV did not increase much. It should be a serious loss."

Due to the epidemic this year, layoffs, unemployment, evacuations, and bankruptcies have continued, and Zhiyu seems to be no exception. Employees even wrote a thousand-word article in classical Chinese to angrily denounce the company for disguised layoffs, looking for legal loopholes, and committing illegal acts!

Cross-border e-commerce platforms have collapsed one after another. Fortunately, 2020 is about to pass. I hope that sellers can continue to hold on and create greater glory in 2021!

(Source: Cross-border Black Technology)

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