Closed on October 15! Just now, another cross-border e-commerce platform collapsed!

Cross-border e-commerce companies go bankrupt every year, but this year there are particularly many.

Recently, another e-commerce platform was reported to be on the verge of bankruptcy!

Recently, some sellers said they had received a notice from the German office stating that Rakuten will conduct a strategic review of its business in Europe and Germany, and will therefore stop accepting new orders from October 15 .

The announcement stated that it 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 strategy in Germany, which will not be affected by the closure of the site.

According to the whistleblower, they suddenly received a notice from the German office on September 24 without any prior notice. Currently, the seller's orders on Rakuten Germany are still very stable.

It is reported that Rakuten Germany is the third largest online e-commerce sales platform in Germany after Amazon and eBay. Its predecessor was Tradoria , which was acquired by Rakuten 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.

I didn’t expect that even Lotte couldn’t hold on, which was a bit surprising. In fact, since the outbreak of the epidemic, more than one or two cross-border e-commerce platforms have closed down.

In early September , Awok.com, an e-commerce platform based in the United Arab Emirates , was shut down . The website was no longer accessible, some links were wrong, and the social media had not been updated since May. At the same time, many posts about unpaid wages appeared online.

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

However, Omar Kassim, an influential figure in the Middle East venture capital circle , believes that the main culprit for Awok's closure was its attempt to grow rapidly in a region without much real growth capital , resulting in high customer acquisition costs, low average order value, and high costs of self-operated logistics.

It is understood that AWOK was founded in April 2013 , starting with the 3C category, mainly selling affordable products in the UAE and Saudi Arabia, and the company has more than 700 employees. More importantly, Awok just announced that it had received US$ 30 million in financing in April last year.

According to several Awok employees, the company has been in crisis since the beginning of 2020. These employees have not received salaries since January, and most of them left the company in March without receiving any compensation.

Suppliers also suffered. Customer orders that had already been paid had no new progress or were even cancelled, and many suppliers did not receive their dues . According to a friend of Momentum Works who is familiar with long-term e-commerce sellers in the Middle East, Awok owed at least tens of millions of dirhams ( 1 dirham = 0.27 US dollars) to several suppliers, and it is estimated that it will be difficult for many more sellers to recover the tens to millions of dirhams owed.

E-commerce in the Middle East seems to be having a bad year this year. In addition to Awok , Zhiyu was also previously 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, which read as follows:

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. One person said: "As a unicorn e-commerce company in the Middle East, I didn't expect it to decline like this. 2,500 people were laid off 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. It seems that this year will not be so easy. However, I hope that sellers can hold on. After all, the peak season in the second half of the year is coming, and it’s time to make money.

(Source: Cross-border Sellers Teahouse)