Shanghai-based online shopping platform Ymatou is reportedly struggling with lower cash flow and tough business prospects.
Some sellers have complained that they have had to wait months to collect their debts on the platform since early 2022.
The company’s headquarters in Jing’an District was closed and there was speculation that the company would no longer be able to repay lenders and suppliers.
The Shanghai Daily tried to reach Ymatou by calling the phone number on its website, but no one answered.
The company said on Tuesday it had removed a number of sellers peddling counterfeit products from its platform, and those unable to collect their claims spread rumors that the company was refusing to pay the claims. suppliers and debts.
Ymatou officials said he did not lay off any employees even though his office was closed for the time being.
Last month, Zeng Bibo, the company’s founder and managing director, acknowledged in an open letter to vendors and suppliers that the company was facing increasing challenges, but pledged to do everything possible to keep the business going, stick to customer service and pay its debts.
Zeng said Ymatou had to close his office because the lease expired at the end of August, and he asked employees to work from home to reduce rental expenses.
He said he suspended payments to some sellers because they were selling fake merchandise and their online storefronts did not follow platform rules. He also said these vendors spread rumors that the company was bankrupt.
Imported digital retailers are still favored by domestic shoppers looking for overseas niche products, but individual sites face various challenges and find it harder to win back shoppers’ trust than trade giants. electronics like Alibaba and JD.
Zhang Zhouping, analyst at the Internet Economy Institute
The crisis facing Ymatou highlights the uncertainty and competitive landscape of the country’s online shopping environment, especially for imported goods.
Ymatou started its activity by proposing private sellers, or sourcing agents (daigou), a platform to sell niche foreign products to Chinese buyers and has gradually added small businesses and foreign brands to its offering.
Founded in 2010, Ymatou has since attracted hundreds of millions of yuan in venture capital investment and has been optimistic about building its own cross-border logistics facilities to speed up deliveries.
At its peak, the site had around 116 million users and over 80,000 foreign sellers.
But in recent years, he has faced challenges. Unlike overseas-based product providers like Tmall Global, JD Worldwide and Kaola, Alibaba’s import e-commerce unit, which allow brands to set up official flagship stores, Ymatou lags behind in terms of supply chain, delivery and customer service.
Many shoppers have taken to social media to complain about counterfeit or substandard products being sold without proper subsequent customer service.
The online customer complaints segment of Chinese social media Sina Weibo has received hundreds of requests for Ymatou to properly handle refunds and after-sales service.
An online shopper dubbed “Forest Island 518” complained that she asked for a refund for face masks she bought in early August, but the seller delayed her request for about a month.
Ymatou’s business performance and buyer sentiments have been adverse as pandemic restrictions have limited deliveries of imported goods. Some said it took them several months to receive their purchases from foreign sellers.
Chinese internet consultancy iiMedia said Ymatou only had around 5% market share compared to market leaders like Tmall and JD which together held more than 50% market share.
Cross-border e-commerce is still booming, with the total market size growing 14% in 2021 to 3.2 trillion yuan ($460 billion) and a consumer base of 155 million, according to the firm. private consultancy Internet Economy Institute.
Last year, Ymatou tested the waters with new offline stores offering imported goods at lower prices than duty-free shops in cities like Shanghai and Chongqing that leveraged livestreaming sessions to win back customers. buyers.
Imported digital retailers are still favored by domestic shoppers looking for overseas niche products, but individual sites face various challenges and have a harder time regaining buyer trust than trade giants. electronics like Alibaba and JD, said analyst Zhang Zhouping of the Internet Economy Institute. .
“Customers now have a wide range of shopping sites to choose from, and even niche imported products are not hard to buy from domestic retailers right now,” Zhang said. “It’s hard to differentiate what they offer given the highly competitive landscape.”