Beijing staff of e-commerce pioneer put on indefinite leave in latest sign of hard times for China’s internet sector
- Chinese internet companies are cutting back operations as the economic slowdown and Beijing’s rigid Covid-19 controls deal a heavy blow to the private sector
- HC Group listed on the Hong Kong Growth Enterprise Market in 2003 and shifted its shares to the main board in 2014
China’s e-commerce pioneer HC Group, which started business years before Alibaba Group Holding and JD.com, plans to put some staff at its Beijing subsidiary on indefinite leave due to “difficulties in operations”, according to a notice seen by the South China Morning Post and confirmed by employees who declined to be named.
The move is the latest example of a Chinese internet company cutting back operations as the economic slowdown and Beijing’s rigid Covid-19 control measures deal a heavy blow to the private economy. Staff will be put on leave and the office will close on Thursday, according to the notice issued by Beijing HC360 Technology, a subsidiary of HC Group.
The subsidiary, which was incorporated last year as an e-commerce promotion unit, said it will “do its best” to pay full salaries for the first month, and thereafter match 70 per cent of the local minimum wage to ensure “employees’ basic living security”.
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Beijing’s official minimum salary is 2,320 yuan (US$339) per month, which means 1,624 yuan per month for the affected employees. The notice did not say how long the 70 per cent wage would continue to be paid.
According to corporate registration information, Beijing HC360 Technology has 136 employees.
The employees who spoke to the Post said they have not been paid for July, and that their May and June bonuses were not granted either.
HC Group did not immediately respond to a request for comment.
The parent company, which provides e-commerce services to industrial users, was created in 1992 when Alibaba founder Jack Ma was still an English teacher in Hangzhou. (Alibaba owns the Post.)
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The company initially provided pricing and industry information for computers, cars and household appliances, and later expanded that to more than 60 industries. It also developed a search engine and offered paid memberships for suppliers to connect with clients.
In 2018, HC Group expanded into the “industrial internet”, helping private businesses ramp up their industrial efficiency and improve their supply chains.
HC Group chairman Liu Jun said the company “didn’t make that much money even though it covered over 60 industries, because it didn’t go deep enough”, according to a 2018 interview with the Securities Daily newspaper.
In the first half of this year, the group reported that its revenue dropped 13.4 per cent to 6.1 billion yuan, while net losses narrowed 59 per cent to 48.1 million yuan.
