Chinese headphone maker in Dongguan shuts down, intensifying country’s woes in manufacturing, cross-border e-commerce
- Dongguan Koppo Electronics Co has decided to cease operations partly because of delayed payments by cross-border e-commerce merchants
- The Bluetooth headphone maker, which has been in business for 12 years, is expected to lay off 100 workers
“Since the outbreak of the Covid-19 pandemic, global economic and trade flows have seen unprecedented disruptions,” the notice said. “The company has been hit by delayed payments by a number of cross-border merchants, and a huge amount of finished goods are stockpiling in the warehouse.”
Koppo Electronics is expected to lay off 100 workers, according to a report on Wednesday by Chinese digital media Jiemian News. At its peak, the company had more than 1,000 workers and produced about 400,000 headphones a month.
Phone calls to Koppo Electronics went unanswered on Wednesday.
Lay-offs in China’s export heartland add to worries over economic slowdown
That Amazon vendor’s accounts were frozen last year by the US e-commerce giant for failure to comply with the online platform’s rules, which led to its failure to pay Koppo Electronics for the products it ordered, the Jiemian News report said.
Sunvalley and its parent company, Guangdong SACA Precision Manufacturing Co, did not immediately respond to requests for comment.
A total of 367 Amazon online stores operated by Sunvalley were suspended by the platform in 2021, accounting for 70 per cent of all of the Chinese firm’s accounts, according to the annual report of parent SACA. It said more than 32 million yuan (US$4.74 million) of Sunvalley funds were frozen by Amazon.
Shenzhen-listed SACA’s cross-border e-commerce sales for 2021 were nearly halved because of Amazon’s crackdown, which led to a 1.52 billion yuan loss in the period, according to its annual report. Koppo Electronics was one of the top suppliers for Sunvalley, the company’s filing showed.
When Amazon started to clamp down on fake reviews last year, the US platform shut 3,000 online merchant accounts backed by about 600 Chinese brands, damaging the operations of the “Made in China, Sold on Amazon” community.