Shenzhen’s ‘made in China, sold on Amazon’ dreams undercut by merciless crackdown
- Patozon’s recent decision to put all of its research and development employees on suspension for six months has created uncertainty over its viability
- In 2020, China’s cross-border e-commerce exports surged 40 per cent, far exceeding the general export growth rate of 4 per cent
A large number of exporters in Shenzhen engaged in a business model known as “made in China, sold on Amazon” have hit hard times as the US e-commerce giant moves to shut down their stores over suspected abuses of the customer review system, exposing their vulnerability of relying on this platform to reach consumers overseas.
Patozon, a Chinese cross-border trading company based in the Jianghua E-Commerce Industrial Park on the outskirts of Shenzhen, was once a high flyer with the potential to dominate the global market for electronics accessories, such as headphones and keyboards.
But the exceptional growth of the nine-year-old company, which had over 800 best-selling products on Amazon.com last year, came to a halt four months ago when its flagship store on the US e-commerce platform was shut down.
Patozon has not disclosed its specific losses from the Amazon move as it is now privately owned, but its recent decision to put all of its research and development (R&D) employees on suspension for six months has created uncertainty over its viability.
Earlier this year, the Shenzhen-listed Global Top E-commerce sold the Patozon business to a consortium which included TikTok owner ByteDance, Chinese smartphone maker Xiaomi, and China’s new fashion retail giant Shein.