Chinese e-commerce platform Ymatou’s founder vows to keep business afloat amid ‘cold winter’ that has dried up market demand

Ymatou founder and chief executive Zeng Bibo detailed the firm’s efforts to survive various disruptions in a lengthy letter posted on WeChat
Zeng blamed the Covid-19 lockdown in Shanghai for shutting down vital logistics operations, which prompted many Ymatou users to cancel their orders

E-commerce

Xinmei Shen

Published: 7:00pm, 25 Aug, 2022

Why you can trust SCMP

The founder of struggling Chinese cross-border e-commerce platform Ymatou has vowed to keep the business afloat amid hardships caused by a “cold winter”, in which industries nationwide face mounting challenges from the country’s faltering economy, rigid Covid-19 control measures, consumer spending slowdown and energy crisis.

Ymatou founder and chief executive Zeng Bibo made that pledge in a 5,000-character letter, posted earlier this week on the company’s official WeChat account and addressed to merchants on the platform, detailing the firm’s efforts to survive various disruptions, which have resulted in a dwindling cash flow and an exodus of employees.

“This winter is extraordinarily cold, and the days in this year have been extremely difficult,” Zeng wrote. “I deeply feel an unprecedented amount of pressure and crisis, and need everyone’s support and trust more than ever.”

Shanghai-based Ymatou, which was founded in 2009 to cater to a growing domestic market for brand-name foreign goods such as handbags and cosmetics, has stopped leasing office space to cut expenses, enabling its remaining employees to work from home.

Zeng Bibo, founder and chief executive of Chinese cross-border e-commerce platform Ymatou. Photo: Baidu

Zeng blamed the nearly three-month Covid-19 lockdown in Shanghai for shutting down vital logistics operations, which prompted many Ymatou users to cancel their orders, “completely disrupting” the company’s business.

While the easy and most logical choice at present would be to give up and close the company, Zeng wrote that he remains optimistic about Ymatou’s prospects to survive because of its advantages, including an asset-light business model and user-stickiness.

But the firm resolve expressed by Zeng goes against the disruptions that have dealt a heavy blow to the state of China’s e-commerce industry.

Although the government has taken steps to end regulatory crackdowns on the internet industry, stringent lockdowns and other Covid-19 control measures continue to unsettle the operations of merchants, goods manufacturers, logistics services providers and online platform operators in the e-commerce sector.

China’s e-commerce industry hit by disruptions as Yiwu lockdown continues

Chinese e-commerce pioneer HC Group, which started business years before Alibaba Group Holding and JD.com, on Wednesday announced its plan to put some employees at its Beijing subsidiary on indefinite leave owing to “difficulties in operations”.

Secoo, once China’s top online luxury goods retailer, earlier this month filed a bankruptcy petition for the second time this year. Nasdaq-listed retailer Missfresh collapsed in July with a dramatic announcement that it was dismissing most of its employees and leaving hundreds of suppliers unpaid.

Alibaba let go of nearly 10,000 employees in the three months ended June 30, as the e-commerce giant struggled with stagnating sales amid weak consumer spending and economic headwinds in China. Alibaba owns the South China Morning Post.

Huawei Technologies Co founder and chief executive Ren Zhengfei has written about a bleak global outlook, which struck a chord with many Chinese netizens. “The next 10 years will come down as a painful period in history, as the world economy goes into recession,” Ren wrote in a leaked internal memo than went viral on Chinese social media.

Post