Once a dominant force in cross-border e-commerce, Kuajingtong (Cross Border E-commerce) now faces a precipitous decline. The company's recently released 2021 financial report reveals a stark reality: revenues have plummeted to less than 30% of their former $1.7 billion peak. This dramatic downturn, exacerbated by Amazon's account suspension wave and the bankruptcy of subsidiary Globalegrow, raises critical questions about industry evolution and corporate strategy.
Revenue Collapse: From Market Leader to Struggling Survivor
The annual report shows total revenues of 8.81 billion yuan ($1.38 billion) for 2021, with cross-border export e-commerce contributing just 2.67 billion yuan - a mere 30.39% of total revenue. This represents a catastrophic drop from 2020's 17 billion yuan performance. The dual blows of platform restrictions and subsidiary failures have decimated the company's core export business.
Subsidiary Performance: Mixed Results in Crisis
Analysis of Kuajingtong's key subsidiaries reveals divergent fortunes:
- Youyi E-commerce: Generated 6.12 billion yuan (69.43% of total revenue) from maternal and infant products, though still showing a 15.67% year-on-year decline.
- Saturu: Reported 600 million yuan revenue (6.9% of total) from fashion platforms like ZAFUL and Rosegal, but recorded 429 million yuan net loss including 272 million yuan in bad debt provisions.
- Patuoxun: Contributed 1.658 billion yuan (18.81% of total) before being divested in April 2021.
- Globalegrow: Managed just 410 million yuan (4.68% of total) before entering bankruptcy proceedings in November 2021.
Independent Platform Struggles: Self-Reliance Strategy Falters
Revenue from proprietary platforms (including mobile) collapsed by 84.99% to 600 million yuan, while third-party platform income fell 65.61% to 2.07 billion yuan. This dramatic contraction reflects both Globalegrow's operational paralysis and Patuoxun's divestment, undermining the company's efforts to reduce platform dependence.
Brand Strategy: Glimmers of Hope Amid Challenges
The company's 44 proprietary brands generated 2.18 billion yuan (24.75% of total revenue), signaling progress in brand development. However, this remains insufficient to offset broader declines, particularly in apparel/home goods (down 83.65%) and electronics (down 62.22%).
ZAFUL's Uncertain Future
Saturu's subsidiary Safu, operator of the ZAFUL fashion platform, faces significant challenges despite its established position in swimwear and plus-size categories. With substantial losses and bad debt provisions, ZAFUL's ability to drive recovery remains uncertain.
Path Forward: Transformation Imperatives
Kuajingtong's survival likely depends on several strategic shifts:
- Supply chain optimization to reduce costs and improve efficiency
- Diversification beyond major third-party platforms
- Accelerated development of proprietary brands
- Product category realignment toward higher-margin segments
- Enhanced data-driven operations and customer engagement
The company's dramatic reversal serves as a cautionary tale for the cross-border e-commerce sector, highlighting the imperative for continuous adaptation in an increasingly competitive global marketplace.