As winter settles in, China's tech workers grow increasingly anxious. The year-end period brings heightened financial pressures, with many fearing they won't receive their hard-earned salaries on time. Following the Globalegrow supplier payment scandal, domestic gaming phone brand Black Shark now finds itself embroiled in controversy over unpaid severance packages, casting a shadow over employees' new year celebrations.
I. Black Shark's Compensation Crisis: Employees Demand Justice
"Whether rich or poor, come home for the New Year" remains a deeply ingrained Chinese tradition. Yet for Black Shark employees, this festive season brings only cold comfort. The 2022 tech industry layoffs hit Black Shark hard, with the company reducing its workforce by approximately 80% between August and December - from over 1,000 employees down to just 100. This drastic downsizing left a compensation shortfall estimated between $10-11.5 million.
The company's official Weibo account hasn't been updated since October 2022, while its gaming phone account posted just once on January 1, signaling severe operational difficulties. Most disturbingly, Black Shark has repeatedly delayed severance payments, issuing a notice stating: "Since encountering significant operational challenges during this special period, we've been working diligently to fulfill compensation obligations. We regret to inform you that this month's severance cannot be paid in full as agreed."
This announcement sparked employee protests, with banners reading "Black Shark Withholds Wages, Return Our Hard-Earned Money!" appearing at company offices. Black Shark CEO Luo Yuzhou's social media accounts have been flooded with demands for payment, with some workers reporting receiving just $290 - far below their contracted "N+1" severance terms.
II. Caught Between Giants: Black Shark's Amazon Mystery
Once a rising star in China's gaming phone market, Black Shark enjoyed early support from tech luminaries including Lei Jun and Luo Yonghao. The company ambitiously pursued an ecosystem strategy for gaming products, but its fortunes changed dramatically after developing VR gaming equipment.
Industry observers note that after releasing the Black Shark 3, the company invested heavily in VR development over six months. When parent company Xiaomi showed little interest, Black Shark sought new investors, ultimately securing funding from Tencent. However, after acquisition talks collapsed in 2022, the company entered financial limbo:
- January 2022: Reports surfaced that Xiaomi sought to sell Black Shark for $4.3 billion, but Tencent offered just $2.9 billion
- May 2022: Tencent reportedly abandoned acquisition plans
- October 2022: Media reported massive company-wide layoffs
While Black Shark products remain available on Amazon US under the "Black Shark" brand - including popular Bluetooth headphones with over 5,000 ratings - the storefront appears operated by an unrelated Shenzhen trading company, suggesting authorized resellers rather than direct sales.
III. Lessons From Black Shark's Collapse: Innovation vs. Sustainability
Black Shark's decline reflects systemic challenges facing Chinese tech firms, offering important lessons:
- Strategic Innovation: The company's premature VR push without adequate market research or technical preparation proved disastrous. Firms must focus resources on core competencies.
- Capital Dependence: Black Shark's reliance on Xiaomi and Tencent left it vulnerable when support evaporated. Companies must maintain operational independence.
- Market Responsiveness: Despite the gaming phone market's potential, Black Shark failed to sustain product innovation, losing ground to competitors.
IV. Cross-Border E-Commerce Implications
Black Shark's case highlights critical considerations for global online sellers:
- Regulatory Compliance: Cross-border operations must adhere to diverse international regulations
- Operational Precision: Success requires product optimization, listing improvements, and conversion rate enhancement
- Risk Management: Companies must prepare for currency fluctuations, logistics disruptions, and policy changes
Black Shark's dramatic fall from industry darling to struggling enterprise serves as a cautionary tale about balancing innovation, capital, and market realities in the competitive tech landscape.