The cross-border e-commerce industry has been rocked by news that Xu Jiadong, founder of former industry leader Globalegrow and ex-chairman of listed company Cross-Border Perfect Global, is under criminal investigation for alleged embezzlement. The case has sent shockwaves through an industry already facing multiple challenges.
Public Company Discloses Former Chairman's Alleged Crimes
According to an announcement by Cross-Border Perfect Global, Xu resigned from all positions in May 2021. Subsequent internal audits revealed suspected criminal activities during his tenure that harmed company interests. Authorities have confirmed some facts of the case, though the exact amount involved and other potential suspects remain under investigation.
The company's board stated it would fully cooperate with authorities to recover losses, but acknowledged uncertainty about the case's ultimate impact.
The Rise and Fall of a Pioneer
Globalegrow, along with sister companies Jollychic and Zestpioneer, once formed the crown jewels of Shenzhen's cross-border e-commerce sector before their successive acquisitions. Ironically, all three founders eventually became embroiled in legal disputes, prompting industry-wide reflection on business models.
Founded in 2008, Globalegrow was among China's earliest cross-border e-commerce platforms. Founder Xu, holding a Ph.D. from UC Davis, built the company into an industry leader before the concept gained mainstream recognition. A landmark 2011 investment of 50 million yuan from Shenzhen Capital Group and Hongtu Venture Capital signaled the sector's potential.
From Trousers to E-Commerce Empire
In 2014, apparel retailer Baiyuan Pants completed its acquisition of Globalegrow, pivoting to cross-border commerce. The renamed Cross-Border Perfect Global capitalized on the industry's golden era, with revenue and market value skyrocketing. Chairman Yang Jianxin became Shanxi province's wealthiest individual during this period.
When Yang stepped down in November 2018, Xu assumed leadership as annual revenue peaked at 21.5 billion yuan, cementing the company's industry dominance.
Precipitous Decline
The downturn began in 2019 amid rumors of controlling shareholders planning to transfer equity. Though financials appeared stable—with first-half revenue of 8.97 billion yuan and profit of 460 million yuan—the proposed acquisition by Luzhou Laojiao's investment arm collapsed.
Guangzhou's state-owned Emerging Fund intervened that September, becoming the largest voting shareholder after providing 400 million yuan in emergency funding. The company pledged 51% equity of subsidiary Pattison as collateral.
Financial Freefall
Following the ownership transition, fourth-quarter 2019 results revealed a shocking reversal: annual revenue of 17.87 billion yuan masked a staggering 2.7 billion yuan net loss—a 3.4 billion yuan swing from the first three quarters. The hemorrhage continued in 2020 with 3.37 billion yuan in losses.
Company filings blamed platform account suspensions, inventory obsolescence, and aggressive write-offs of unsellable goods for the financial catastrophe.
Leadership Exodus
May 2021 saw Xu resign all executive positions from the now-ST-listed company, though he retained a board seat. Multiple senior executives followed suit in a mass departure.
Bankruptcy and Legal Aftermath
By November 2021, creditors pushed Globalegrow into bankruptcy proceedings, with courts seizing all assets. Eighteen months after his departure, Xu reemerged in public records—this time as the subject of an embezzlement investigation.
Industry at an Inflection Point
Shenzhen's cross-border e-commerce sector, long celebrated for its explosive growth, now faces sober reassessment as multiple industry pioneers confront legal and financial ruin. The dramatic reversals underscore the urgent need for operational discipline, compliance rigor, and sustainable strategies as the industry's wild west era concludes.