The list of e-commerce "casualties" in 2022 is released

The "cold" Double Eleven battle report in 2022 seems to have foreshadowed the sluggish state of the e-commerce industry this year. A year later, many small and medium-sized enterprises have disappeared in the cold winter of the e-commerce industry. This article reviews the year 2022. Based on the 89 e-commerce platforms that were shut down during the year, it analyzes and summarizes the common characteristics of the e-commerce decline in 2022. I hope it will be helpful to you who are concerned about the e-commerce industry.

Double 11 has always been regarded as the "barometer" of the e-commerce industry. However, on last year's Double 11, Tmall and JD.com, the two major "faces" in the e-commerce industry, did not disclose their "final battle report" to the public for the first time. The deserted shopping festival also seems to send a signal to the outside world: the "cold winter" of e-commerce is not over yet.

In 2022, under the influence of multiple factors such as repeated epidemics, sluggish consumption, and peak traffic, the e-commerce industry has experienced unprecedented tests. Among them, some companies have "slimmed down" and hibernated, some have turned around and sought change, but many companies are struggling on the brink of life and death, and some have even collapsed and failed to hear the New Year's bell...

According to incomplete statistics from Lianshang.com, at least 89 e-commerce platforms will be shut down in 2022 (a summary table is attached at the end of the article), involving multiple sub-sectors such as comprehensive e-commerce, social e-commerce, shopping guide e-commerce, community group buying/fresh food e-commerce, and cross-border e-commerce. Among them, there are also some companies that were once favored by capital and backed by giants, such as Eachnet, Fengqu Haitao, Shihuituan, Xiaoe Pinpin, etc.

1. 89 e-commerce platforms shut down, few survived for 5 years

From the perspective of sub-sectors, among the 89 e-commerce platforms, shopping guide e-commerce platforms had the highest "death" rate, with 32 closures, accounting for 36%; the number of closures of comprehensive e-commerce platforms ranked second, with 20 closures, accounting for 22.5%; social e-commerce and fresh food e-commerce/community group buying were equally matched in the number of platform closures, with 11 each, ranking third.

In addition, 9 cross-border e-commerce platforms were shut down, and 3 maternal and infant e-commerce and second-hand e-commerce platforms were suspended respectively.

Judging from the financing situation of these e-commerce platforms, not many of them have received financing, and even fewer have received multiple rounds of financing or even gone public. Among them, Eachnet and Dongxiaodian were successfully listed, while MiYa and Shihuituan received E and D rounds of financing respectively before they "collapsed". There were three companies that received A round of financing, namely Fengqu Haitao, Xiaohongdao and Xiaopinhui.

In addition to the above-mentioned companies, among the remaining e-commerce platforms that collapsed in 2022, only 8 received angel round financing. According to statistics, the number of e-commerce platforms that died without ever receiving financing reached 74, accounting for as high as 83.1%.

In fact, it is not difficult to see from the financing situation that compared with some short-lived brands, most of the companies that collapsed in the "cold winter" did not even have a chance to "splendidly" and "died" early.

This is also reflected in the survival time of the platform. According to statistics, 28 out of 89 e-commerce platforms have survived for more than 5 years; only 2 have survived for more than 10 years, and only OneNet has survived for more than 20 years. The "lifespan" of most e-commerce platforms is between 2-3 years, and some are even shut down after only a few months online.

2. Community group buying and fresh food e-commerce: the dilemma of forward warehouses

In just two years, community group buying, which started in the sinking market and flourished during the epidemic lockdown, has been like a roller coaster, from "the next 10 billion yuan trend" to being on the verge of death.

Today, of the “old three group companies” that emerged at the beginning of the outbreak in 2020 - Shihuituan, Tongcheng Life, and Xingsheng Youxuan - only Xingsheng Youxuan is still holding on. In 2022, Shihuituan became the second platform among the "old three groups" to fall behind.

In March 2022, Shihuituan was exposed to have shut down all businesses in cities across the country and entered the aftermath stage, mainly dealing with the settlement of supplier payments and the settlement and compensation of employee wages. At that time, the Shihuituan WeChat applet was no longer accessible and the APP displayed a blank screen when opened.

In fact, as early as 2021, many community group buying platforms suffered a "Waterloo" due to difficulties in financing, and the industry entered a "cold winter period." Therefore, in 2022, many companies chose to shrink their community group buying business. For example, Jingxi Pinpin, a subsidiary of JD.com, carried out two rounds of contraction in March and June 2022, reducing its business from 20 provinces to only Beijing and Zhengzhou. Similarly, after closing down markets in many locations one after another, Meituan Youxuan announced in October that it would transform into "Mingrida Supermarket."

As the only one of the "old three groups", Xingsheng Youxuan withdrew from five provinces in August and closed its business in four provinces and cities including Henan in October, retaining only provinces such as Hunan, Hubei and Guangdong to maintain regional operations.

Similar to community group buying, fresh food e-commerce, which uses the forward warehouse model as its core operation, is also undergoing a contraction and transformation in 2022.

Although the MissFresh platform was not included in the "death list" because it was not shut down as a whole, the results show that it is already on the verge of death. On July 28, 2022, MissFresh announced the closure of its forward warehouse express delivery service, which accounted for 90% of its revenue. Hundreds of employees were laid off on the spot, and more than 1 billion yuan in debts owed to suppliers could not be collected.

Public information shows that MissFresh had received 11 rounds of financing before its listing, with a total amount of more than 14 billion yuan. At the same time, at its peak in 2019, MissFresh established more than 1,500 forward warehouses in 20 cities across the country, becoming the number one in the industry.

The collapse of MissFresh is undoubtedly a wake-up call for the industry. In 2022, Dingdong Maicai withdrew from Xuancheng and Chuzhou in Anhui, Tangshan in Hebei, Zhongshan, Zhuhai in Guangdong, Tianjin and Xiamen; Hema Neighborhood successively withdrew from Beijing, Xi'an, Chengdu, Wuhan and other markets, focusing on the Shanghai market.

Obviously, for the survivors of the industry, how to achieve profitability has become the top priority rather than pursuing scale. After all, the bloody experience of Shihuituan and MissFresh tells us that in an environment where financing is difficult, the profit dilemma is the "sword of Damocles" hanging over your head.

3. Cross-border e-commerce: from prosperity to decline

In November 2022, SF Express's self-operated cross-border e-commerce platform "Fengqu Haitao" was declared bankrupt. According to its legal representative and CEO Ren Xiaoyu, the company had been dissolved long ago, the platform had been shut down long ago, and employee resettlement compensation had basically been completed.

As SF Express’s “own son”, the suspension of Fengqu Overseas Shopping has made people smell the “chill” coming from the cross-border e-commerce field. In fact, long before Fengqu Haitao collapsed, many companies that were once famous in the field of cross-border imports had fallen into difficulties to varying degrees.

The most typical example is Yangmatou, a ten-year-old player in overseas import shopping. Although the Yangmatou platform has not been shut down at present, in September 2022, negative rumors about Yangmatou such as "empty building" and overdue payments were exposed.

Regarding the crisis of deteriorating cash flow, Zeng Bibo, the founder of Yangmatou, believes that the epidemic and the repatriation of red chips are the fuse: on the one hand, the number of flights has been greatly reduced due to the epidemic, and goods cannot be brought in; several major core ports have set a 14-day static period for imported materials, and the order cancellation rate has increased. On the other hand, when the red chip structure was dismantled in 2021, a lot of funds were withdrawn, including more than 100 million yuan from Sina Weibo and nearly 80 million yuan from bank loans.

Is this really the case? Maybe, but definitely not all. After all, in recent years, independent overseas shopping platforms have all had their own problems and are almost "destroyed".

Quality and service issues are the main culprits for independent overseas shopping platforms such as Yangmatou losing consumers. Data from the online consumer dispute mediation platform "DianSuBao" shows that in the first three months of 2022, the top three cross-border e-commerce platforms in terms of the number of effective complaints from users in the cross-border e-commerce field are: Secoo, Ymatou, and AliExpress. The main complaints focus on product quality, after-sales service, online counterfeit sales, online fraud, and mismatching of goods.

In particular, the entry of Alibaba and JD.com with huge traffic and merchant resources has further squeezed the living space of independent overseas shopping platforms.

In fact, data from the "2022 (Part 1) China Cross-border E-commerce Market Data Report" released by the E-Commerce Research Center of the China Internet Network Information Center shows that the cross-border e-commerce market size in the first half of 2022 was 7.1 trillion yuan, and the market size for the whole year of 2022 is expected to reach 15.7 trillion yuan. The market is huge. Therefore, overall, the big cake of cross-border e-commerce has not disappeared, but the golden age of Yangmatou, Fengqu Overseas Shopping, etc. has come to an end.

4. Maternal and infant e-commerce: MiYa’s failure is a microcosm of the industry

According to Nielsen's "2022 Maternal and Infant Industry Insight Report", the size of the maternal and infant market continues to increase year by year, and driven by factors such as increased disposable income of residents, consumption upgrades, and changes in consumption concepts, it has moved from a total size of 4.78 trillion yuan in 2021 to the threshold of 5 trillion yuan. The growth rate rebounded by nearly 20% compared with last year, becoming a new high in the past five years.

However, just as the industry continued to release positive signals, Miaya, which once enjoyed great success in the maternal and infant vertical e-commerce field, left the market in September last year.

MiYa’s departure is actually not surprising. In the maternal and infant e-commerce vertical, it seems that there has never been a real winner. Before MiYa, the Mother and Baby Home was exposed for suspected abnormal operations in 2019, and the registered address was deserted. In 2020, there were news of large-scale layoffs in many businesses under the Beibei Group, to which Beibei.com belongs. In 2021, hundreds of suppliers besieged the company's headquarters to collect debts.

In addition, Babytree, once known as the "No. 1 stock in the maternal and infant industry" in Hong Kong stocks, has seen shrinking revenue and profits over the years and eventually transformed into the advertising business, with maternal and infant e-commerce becoming a sideline business. The only one that seems to be doing okay is Kidswant, but according to its latest financial report, its profitability seems to be a bit worrying. In the first three quarters of last year, the company's revenue and net profit both declined year-on-year.

In a sense, MiYa’s departure is also a microcosm of maternal and infant vertical e-commerce. When shutting down and removing the APP service, MiYa officials gave an explanation: "Users' shopping habits have changed."

As we all know, the maternal and infant industry is naturally offline-oriented and the e-commerce ceiling is limited. According to iResearch Consulting data, in 2021, offline consumption of maternal and infant products accounted for 66.2%, and by 2025, the proportion of online consumption of maternal and infant products in China will reach 39.0%. At the same time, maternal and infant e-commerce will also face a number of strong competitors such as comprehensive e-commerce and content platforms. According to iResearch Consulting data, 48.3% of consumers purchase maternal and infant products through online comprehensive e-commerce platforms, exceeding the 39% of maternal and infant vertical e-commerce.

In fact, it is not just the maternal and infant vertical e-commerce. In the list of e-commerce casualties in the past few years, except for the comprehensive e-commerce platforms that have been unable to stand out under the shadow of the three major comprehensive e-commerce "mountains" of Taobao, JD.com, and Pinduoduo, vertical e-commerce in various segments has always had a high share. From Lefeng.com, Vancl, Jumei to today's Yangmatou, Miaya, Secoo, etc., it is an indisputable fact that vertical e-commerce has difficulty surviving.

Appendix: List of e-commerce platforms that will stop operating in 2022:

Author: Shiyi; WeChat public account: New Retail (ID: ixinlingshou)