As the "explosive order myth" gradually fades, the risks hidden behind the prosperity of cross-border e-commerce are beginning to surface. Recent negative reports about a major cross-border e-commerce seller in Guangzhou have raised concerns about its financial health, with measures such as layoffs, performance reforms, and benefit cancellations sparking industry-wide discussions. While the company has publicly denied bankruptcy rumors, a supplier's payment demand letter has emerged as a bombshell, drawing renewed attention to cash flow issues in the sector.
Payment Demand Letter Exposes $150,000 Debt Crisis
A supplier's payment demand letter has thrust this once-thriving cross-border seller into the spotlight. The document reveals that as of August 31, the company owed over 1.5 million yuan (approximately $210,000) in unpaid goods, with no resolution in sight. The supplier issued a stern warning in the letter, threatening legal action if payment isn't received within 30 days. This development raises serious questions about whether this previously successful enterprise is now facing financial distress.
Tip of the Iceberg: Multiple Suppliers Face Payment Delays
This case isn't isolated. Another supplier specializing in snow boots disclosed that the e-commerce giant has accumulated approximately 1.2 million yuan ($170,000) in unpaid invoices since last year, despite repeated attempts at negotiation. With no payment forthcoming, the supplier has engaged legal counsel and is preparing evidence for potential litigation. Historically, this supplier provided over 100,000 pairs of snow boots annually to the company, but sales plummeted to about 30,000 pairs last year following platform restrictions. This year's projections show further decline to fewer than 10,000 pairs, suggesting that plummeting sales may be contributing to the payment crisis.
Internal Turmoil: Product Lines Cut, Suppliers Left in Limbo
"The footwear product manager we worked with is no longer handling matters, and we've heard the company has dissolved its handbag division. The footwear category might be next, with employees potentially not receiving proper severance," revealed one supplier. These operational cutbacks have intensified suppliers' concerns. While layoffs may represent necessary corporate restructuring, delayed payments effectively transfer financial risk to suppliers, who face potentially catastrophic losses if the company's cash flow collapses.
Industry Warning Signs: Expansion Brings Hidden Risks
This case reflects broader industry challenges. Many cross-border e-commerce companies expanded rapidly in recent years while neglecting risk management. Market fluctuations or unexpected events can easily destabilize fragile cash flows. Additional vulnerabilities include over-reliance on single platforms, product homogeneity, and lack of competitive differentiation—all creating significant challenges for the sector.
Supplier Self-Protection: Legal Action Becomes Imperative
Faced with payment defaults, suppliers must take proactive measures:
Document preservation: Maintain comprehensive transaction records including orders, contracts, invoices, and correspondence.
Timely follow-up: Implement regular payment reminders while documenting all collection efforts.
Professional consultation: Seek legal advice to understand rights and develop appropriate action plans.
Collective action: Collaborate with affected suppliers to increase pressure and improve outcomes.
As the cross-border e-commerce industry undergoes significant transformation, both sellers and suppliers must prioritize risk management, compliance, and sustainable partnerships to navigate current challenges and prepare for future opportunities.