The cross-border e-commerce industry has created numerous wealth creation stories, but behind these success tales lie significant risks. The bankruptcy liquidation of Globalegrow, once a leading player in the sector, serves as a stark warning. This former star enterprise, which once achieved annual sales exceeding 10 billion yuan, now finds itself mired in 815 million yuan of debt, barely able to partially compensate employee claims. Its dramatic rise and fall warrant thorough analysis and reflection.
Collapse: The Bankruptcy Liquidation of Globalegrow
The bankruptcy liquidation of Globalegrow marks the end of an era. In 2024, the company announced its second bankruptcy property distribution, allocating just 9 million yuan exclusively to undisputed employee claims as determined by court rulings. This increased the overall employee claim settlement ratio to 43.12%. However, for numerous ordinary creditors—including suppliers, logistics service providers, and other industry partners—this distribution represents merely a drop in the bucket, failing to compensate for their substantial losses.
Founded in 2007 and acquired by listed company Kuajingtong in 2015, Globalegrow entered a period of rapid expansion. Through its well-known independent platforms like Gearbest and Zaful, the company quickly rose to prominence, operating in over 200 countries and regions worldwide. In 2017, its sales surpassed 10 billion yuan, reaching 12.407 billion yuan in 2018, establishing itself as a benchmark for China's cross-border e-commerce expansion.
Yet beneath this prosperity lurked impending crisis. In the fourth quarter of 2019, Globalegrow's performance deteriorated sharply, recording annual net losses of 2.708 billion yuan. The primary causes included user attrition on its self-operated platforms, massive inventory backlogs resulting from third-party account suspensions, and subsequent profit erosion from clearance promotions. Concurrently, issues like capital chain ruptures, management disorder, and loss of core talent became increasingly apparent, ultimately leading to complete operational paralysis.
In November 2021, creditors applied to the Taiyuan Intermediate Court for bankruptcy liquidation. The court accepted the case and seized all of Globalegrow's assets, formally marking the exit of this former industry giant. The liquidation process strictly followed the repayment sequence stipulated by China's Enterprise Bankruptcy Law, prioritizing employee claims. The initial 10 million yuan distribution also went entirely to employee claims, with the year-and-a-half interval between distributions reflecting the complexity of asset liquidation, evaluation, and realization processes.
Data reveals Globalegrow accumulated 431 claims totaling 815 million yuan, including 783 million in ordinary claims, 31.65 million in employee claims, 170,000 in tax claims, and 930,000 in subordinated claims. The combined 19 million yuan from both distributions barely covers partial employee compensation, leaving ordinary creditors with bleak recovery prospects. This highlights the harsh reality that ordinary creditors, positioned at the end of the repayment hierarchy under insolvency conditions, face extreme difficulties in securing their rights.
Lessons: Aggressive Expansion and Systemic Vulnerabilities
Globalegrow's collapse was no accident, rooted fundamentally in an aggressive expansion model built on fragile foundations. To meet post-acquisition performance commitments, the company long adhered to a "massive product dumping" strategy while neglecting refined operational capabilities like precise product selection, inventory turnover, and supply chain coordination. This crude development approach ultimately planted seeds of crisis.
In 2019, Globalegrow's problems erupted. The company accumulated approximately 4.5 billion yuan worth of unsold inventory across nearly 40 overseas warehouses, with inventory depreciation and stagnation alone causing over 1.2 billion yuan in losses that year. Additionally, Globalegrow routinely imposed 30-60 day payment terms on upstream suppliers, amassing enormous accounts payable during expansion and transferring substantial operational risks to vulnerable supply chain segments.
When external financing tightened and bank credit contracted, Globalegrow's strained capital chain snapped rapidly, plunging the company into a vicious cycle of "declining sales—drying cash flow—debt defaults—asset freezes—business suspension." This model's flaw lies in excessive reliance on external financing and supplier credit—once the capital chain breaks, the entire system collapses swiftly.
In stark contrast, Globalegrow's affiliated entity, Guangdong Globalegrow (Zhaoqing) Cross-Border E-Commerce Co., achieved revival through bankruptcy reorganization. Under court supervision, the company attracted strategic investment, revitalized core real estate assets, preserved jobs and supply chain stability, and offered creditors better repayment terms than liquidation would have. This case demonstrates that reorganization remains possible in bankruptcy proceedings, contingent on timely intervention and finding suitable investors.
These contrasting cases clearly illustrate bankruptcy law's dual functions: liquidation emphasizes orderly exit and equitable repayment, while reorganization focuses on judicial rescue and value preservation. This suggests enterprises, creditors, and local governments should identify risks early and scientifically select optimal judicial pathways. For struggling companies, initiating reorganization promptly might avert ultimate liquidation.
Warning: Building a Healthy Cross-Border E-Commerce Ecosystem
Globalegrow's case also exposes systemic risks in the cross-border e-commerce ecosystem. The company's prolonged dependence on upstream supplier financing meant its collapse immediately pressured hundreds of supply chain partners. This "big fish eats small fish" model undermines long-term industry health. A robust ecosystem should foster transparent, trustworthy, risk-sharing cooperation rather than zero-sum competition.
Building a healthier cross-border e-commerce ecosystem requires:
- Enhanced supply chain coordination: Optimize supply chain responsiveness through data sharing to improve efficiency and transparency while reducing operational costs.
- Improved credit systems: Establish comprehensive credit evaluation mechanisms to elevate corporate credit awareness and reduce transaction risks.
- Risk diversification: Utilize financial instruments like credit insurance to distribute performance risks and protect both parties' interests.
- Regulated competition: Strengthen industry oversight, standardize market competition, and combat unfair practices to maintain equitable market environments.
- Corporate capacity building: Cross-border e-commerce firms should focus on refining operational capabilities, nurturing talent, and enhancing core competitiveness.
Globalegrow's bankruptcy liquidation epitomizes broader industry development challenges. It reminds us that while pursuing rapid expansion, equal emphasis must be placed on risk control and sustainable growth. Only by constructing a healthy, transparent, and trustworthy ecosystem can the industry achieve lasting prosperity.