There is a tree frozen by Amazon for over 100 million yuan, and the predicament is difficult to resolve?
Amazon froze a tree worth over 100 million yuan and resolving the issue is difficult
After a tree was banned, the pain still lingers… On May 12th, 2023, ST YKS held a performance briefing, during which an investor asked whether the hundreds of millions of yuan frozen by Amazon had been returned to the company.
Q: Has the hundreds of millions of yuan frozen by Amazon been returned to your company?
A: After the Amazon incident, the company established a special working group to actively appeal to Amazon, and is also seeking arbitration and litigation across borders to make every effort to release frozen funds. However, the large amount of frozen funds has not yet been recovered. Thank you!
01 The frozen large amount of funds has not yet been recovered
In the latest financial report, it has been treated as “bad debt provision”.
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In the latest financial report for 2022, it shows that Amazon still owes YKS 104 million yuan in accounts receivable. Among them, 103 million yuan has been provisioned as “bad debt provision” due to “platform fund freeze”.
Surprisingly, YKS also has about 22.51 million yuan in accounts receivable from Walmart, of which about 21.29 million yuan has been provisioned as “bad debt provision”, with the same reason for provision being the “platform fund” freeze.
During the reporting period, YKS’s revenue from online channels in the cross-border e-commerce field was 625 million yuan, accounting for 98.79% of the total cross-border e-commerce business revenue, a year-on-year decrease of 59.25%. Among them, revenue from Amazon was 202 million yuan, a year-on-year decrease of 61.28%.
The company’s offline channel revenue was 7.69 million yuan, a year-on-year decrease of 85.36%. Overall, the company’s revenue in the cross-border e-commerce field in 2022 was 634 million yuan, a year-on-year decrease of 60.11%.
“Suddenly lost more than 100 million”, Amazon’s “blacklisting” has dealt a painful blow to Youkeshu.
02 Long Road to Recovery
The Amazon account suspension incident in 2021 dealt a heavy blow to the cross-border e-commerce industry.
Starting from May 2021, Amazon began aggressively suspending Chinese sellers’ accounts. Incomplete statistics show that a total of 600 brands and more than 3,000 Chinese seller accounts were suspended, with direct and indirect economic losses reportedly exceeding 2 billion US dollars.
Youkeshu was also affected by this wave of account suspensions.
On July 6 of that year, the listed company Tianze Information announced that, due to suspected violation of Amazon platform rules, Youkeshu, its cross-border e-commerce subsidiary, had added about 340 frozen or suspended sites in 2021, with frozen funds amounting to about 130 million yuan.
Thereafter, Youkeshu embarked on a long road to recovery.
In order to quickly get out of the predicament, Youkeshu made a series of strategic adjustments. First, reduce inventory management costs and quickly recover cash flow; second, downsize employees and office space; and third, reduce dependence on single platforms such as Amazon.
Looking solely at Youkeshu’s financial report for the first quarter of 2023.
The financial report shows that Youkeshu achieved operating revenue of 120 million yuan in the first quarter of 2023, a year-on-year decrease of 47.56%; net profit attributable to shareholders of the listed company was negative 21.12 million yuan, a year-on-year increase of 21.77% from 2021. Due to the impact of the global economic downturn, the company is still in a loss-making position.
In looking forward to 2023, when asked about confidence in the recovery of cross-border trade this year, and confidence and strength in strengthening the company’s cross-border e-commerce, the company expressed optimism about the future development trends and space of the cross-border e-commerce industry. The export business of cross-border e-commerce is currently the company’s core main business. The company has sufficient confidence in doing well and strengthening its e-commerce business, and will continue to focus its resources on the development of cross-border e-commerce business, to enhance the company’s market competitiveness and influence. Thank you!
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