Another e-commerce platform is suspected to have gone bankrupt!

As the cross-border e-commerce sector is undergoing an accelerated reshuffle, there are constant news of bankruptcies in the industry, including bankruptcies of big sellers and closures of cross-border e-commerce platforms. Earlier, many cross-border e-commerce platforms under major Internet companies announced their suspension, and now multiple layers of information show that Tophatter, an e-commerce platform that has been deeply involved in the North American market for ten years, may have closed down.

North American e-commerce platform Tophatter is suspected to be closed

On the eve of the Black Friday promotion, an overseas netizen went to the Tophatter platform to shop, but after entering the URL, it kept displaying a 404 interface. Reluctantly, the netizen tried to open the platform's APP, but found that it also displayed an error and could not enter.

According to external online consumers, Tophatter's website has been unable to open since November.

When checking its social media accounts, we can see that on Facebook, the last post on the Tophatter account homepage was published in June, which means that five months ago, the social platform had stopped updating platform-related content.

On Twitter, the last interaction between Tophatter officials and netizens was on October 15, when netizens mentioned that Tophatter's search bar was gone, and the platform's response was: it will be shut down indefinitely from October 11.

The website and APP cannot be opened, the social platform has stopped updating, and the search bar has been shut down indefinitely. Combined with the behavior of many platforms before they were shut down, we can speculate: Has the Tophatter platform been shut down?

Following our timeline, when its social platform stopped updating in June, Tophatter also did a big thing. It sent a notice to the majority of Chinese sellers in the name of CN Tophatter Team. The content was roughly: Based on changes in the US consumer market and the overall transformation of the platform model, Tophatter will officially close to Chinese sellers, and sellers who have already settled in will also stop all services.

While many platforms were scrambling to attract Chinese sellers, Tophatter chose to withdraw. At the time, most sellers were puzzled by Tophatter's move, but now perhaps it can be explained.

At the time, many sellers expressed dissatisfaction, accusing Tophatter of running away after cutting leeks. A large number of platform sellers also said that they did not make any money, but were just doing charity projects. A large number of orders were only $1, which could not cover the cost at all. After trying for a period of time, they had already withdrawn.

Some sellers also speculated that Tophatter's withdrawal was due to the unfavorable economic situation in the United States and the high cost of online customer acquisition . The platform was forced to further optimize costs, and shrinking overseas fronts and focusing on local merchants became one of its means of optimizing costs.

But in the eyes of some sellers, Tophatter is a pit that makes sellers lose money and buyers buy against their will. One seller said: "In 2021, I placed nearly 100 orders on the platform, but the payment was negative, which was funny." It is reported that when all the seller's orders were completed, the payment within one month was positive, but it turned negative after 3 months, which is equivalent to not making any money but losing money.

As for Tophatter, many sellers said that this is a platform that is more inclined to spend money on continuous testing, but the test results show that the rules of the platform are difficult to grasp and the mechanism changes very quickly, but the charging process is not ambiguous, so small sellers are not recommended to enter.

Many sellers agree with the platform's withdrawal from China. The early batch of sellers did make a lot of money, but the subsequent changes in the platform's mechanism have made it impossible for many sellers to control the trend, making money even more difficult.

Combining the feedback from many sellers and the platform's actions, we can conclude that as early as early June, there were problems with the platform's internal operations. At that time, Tophatter hoped for a series of contraction measures, but the results were not satisfactory. The platform was most likely to stop service in October, and the company may be in a state of bankruptcy recently.

There was a seller whose annual sales reached 6 million US dollars.

As a company that started as an auction website and later developed into a flash sale model APP, Tophatter is based on the 90-second quick auction model, has accumulated a large number of users, captured a lot of overseas media, and has had many glorious moments.

In 2016, Tophatter's annual turnover reached 160 million US dollars. After opening to Chinese sellers, the platform has listed many outstanding seller cases, such as Guangzhou sellers with annual sales of up to 6 million US dollars; Shenzhen sellers settled in the platform for less than three months and were able to place thousands of orders a day.

In 2018, Tophatter had 20 million active users, with an average daily order volume of 150,000. Jewelry, home furnishings, electronics, clothing, and beauty products were the hot-selling items on the platform at the time. That year, the platform's transaction volume reached US$500 million, with an annual growth rate of more than 100%.

During the 2021 Spring Festival, the platform's overall traffic increased by 30%, with new sellers achieving sales of over 10,000 US dollars, ushering in a good start; and old sellers achieved sales of over 100,000 US dollars during the seven days of the Spring Festival . In the same year, Tophatter also announced the completion of a US$27 million Series C financing.

But it was also in 2021 that the platform began to encounter some problems. At that time, some sellers collectively launched a rights protection against Tophatter, and the reason for the sellers' rights protection was that the platform would inexplicably fine or withhold loans from Chinese sellers.

At that time, many sellers were already dissatisfied. In June 2022, after Tophatter announced its closure, many sellers said that it was a good decision to leave. The sales model of this platform was not suitable for Chinese sellers. If the platform automatically withdrew, Chinese sellers would also reduce a lot of sunk costs.

In fact, in the later period of entering Tophatter, many sellers have found some problems, either it is difficult to place orders, or they place orders but do not receive payments. The initial high traffic and conversion of in-site orders are no longer as good as before.

Some big sellers also said that when they first joined the Tophatter platform, they did have good orders, with 10,000 to 20,000 orders a day at most. However, since 2021, the platform traffic has dropped very seriously, and they had no choice but to withdraw. According to the editor, there are many sellers who have the same operation as the above sellers. They reaped small dividends during the bonus period of Tophatter in the first few years, but when the platform traffic gradually declined in the later period, they chose to leave quickly.

The case of Tophatter also reflects the current cross-border e-commerce market from the side. The cross-border e-commerce market in 2022 is not optimistic. Not only the Tophatter platform, but also Chinese sellers on other platforms such as Amazon are gradually decreasing, turning to other platforms, and many big sellers are also reducing their scale. In order to reduce operational risks, sellers will choose a multi-platform layout.

From the initial high-profile investment promotion to the gradual withdrawal of sellers in the later period, the Tophatter incident is also a warning to sellers: if you want to gain a foothold in the cross-border circle, you must first choose a reliable platform. Sellers need to keep up with the general trend in the circle, combine their own supply chain advantages, and choose a platform that suits them. At the same time, sellers need to be clear about the entry and operation rules of different platforms and product preferences.

North America

Tophatter

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