Shenzhen is giving out money! Two cross-border sellers each received 3 million yuan in subsidies

Seven e-commerce companies in Shenzhen received a total of 21 million yuan in rewards, of which Tongtuo and Aoji each received 3 million yuan in rewards!

The topic of "the strictest power restriction order" has been discussed repeatedly recently . Due to the power restriction, Tongtuo's parent company also issued the latest production suspension announcement...

Shenzhen big seller receives 3 million yuan in official subsidies

Although this year's wave of account bans on Amazon has dealt a heavy blow to some sellers, some big sellers have not been defeated. Many of them have already opened up new channels and started to expand their business.

Some time ago, the Shenzhen Municipal Bureau of Commerce also introduced a policy to support independent stations, which gave many sellers a glimmer of hope. Zebao also applied for special support funds for independent stations from the Shenzhen Bureau of Commerce, but the results have not yet come out.

Although the special support funds for independent sites have not yet been issued, the results of another support fund have come out. Two well-known big sellers have received this support. It has to be said that Shenzhen’s subsidy strength is still very large.

Yien.com learned that the Shenzhen Municipal Bureau of Commerce issued a notice on September 23, stating that according to the "Guidelines for Application for Three Award Projects including National Digital Commerce Enterprises under the 2021 E-Commerce Innovation and Development Support Plan of the Shenzhen Municipal Bureau of Commerce", after acceptance, review, and public announcement procedures, the 2021 E-Commerce Innovation and Development Support Plan National Digital Commerce Enterprise Award Project Award Plan has been issued, and 21 million yuan of funds have been allocated to reward 7 projects.

The 7 companies that received support from the Shenzhen Commerce Bureau are as follows↓

Shenzhen Zhongnong Network Co., Ltd.

Shenzhen SF Taisen Holdings (Group) Co., Ltd.

Shenzhen Newspaper E-Commerce Co., Ltd.

Shenzhen Tongtuo Technology Co., Ltd.

Aoji Technology Co., Ltd.

Shenzhen Soule Network Technology Co., Ltd.

Tubatu Group Co., Ltd.

Among the above-mentioned companies, Tongtuo and Aojie are well-known cross-border sellers in Shenzhen. These two sellers each received a reward of 3 million yuan from the Shenzhen Municipal Bureau of Commerce .

It is understood that the two big sellers have won the national digital commerce enterprise award project, which is aimed at accelerating the digital transformation of enterprises in the business field, actively cultivating and promoting national digital commerce enterprise development models, encouraging digital commerce enterprises to grow and develop, and play a leading role in demonstration.

Tongtuo and Aojie, as two well-known sellers in Shenzhen’s cross-border circle, have now received support funds from the Shenzhen Bureau of Commerce. I believe that in the coming period, the two sellers will regroup, open up new channels, and play a leading role in Shenzhen’s cross-border circle!

Power restriction and production suspension, Tongtuo's parent company issued the latest announcement

The power restriction order has been widely discussed recently. It is reported that Tongtuo's parent company is also affected by the power restriction order, and the production capacity that has been suspended accounts for 50% of the company's total production capacity before the "double control" suspension. The following is the details of the announcement:

On September 25, 2021, Yiwu Huading Nylon Co., Ltd. (hereinafter referred to as the "Company") temporarily suspended production in some of its factories and subsidiaries due to the requirements of "dual energy control" and in accordance with the unified deployment and arrangements of the government.

The company, based on the overall situation of maintaining social and local economic development, actively responded to the requirements of the government's power restriction and energy dual control policies, and fully cooperated with the local government's power restriction measures. The main body of this temporary suspension of production is the company's second plant (designed capacity of 40,000 tons) and the part of the wholly-owned subsidiary Yiwu Wuzhou New Materials Technology Co., Ltd. that has been started (the project is a construction project with a designed capacity of 150,000 tons, and some production lines have been started). The above-mentioned production capacity accounts for 50% of the company's total production capacity before the "dual control" suspension. This temporary suspension of production will be implemented from September 25, 2021, and it is initially expected to resume production on October 1, 2021.

In order to minimize the impact of the company's temporary suspension of production, the company will arrange equipment overhaul, equipment maintenance, optimize process control, etc. to minimize the adverse impact of the temporary suspension of production on the company. At the same time, the company will actively maintain communication with customers to maximize the timely supply of orders and meet customer delivery requirements.

In addition to the above-mentioned temporary suspension of production, the company's other production plants are currently maintaining normal production. The company will actively continue to communicate with the local government on issues related to power restrictions, and will keep a close eye on the progress of this temporary suspension of production.

Tongtuo's revenue in the first half of the year was 3.6 billion, and its net profit was more than 76 million

Public data shows that Tongtuo's parent company ST Huading has been losing money for two consecutive years and ushered in a turning point in performance in 2021. Financial data show that in 2019 and 2020, the company lost 1.329 billion yuan and 197 million yuan respectively; in the first half of 2021, it achieved a net profit of 172 million yuan attributable to its parent company, a year-on-year increase of 149.54%.

Currently, Huading is affected by power restrictions, and its suspended production capacity accounts for 50% of the company's total production capacity before the "double control" suspension. Its subsidiary Tongtuo was also affected by the Amazon account blocking incident some time ago, resulting in the freezing of more than 40 million yuan of funds.

Huading Co., Ltd. disclosed in its semi-annual report that Tongtuo achieved operating income of 3.602 billion yuan in the first six months, a year-on-year decrease of 5.17%; total profit of 92.3199 million yuan, a year-on-year increase of 6.62%; net profit of 76.8004 million yuan, a year-on-year increase of 9.76%.

However, before releasing its semi-annual report, Huading Holdings also disclosed important matters about Tongtuo Technology.

The announcement disclosed that since mid-to-late July, multiple brands of Shenzhen Tongtuo Technology Co., Ltd. have had their stores suspended from selling by Amazon and their funds frozen. Upon investigation, it was found that the reason may be inappropriate reviews of some products, suspected of violating Amazon platform rules. As of the date of this announcement, a total of 54 stores of Tongtuo Technology have been banned from selling and closed , and funds of RMB 41.43 million have been frozen, accounting for 4.27% of the company's monetary funds at the end of 2020.

Amazon is the largest third-party sales platform for Tongtuo Technology. The sales of the above-mentioned affected stores accounted for about 18% of Tongtuo Technology's total sales from January to June 2021, which will have a certain degree of adverse impact on the development of this year's cross-border e-commerce business. Tongtuo Technology's stores on other platforms and self-operated websites were not affected and sales were normal. The production and operation of other business segments of the company and its subsidiaries are normal.

In response to the above-mentioned industry problems of cross-border e-commerce, Tongtuo Technology has filed a complaint with the Amazon platform, striving to resume sales of related brand stores and lift the fund freeze as soon as possible, and has hired professional lawyers to prepare for arbitration. However, as of now, there has been no news that Tongtuo Technology's account has been restored.

Facing this wave of sanctions from Amazon, Tongtuo Technology is also actively expanding its sales channels. Huading Holdings stated in the announcement that while filing a complaint with Amazon, it also increased the sales share of other e-commerce platforms such as eBay, Walmart, AliExpress, Lazada, etc., and increased investment in Tongtuo Technology's own website, and actively expanded offline physical store channels in Europe and the United States.

Although Tongtuo's net profit in the first half of the year was very impressive, due to the impact of Amazon's account ban, the third-quarter financial report may shrink significantly. We might as well wait for the answer to be announced!

Shenzhen

Cross-border e-commerce

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