The founding team withdrew and suppliers collectively demanded repayment, but Wang Zhiyu of the Middle East criticized InnoNet in this way

Cross-border sellers have "exploded" one after another. After Global Easy Shopping was visited by debt collectors for defaulting on loans to suppliers, another super seller has "fallen from the altar"...

It is understood that Zhejiang Zhiyu , known as the dark horse of cross-border e-commerce in the Middle East , has now reached the point where suppliers are blocking its door to demand payment .

In fact, similar incidents had already broken out on a large scale as early as 2020. As time went on, Zhiyu owed suppliers more and more money, and its attitude became increasingly vicious.

According to the feedback from the rights-defending suppliers, Zhiyu wanted them to accept the unfair terms: 10% off the price for the goods, and if they disagree, forget it. The editor learned that the 10% off price for the goods means "only 100,000 yuan for the original 1 million yuan of goods", and faced with such unreasonable demands, the suppliers said they could not accept it.

At present, the "tug of war" between Zhiyu and its suppliers is still at a stalemate. As an industry media, Yien.com wants to reconcile the contradictions and solve the problems. As a result, during the communication process, the founder of Yien.com was verbally attacked by people related to Zhiyu: "Who are you!", "You are quite crazy!"...

I am a humble editor who is watching the drama online and thinking: Can I get my money back from suppliers? Is Zhiyu going to be in trouble?

Zhiyu defaulted on loans, suppliers formed a group to defend their rights

" Zhi Yu pays back the money, Zhi Yu pays back the money , Zhi Yu pays back the money "...

Recently, videos of Zhiyu being blocked by suppliers for debt collection have been widely circulated in the cross-border circle. The complaints of suppliers in the videos have revealed the tip of the iceberg of Zhiyu's arrears of payment to suppliers.

In one of the videos, a woman cried loudly at the door of Zhiyu: "Mom, I'm sorry, I owe you money"...

The woman's cries were mixed with the helpless voices of other suppliers:

Such a big company can’t even pay back its suppliers?

Zhiyu owes me 170,000 yuan, and now their four security guards are blocking the door and won't let us in.

I flew here specially, but all the top leaders of Zhiyu were hiding away.

…

The current situation where Zhiyu is visited by suppliers to collect debts is in stark conflict with Zhiyu's high-profile evaluation of himself.

According to data , Zhiyu claims to be the earliest e-commerce platform to enter the Middle East market. It is well-known in the Middle East Gulf region, with more than 30 million active users and ranks first in Saudi Arabia's market share . Its three apps accurately target full-category, high-cost-performance and light luxury consumption needs, covering 15 major categories including clothing, home furnishings, shoes and bags, accessories, mother and baby products, etc.

It is this e-commerce platform that is so popular that many suppliers are suffering from the reality. " Zhiyu has taken all the money from suppliers. Poor suppliers have lost all their money and have no way to complain, " said a supplier.

The editor learned that in just one rights protection group, there are now nearly 50 victims, and the team is still growing. Although they know that "going to the door to collect debts" may have little effect, they have to do it.

"If Zhiyu hadn't repeatedly defaulted on payments, who would have thought of collecting debts?" A supplier who was owed money said that he was currently owed nearly 800,000 yuan on the Zhiyu platform, but Zhiyu had not paid it back. This supplier's situation was not the worst, as some suppliers were owed millions of yuan.

A supplier who was owed more than 400,000 yuan also owed money to others. Although his life was difficult, he had to sell his house to pay off his debts. Now, he only hoped that Zhiyu could pay back the money as soon as possible to alleviate the current bad situation.

There are also a large number of people who have the same idea as this supplier: to get back their payment for the goods, to get back their hard-earned money!

Zhiyu's overbearing terms: Pay for goods at a discounted price, if you don't agree, forget it

When will Zhiyu be able to pay back the money? It seems to have become an unsolved mystery.

The suppliers who are collecting debts said that Zhiyu has been delaying the settlement of payments for goods. Recently, Zhiyu sent people to Shenzhen to discuss loan solutions with some merchants. The mandatory solution they proposed is that it can only be processed at a 10% discount, which means that Zhiyu will only give 100,000 for the original payment of 1 million. If the seller accepts it, he will pay. If not, it will continue to drag it out until Zhiyu has the money to pay.

Suppliers have expressed their disapproval of such unfair terms. One supplier said that Zhiyu has repeatedly broken its promises. When Zhiyu said it was in a difficult situation, he, as an old supplier, supported Zhiyu by supplying goods for a year. Now, Zhiyu is giving him a 10% discount on the payment in return, which is simply unscrupulous.

When suppliers came to Zhiyu to defend their rights, Zhiyu’s series of practices once again made the suppliers say that it was “eye-opening”.

One supplier said that he had been outside Zhiyu for a whole day, but no one came forward to solve the problem. If the supplier wanted to solve the problem, he had to go in one by one to talk, and his mobile phone was confiscated. Even if he succeeded in meeting the senior management, the result of the conversation was not satisfactory.

Maybe there are too many suppliers asking for payment in the past two years, and Zhiyu has used more and more tricks to avoid paying back the money: the senior executives hide and don’t see the suppliers, and they report to the police station when they go to the office to make trouble. When you go to ask for the money, they shut down your account so that you can’t see the debt interface. When you find one or two senior executives, they say they have resigned ...

After repeated attempts at communication had little effect, a supplier had no choice but to seek legal help. "We are currently suing Zhiyu. Zhiyu has been in arrears of payment for more than a year, and even when we sued them, they still refused to acknowledge the corresponding amount of payment. They privately changed the supplier's backend data without prior communication, and even shut down the login permission. They even refused to acknowledge the signed purchase contract." Although the supplier encountered many difficulties during the lawsuit, he said, "I just don't believe that no one can deal with Zhiyu."

According to the editor, several suppliers are also suing Zhiyu in order to successfully get their payment back.

"You are quite crazy!" Founder of Yien.com was verbally attacked by Zhiyu people

Regarding Zhiyu's arrears of payments to suppliers, Yinen.com, as a well-known media in the industry, is well aware that we cannot listen to one side and only report the supplier's words. Therefore, we contacted the relevant personnel of Zhiyu with a sincere attitude of pursuing facts and solving problems.

From the above picture, we can see that the founder of Yien.com clearly stated that he was not responsible for media business, and told Zhiyu Company's public relations person Du Minghao that he could communicate with the reporter responsible for writing the article about the latest progress of the supplier's debt collection. However, Du Minghao did not respond directly to the supplier's debt collection, and began to "furious":

"I have never been and will never be ordered to answer questions. Without even introducing myself, you told me to communicate with someone. Who are you? @鲁泓海"

Then, Du Minghao, who is in charge of public relations at Zhiyu Company, said bluntly:

" You are quite arrogant. You don't even have basic professional ethics. Your swearing language only shows that you are uneducated. I am in Shenzhen and can tell you the details in person. "

Not long after the "harsh words" were spoken, Du Minghao, who was in charge of maintaining public relations at Zhiyu Company, left the group...

At this point, the communication came to an end, and the issue of suppliers being owed money did not receive an effective response from Zhiyu.

Yien.com wanted to ask Zhiyu’s people whether Zhiyu was as “overbearing and unreasonable” as the supplier said , but was instead accused of being “crazy”. This trend was not what the editor expected…

Although Zhiyu refused to communicate with Yien netizens about the supplier payment issue and had been dealing with suppliers refusing to pay back the money, the suppliers who were owed money could not wait any longer.

"Can we get back the full payment for the goods?" This is the issue that many suppliers are most concerned about.

"If we wait any longer, the probability that suppliers will want their money back will be even lower." An insider said that Zhiyu can't even afford to pay its suppliers, and the actual situation within the company may be even worse. Zhiyu is likely to file for bankruptcy. If Zhiyu files for bankruptcy, the probability that suppliers will want their money back will likely be even lower.

A lawyer friend also said that in this situation, he recommends that suppliers file a lawsuit early. Although it cannot be guaranteed to be 100% effective, the effect will be much better than going to the supplier to defend their rights.

Major changes in Zhiyu management: legal person change, executives collectively exit

After the rights protection incident, there are many speculations from the outside world that "Zhiyu is going to be in trouble". In fact, at the beginning of this year, the editor has heard some sellers in the industry talking about it: "Zhiyu is going to be in trouble! "

Recently, the frequent changes in Zhiyu have made people in the industry say that there must be problems within Zhiyu.

Through the query of Qichacha, the editor found that on May 25, the legal person of Zhiyu was changed from "Li Haiyan" to " Wang Ruihan ", and there were also major changes in the senior management. Directors Wen Qi , Zong Peimin , Li Jiaqing , Yuan Ye , and Zhou Jun all withdrew. Now, Wang Ruihan is the executive director and general manager of Zhiyu, and Yang Tinghui is the supervisor.

This operation seems familiar. On June 6 last year , the legal representative of Zhiyu's related company Hangzhou Xuandai E-Commerce Co., Ltd. was also changed from "Li Haiyan" to "Wang Ruihan" .

Relevant information shows that in addition to serving as the executive director and general manager of Zhejiang Zhiyu Information Technology Co., Ltd., Wang Ruihan also served as the legal representative of Zhejiang Zhiyu Information Technology Co., Ltd. , Yiwu Zhiyu Information Technology Co., Ltd. , Hangzhou Xuandai E-Commerce Co., Ltd. , and a senior executive of Zhejiang Zhiyu Information Technology Co., Ltd. , Yiwu Zhiyu Information Technology Co., Ltd. , Hangzhou Xuandai E-Commerce Co., Ltd.

That's right, there have been major changes in Zhiyu's management. Does this scene remind you of the collective resignation of Global Easybuy's management that made a lot of noise before ? In this regard, the editor can't help but sigh, the same formula, the same script, will it lead to the same ending?

Zhiyu is a cross-border e-commerce company founded by Li Haiyan in 2012. After nine years of hard work, why would he have the heart to abandon his "son" whom he had raised? Was he afraid that suppliers would come to collect debts?

An insider revealed that this was because Zhiyu had operational problems and could not obtain new financing. The only way to obtain financing was to lower the valuation, but this method was opposed by the original investors. Li Haiyan and the original investors could not reach an agreement, so she withdrew.

Relevant insiders said that without financing, Zhiyu can only last for half a month at most, and will go bankrupt within a week at the earliest.

Regarding the rumor that Zhiyu might go bankrupt, the editor plucked up the courage to verify it with Zhiyu's Du Minghao again, but found that the steps to restore the truth were blocked by "you are not his friend yet"...

Something went wrong suddenly? Actually, the problem with Zhiyu has been going on for a long time.

Having said that, many people may find it a bit sudden to hear about Zhiyu's troubles. In fact, the reason why suppliers came to collect debts for the company was due to the accumulation of problems day after day. From being the first in the region and a well-known unicorn to a company with declining performance that may become a "martyr" , what has happened to Zhiyu over the years?

The impact of an epidemic is enough to cause Zhiyu to bleed heavily .

An insider close to Zhiyu told the editor that a large part of the reason why Zhiyu has come to where it is today is due to the epidemic. "Last year, due to the impact of the epidemic, several hundred million yuan of goods could not be delivered in a month." The insider sighed: "Just think about it, how many times can you lose several hundred million yuan a month?"

Of course, before the epidemic, Zhiyu also had some problems.

The insider admitted that before the pandemic, Zhiyu vigorously developed overseas warehouses in the Middle East. Without testing the entire container, it directly sent hundreds of containers of goods in large quantities at once, and finally all of them were stuck in customs. "Each of these containers has thousands of SKUs, and they are to B , so they were all gone in an instant. "

In addition, Zhiyu also has problems such as too many redundant staff, inadequate management, too fast pace and insufficient funding .

"The scale of Zhiyu is roughly based on that of JD.com. It's a bit too big, and after recruiting employees, the management hasn't kept up," the insider said. "In addition, Zhiyu 's expansion speed is too fast. The Zhiyu APP, overseas warehouses, and Zhiyu payment, everything in this entire ecosystem is burning money, and the funds it has raised are not enough to support this expansion speed. "

In general, Zhiyu is on the verge of bankruptcy today . The factors include: the epidemic, poor management, rapid expansion, inability to obtain new financing, and debt collection from suppliers.

The issue of Zhiyu defaulting on payments to suppliers broke out last year

Zhiyu's current situation of internal and external troubles could be seen as early as in the previous years' suppliers' debt collection storm and layoffs storm.

The editor learned that Zhiyu’s arrears of payments to suppliers had actually surfaced as early as 2020 or even earlier.

On February 23 last year , a supplier reported to the Black Cat Complaint Platform: "Zhi Yu has seriously deceived suppliers, has been in arrears of loans, and has failed to fulfill its promises in accordance with the contract." Subsequently, more and more suppliers posted on the forum for help.

On April 3, Zhiyu founder Li Haiyan published an open letter in response to many suppliers asking for payment.

From the above picture, we can see that Li Haiyan did not evade the issue of overdue payments to suppliers. At the same time, Li Haiyan explained in the letter that the reason for not paying the payment on time was that the sudden increase in the epidemic in Saudi Arabia squeezed the cross-border logistics channel and caused the cost to be abnormally high. The local martial law and city closure caused the local logistics efficiency and receipt rate to decrease, and the sales of some non-essential products declined. These factors caused some difficulties in the operation of the platform and the corresponding increase in financial pressure.

At the same time, he said that Zhiyu is willing to negotiate a solution with suppliers through debt-to-equity swaps or installment payments.

In addition, he also pointed out in the letter that local governments and other relevant parties in China are actively helping Zhiyu overcome difficulties, including: providing supply chain financial solutions to ease the financial pressure of small and medium-sized suppliers; accelerating collection efficiency; and communicating with local banks to speed up capital recovery. At the same time, Zhiyu is also conducting a new round of strategic financing for blood transfusion, and has made positive progress.

At that time, after the open letter was issued, it caused a lot of heated discussion.

Some suppliers said frankly that the problem did not exist today, and Zhiyu's arrears of payment to suppliers began as early as November 2019. Some netizens also said that it seemed that they had seen the next Taojiji.

At that time, after the supplier's debt collection and rights protection incident occurred, although Zhiyu did not propose the unfair terms of " payment for goods at 10% off the price ", its handling method also continued its usual rogue style.

Some suppliers who received solutions said that Zhiyu’s handling method was simply rogue. For uncooperative suppliers, the payment would be settled in 24 installments, and for those who continued to cooperate, it would be settled in 12 installments, or debt-to-equity swaps and supply chain finance would be used.

The burden of personnel is too heavy, and the word is "layoff"

In addition to being deeply mired in the crisis of overdue payments to suppliers, Zhiyu is also facing the problem of "violent layoffs."

During the epidemic last year, many companies were reported to have "laid off a large number of employees to reduce costs", and Zhiyu was one of them.

In March last year , an employee of Zhiyu revealed that he was laid off in disguise by Zhiyu in the form of "salary cut and suspension of work". The "waiting notice" issued by the employee showed that the employee was on standby at home from March 1, 2020 to May 31, 2020. During the standby period, the company paid 80% of the Hangzhou minimum wage standard (i.e. 1,608 yuan/month) for living expenses.

Afterwards, another employee published a 1,000-word article to denounce Zhiyu under his real name. The article focused on three aspects: 1. Forcing employees to sign layoff agreements, which was a disguised layoff, and pregnant women were not spared; 2. The company had just raised funds, so where did the money go; 3. In 2019, the company did not meet shareholders' expectations and withheld employees' year-end bonuses.

It was thought that this wave of disguised layoffs had reached its peak, but what was unexpected was that at the end of 2020, another Zhiyu employee broke the news that Zhiyu was going to have another big layoff at the end of the year. Employees were asked to leave without any compensation, and their door cards were banned if they did not agree. They were required to sit at fixed workstations equipped with cameras, without computers or assignments. Anything else would be considered a violation.

In fact, Zhiyu's massive layoffs began in 2019. At the end of 2019, a Zhiyu employee broke the news that he had received news from the company that since the company's performance in 2019 did not meet shareholders' expectations, it decided to lay off employees in order to cut expenses, and issued temporary regulations in many aspects such as business travel applications, year-end bonuses, and team building.

In June before that, someone pointed out on Zhihu that Zhiyu had cut its staff from 2,500 to only about 1,000. By the end of 2020, some people even said that there were only 200 people left.

Final Thoughts

It is not an isolated case that suppliers come to Global Easy Shopping to collect payment for goods. Not long ago, a woman knelt down and begged Global Easy Shopping: "Give me back my money!" The scene is still vivid in my mind.

The Global Easy Shopping incident has not yet subsided, and it was revealed that Zhiyu was also collectively visited by suppliers to demand payment for their goods.

Time and again, what should have been a done deal about debt repayment has become a hot topic. It has also caused people inside and outside the circle to distrust cross-border e-commerce companies, especially suppliers, who are now even more afraid of getting into trouble after supplying goods to big sellers .

Some suppliers directly said that they would not do business with companies unless they were paid in cash or had long credit terms, and that the bigger the company, the less they liked it. "We would rather supply small sellers than big sellers. Big sellers have too many stalls and often use their sales and stable supply volume to control suppliers. The credit terms are long, so if there is a problem, we are the ones who get hurt in the end."

Trading companies and suppliers are interdependent. If the supplier is hurt, the seller's future overseas expansion will be greatly hindered. And the editor has learned that in recent years, similar incidents of sellers defaulting on payments to suppliers have occurred every year.

Therefore, as an industry media, the editor still calls on sellers including Zhiyu and Global Easy Shopping to actively stand up and negotiate with relevant suppliers to resolve the issue. Don't let the majority of suppliers, or even the outside world, lose confidence in the cross-border e-commerce industry.