Sold multiple subsidiaries for 0 yuan! Cross-border sales have been acquired

Some people say it is the "East China version of SHEIN", let's not discuss this for now, but its business model is indeed comparable to SHEIN. However, it has been suspended many times since its listing, its performance has repeatedly been in the red, and its subsidiaries have been sold for 0 yuan. Now this big sale seems to have come to an end...

Ever wanted to remake SHEIN? Now this hot seller has been acquired

On September 5, Wuxi ZeShang Technology Co., Ltd. ( hereinafter referred to as "Zeshang Technology" ) , a cross-border seller from Jiangsu , issued an "Acquisition Report" announcing that the company had been acquired.

According to the announcement, on September 4, 2023, Qingdao Olive Tree Intelligent Manufacturing Co., Ltd. ( hereinafter referred to as "Qingdao Intelligent" ) and ZeShang Technology respectively signed the "Share Transfer Agreement".

Qingdao Smart acquired 10,368,254 shares held by Zou Zheng, the actual controller of ZeShang Technology, accounting for 48.75% of the total share capital of ZeShang Technology; and acquired 1,218,200 shares held by shareholders Qin Hui and Founder, accounting for 5.73% of the total share capital; a total of 11,586,454 shares were acquired, accounting for 54.47% of the total share capital.

After this acquisition, Qingdao Smart will become the new controlling shareholder of ZeShang Technology, and Qingdao Smart’s legal person Ren Pingping will become the new actual controller of ZeShang Technology.

At a price of 0.108 yuan per share , Qingdao Smart spent only 1.25 million yuan to buy the actual control of ZeShang Technology, and now the overall valuation of ZeShang Technology is only 2.3 million yuan .

Founded in 2009, in 2015, ZeShang Technology was officially listed on the National Equities Exchange and Quotations as the country's first cross-border export e-commerce company .

Let's first talk about Zeshang Technology's business. Its main business is traditional clothing trade export and cross-border export e-commerce retail. When it comes to clothing, Zeshang Technology also makes good use of a flexible supply chain. Through its self-developed ERP system, it integrates and manages suppliers, logistics providers, and overseas end customers, which is quite similar to SHEIN.

With its fast fashion brand CHOIES sold on Amazon and other platforms, Zeshang Technology's market covers more than 100 countries and regions in North America, Europe, the Middle East, Asia, etc. However, its development has been repeatedly frustrated and it has also sought to be acquired many times.

In 2017 , the overseas company Anto Technology Inc (USA) commissioned Zhishang Zhuoji Technology (Hong Kong) Co., Ltd. to conduct two due diligences on Zeshang Technology , but the acquisition was terminated due to a sharp decline in Zeshang Technology's performance that year.

As a last resort, in 2018, ZeShang Technology ( having cooperated with Hongye Holdings in 2016) once again announced that it had signed a strategic cooperation agreement on cross-border e-commerce operations , with the intention of achieving model innovation in the integration of cross-border export e-commerce and foreign trade supply chains, and improving performance and brand image .

But judging from the current situation, this move is likely to have little effect.

Sold several subsidiaries with negative net assets for 0 yuan

In fact, long before this acquisition, ZeShang Technology sold several of its subsidiaries for RMB 0.

According to the announcement released in June, Wuxi Taiping Industry and Trade Co., Ltd. , Nanjing Interjet Software Technology Co., Ltd., V-SHANGS SCIENCE AND TECHNOLOGY (HK) CO., LIMITED (all 100% wholly-owned), and INVOGUE ECOMMERCE TECHNOLOGY INC (holding 60% of the shares) under ZeShang Technology were transferred to others for RMB 0.

In addition, the announcement also pointed out that as of April 30, 2023, the net assets of the four subsidiaries sold were all negative, totaling -15.08 million yuan, and the net assets of one wholly-owned subsidiary were even as high as -11.1 million yuan.

Obviously, many subsidiaries of ZeShang Technology are insolvent, and the sale for RMB 0 may be to repay debts.

Since its listing, Zeshan Technology has been suspended many times, the most recent one being in September last year . It was suspended a year ago and was acquired a year later. Zeshan Technology’s cross-border journey has come to an end.

It was only listed in 2015, and now, only 8 years have passed, but ZeShang Technology has come to this point. At that time, it was full of fighting spirit and wanted to show its strength after the listing, but after the listing, ZeShang Technology only enjoyed two years of glory, and its ambitions have not been fulfilled.

In 2015, ZeShang Technology's revenue was 115 million yuan, an increase of 388.06% over 2014 , and its net profit reached 2.43 million yuan, an increase of 211.15 % ( net loss of 2.19 million yuan in 2014).

In 2016, its revenue increased by another 163.02% to 302 million yuan , and its net profit increased by 274.04 % to 9.1 million yuan .

Market sales and profitability seemed to be improving steadily, but the good times came to an abrupt end:

In 2017, revenue was halved ( -59.41% ) to only 123 million yuan , and net profit began to suffer losses, with a loss of 4.03 million yuan.

After 2018, the decline is far from over. From 2018 to 2022, ZeShang Technology's revenue was 131 million yuan, 204 million yuan, 297 million yuan, 64 million yuan, and 49 million yuan, respectively. In terms of profit, except for a net profit of 1.63 million yuan in 2019, it lost 18.26 million yuan, 7.31 million yuan, 3.1 million yuan, and 10.31 million yuan, respectively.

In the first half of this year, revenue was only 14 million yuan, and net profit was a loss of 2.76 million yuan.

In response to such business performance, ZeShang Technology has also issued several "Announcements on the Company's Unrecovered Losses Reaching One-Third of the Total Paid-in Capital" .

From 2021 to the first half of this year alone , five such announcements have been issued.

As for the reason for this year's losses, ZeShang Technology attributed it to the fierce competition in the industry. It stated: SHEIN and the newly emerging Temu have had a serious impact on the company's sales on platforms such as Amazon; in addition, in order to increase sales revenue, the selling prices of some products were adjusted, and the gross profit margin was affected, resulting in losses.

ZeShang Technology is not indifferent to years of losses.

Repeatedly doing "subtraction", but there is still no "good solution" for self-help

As an integrated industrial and trade enterprise with 15 years of experience in clothing brand design and processing, ZeShang Technology adheres to the concept of being a fast fashion brand and once attempted to become a strong competitor of SHEIN.

Overseas, Choies sells its own fast fashion brand CHOIES products through its own websites, mainly www.choies.com, and third-party e-commerce platforms such as Amazon, AliExpress, and Wayfair , covering markets in hundreds of countries and regions.

In terms of products, Zeshang Technology has never been complacent. Since 2017, Zeshang Technology has made every effort to reduce the number of SKUs, controlling the number of SKUs sold in all channels from more than 20,000 to around 2,500 .

In 2018, its e-commerce product line gradually developed from a single women's fashion to multiple categories such as outdoor, home furnishings, and office stationery, and maintained the continuous development of its e-commerce product line in multiple fields such as fashion, home furnishings, and office stationery.

In terms of channels, in addition to third-party e-commerce platforms such as Amazon, since 2017, ZeShang Technology has significantly reduced low-price distribution sales on platforms such as Wish, and focused on strengthening sales on channels such as Amazon.

In addition, Zeshan Technology has proactively laid out its independent station business early on. However, due to the continuous investment in advertising fees for the independent station business, the company is now losing money, and the cash flow is insufficient to support the continued investment in the independent station business. In 2021, Zeshan Technology will close its independent station business except CHOIES.

ZeShang Technology is focusing on intensively cultivating and deeply nurturing the niche markets, no longer insisting on the large and broad market, and vigorously doing "subtraction" . However, judging from the results, the effects are minimal, and ZeShang Technology is still unable to escape the state of a sharp decline in performance year after year.

Despite repeated efforts in products, promotion and internal management capabilities, Zeshan Technology still cannot find a way to save itself. It used to have the ambition to catch up with SHEIN, but now its fate is completely different: SHEIN is rising step by step overseas, while Zeshan Technology may be buried in the dust of history.

Big Sell

Acquisition

Selling for 0 Yuan