A major manufacturer of Bluetooth headphones, Dongguan Koppo Electronics Co, has decided to permanently close and lay off all of its workers, becoming the latest victim of economic headwinds, supply chain disruptions and trade difficulties that have hit the heart of manufacturing in China.
Koppo Electronics, which has operated its factory in Dongguan city, southern Guangdong province, for 12 years, said it was ceasing business in part because “a number of cross-border e-commerce customers have not not made the payments due”, according to a notice seen by the Job.
“Since the outbreak of the Covid-19 pandemic, global economic and trade flows have experienced unprecedented disruptions,” the notice said. “The business has been impacted by late payments from a number of cross-border traders, and a huge amount of finished goods are piling up in the warehouse.”
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Koppo Electronics is set to lay off 100 workers, according to a report by Chinese digital media on Wednesday Jiemian News. At its peak, the company had over 1,000 workers and produced around 400,000 headphones per month.
A production line inside the factory of Dongguan Koppo Electronics Co, a major manufacturer of Bluetooth headphones in China. Photo: Handout alt=A production line inside the factory of Dongguan Koppo Electronics Co, a major manufacturer of Bluetooth headphones in China. Picture: Document>
“The business has made losses in recent years and it is difficult to continue operations,” the notice said. “The sudden appearance of [the Ukraine] the war has dealt a new blow to the company’s activities, and the market situation is simply bleak. »
Phone calls to Koppo Electronics went unanswered on Wednesday.
Its collapse follows a number of high-profile factory closures in the Pearl River Delta, raising fears that China could lose its competitive advantage in manufacturing and its leading role in supply chains. global supplies.
Problems at the heart of Chinese industry have the potential to ripple throughout the economy. The export sector provides jobs for 180 million people, more than a third of the country’s 530 million non-farm jobs, according to data from China’s Ministry of Commerce.
Koppo Electronics’ demise also reflects more signs of trouble for the “Made in China, Sold on Amazon” community, following the US e-commerce company’s sweeping crackdown that removed thousands of Chinese sellers. of the platform since last year.
According to the report of Jiemian Newswhich quoted Koppo Electronics’ major shareholder, Wei Yongning.
That the Amazon seller’s accounts were frozen last year by the US e-commerce giant for failing to follow the online platform’s rules, leading it to fail to pay Koppo Electronics for the products it purchased. he ordered, the Jiemian News says the report.
Sunvalley and its parent company, Guangdong SACA Precision Manufacturing Co, did not immediately respond to requests for comment.
The “Made in China, sold on Amazon” community faces a bleak future after years of rapid growth. Photo: Shutterstock alt=The “Made in China, sold on Amazon” community faces a bleak future after years of rapid growth. Photo: Shutterstock>
In June last year, Amazon banned the sale of three popular product lines under Sunvalley – RAVPower power banks, Taotronics headphones and VAVA cameras – for the seller’s attempts to solicit positive customer reviews. Last October, three of the company’s other gadget brands – Anjou, Sable and Hootoo – were removed online by Amazon.
A total of 367 Amazon online stores operated by Sunvalley were suspended by the platform in 2021, representing 70% of all the Chinese company’s accounts, according to parent company SACA’s annual report. He said more than 32 million yuan ($4.74 million) of Sunvalley funds had been frozen by Amazon.
Shenzhen-listed SACA’s cross-border e-commerce sales for 2021 were nearly halved due to Amazon’s crackdown, which resulted in a loss of 1.52 billion yuan during the period, according to its annual report. Koppo Electronics was a major supplier to Sunvalley, according to the company’s filing.
When Amazon began cracking down on fake reviews last year, the US platform shut down 3,000 online merchant accounts backed by around 600 Chinese brands, damaging the operations of the “Made in China, Sold on Amazon” community. .
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice journal on China and Asia for over a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
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