Dongguan Koppo Electronics Co., a major Bluetooth headphone maker, is to shut down operations for good as a number of cross-border e-commerce clients have failed to make due payments. Hit by economic headwinds, supply chain disruptions, and trading woes, Koppo Electronics is expected to lay off 100 workers.
The company is an official notice, highlighting that the global economic and trade flows had seen unprecedented disruptions since the outbreak of the COVID-19 pandemic. It said Koppo Electronics had been affected by delayed payments by a number of cross-border merchants. It added that a huge amount of finished goods are stockpiling in the warehouse.
Koppo Electronics, as per the notice, has been making losses in recent years. It said the Russo-Ukraine war had dealt another heavy blow to the company’s business and that the market situation is just too grim. Sunvalley, one of Koppo Electronics’ biggest clients, missed payments. The Shenzhen-based cross-border consumer electronics firm is a large seller of Chinese-made gadgets on Amazon. Sunvalley’s account was frozen in 2021 by Amazon for failure to comply with the online platform’s rules. This, in turn, led to the failure to pay Koppo Electronics for products it ordered.
Reports reveal that 367 Amazon online stores operated by Sunvalley were suspended in 2021. This accounts for 70% of all of the Chinese firm’s accounts – more than USD 4.74 million of Sunvalley’s funds were frozen by the American e-commerce giant. Koppo Electronics is said to be one of the top suppliers for Sunvalley. This shows more signs of trouble for the “Made in China, Sold on Amazon” community following the e-commerce giant’s extensive crackdown that removed thousands of Chinese sellers from the platform in 2021.
Furthermore, it should be noted that trouble in China’s manufacturing industry has the potential to ripple through the wider economy. It provides employment for 180 million people.