Hello everyone, today we’ll mainly analyze how cross-border e-commerce has transformed from a wealth-creating sector into a shakeout, with a number of established companies rapidly exiting the market.
From 2015 to 2025, cross-border e-commerce was one of the most profitable sectors. However, things changed after 2025. Tighter policies, rising costs, and weak overseas consumption—these three forces combined have transformed the industry from one where “whoever can buy volume wins” to one where “whoever has stable cash flow survives.” A number of companies once favored by capital are now delisting, shutting down operations, or transforming their businesses. These are not isolated cases; they signal that the entire industry is entering a shakeout phase.
Regarding the delisting trend, Shangyang Technology, once known as the “first listed cosmetic tools company,” saw its revenue reach 107 million yuan in the first half of 2025, a year-on-year decrease of 19.28%; net profit was 14.5859 million yuan, a year-on-year decrease of 29.07%. Its main clients were major European and American brands like L’Oréal and Sephora, and it operated as an ODM (Original Design Manufacturer). Fluctuations in customer orders and rising costs immediately squeezed profits. Its stock liquidity remained consistently low, with daily trading volume approaching zero. Listing maintenance costs were no longer a necessary expense but rather a burden. The stated reason for delisting was “focusing on production and operation, and reducing operating costs,” but in reality, the ODM model couldn’t withstand tariff fluctuations. Chenbei Technology, on the other hand, went from listing on the Hong Kong Stock Exchange to delisting in just three years, setting a record for the fastest delisting of a cross-border e-commerce company in Hong Kong. It owned brands such as Levoit, Etekcity, and Pawsync, selling small appliances in the North American market. Revenue from 2020 to 2024 was $349 million, $454 million, $490 million, $585 million, and $653 million respectively, seemingly showing a continuous upward trend. However, profits were unstable: $55 million, $42 million, -$16 million, $77 million, and $93 million. Increased uncertainty regarding tariff policies in 2025 amplifies the structural risks of its heavy reliance on the North American market. Hong Kong stock valuations have long been low, with the price-to-earnings ratio hovering around 8, rendering its financing function almost ineffective. Delisting is not a failure, but rather a way to escape the short-term pressure of the public market and create room for future adjustments. Regarding the wave of closures, Huijie Group shut down its cross-border brand Understance. This brand’s lingerie products are priced between $25 and $40, leaving little room for profit margins. Its supply chain structure is “Made in China + Transit in Canada + Direct Shipping from North America,” and policy changes have exposed the vulnerability of the entire chain. The US’s elimination of tax exemptions for small packages under $800, coupled with comprehensive tariffs on Canadian imports, resulted in a loss of 33.55 million yuan for its Canadian subsidiary in the first half of 2025. Huijie Group chose to cut its losses: shutting down the brand and all three of its Canadian stores, bearing the direct losses of 34 million yuan from inventory depreciation and warehouse lease terminations, and refocusing resources on its core domestic business. Zeshang Technology, the “first cross-border stock on the New Third Board,” saw its revenue drop to zero from 2024 to the first half of 2025, with its main cross-border business almost completely halted. Its problem lies in its over-reliance on the “buying volume + distribution” approach. In 2020, sales expenses reached 202 million yuan, accounting for 67.98% of revenue, meaning that for every 10 yuan of sales, nearly 7 yuan was spent on marketing. This “burning money for growth” model only works when traffic is cheap and growth is smooth. Once costs rise and demand slows, it becomes a financial black hole. As of December 31, 2023, Zeshang Technology had accumulated losses of 39.5075 million yuan. The company is now pushing for “shrinking business lines, integrating resources, and transforming into the new energy industry,” which is widely seen as a gradual withdrawal from cross-border e-commerce. Three types of old players are being eliminated. The first type is companies reliant on a single market. Whether it’s a small appliance brand or a clothing seller, as long as they are highly dependent on the North American market, changes in policy and demand in the same market will amplify the risks exponentially. What used to be an efficient choice of “betting on North America” may now become a structural risk. The second type is companies with fragile supply chains in low-profit price ranges. With product pricing concentrated in the $25 to $40 range, gross profit margins are already thin; any increases in tariffs, logistics, warehousing, and compliance will directly erode profits. These companies fail not because they can’t make products, but because the entire supply chain lacks a “shock-absorbing buffer.” The third type is companies extremely reliant on buying traffic and expanding distribution. During the period of rapid growth driven by traffic dividends, advertising can quickly generate scale; however, during periods of rising costs, advertising may initially result in losses. The case of Zeshang Technology serves as a reminder to the industry: when growth can only be sustained by burning cash, the story will eventually end. The reshuffling of cross-border e-commerce in 2025 was not due to companies delisting, shutting down, or transforming, but rather because the old conditions upon which the industry relied for growth underwent a directional shift. Policies became more uncertain, costs more rigid, and demand more cautious. Cross-border e-commerce is no longer a wealth-creating track where “whoever dares to rush in wins,” but rather an elimination arena where “whoever can stabilize cash flow, maintain profit margins, and withstand uncertainty” prevails.
