Chinese headphone maker in Dongguan shuts down, intensifying country’s woes in manufacturing, cross-border e-commerce

A big Bluetooth headphone maker, Dongguan Koppo Electronics Co, has made the decision to shut down for good and dismiss all its workers, turning out to be the latest casualty of the financial headwinds, supply chain disruptions and investing woes that have hit China’s producing heartland.

Koppo Electronics, which has operated its manufacturing unit in the metropolis of Dongguan in southern Guangdong province for 12 decades, explained it was ceasing operations partly since “a number of cross-border e-commerce purchasers have failed to make owing payments”, in accordance to a observe seen by the Publish.

“Due to the fact the outbreak of the Covid-19 pandemic, world-wide economic and trade flows have noticed unprecedented disruptions,” the observe claimed. “The corporation has been hit by delayed payments by a amount of cross-border merchants, and a big quantity of completed goods are stockpiling in the warehouse.”

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Koppo Electronics is anticipated to lay off 100 workers, in accordance to a report on Wednesday by Chinese electronic media Jiemian News. At its peak, the corporation had a lot more than 1,000 workers and developed about 400,000 headphones a thirty day period.

A production line inside of the factory of Dongguan Koppo Electronics Co, a key Bluetooth headphone maker in China. Picture: Handout alt=A production line inside of the manufacturing facility of Dongguan Koppo Electronics Co, a major Bluetooth headphone maker in China. Photo: Handout>

“The business has been making losses in new yrs and it really is hard to keep on the operation,” the detect reported. “The sudden outbreak of [the Ukraine] war has dealt a different hefty blow to the firm’s company and the market place situation is just grim.”

Cellphone calls to Koppo Electronics went unanswered on Wednesday.

Its collapse will come on the heels of a selection of large-profile factory closures in the Pearl River Delta, which has elevated problems about China losing its competitive edge in producing and big part in world supply chains.

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Hassle in China’s manufacturing heartland has the likely to ripple through the wider economy. The export sector delivers careers for 180 million persons, or far more than a 3rd of the country’s 530 million non-farming work opportunities, in accordance to info from China’s Ministry of Commerce.

The demise of Koppo Electronics also demonstrates far more signs of difficulty for the “Produced in China, Bought on Amazon” local community, next the US e-commerce firm’s considerable crackdown that eliminated countless numbers of Chinese sellers from the platform since past year.

A person of the company’s major clients to pass up payments was Shenzhen-based cross-border purchaser electronics agency Sunvalley, a huge vendor of Chinese-built gadgets on Amazon, in accordance to the report by Jiemian News, which cited big Koppo Electronics shareholder Wei Yongning.

That Amazon vendor’s accounts have been frozen very last calendar year by the US e-commerce huge for failure to comply with the on the net platform’s guidelines, which led to its failure to pay out Koppo Electronics for the items it ordered, the Jiemian News report explained.

Sunvalley and its dad or mum company, Guangdong SACA Precision Producing Co, did not quickly answer to requests for remark.

The “Designed in China, offered on Amazon” local community faces a gloomy long term right after years of speedy expansion. Photograph: Shutterstock alt=The “Manufactured in China, sold on Amazon” local community faces a gloomy long run just after several years of quick advancement. Photo: Shutterstock>

In June previous 12 months, Amazon banned the sale of 3 well-known product or service strains beneath Sunvalley – RAVPower electric power banking institutions, Taotronics earphones and VAVA cameras – for tries created by the seller to solicit beneficial customer evaluations. Previous October, a few far more of the company’s gadget manufacturers – Anjou, Sable and Hootoo – have been eradicated on the web by Amazon.

A complete of 367 Amazon on the web stores operated by Sunvalley were suspended by the platform in 2021, accounting for 70 for each cent of all of the Chinese firm’s accounts, in accordance to the once-a-year report of mum or dad SACA. It stated more than 32 million yuan (US$4.74 million) of Sunvalley funds had been frozen by Amazon.

Shenzhen-outlined SACA’s cross-border e-commerce income for 2021 were practically halved for the reason that of Amazon’s crackdown, which led to a 1.52 billion yuan loss in the period, according to its once-a-year report. Koppo Electronics was just one of the best suppliers for Sunvalley, the company’s submitting showed.

When Amazon started out to clamp down on phony opinions final yr, the US system shut 3,000 on-line merchant accounts backed by about 600 Chinese manufacturers, detrimental the functions of the “Produced in China, Offered on Amazon” group.

This short article initially appeared in the South China Morning Publish (SCMP), the most authoritative voice reporting on China and Asia for additional than a century. For extra SCMP stories, you should check out the SCMP app or take a look at the SCMP’s Fb and Twitter internet pages. Copyright © 2022 South China Morning Write-up Publishers Ltd. All rights reserved.

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