Complaint

Nonetheless, shrinking the front is an indisputable fact.

The security guard of the building where the Shanghai Secoo offline experience center is located told the 21st Century Business Herald reporter that the Secoo store has been closed for seven or eight months and will not reopen. A customer told reporters that he had been there once in January this year. At that time, there was a notice on the store that “the store will be closed from December 23 to 25, 2021, so the store will be closed”, but it was basically emptied by then. . Therefore, it can be seen that Secoo’s move is not directly related to the Shanghai epidemic this year.

In fact, the first stock of luxury e-commerce has frequently reported negative news since last year.

“I bought a bag of regarding 10,000 yuan on Secoo in July last year, but it has not been shipped. After I applied for a refund, I never believed it. The customer service shied away. I didn’t receive the refund until January this year.” Liu Yue (pseudonym) told the 21st Century Business Herald reporter that during this process, she made complaints through various channels such as black cat complaints, citizen hotlines, and 12315. According to her, she has been considered lucky, and there are still many people who have complained frequently and have not seen the shadow of a refund.

Searching for “Secoo” on Xiaohongshu, a lot of content is regarding refunds and rights protection. As of press time, the number of complaints regarding Secoo on Black Cat Complaints is as high as 17,590, of which only 9,933 have been completed, and the satisfaction rate is only three stars.

In addition, many Secoo employees exposed news on social media that Secoo owed employees several months of wages, cut off social security payments, and did not settle wages following resignation. Employees can only protect their rights through arbitration. According to Qixinbao data, recently, Beijing Secoo Trading Co., Ltd. and its legal representative Li Rixue added a new order to restrict consumption. The key case is a dispute between Beijing Yunrui International Culture Media Co., Ltd. and the company’s related contract. Previously, the case had been enforced, and the execution target exceeded 3.71 million yuan. Risk information shows that Beijing Secoo Trading Co., Ltd. has multiple pieces of information regarding the persons subject to execution, and the total amount of execution exceeds 21.9 million yuan.

sluggish performance

In 2017, Secoo, as the “first share in luxury e-commerce”, listed on Nasdaq and issued 8.5 million American Depositary Shares (ADS) at US$13 per share, raising a total of US$110 million. Three years later, in December 2021, Secoo received a Nasdaq delisting warning because the stock closed below $1 for 30 consecutive days.

After all the way down, on August 18, the closing share price of Secoo was only US$0.232, down more than 98% from the issue price, and the total market value shrank to US$16.3914 million.

On May 13, Secoo released its 2021 annual performance report. The financial report shows that the company’s revenue in 2021 will be 3.132 billion yuan, a year-on-year decrease of regarding 47.98%; the net loss will reach 566 million yuan, a year-on-year decrease of 681.82%. The upbeat results deteriorated further.

According to the 2020 financial report, Secoo’s net loss attributable to the company’s ordinary shareholders was 71.864 million yuan, compared with a profit of 154 million yuan in the same period last year, which turned from profit to loss. In the first quarter of 2020, Secoo’s revenue began to show negative growth and continued to expand, with only a slight recovery in Q4. At the same time, its net profit and gross profit declined year-on-year for five consecutive quarters.

In terms of the number of active users, in the first quarter of 2019, the number of active users of Secoo increased by 89.6% year-on-year. After that, the growth slowed down, and the growth rate in the fourth quarter was only 50.9%. In the third quarter of 2020, the growth of active users of Secoo was only 50.9%. At 7.5%, the ceiling has emerged. In the first half of 2021, the number of active customers of Secoo was 568,900, compared with 658,700 in the same period of 2020, a year-on-year decrease of 13.6%.

As of the end of the 2021 reporting period, Secoo held 156 million yuan in cash and cash equivalents, a year-on-year decrease of 75.62%, which is not very optimistic. In the same period, the inventory was as high as 3.347 billion yuan, which also means that a lot of cost input is required, and the high inventory also causes financial pressure.

Not long ago, luxury brand Prada applied to freeze more than 11 million yuan and corresponding value properties under the name of Secoo for a period of one year. In 2019, Secoo was the first stop for Prada to enter the Chinese e-commerce market, and it was also an important partner of Prada Group in distribution strategy. Now the action has also increased the pressure on the company.

The US$4 million received by Secoo this time is undoubtedly a life-saving money. Li Rixue, chairman and CEO of Secoo, said: “This important injection will provide Secoo with capital to implement our strong growth plan.”

However, the existing problems of the temple will not be wiped out. Zhang Yi, CEO of iiMedia Research, said in an interview with a 21st Century Business Herald reporter that for luxury e-commerce, the most important thing is to build consumer trust, and the platform still lacks in ensuring product quality. Secondly, luxury itself is also a relatively niche field. The platform cannot obtain high profits, so it cannot do the work of attracting traffic, and the road will become narrower and narrower.

“Luxury e-commerce is best to rely on some big platforms. The platform itself has certain high-quality customers and huge traffic. Screening customers with luxury needs on such platforms can ensure its sustainable growth.” Zhang Yi Say.

On the way to the development of luxury e-commerce, catwalk and treasure.com have fallen one following another, and comprehensive e-commerce represented by the two giants Tmall and JD.com has already begun the layout of luxury goods. This year, luxury brands such as menswear brand Berluti of LVMH group and luxury down jacket brand Moncler have entered Tmall one following another. The daily turnover of luxury goods on JD.com 618 has increased by 93% year-on-year.

Data from the Toubao Research Institute shows that the second-hand luxury goods market in China accounts for only 5% of the market size of the entire industry. Compared with 20% or even 30% in developed countries, there is still a lot of room for development. In the future, the penetration rate of luxury e-commerce in China will gradually increase, but there are still challenges for luxury vertical e-commerce such as Secoo.

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