Foxconn (HKG:2038; TPE:2354), the Taiwanese manufacturer thrust into the global spotlight after fourteen worker suicides in 2010, seems to be failing in its Chinese B2C e-commerce venture, and it might be on the verge of shutdown.
efeihu.com – or, ‘e-flying tiger,’ to give it its pretty awesome literal translation – first went online in December 2009, selling mostly home electronics and gadgets (3C). Just the kinds of things, in fact, that Foxconn actually assembles for clients such as Apple (NASDAQ:AAPL), Acer (TPE:2353), and Microsoft (NASDAQ:MSFT). But, two years after its inception, the Chinese tech media is reporting that the e-commerce site is selling no more than “6,000 to 8,000” items per day.
But that’s a paltry figure when we know that 14 percent of Chinese urbanites has shopped online in the past month. And so Foxconn’s efeihu site seems to have failed up against similar B2C 3C sites such as 360Buy and Dangdang (NYSE:DANG).
The e-commerce effort was struggling last year as well, when it was decided that efeihu should diversify into general goods and foodstuffs – the territory of specialist online malls such as the Walmart-backed YiHaoDian.
Another failure, as reported by Sina Tech, is that as many as 30 percent of the site’s customers are in very rural areas – the kinds of places where Foxconn’s factory-floor workers originally come from – and so the site is purportedly losing money on a lot of its set delivery fees. Delivering to major urban areas is, of course, a lot cheaper.
And so, with rumors of a major restructuring – or even shutdown – for Foxconn’s online venture, it seems that the Taiwanese manufacturer failed to take advantage of its relationships with so many hardware companies. For example, efeihu doesn’t have the kind of official, brand-run storefronts on its B2C platform that Taobao Mall has; and so Foxconn’s online mall appears to consumers to be quite random and less impressive than its rivals.
Plus, in breaking news, Foxconn CEO China Wai-leung will be resigning on January 1st, 2012.
[Source: Sina Tech news – article in Chinese]
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