Another Chinese E-Commerce Site Bites the Dust as VCotton Gets its Socks Seized

Ba-da-boom-boom-boom, another one bites the dust. Yes, the big-spending, low-margins world of B2C Chinese e-commerce has claimed another victim. This time it’s the specialist e-tailer VCotton, which sold only socks and underwear. A notice on the homepage (pictured above) alerts users to the “suspension” of sales, which went into effect on August 17th, due to a claimed technical error in logistics. But some fine snooping by Marbridge Daily reveals that VCotton’s Beijing warehouse has been seized by authorities.

A former VCotton employee then explained that the notice on the site is nonsense, and that, to quote Marbridge, the warehouse and all its stock has been “seized by government authorities after the company’s suppliers sued VCotton for failure to pay outstanding debts.” That’s quite a logistics failure. Apparently out of funds, it seems sadly impossible for the company to recover from that.

The writing was on the wall earlier this year when we profiled VCotton’s CEO, Lin Wei, as he spoke of how he was struggling to raise some series A funding. In two prior seed rounds, VCotton had pulled in 10 million RMB (US$1.59 million) shortly after launching and then 30 million RMB ($4.77 million) a short while later. Though some very specialist online retailers do well in China – such as the Uniqlo-like Vancl for cheap clothing, or the Walmart-controlled Yihaodian for food and domestic supplies – it would appear that going down to the undergarments was a bit too focused for VCs. Yes, socks and underwear need to be replaced very often, but the site was in a sector where there’s zero reason for store or brand loyalty.

Just three weeks ago we reported the demise of the Chinese e-commerce site Yaodian100. At the time, the store said it was suspending sales due to “relocation,” but it has not re-materialised since.

[Source: Marbridge Daily]