The letter was originally written in Chinese, and it is translated into English here.
These few days, some of you have been chasing for payments. I completely understand how you feel. As the personal ultimately responsible for JollyChic, I and my team are very willing to openly and transparently discuss with you. I am indeed grateful to the long term trust and support you have extended to JollyChic, and especially the solidarity during the coronavirus pandemic! I am not only grateful, but also deeply touched.
If there was no basic trust, we would not be able to work together for so long. You are not only supplier of JollyChic, but also trustworthy friends, brothers! Because of such deep trust, I would like to say a few things today:
First, I would like to explain why the payments have not been on time. Because of the outbreak in Saudi Arabia, the cross border logistics has been squeezed. The cost rose sharply, and the curb on movements imposed by authorities have impacted both logistic efficiency as well as the rate of successful deliveries. Demand for non essential household items has also dropped – adding to the difficulties facing our platform. The cashflow pressure is real. But, the difficult is definitely temporary! As the measures scale up, people’s sense of self protection rises, the outbreak will be contained, the panic will subside, and the platform will return to normal. The difficulties we are facing now is because of the sudden nature of the outbreak. I firmly believe that they will not last!
Second, about the payment, I would like to point out that local government in China is actively helping JollyChic overcome these difficulties. This is because foreign trade and employment are important and JollyChic is a worth party to be helped. The solutions include: supply chain financing and helps from the banks to expedite incoming funds. In the meantime, we are raising a new round of strategic investment, and have achieved some very positive progress. To solve the payment issue you are all facing, we have agreed with our investors to open discussions about converting debt into equity and instalment payment. Of course, we will discuss with you in detail once we have a more concrete plan. We will communicate this with you within a week, i.e. before 10 of April.
Last, I hope that everyone will keep your confidence in JollyChic! With the continuous effort of our team, JollyChic has made a number of major achievements since last year. Cross border logistics had some major breakthroughs: Saudi government agreed that JollyChic warehouse would be converted into a bonded warehouse; our own logistics network has cover the whole of Saudi Arabia; Jollypay received licences in both Saudi Arabia and UAE, becoming the first foreign company to do so; through collaboration with retail giant Tamer, JollyChic has entered FMCG ecommerce market in the gulf. Since the outbreak started, JollyChic has made available household necessities on our platform, and the sales growth has been tremendous! Look back into 2003, SARS spurred the growth of ecommerce in China, and we believe this crisis will be a big impetus to ecommerce in the Middle East. And we are already seeing it happen! Past bottlenecks of penetration rate and online payment are being resolved. We need more patience, and more perseverance.
Success or failure, some times it is decided at one key turning point. As a serial entrepreneur, I have decided to be patient, and to be persistent. I Hope you will make the same choice – for our common goal and benefits.
Thank you again for your understanding and support!
Aaron Li, Founder & CEO, JollyChic
3 April 2020