Core Viewpoint - The emergence of the short video e-commerce platform Yulily has led to significant financial losses for over 200,000 sellers, amounting to 1 billion dollars in just four months, highlighting the risks associated with new platforms in the e-commerce space [2][3][19]. Group 1: Yulily's Business Model and Operations - Yulily's business model, branded as "S2K2C," aimed to create a closed-loop value network involving supply, influencers, and consumers, which initially attracted many sellers [4][5]. - The platform employed a strategy of low entry barriers and high rewards, offering incentives such as a $1.5 registration bonus and claims of 10% returns within 14 days, which lured in many unsuspecting individuals [5][6]. - Yulily falsely claimed to have a legitimate operational structure, including a supposed office in Hangzhou and partnerships with major entities, to build trust among users before implementing its deceptive practices [6][11]. Group 2: Deceptive Practices and User Impact - The platform's operations were characterized by a "three-part scam" approach, where initial attractive offers led users to invest significant amounts, only to later impose withdrawal restrictions and other barriers [9][12]. - Many users, including retirees and stay-at-home parents, invested their life savings or took loans, believing in the promised high returns, only to find themselves unable to withdraw their funds [3][6][15]. - Yulily's operational model was revealed to be a pyramid scheme, relying on new user investments to pay returns to earlier investors, rather than generating actual sales or revenue [12][14]. Group 3: Industry Context and Warnings - The broader context of cross-border e-commerce shows a growth of 6.4% in imports and exports, indicating ongoing opportunities but also attracting fraudulent schemes targeting aspiring entrepreneurs [19][20]. - The article emphasizes that legitimate cross-border e-commerce requires substantial effort, including product selection, data analysis, and understanding logistics, contrasting sharply with the unrealistic promises made by platforms like Yulily [23][24]. - The narrative serves as a cautionary tale, warning potential investors to be wary of platforms promising high returns with little effort, as these are often indicative of scams [26][27].

Core Viewpoint - The article discusses the rise and fall of the micro-business (WeChat business) model, highlighting its initial success driven by social media and the subsequent decline due to market changes and regulatory pressures [6][32]. Group 1: Rise of Micro-Business - The micro-business model thrived due to the emergence of WeChat and the concept of "private traffic," allowing individuals to leverage personal networks for sales [13][14]. - In 2015, the number of micro-business practitioners in China exceeded 12 million, with a significant portion being stay-at-home parents and students seeking income opportunities [18]. - The rapid growth of disposable income in lower-tier cities (38% CAGR from 2010 to 2018) fueled the micro-business boom, as these markets were more receptive to the model [21]. Group 2: Challenges and Decline - The micro-business landscape faced challenges from regulatory scrutiny, particularly after the introduction of the E-commerce Law in 2019, which mandated business licenses for operators [32]. - Issues such as the proliferation of counterfeit products and unsustainable business practices led to a decline in consumer trust and the eventual downfall of many micro-businesses [27][32]. - The article notes that many former micro-business operators have transitioned to other platforms like Douyin and Kuaishou, or have adopted new models such as community group buying [41]. Group 3: Evolution and Future Directions - The introduction of the "Tuike" model by WeChat represents a shift towards a more structured and sustainable business environment, allowing users to promote products without the need for inventory [44][51]. - The "Tuike" model aims to leverage social connections for sales while ensuring product quality and compliance with regulations, marking a significant evolution from the chaotic micro-business era [50][51]. - Experts suggest that the future of social commerce will focus on quality over speed, with platforms like WeChat seeking to create a more reliable ecosystem for both consumers and sellers [50].