Fengchao, the smart parcel locker operator, is facing a harsh winter as its core business model comes under increasing scrutiny. The company’s founder and CEO, Xu Yubin, recently resigned due to health reasons, a move some industry investors interpret as a loss of confidence in the company’s IPO prospects.

Fengchao’s smart locker service, initially launched in 2015 to solve last-mile delivery challenges, has drawn over 37,000 complaints on the consumer rights platform Hei Mao. Issues range from lost parcels and unreasonable fees to system malfunctions preventing users from retrieving deliveries. Many couriers, wary of disputes, now avoid using the lockers, while recipients reject delayed pickup fees, further straining the business.

Adding to its woes, Fengchao’s IPO plans have stalled. Its Hong Kong listing application lapsed in February 2025 after failing to submit required supplementary documents. The delay stems from a legal dispute with investor Asia Investment Capital (AIC), which sued Fengchao over a share repurchase agreement tied to its unmet IPO deadline.

Financially, Fengchao has struggled with massive losses—totaling RMB 3.78 billion from 2021 to 2023—before briefly turning a profit of RMB 71.6 million in May 2024. Its main revenue source, last-mile delivery services, grew at a modest 8% annual rate, while parcel volume saw minimal growth.

Management turmoil further complicates matters. Founder Xu’s departure in October 2025 fueled speculation about the company’s future. Meanwhile, Fengchao’s 2018 betting agreement with AIC, requiring a buyback if it missed its 2024 IPO target, has triggered litigation. Fengchao’s attempt to extend the deadline to 2027—costing RMB 565 million in adjustment fees—spiked its liabilities to RMB 6.62 billion by mid-2024.

With unresolved legal risks, Fengchao’s path to an IPO remains uncertain, casting a shadow over its once-promising last-mile delivery solution.