We don't recall Yinan Du (right) discussing the 'incur and then ignore massive debt' strategy when he was onstage at Disrupt Beijing last month
Last month at Techcrunch Disrupt, Du Yinan of the group buy site 24quan surprised us all by saying that even in the midst of a market so harsh it has seen massive layoffs at a bunch of Chinese group buy companies, 24quan was expecting to become profitable by this December. How is that possible? Mr. Du didn’t go into detail, but it turns out we should have been listening to Meituan’s Wang Xing instead. Later in the same panel, he said: ‘It’s easy to be profitable if you cut thousands of people; you’ll be profitable next month.’
That may be exactly the strategy 24quan has adopted.
CCTV is reporting that 24quan local branches, like their Huai’an branch, have essentially disappeared overnight. Offices are empty and the people are gone, leaving only angry merchants who are still owed tens of thousands of dollars. This follows earlier reports that 24quans Taiyuan branch owes over 2 million RMB ($312,000) to merchants and is behind in payments, and there are similar reports for other regional areas.
24quan insiders are saying that the central office is closing branch offices and essentially leaving the workers there, who it owes money to, out to dry as they’re threatened by local merchants 24quan owes money to. And there were reports as early as September of large-scale staff cuts of as many as 1,000 employees.
So, is 24quan going to be profitable next month like Du Yinan suggested at Disrupt? It sure sounds like it. Of course, that may be because they appear to be making massive staff cuts while keeping money owed to both employees and vendors, but hey, that’s just business, right?
Oh, wait, no, it’s not business, it’s stealing.
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