Business Story Behind The Bankruptcy Of Tongcheng Life: The "Ebb" Moment Of Community Group Buying

The hot community group buying market is ushering in an important node. After swarming into the game, some players had to leave the game, which also dragged down the suppliers.

"A certain fruit industry has lost millions, and another is the import area, where the loss is much more."

In Jiaxing fruit market, the loss of a certain fruit industry has been widely spread, but the relevant person in charge of the company is not willing to mention it. In the import area, only Fuye fruit industry and Yuehao fruit were contacted by the reporter, and both of them were in arrears of payment of 6.7 million yuan. This is the largest fruit distribution center market in the Yangtze River Delta. The trade radiates to Jiangsu, Zhejiang, Shanghai and the surrounding provinces and cities. It was also one of the important wholesale places for the same journey.

On July 22, the 21st century economic reporter visited the market and interviewed more than ten shops. It was found that from several thousand yuan to nearly one million yuan, dozens of suppliers who had cooperated with life in the same project still had not received payment. They also went to their Suzhou headquarters to collect accounts and signed repayment contracts. According to the contract, within 15 days after signing the contract, they will receive the first 30% payment, the second 30% within 30 days, and the remaining 40% will be automatically abandoned.

Even though this clause is obviously unfair, most suppliers have to sign up to recover the loss as much as possible. As of July 23, two suppliers revealed that they had received the first payment, while most of the others were still waiting.

This is a company that was once favored by capital. According to public information, in the past three years from November 2018 to now, Tongcheng life has successively obtained eight rounds of investment from Tongcheng capital, Baiguoyuan, Zhenge fund, Jinshajiang venture capital and other well-known investment institutions, with a total amount of more than US $300 million.

It can be said that the bankruptcy of Tongcheng life has poured a basin of cold water on the current hot market. At the same time, it also adds a curse to the future development of the industry“ For the time being, we will not cooperate with e-commerce. Even if we cooperate, the accounting period should not exceed a week, and we must not delay any more. " As the saying goes, once bitten by a snake for ten years, many merchants in Jiaxing fruit market are now full of vigilance to online platforms.

When the ebb tide starts, what is the next step for community group buying?

People who have been caught in the whirlpool twice

Shitu has been in the fruit business for 40 years, but dairadish went bankrupt and failed to get 100 thousand loans. All kinds of lawsuits have been fought and won, but no money has been received so far.

In 2019, coating began to cooperate with the life of the same process. The accounting period was from one week to half a month, and finally to a month. The coating industry noticed this problem. Moreover, because of the good relationship with the purchasing staff, the purchasing staff mentioned that they should try their best to get the money back, and speculated on the meaning of the money. It may be that the purchasing staff have some knowledge of the company's situation“ There's something wrong with the company. " Shi Tu recalled the original speculation to the 21st century economic reporter.

As the earliest group buying platform, Tongcheng life has experienced rapid development. He Pengyu, founder and CEO of Tongcheng life, said in the open letter that since the establishment of the company in January 2018 and by the middle of 2020, Tongcheng life has achieved the front-end performance leveling and entered a stage of benign development, during which it has also attracted much attention from capital.

According to public information, the largest one is the US $200 million round C financing obtained in June 2020. In September 2020, after Internet giants have entered the community group buying industry, it has become normal to burn money to seize the market. However, Tongcheng life has entered the era of price war and has not obtained any financing.

This situation is even more difficult after the prosperity and optimization group and the group have obtained huge amount of financing. It is understood that at the end of June 2021, Tongcheng life is still trying to get better business data through increasing marketing efforts, and then seek merger and acquisition.

Prior to that, in 2019, dairadish with capital chain problems could be described as one of the earliest fresh fresh retail platforms. In the three years, the number of offline stores reached thousands, and the angel round financing of 10 million US dollars and a round financing of 634 million yuan was adopted.

Crazy expansion of burning money, so that stay radish in a round of financing less than a year on the emergence of capital chain problems. The collapse of the two platforms has affected many wholesalers in Jiaxing fruit market, and Shitu is just one of them.

In June this year, Tongcheng life wanted to take goods from Shitu, so he called the accountant. The accountant said that it was very difficult to get back the money from Tongcheng life, and Shitu did not supply goods to Tongcheng life. Until July, suppliers of Tongcheng life concentrated on collecting payment for goods, which eventually led to the fracture of their capital chain.

At present, there are still 188000 yuan in arrears of payment by the same process of life. In retrospect, the painting is still in fear, "if the cooperation is not terminated in time, the loss is unimaginable."

Most affected

Shi Tu frankly said that more than half of the current supply is for e-commerce platforms. If we do not do e-commerce and do not do community group buying, the business volume is bound to shrink. However, almost all e-commerce platforms are deferred payment“ Although there are risks, we have to take risks to maintain our business. There is no way

On the one hand, community group buying is still cultivating the market, and loss has become the norm. On the other hand, in the case of no profit dawn and capital support, Tongcheng life puts pressure on the supplier's capital chain.

Another fruit supplier, Mr. Lu, told the 21st century economic report that he had cooperated with Tongcheng life in 2019. For the problem of payment delay, Tongcheng life gave an explanation of financial travel and vacation. However, no one thought that the real reason was that there was a financial problem in Tongcheng life, not to mention that Tongcheng life would go bankrupt so quickly. Just in July, they are still supplying goods for the same journey. At present, there are still 6.7 million loans that have not been recovered.

Mr. Lu was very helpless. "The contracts with the life of the same journey were all signed in black and white, but in the end, they were not bankrupt. What can you do with it? They are legal procedures, and you still can't get money."

In the Pitaya trading area in the import area, four stalls visited by 21st century economic report said that they had not cooperated with Tongcheng life. Some stall owners said that in March and April this year, some purchasing staff of Tongcheng life came to talk about cooperation. However, due to the long account period of one month, their own capital turnover was relatively tight and they refused to cooperate.

Bad debts are not just from e-commerce. According to Che Chen, a fruit wholesaler, it's the off-season in the fruit market. Several of the employees have gone out to ask for accounts. The total amount of the external accounts is also tens of millions, most of which are owed by some self-employed households. Earlier, a small supervisor named Jackie Chan of Tongcheng life found Che Chen to talk about cooperation. She showed reporters the chat record, which was on May 26, but at that time, Che Chen said that she was in a tight turnover and refused.

Jackie Chan vowed to shorten the payment to a week. However, due to too many bad debts before, and out of caution, Che Chen did not cooperate with the life of the same journey. In retrospect, Che Chen was very glad that he had escaped a robbery.

"Because our family had a lot of bad debts before. We cooperated with dairadish, but dairadish didn't owe us any money. In the past, like all supermarkets, we were open-minded. Later, we felt that business was so difficult to do now, so we gradually narrowed down (business scope), and we did not accept many debts. "

Sensitive e-commerce credit

Due to several bankruptcies, the merchants in Jiaxing fruit market are more and more sensitive to deferred payment. In particular, the majority of domestic fruit wholesalers with small file size are not allowed to pay for more than seven days. For old customers with good credit and large supermarkets, the payment can be allowed for half a month or even a month. However, the payment period of e-commerce is very high.

Haiguangxing market belongs to the import area of Jiaxing fruit market. Shen Ting is responsible for the operation of one of the stalls. At the time of the application for bankruptcy by Tongcheng life, Shen Ting had not received the payment of 420000 yuan.

He also had cooperation with dairadish, but at that time, he realized that the account period was getting longer, so he collected the money early and ended the cooperation with dairadish. Later, when dairadish went bankrupt, he was able to avoid a disaster. I never thought of the same routine this time. When Shen Ting found out that the situation was wrong, he had already owed 420000 yuan on the account.

Shen Ting explained the reasons for his slow reaction. First, he had cooperated with Tongcheng life for such a long time since April and may last year, and the accounting period was still very good at the beginning. Secondly, he saw that there was Tong Cheng Yilong behind Tongcheng life (from the public information, the reporter could not find the relationship between the two), and did not expect that it would suddenly go bankrupt.

The file staff showed the bill of payment to the reporter, which showed that Suzhou orange Technology Co., Ltd. had two payment records of 60000 and 360000, and the payment of 60000 had been more than a month. Shen Ting recalled that before that, he would check with Tongcheng life every Monday, but the other party had always claimed that the financial department had to go through the process. Shen Ting sent the last delivery on July 2, and was still urging the goods on July 3. He suddenly realized that something had happened to Tongcheng life on July 5, and ran to Suzhou to ask for the account.

"Some stalls don't do it in the middle of June, and part of the accounts are collected and stopped (cooperating with the life of the same journey). I don't know. I have contributed nearly 100000 yuan to them at the beginning of July and the end of June." Shen Ting reflected that he did not keep a good eye on the account.

File mouth is the boss, in his own business period out of such a big bad debt, let him bear a huge pressure. The loss has been unavoidable, he is most concerned about how to minimize the loss.

At present, in this market, there is little community group buying cooperation. It is reported that platforms such as Duoduo shopping and meituan optimization adopt the mode of supplier settlement, without directly signing contracts with merchants. After the supplier of duoduomaicai applies to settle in duoduoduomaicai platform, the receivables will arrive within the next working day of the transaction, and the cash can be withdrawn within the second working day after the transaction.

Even so, many businesses still told reporters of the 21st century economic report that they only do cash business and supply goods to small vendors and supermarkets.

At present, coating mainly cooperates with dingdong to buy vegetables, with a turnover of about 5 million per month. Smaller platforms such as minkanghui also cooperate. The main reason is that the accounting period of these platforms is relatively stable, the payment can be made within a week, and the risk will be lower with the support of physical stores.

"When it comes to community group buying, we are cautious and cautious. We prefer not to do it, and the accounting period should not exceed a week. Tongcheng (life) and dairadish have a great impact on our market. " The painting theory.

The last straw

According to the 21st century economic report, it is found that there are three groups of suppliers of Tongcheng life, with nearly 1000 people.

At 3:00 a.m. on July 6, he Pengyu said in an open letter that the company was facing the most difficult moment. The community group buying industry had changed from an era of "striving for innovation and implementation" to an era of "striving for capital and subsidies". In the future, he Pengyu made strategic adjustments and was confident to make a comeback. He hoped that the partners would give them a period of time.

On the same day, Suzhou fresh orange Technology Co., Ltd. announced that "Tongcheng life" was renamed "honey orange life". Meanwhile, it announced to further increase the private domain traffic of the head of the team and the investment in the live supply side, carry out strategic transfer and adjustment, shift from the C-end business to the small b-end, from the supply to the consumer to the head end.

However, just one day before the announcement of the name change and business adjustment, Suzhou orange Technology Co., Ltd. (also known as "Tongcheng life") declared bankruptcy. The reason behind this is unknown, but investors are not willing to pay for the bid again, which may be the last straw to overwhelm the platform.

On July 8, he Pengyu said in an open letter that the reason for the bankruptcy was that the partners concentrated on the payment, and the company's capital chain was facing fracture, and there was no room for further transformation, and he said that he would actively repay.

The suppliers of Tongcheng life didn't expect that it would suddenly end in the way of "death". In a few days, the reimbursement scheme given by Tongcheng life changed many times, and finally a series of plans, such as 60% payment for goods, were given, and the suppliers left one after another.

They signed the contract even though they were extremely reluctant. Shen Ting is worried about bankruptcy and liquidation. On the one hand, Tongcheng life is a light asset company, and the assets that can be used to repay debts are very small. On the other hand, the wages of suppliers and employees have several hundred million dollars in arrears, and they may not get any money at that time.

"They said 30% of the contracts they signed were void, and then they signed 60% of the contracts. At that time, it was mainly because there were too many suppliers to collect accounts. He came up with such a plan and signed the contract for 60% of the payment. No one knows if he can get the money at that time. " Shen Ting thinks that if you can get back 60% of the loan, it doesn't matter if you can get 40% of the loss. In the three years of cooperation, you can earn back the money you lost this time. But if you can't get it, you still have to go to Suzhou for coordination.

In a small stall in the fruit market, Ren ye, a financial staff member, told reporters that the same journey had defaulted on the payment of 50000 yuan. At the beginning of July, someone arranged to go to Suzhou headquarters. Although the final contract said that 60% of the payment was still paid, even if the payment could not be obtained, it would not be possible to ask for it again, and the business of zhankou still needs to be done.

He said that there are many goods in his own stall, and the volume of a single product is not large. Whether it is a community group purchase platform or tmall Jingdong, the purchase work is generally handed over to a third party. Now, the proportion of e-commerce supply is close to 20%. After the same journey life matters come out, the payment for goods has become more urgent. "We are also very cautious now. Basically, we have to pay in five or seven days."

The reporter of 21st century economic report visited the jackfruit stall in the import area. The person in charge of the file said that their cooperation with Tongcheng life was carried out through the guarantor. Therefore, although there was something wrong with Tongcheng life, there was no loss. The reporter contacted the guarantor, but all the replies were negative.

As of July 23, several fruit suppliers, including renye, have begun to receive the first 30% payment. Although Shen Ting has not received the payment for the contract signed on July 10, this is the only dim positive signal for him.

(at the request of the interviewees, all names in the article are pseudonyms) (Intern Zhang Yuecheng also contributed to this paper.)