PPG Is In Danger, Venture Capital Takes Over

PPG, the online direct selling enterprise, which relies on advertising overnight, has always been constant.

More recently, the rumor that Li Liang, his founder, has absconded with the United States for $2 million, has been in hot water, and has aroused the industry's doubts about the PPG mode.

"PPG is a pity to go to today, but it is also inevitable.

The development of the company depends on the leadership of the company. Li Liang can see the future of PPG.

In November 26th, a person who had in-depth contacts with Li Liang and PPG said.

When Li Liang avoided the interview with Tian Min, the project leader of public relations company PPG outsourcing in November 25th, she said she had kept in touch with Li Liang, and Li Liang had not absconded with the money, but was busy with the business of the US branch.

To this end, PPG said Li Liang was scheduled to connect with the domestic media at 10 a.m. on November 27th.

"With my understanding of Li Liang for many years, he will not have any connection with the media. If he really wants to clarify the facts, he will return to the public to give an account."

The above person told reporters, "it is hard to say whether to carry money, but at the moment, we can not find him."

As mentioned by those people, in November 26th, when reporters asked Tian Min about the connection between Li Liang and the media, she said she was not sure that she was no longer responsible for PPG related work.

It is understood that the connection activity is no longer responsible for its public relations company.

In the morning of November 27th, Zhao Yisong, chief marketing officer of PPG, inquired about the specific operation of the connection. Zhao Yisong did not know anything about it.

Huang Langyang, vice president of the original operation, turned to VANCL for PPG's original COO Li Yong Jin, and the former CFO Wang Yanfeng has also left. Tian Min said: "these personnel changes are adjustment of the company strategy. In order to adapt to the flat management of the company, there will be no more jobs such as CEO, and only CFO will be set up. All affairs will be held by him."

It is understood that although the PPG website still has 200 promotional ads to buy 60, but industry insiders told reporters, in fact, PPG business has basically been in a state of stagnation.

"At present, it's about 4 million yuan less than that of the industry and commerce."

Zhao Yisong, chief marketing officer of PPG, just said, "PPG is not convenient for me to disclose anything to PPG."

But it is understood that the current PPG to do OEM enterprises, orders have declined, and are first paid for re production.

"Because there is doubt about the credibility of PPG."

People familiar with the matter said.

If Li Liang is to abscond with his money, the biggest victim is probably venture capitalist.

It is understood that PPG has received more than 80 million US dollars in venture capital.

In August 2006, Huaying venture capital and Ji Fu Asia invested in PPG. In April 2007, Huaying venture capital, Ji Fu Asia shares and Kai Peng Hua Ying injected 50 million US dollars into PPG. Then in March 2008, three hills invested 15 million US dollars in PPG.

"PPG should get $about 80000000 from Li Liang's money," he said.

The insider said, "$80 million should be more than 500 million yuan now. According to the amount of PPG advertising input, it should be around 200 million yuan in 2007, so where is the remaining 300 million yuan?

If there is really 300 million left, why does PPG's advertising disappear and grow slower? "

And, according to people familiar with the matter, "in fact, in August and September 2007, the amount in the PPG account was several million yuan.

That is to say, there are only two possibilities, or money is wasted by Li Liang, or venture capital does not give him 80 million dollars at all.

After all, venture capital is not stupid enough to invest so much money blindly. "

So, how much money did some major venture capital invest?

What is the proportion of shares held?

In this regard, the wind companies are reluctant to disclose.

However, there are reports that investors are seeking new management for PPG.

But the investors are still silent.

Another source of news is that the big trouble with PPG is the signing of the bet agreement between PPG and investors. Because of failing to meet the requirements of the agreement, the deadline is coming up, and unable to return to the sky, Li Liang chose to "dodge".

But this has not been confirmed by both sides.

Li Liang said that he would not let VCs hold such a situation. If the VC did not hold shares, then there would be no way to replace Li Liang. Even if he really ran away with the company and waited for the company to go bankrupt, there would be no way for VC to accept the wrong person.

Li Liang, a person who knows how to play, owns Rolls-Royce and Ferrari's limousines and luxury private yachts, according to people familiar with the matter.

Li Liang once said that he had entered a strategic investment of 100 million dollars in a department store in the United States, and many people in the industry questioned it.

Li Liang, who is going to the United States to open up the market, said PPG: "in fact, the US market still recognised PPG's non store sales mode.

Maybe Li Liang wants to expand his business, but if the PPG capital chain is out of order, it will not be easy to launch a new business.

Ma Ruiguang, a retail expert, said that PPG is not surprising today because its development is too fast, and PPG has no complete management system and no cost control.

And advertising investment is too strong, once the funds can not keep up, it is easy to get into trouble.

Because PPG has pioneered the sales mode of this "light company", it has attracted many followers in China.

It is understood that the current industry's treasure birds and fans are better done.

In the second quarter of 2008 this year, VANCL's sales volume in self selling B2C online shopping was 5.1%, PPG was 2%, while in the third quarter, VANCL accounted for 5.9% and PPG was 1.6%, according to AI's "China online shopping market monitoring report".

The people familiar with the matter also said that although all passengers are now ahead of PPG, there is no way to compare with the peak of PPG.

"We must not lose the online and offline models to solve this problem. We must solve the problems of e-commerce and product quality.

PPG huge advertising fees knocked it down, because without advertising investment, sales fell rapidly, coupled with the fragmentation of capital chain, and the decline in product quality led to PPG in trouble.

The person familiar with the matter said.

Yang Jing: editor in charge