PPG Has Been Exposed To Large Advertising Fees.

As the business enlightenment and pioneer of the online clothing direct selling industry, why did Li Liang escape into the "absconding door" in just 2 years? The founder PK investor said, "domestic public opinion has set him a charge of absconding with money. Li Liang has been suffering for a few days and feels that he is not guilty, but he dare not face the situation."

An insider close to Li Liang revealed.

The rapid rise of PPG is closely related to its big advertising. However, sales did not grow correspondingly with advertising, and eventually dragged it into the abyss. At the end of November, a report on "PPG founder Li Liang absconded with $20 million" led the first batch of clothing network direct selling mode approved by Shanghai (PPG) Co. Ltd. (hereinafter referred to as "PPG") on the cusp of public opinion.

At present, investors in PPG are interested in cutting Li Liang's ties with domestic media.

On the day before Li Liang's announcement that he would meet with the media in November 27th, the PPG public relations company in China was suspended from cooperation, and the video conference was fruitless.

According to the person familiar with the matter, the contradiction between investors and Li Liang has been made public. Investors do not want Li Liang to speak out, especially releasing such information as "re injection of capital" and "Rio overseas market in the US".

Li Liang had originally had an open letter about the PPG crisis, but he failed to meet the public at last. This is also due to the pressure of investors.

The reason why Li Liang threw money at that time was very simple -- optimistic about the concept of clothing network direct selling.

Li Liang originally wanted to use PPG as a product to go on the market by financing and packaging.

But because of the rapid deterioration of the overseas initial public offering (IPO) environment and the emergence of rival customers, it failed to materialize.

"If the door of IPO is not closed this year, if there is no comparison between VANCL and customers, PPG can be listed. This dream is going to be completed. Unfortunately, all customers are out, and the PPG flow of funds is again having problems. They are suffocated. Li Liang can no longer continue to blow up the bubble."

The people familiar with the matter told the Southern Weekend reporter.

The last straw that crushed Li Liang and PPG was the departure of PPG's original CEO Li Yong Jin, which is the landmark event of the PPG crisis.

In September 9th, Li Yong Jin officially left PPG and entered Tudou as an executive.

Li Yongjin previously served as one of PPG's investors in Asia. As a representative of Asia, he introduced the first investment to PPG in August 2006. After introducing second investments for PPG in April 2007, Li Yongjin himself changed from venture capitalist to professional manager to join PPG.

"This guy went in a few Zhou Houcai and found that there was a problem with the reports provided by PPG financing. He fought against Li Liang from 5-6 last year, and in September of this year, there was no result and finally left."

According to the person familiar with the matter, Li Yong Jin finally went to the troubled potato net and did not return to the rich Asia, which was the "disguised punishment" made by investors to the failure of Li Yong's investment.

Before he went to PPG, Li Yongjin had a good reputation in the investment industry. Now he has become a big joke in the investment industry.

At present, the investor's attitude towards PPG and Li Liang is "recognition planting", and the venture's private evaluation of Li Liang is "investing is throwing people, throwing the wrong way, we have no way."

For investors, it is embarrassing that Li Liang and PPG have released huge amounts of capital injection.

According to the Southern Weekend reporter, the injection has not arrived.

Unwilling to continue to help Li Liang "lie" investors, chose to showdown with Li Liang.

A venture capital investor close to PPG investor told the Southern Weekend reporter that investors want the media to forget Li Liang and their failed investment projects.

At present, venture capital is taking action to let Li Liang disappear in public and let Li Liang's image stay in the current "absconding with money".

"Li Yong Jin thought he could do a lot of work and ran out of the organization to PPG.

But the last thing investors want to do is get clear of their failure cases.

The above venture capitalists said.

It is also unrealistic to find a "Li Liang" to revive PPG.

Not to mention that Li Liangren himself is unwilling to give up control, PPG's badly damaged brand, complex situation and huge debts have been deterred by the taking over.

"PPG is not as good as a leather bag company", but Mr. Li Liang did not go to today's field. But when the capital market was low and rival competitors broke up, he chose to escape and stay in the US for half a year.

PPG executives also fell apart, and Li Liang insisted on communicating through e-mail, which led investors to think that this behavior was "no different from running away".

Although PPG was flourishing in the short span of two years, it was indeed the target of venture capitalists.

"We are neither a garment enterprise nor a Internet Co, but a data center, and even you can think of it as a Server Co."

Li Liang once described PPG as DELL computer in the shirt industry -- direct selling mode.

However, in fact, the model of light company like internet database marketing has existed for a long time, and Amazon is the representative.

"Although the sparrows are all small, they must have stock in stock. How can the company get light?

We haven't been able to say that for ten years in the past B2C years.

A former excellent network founder, the elders used the "light as purse company" to describe his eyes in PPG. PPG. The striking feature of the company is its light asset model. It is known as the PPG of light companies, and has no clothing factories and stores. It only sells tens of thousands of shirts per day through the Internet, call centers and warehouses.

PPG's "lightness" is amazing.

All the operations of the company are concentrated on three small buildings outside Shanghai.

At its peak, fewer than 500 employees, including more than 200 call center staff.

Now there are less than 100 people left.

Li Liang didn't even take the initiative to look for orders, no product department was set up, and the clothing industry was "fine work". PPG, which did not attach much importance to the list and quality of checks, began to fall into the quality crisis.

"This child's style of doing things is quick judgement, strong execution, and fast promotion of things that he identifies."

Li Liang, a familiar insider, told the Southern Weekend reporter that Li Liang's current plight came from two aspects. First, the excessive cost of advertising resulted in a tight cash flow; two, he was intent on going public, ignoring product quality and updating products according to different seasons.

PPG last year was the object of the cheering of the print media, and even commented that PPG saved the print media. It was one of the biggest companies to advertise the print media in those days, but many of the fees are still in arrears.

All the bosses have been cheated. Li Liang, the Focus Media's chief executive, turned around in the office and called: "in the end, if you don't pay the money, there will be so many advertisements for you."

PPG quickly let others remember his name and quickly fell into the trap - enough fame, but not enough sales.

"Traditional channels, television advertising is the two or three line city dealers to see, and then open shop in the local.

But if it is a direct selling brand, no shops, dealers can not open shop for you.

Television advertising has become a trap.

Zhong Kaixin, vice president of PPG, told the Southern Weekend reporter.

The core of Internet shopping is repeat customers and two purchases.

Li Liang spent money to go back and only attracted a bunch of users, but he didn't buy two times, and the PPG quality inspection took the outsourcing way, which produced a lot of complaints and quality problems. What's more, after the problem, the reaction mechanism didn't follow.

"When we were preparing for it last year, we were thinking about fighting with him every day. We were thinking about how PPG would react to any move."

Zhong Kaixin laughed at the fact that anyone who came to the battlefield with an assault rifle tried to find a PPG war, but found that his opponent did not take over.

Zhong Kaixin's comment on PPG's problem is that the problems it faces are the normal problems encountered by the enterprises, but in the final analysis, the team is immature.

"There is no problem in the mode itself, but Li Liang has distorted his mind."

Li Liang, a senior marketing consultant of Shanghai Kun Kun communication company, told the Southern Weekend reporter that the failure of PPG is not equal to the failure of the industry and business model. As a pioneer of the market, he can really get the public's attention through television advertisements in the early stage. But when the market has been bombed, it should change its strategy immediately, instead of using old methods to deal with new problems.

To some extent, PPG's business style is a reflection of the character of his boss, Li Liang.

Many people around Li Liang think Li Liang is a very crazy person.

For example, once he learned that Ferrari had an event, called to participate in the call, the other side refused to refuse Li Liang's Ferrari sports car, and Li Liang bought two Ferrari in a rage.

Li Liang, 33, is also a very enjoyable person. He often patronize luxurious nightclubs.

Li Liang, a senior PPG executive who was defaulted on wages by Li Liang, said that he was very smart, but he was not very capable of being a man. He was good at bragging and flickering.

Many contracts signed with suppliers are not implemented, and the feeling for partners is "never abide by their promises".

On the ground of "I am not happy today", I often refuse to sign a contract for repayment to the customer.

Now PPG is in anarchy, nobody cares, but Li Liang has been in remote control.

For the VC industry, Li Liang is a sudden jump out of the "no record" of the people.

Although Li Liang claimed that he had invested $1 million in investment in Softbank, Sun Zhengyi, in 1999, he launched a wedding website to run a direct selling business, and in 2000, on the eve of the collapse of the Internet bubble, he found a buyer for the wedding products website and made a net profit of $60 million, digging into the first barrel of gold.

But in many people's eyes, this is a lie that can not withstand deliberation.

"In the age of Internet bubble, don't say that we made 60 million dollars, that is, we sold 20 million dollars. As we all know, we all came here and never heard of it at that time."

A person who has experienced the Internet bubble has told the Southern Weekend reporter that the Internet industry has a lot of financing lies, and Li Liang has not ruled out a pleasant story.

In fact, Li Liang's ability to take away 20 million dollars also exaggerates the current cash flow situation of PPG.

Li Liang didn't get much of the VC.

The first is about 2 million dollars, second for 10 million dollars, and third for 50 million dollars, but the actual payment is about 20 million dollars.

Li Liang claims that PPG sells ten thousand shirts a day, and the sales volume should be around 400 million yuan per year, according to the average sales price of 100 yuan, but Li Liang claims to be as high as 1 billion yuan. If so, why is PPG owing to the problem of cash flow and arrears of huge debts?

In 2007, PPG's sales actually amounted to only one hundred million yuan, while last year it spent nearly 200 million yuan on advertising expenses, while Li Liang only got about 20 million dollars in early 2007.

Despite attracting users, the product is single, unable to support the two user shopping, and PPG plays shirts all the year round, while competitors change products only if the season changes.

Li Liang once attributed the current PPG dilemma to a depression in the economic environment.

But in fact, PPG could have taken advantage of the economic crisis to get rich. Before, Armani and other global brands in the domestic suppliers couldn't see the domestic direct selling industry. Now the economic environment is sluggish and foreign trade orders are declining. Good quality suppliers have begun to target domestic demand orders.

When Li Liang continued to "open up the US market" in the US, the domestic Internet industry was already shouting.

"I sigh, is the fragile Internet industry, the Internet industry in the cold winter, can withstand such a toss?

To say that he is a black sheep or a polite word is just a rat droppings.

Liu Xingliang, executive director of the internet lab, said that the Li Liang incident caused great waves in the Internet industry, and many people began to miss the pure positive and vigorous Internet.

At that time, there was an English couplet in the global Internet industry.

There is another group: that's all.

When the myth of PPG broke down, the venture capital industry began to distrust the industry.

A venture partner said he now takes a wait-and-see attitude towards entrepreneurs seeking direct investment in the clothing network direct selling industry.

When he came to him to talk about financing, he was cut half of the price first, and he only dared to invest in acquaintances. At the expense of paction costs, he must first make the financier real.

"If I were thinking about my life for the rest of my life, I would come out and fly back from the United States for a night, otherwise I would not be able to play for the rest of my life."

The above close to Li Liang's insider said.

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