1 min read
Chinese local convenience store in suspicion of P2P-led capital shortage and bankrupt
邻家大面积关店，被曝资金链断裂，CEO回应“一言难尽” – 36Kr
What happened: Linjia, a convenience store chain in Beijing, has closed several stores in the city in one day yesterday. A staff working at one store says that the company has shut down over 200 stores and that some high-level officers from the company left the business without informing anyone, due to the large debt they owe suppliers. A source familiar with the issue suspects Linjia’s funding from peer-to-peer (P2P) lending platforms is cut. Linjia’s CEO, in response to media requests for comments, says, “It’s a long story,” and he “feels sad”.
Why it’s important: As China tidies up its P2P lending platforms, we are gradually seeing financial impacts the moves are having on commercial projects. The country’s general commercial environment is also in suspicion of lack of sufficient capital support. Linjia’s shutting down stores additionally proves that some fast-growing businesses is far from break-even. The businesses are still relying on burning money.