Gionee
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Gionee was a Shenzhen-based Chinese smartphone manufacturer founded in 2002 by Liu Lirong. Once a mainstream brand in China and India, it sold nearly 40 million handsets in 2016 and ranked sixth for handset sales in China that year. Known for its big-battery phones, it built a retail presence of more than 42,000 stores and 600 exclusive service centers in India after entering the market in 2012.
02 / Gionee FAILURE REASONS
Failure reasons
Gionee's collapse combined heavy losses with a gambling scandal. Chairman Liu Lirong admitted to losing more than 1 billion yuan (about $144 million) gambling at a casino in Saipan, conceding he may have borrowed company funds, while denying the gambling caused the collapse. He also said the company had been losing around 100 million yuan ($14.4 million) a month between 2013 and 2015, with monthly losses doubling in the final two years, and had spent heavily, including about $1.4 billion on marketing and investments. Suppliers halted component shipments after months of unpaid bills, and total debts reached 17 to 20.2 billion yuan (about $2.4-3 billion), including 10 billion yuan owed to banks, 5 billion to upstream suppliers and 2 billion to advertising agencies.
03 / EVENT HISTORY
Events in the structured record
- Liquidation
Shenzhen court declared Gionee Communication Equipment Co. Ltd. bankrupt on 10 Dec 2018 after a creditor applied for liquidation; administrators appointed December 2018. TechNode (3 Apr 2019) and GSMArena (19 Dec 2018) corroborate Shenzhen Intermediate People's Court accepting Huaxing Bank's bankruptcy-liquidation application in December 2018.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
In November 2018, 20 suppliers filed for bankruptcy reorganization of Gionee with the Shenzhen Intermediate People's Court after months of unpaid bills.
- 02
On December 17, 2018, the Shenzhen court accepted the bankruptcy liquidation application filed by Huaxing Bank, moving the proceedings forward.
- 03
Gionee owed about 20.2 billion yuan (about $3 billion) to 648 creditors, roughly half of it to banks.
- 04
The company hired restructuring consultants and Liu Lirong said a turnaround could take three to five years, but the brand never recovered.