In 2024, just two months after the start of the year, the "first wave of bankruptcies in the Year of the Dragon" has swept in, and many industries such as the Internet, education, medical care, tourism, and new energy vehicles have not been spared.
Which businesses have gone out of business?
1.Gaohe Automobile: Once a "new power star".
Gaohe Automobile has emerged among the new forces of car manufacturing with high-priced, high-performance luxury intelligent electric vehicles, and the founder Ding Lei has vowed to benchmark Tesla. However, on March 1, 2024, Gaohe Automobile announced a six-month shutdown and said that it would provide N+1 compensation to employees.
The main reasons for the collapse of Gaohe Automobile are as follows:
Sales are sluggish, and the capital chain is brokenSince its launch in 2020, sales have been poor, and the annual sales volume in 2023 will only be more than 4,000 units. The high R&D and operating costs broke the capital chain of Gaohe Automobile, and finally had to choose to stop production.
Unclear product positioningGaohe Automobile focuses on the high-end market, but its products are similar to traditional luxury brands such as BBA, and the cost-effective advantage is not obvious. At the same time, the intelligent functions of Gaohe Automobile have not been recognized by consumers.
Mistakes in marketing strategies: Gaohe Auto's marketing strategy relies too much on KOLs and celebrity endorsements, but it has not effectively reached the target user group.
2.Tianya Community: Once a "landmark of Internet culture".
Tianya Community was once one of the most well-known Internet communities in China, attracting countless netizens with its free and open atmosphere. However, with the rise of emerging social platforms such as Weibo and WeChat, the Tianya community gradually fell into loneliness, and was finally filed for bankruptcy liquidation in March 2024.
The main reasons for the closure of Tianya Community are as follows:
The business model is outdated: The main income of the Tianya community** is advertising, but with the shrinking of the Internet advertising market, the income of the Tianya community has also decreased year by year.
Lack of product innovationTianya community has not undergone major revisions and upgrades for many years, and the product form and function are outdated, which cannot meet the diverse needs of users.
The community atmosphere deteriorated: Tianya community has been criticized for problems such as "water army" and "black public relations", and the community atmosphere has gradually deteriorated, resulting in serious user loss.
3.LianBio: Former "star of innovative pharmaceutical companies".
LianBio is an innovative oncology company that was listed on the NASDAQ in the United States. However, after just two years of development, LianBio announced its closure in February 2024 and said it would delist and retain its pipeline.
The main reasons for LianBio's collapse are as follows:
R&D investment is huge, and commercialization is slow: LianBio has a long R&D cycle and high cost of innovative drugs, and although LianBio has multiple promising pipelines, it is difficult to achieve profitability in the short term.
Changes in the capital market environment: In recent years, the financing environment in the global pharmaceutical market has cooled, and LianBio has not been able to obtain sufficient financing support, resulting in its R&D progress being hindered.
Management team issues: LianBio's management team was inexperienced and had errors in R&D strategy and commercialization.
Behind the wave of bankruptcies in the Year of the Dragon
1.The downward pressure on the economy has intensified
In 2024, the global economic growth will slow down, and China's economy will also face downward pressure. Against the backdrop of the economic downturn, corporate financing costs have risen, profitability has declined, and the risk of bankruptcy has intensified.
2.Competition in the industry has intensified
In recent years, the Internet, education, medical care, tourism and other industries have become increasingly competitive, and enterprises are facing huge pressure to survive. Under the market law of survival of the fittest, those enterprises that lack core competitiveness will be eliminated.
3.Changes in the policy environment
In recent years, the state has made a number of policy adjustments to the Internet, education, medical and other industries, which have had an impact on the operating model and profitability of enterprises.
What other industries will fail in the future?
1.Real estate industry
In recent years, China's real estate industry has continued to decline, with rising financing costs for real estate companies, declining sales and compressed profit margins. In the future, with the intensification of the contradiction between supply and demand in the real estate market and the continuation of policy regulation, it is expected that some real estate companies will be at risk of bankruptcy.
2.Internet industry
The Internet industry is highly competitive, and the market landscape is constantly changing. In recent years, there have been many bankruptcies in the Internet industry, and with the rapid development of Internet technology and the continuous emergence of new business formats, it is expected that some Internet companies will go bankrupt in the future.
3.Education industry
In recent years, the state has made a number of policy adjustments to the education industry, and the supervision of off-campus training institutions has been continuously strengthened. In the future, with the intensification of competition in the education industry and changes in the policy environment, it is expected that some educational institutions will go out of business.
4.Medical industry
The medical industry is a highly competitive industry, and in recent years, with the deepening of medical reform and the increasing pressure on medical insurance cost control, it is expected that some medical institutions will close down.
Alarm bells: What should businesses do?
1.Prudent investment and strengthen risk management
When making investment decisions, enterprises should fully consider the market environment and their own capabilities, strengthen risk management, and avoid blind expansion.
2.Enhance core competitiveness
Enterprises should continuously improve the quality of products or services, strengthen technological innovation, and build core competitiveness in order to be invincible in the competition.
3.Actively embrace policy changes
Enterprises should pay close attention to policy changes and adjust their business strategies in a timely manner to ensure compliance operations.
Conclusion
At the beginning of the Year of the Dragon, the tide of bankruptcies is surging, which is not only an inevitable product of increasingly fierce market competition, but also a ruthless screening of changes in the economic environment. However, this wave of closures is more like a mirror, reflecting the wisdom and courage of enterprises to survive. In the face of challenges, enterprises need to keep a clear head, invest prudently, strengthen risk management, and sharpen their core competitiveness, so as to ride the wind and waves in the future business sea and be invincible.