Gionee officially files for bankruptcy: Report

According to media reports, a court in Shenzhen has accepted the Gionee application for liquidation bankruptcy. Another report last month said the founder of Shenzhen-based Gionee admitted he may have used company assets to gamble at a Hong Kong-listed casino in Saipan. In an interview, Liu Lirong, Gionee’s Chairman and Chief Executive, “admitted that Gionee’s total debts amount to 17 bn yuan, with 10 bn yuan of this owed to banks, 5 bn yuan to upstream suppliers and about 2 bn to advertising agencies”.

On how much he lost gambling, Liu said, “a bit more than 1 bn yuan”, which may actually be to the tune of 10 bn yuan ($1.44 bn). Gionee, which ranked behind Apple in the sixth place for handset sales in China last year, began facing difficulties when suppliers halted component sales after failing to receive payments for several months. “For comparison, Liu claims that the company was losing around 100 mn Yuan ($14.4 mn) a month between 2013 and 2015. The losses per month doubled in the last two years,” it was reported. Founded in 2002, Gionee was once a mainstream brand in China and India, selling nearly 40 mn handsets in 2016.  Gionee, which established its presence in India in 2012, claimed in February this year to have retail presence in over 42,000 stores and has 600 exclusive service centres in the country. It also claimed a customer base of 1.25 crore in the country. After running domestic operations for almost five years, Gionee India’s CEO and MD Arvind Vohra stepped down in August 2017. David Chang, Global Sales Director for Gionee, then started leading the India operations. In the first quarter of 2018, Gionee shipped an all-time low of 150,000 units with shipments down 90 pc year on year, according to Counterpoint Research.