The reason why 1 million member 'Bogoplay' went bankrupt

'Bogoplay', a live commerce company with 1 million members, is in the process of revival.

The cumulative debt alone is 52.6 billion won, and the unpaid amount to the store is 33.6 billion won.

There are 77 companies that have not received payments of 100 million won or more.  

why is it important

Companies that have entered Bogo Play are in danger of not receiving sales proceeds. 

On the 19th, the Bogoplay side held a meeting for companies in Seoul somewhere.

He said he was looking for a way to continue the service, and came up with a solution that he would receive investment or attempt M&A based on this if 80% of the tenants agreed.

At the same time, he added a word to the shopkeeper not to apply pressurization.

I will pay money to save the service, so I was asking for help right now. 

However, the on-site response was cold.

An official from a company that did not receive a payment of 500 million won criticized, saying, “Even the fact that the meeting was held was not communicated well.” 

Consumers are also expected to suffer.

The amount of cashable points that consumers have accumulated in Bogo Play is about 1.2 billion won.

Currently, the service is paralyzed to such an extent that even if you order something, it is automatically canceled, so there is a high possibility that you will not be able to use this point.  

It is a situation where we need to encourage the participation of vendors and restore consumer confidence.

It doesn't look easy to get through. 

explain a bit more

The reason why Bogoplay came close to bankruptcy can be seen by looking at the business models of platform companies and the investment practices of startups. 

The platform company's growth strategy is 'grow big first.

Then you can make money'.

At first, they focus on strategies to increase the number of users, and when they grow in size, they add a small fee to the service to make a profit.

This is why services that seem unreasonable, such as early morning delivery, are competing with each other. 

Bogoplay chose a method of lowering commissions and pouring money into marketing to attract as many entrants and consumers as possible.

As a 'ultra-low price' strategy, we provided 'payback' and discount coupons that return a portion of the sale price, but it has grown while bearing the cost of this bloody competition.

Sales are usually around 10 billion won, and at most 20 billion won, but 17 billion won of promotion costs were entered every month. 

This growth strategy is not a problem when funds are plentiful in the market.

This is because even if you spend money on marketing after receiving an investment and lose money, you can continue to grow if you receive another investment.

Even two to three years ago, when money was released at close to zero interest rates and policy support was given to start-ups, investment money would come in even after reporting 'sales growth', even if it was in the red.

In fact, Bogo Play was recognized for its business value to the extent that it received an investment of 11 billion won from 7 large investors in May of last year. 

But high interest rates and a recession put a halt to this growth strategy.

As consumption slowed down, sales growth began to slow down little by little.

As the money in the market dried up, 'blocking' continued, in which sales proceeds that had to be given to stores were used for sales activities.

Bogoplay acknowledged, "There was a crisis signal that sales were declining from November, but the response was complacent."

An official from an investment company that invested in Bogo Play said, "It seems that we are on the verge of bankruptcy because we have not received any new investment in a situation where we have used up our investment."    

one more step

It is common sense that when the economy deteriorates, the perspective of looking at companies changes.

Last year, while the 'Giant Step', which raised interest rates by 0.75 percentage points in the United States, was carried out four times in a row, the stock price of Nasdaq technology stocks was sluggish.

This is because when interest rates rise and are cautious about spending money, the attractiveness of technology stocks that cannot make profits right away and have to look forward to the distant future is reduced.   

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