100 Billion USD Real Estate Project Rotten-ended, Crisis Behind the Top-Selling Real Estate Company

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The secret behind the No.1 Chinese company in real estate sales
Crisis Behind the Top-Selling Real Estate Company
Country Garden is a Fortune 500 property development company based in Guangdong, China. According to the latest "Top 200 Chinese Real Estate Companies’ Sales Results from January to September 2021" released by China Index Academy, Country Garden's sales exceeded 93 million USD, ranking first in the sales of real estate enterprises in the same period, continuing their consecutive years of leading sales performance. As a Top 3 private real estate enterprise, what secrets are hidden behind the impressive sales performance? We are going to talk about this topic today.

Recently, news of a Country Garden internal high-level meeting has been circulating, and five main points were discussed:
1. Country Garden vowed to keep the annual sales target of 800 billion RMB, and a monthly target of 80 billion per month will launch in October. If the year-end target is not completed, Dr. Cheng Guangyu, who is in charge of marketing work, will resign.

2. There will be one and only one target after October, which is the sales target.
3. 4. 5.

This pledge of responsibility can be said to be the toughest sales target in the history of Country Garden. Behind this strict sales, system is a more ruthless hiring system, which has also given rise to the high turnover rate. The social networking sites in China are constantly full of people complaining about the company’s work environment and hours.

This management structure makes its corporate culture emphasize team culture. Under this culture, the concept of "overtime" and "work" is indistinguishable at all company levels. The work pattern is basically 007, in other words, from 0:00 to 0:00, 7 days a week, people are constantly ready to work.

And in the eyes of some leaders, it is a sin to leave work on time or rest normally if the work is not done properly, which in a sense is a kind of moral kidnapping.

Country Garden has a unique business model. This business model is accompanied by a high turnover of capital. While acquiring land, the building design is basically completed, construction can start within 3 months, and the property is opened for sale in 4 months, with the fastest one being a record of 35 days; In 5 months, cash flow is positive, and in 6 months this money can be reinvested in new projects.

Country Garden's positioning is very similar to Evergrande's in that both are working in small and medium-sized cities in the third and fourth tier.

With the fall of Evergrande, there will certainly be a major impact on the real estate market.
Behind Country Garden's high turnaround rate, there are also numerous construction safety and quality problems. In order to speed up the progress, various building collapses have occurred repeatedly. Public reports show that in just four months of 2018, four safety accidents occurred in a row in Country Garden-built properties.
　
On April 7, 2018, a collapse occurred at a construction site in Chongzuo, Guangxi province, in the second phase of the project, resulting in 1 death and 1 injury. On June 24, a fatal mold frame collapse occurred in a project in Shanghai during the concrete pouring of the 6th-floor ceiling, resulting in 1 death, 2 serious injuries, and 7 minor injuries. On July 26, a fence wall and a movable slab collapsed in a project in Liu'an, Anhui Province, due to heavy rainfall and strong wind, resulting in 6 deaths, 1 critical injury, and 2 serious injuries.

On August 1, the roof of an under-construction building under the management of Country Garden in Qidong, Jiangsu Province caught fire.

At the same time, in order to obtain greater profits, Country Garden constantly compresses the cost of building houses and reduces the quality of materials.

When it comes to Country Garden, people in Malaysia may be more familiar with it. This brings us to Country Garden's other famous financial trap, the Malaysian reclamation project - Forest City. This project also opened up a black hole for Country Garden's funding in Malaysia for many years.

#ChinaRealEstate#CapitalChain#CountryGarden#ForestCity#TopSelling#TofuDreg#ConstructionQuality#Evergrande#DebtCrisis#BondDefault
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How on earth can Country Garden seriously think to compete overseas? Not only does the rest of the world not like buildings made out of sponge cake, but they'd be screwed by regulation.

crunchyfrog

Well they were nice to install all of those plants everywhere. Will make it easier for nature to reclaim that land after the project falls apart. That's planning ahead!

MrBurns-tfif

"Country Garden has cut its Malaysia staff to 500 as of June following three rounds of retrenchments over the last 18 months, from 1, 700 in 2019. The company has sold fewer than 10 homes at Forest City in the past 18 months, according to salespeople who declined to be identified."
RIP Chyna!

googlgfacef

Ironically Country Gardens Yang Huiyan (楊惠妍) just bought her EU citizenship in Cyprus in 2018. I guess that is where she will flee when the shit comes down. The wealthiest Chinese billionaires all have citizenship in other countries.

twomix

The problem with most people who push working more than 8 hours a day is that they are typically in management positions with good pay and whose bonuses are dependent on team performance. The people actually doing the overtime generally don't make very much and don't get paid extra for overtime.

addanametocontinue

I went to visit Forrest city thinking to invest. After speaking with sales staff and realizing the main focus was primarily sell mostly to the Chinese nationals. The concept was really intriguing. They were going to set up an express way to Singapore so residents did not need to go through customs, allowing Singaporeans to reside in Malaysia but work in Singapore. They were going to build schools and hospitals. major thorough ways and transit systems, while projecting a "Green Image" The idae and image seemed sound. Thanks to the poor sales staff I choose not to invest. Thank you lousy sales staff!

garys

I think that China Observer is following the 007 work model- how else could these videos be so thoroughly researched? And the brilliant analysis on top of this?

charleswomack

Just wanna say great reporting. I have no stake in China living in the West. Still it helps to understand what’s going on in rest of world and especially in China. Some global instability has to result from the Chinese Real Estate bubble.

ardentdfender

Mahathir was right ! How could a project in a country sold to foreigners and locals are sideline because the price is absurd for locals, furthermore it involves the issues of soverign, Najib made a grave mistake when he approved it.

saidali

I've seen a touch of this kind of culture. Since everyone is tired and cranky all the time work moves at a snail's pace, meaning little additional work is done for all the hours spent.

samsonsoturian

SMART MOVE MAHATHIR YOU ARE VERY SMART MR MAHATHIR.

libertytan

Who had the bright idea of growing shrubbery on a concrete building? Every drop of irrigation weakens concrete and rusts rebars a little more. Speaking of which, how are repairs or painting to be accomplished with all that stuff in the way? I wouldn't want any responsibility / liability on anything to do with that nightmare.

BonannoCM

~12 years ago i was wondering how the fuck they could POSSIBLY build structures that fast without compromising the quality. The answer --> they didn't.

Talinthis

I wouldn't buy a house built in 30 days even in the US.

changhahn

Country Garden, the largest Cockroach in China’s Property cupboard. I don’t things are going to work out well for the many investors in the property market and many other associated industries. Looks like terrible times ahead.

jackfrost