Evergrande Group reportedly collapsed due to octopus-style business expansion

SBS covered the news of Evergrande Group's bankruptcy. A real estate company called Evergrande Group expanded its business in an octopus-like manner into electric vehicles and bottled water and went bankrupt. The story was perfectly coherent from beginning to end. But what is missing is exactly why it expanded into bottled water and electric vehicles.

Evergrande Group's brand image

Evergrande Group had made many donations since its founding. Not only did it rank first in Forbes' 2012 China charity list, but it also invested heavily in sports.

In particular, the football offensive driven by financial power brought in world-class players with full support from the parent company and even won the ACL.

Based on this corporate image, it entered the beverage business, a consumer good based on domestic demand. (Of course, in Korea, it was controversial due to the Baekdu Mountain issue.)

Evergrande Group and electric vehicles

The beverage business might be understandable, but electric vehicles seem too out of the blue. However, read between the lines. Starting in 2018, China's real estate curbing policies made it difficult for local governments to lend land to private companies and raise tax revenue while minding the central government. What came out of this was taking advantage of the 'electric vehicle' policy that the Chinese government was pushing.

By entering the electric vehicle business, they received factory sites, acquired more land than needed, and developed real estate on that land. When the US and Europe restricted subsidy policies for Chinese electric vehicles, they began using such underhanded methods.

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