How did Evergrande lure investors into its wealth products?

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Evergrande Utilised High Yields, Gifts, and Corporate Prestige to Attract Investors

China Evergrande Group enticed tens of thousands of investors into its wealth management products (WMPs) by promising yields nearing 12 per cent, offering luxury gifts, and leveraging its status as a prominent developer. These products, often marketed to conservative investors seeking steady returns, were sold from 2019 onwards following a regulatory shift away from the P2P lending sector. Investors were reassured by the company's positioning as a Fortune Global 500 entity and the perceived guarantee of China's top-selling developer.
High Yields and Additional Incentives Drove Investment

Evergrande actively promoted its WMPs with attractive annualised yields, sometimes reaching up to 11 per cent for a 12-month investment. For certain products, investors could receive additional yields of up to 1.8 per cent, further increasing the potential returns. These offerings were often presented as fixed-income products, suitable for individuals looking for stable returns on their capital.
Luxury Gifts Served as Tangible Enticements

Tangible incentives were also employed to attract investors, particularly for larger sums. During a Christmas promotion in the previous year, individuals who invested more than 3 million yuan in WMPs were presented with high-value gifts. These included sought-after items such as Dyson air purifiers and Gucci handbags, adding a layer of desirability to the investment opportunity.
Corporate Reputation and Guarantees Provided Assurance

The reputation of China Evergrande Group as a leading developer and a Fortune Global 500 company was a significant factor in attracting investors. The perceived guarantee from the company, coupled with its prominent status, instilled a sense of trust. Furthermore, the repayment promise for some products was backed by Evergrande Internet Information Service (Shenzhen) Co, a subsidiary overseeing Evergrande Wealth, adding another layer of assurance for those committing funds.

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How did Evergrande lure investors into its wealth products?

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