As a segment track with relatively good revenue in the “sharing economy”, the days of “low investment and high return” and “lying rent collection” can no longer come back.
Recently, some media reported that Xiaodian technology, one of the leaders of shared charging treasure, will lay off 2000 people, mainly focusing on the bottom employees of the company, such as operation, Ka, products and other departments, accounting for about 40% of the total.
In response to the rumor, Xiaodian technology responded that the company not only did not lay off staff, but also had a new upgrade in its business form. He also said that the business orientation of Xiaodian technology this year is to develop the “direct sales + agency” model. Therefore, the organizational structure and posts of the company have been adjusted and optimized. In addition, the company is still recruiting a large number of posts in technology, products and supply chain.
According to the new consumption daily from the recruitment website, the recruitment scope of Xiaodian technology involves 84 cities, with a total of 371 jobs being recruited, of which nearly 60% are local sales (BD) jobs. In January this year, Xiaodian technology announced the implementation of the “partnership” mechanism, which only retained direct sales in 20 or 30 first and second tier cities, and the rest were handed over to the local promotion (BD) agent who established a new company after leaving.
According to the prospectus data of Xiaodian technology, by the end of 2020, the offline shared charging treasure directly operated by the company accounted for 93.6%, contributing more than 90% of the revenue, and only 6.4% was operated through cooperative channels, while the net profit loss of the company reached 104 million yuan in 2020.
It is not difficult to see that small power technology entering 2022 is “reducing the burden” of business and seeking business model transformation.
At the same time, the other two giants, monster charging and zhumang technology, have also adjusted their business structure to explore a new growth curve outside the business of charging treasure.
The shared charging treasure track, which has a low threshold, has been slightly tired under the fierce competition of more than a dozen brands for several years, and it is difficult for charging treasure to surprise everyone.
madness under “rigid demand”
In the era of large screen smart phones, the anxiety of low power is more or less perplexing people who go out. In 2015, with the rise of “sharing economy” such as sharing bicycles and online car hailing, the business opportunities of sharing charging treasure were quickly explored.
Especially in traffic hubs, bars, shopping malls, scenic spots, urban streets and other scenes that require frequent use of mobile phones, mobile shared charging treasure has even become a “rigid demand” to some extent. A number of brands, such as small power technology, monster charging, call technology, cloud charging bar, street power, magic power and so on, quickly emerged.
According to iResearch consulting data, in 2017, the market scale of shared charging treasure was about 100 million yuan, while in 2019, the data soared to 7.91 billion yuan. In 2020, when the epidemic comes, iResearch consulting also said that the scale of China’s shared charging market will grow to 9 billion, and further expand at an average annual rate of more than 35% in the next few years until it exceeds 100 billion.
Due to the low cost of the power bank and the OEM technology, it is not difficult to seize the points of the business circle offline, and the elimination rate of emerging brands in the track is amazing. Some enterprises survived only about half a year and were not optimistic at first. However, there are still supply chains that push brands with excellent operation out of the siege.
In 2017, attracted by the prospect of “sharing economy”, the capital quickly entered the market, with a total of 39 financing events in only one year, with a total amount of more than 3 billion yuan. Behind the head brand, there are many well-known institutions such as Hillhouse capital, Sequoia China, Shunwei capital, IDG capital, CDH capital, Xiaomi technology and Tencent capital.
The “three electricity and one beast”, represented by small electricity technology, call technology, street electricity and monster charging, won 2-3 rounds of financing within a year, which belongs to the “highlight moment” of the track.
At the same time, due to the low fixed investment cost and low maintenance cost of the charging treasure, a charging cabinet can be paid back in three months as fast as possible and six months as slow as possible in the early stage of the market outbreak. At the end of 2017, some brands soon announced profits.
In 2019, small power technology turned into profit for the first time, with an annual profit of 194 million yuan; Monster charging also made a full profit for the first time, with a net profit of 167 million yuan.
are all caused by internal involvement
Although the head brand of the shared power bank made a lot of money in 2019, the industry competition has become white hot.
The main business districts of the first and second tier cities with the strongest consumption power have been basically occupied by all kinds of promotion, and the “war” has spread to the third and fourth tier cities.
According to the data of prospective industry research institute, the market share of “three electricity and one animal” in 2019 was as high as 96.4%. Among them, street power accounted for 38.6%, small power technology accounted for 27.1%, monster charging accounted for 25.1%, and call technology accounted for 15.6%.
From the perspective of revenue structure, the rental income of charging treasure has always been the mainstream of brand revenue. According to the data of AI media consulting, in 2019, the rental income of the shared charging treasure industry accounted for 97.2%, advertising income accounted for 0.5%, and other income accounted for 2.3%.
Through the direct operation mode of direct delivery and operation and maintenance of the company, the revenue and gross profit are the most stable, and the main costs come from equipment, merchant admission fee and local promotion (BD). Agent operation and cooperative operation are carried out by charging 10% ~ 30% of the platform fee, and the rest of the promotion is the responsibility of the agent.
Specifically, small power technology, street power and call technology have been developing rapidly in major business districts by virtue of the advantages of direct business model; Monster charging chooses the combination of direct marketing and agent.
Regardless of direct sales or agents, under the same push demand, major brands have chosen to give profits to offline businesses in order to seize more key points in the business district. The rent share left by brands to offline businesses is generally between 60% ~ 70%.
At the same time, due to the fierce competition for brands, some popular merchants such as KTV and cinema need to pay certain admission fees in advance, ranging from tens of thousands to hundreds of thousands, further raising the sales and marketing expenses of brands.
At the beginning of 2020, meituan quietly opened the shared charging treasure business, making the competition situation of “life and death” more severe.
According to insiders, after meituan and other big players entered, the rent share of many charging treasure brands to businesses increased to 70% ~ 90%, and some even offered to make 100% profit and earn money at a loss.
According to the financial report of monster charging, from 2019 to the first three quarters of 2021, the company’s marketing, sales and management expenses were 1.445 billion yuan, 2.201 billion yuan and 2.334 billion yuan respectively. Therefore, it is predicted that the average annual growth rate of this expense exceeded 40%, rapidly crowding out the company’s revenue.
According to the prospectus of Xiaodian technology, from 2018 to the end of 2020, the company’s distribution and marketing expenses were 260 million yuan, 1052 million yuan and 1472 million yuan respectively, with an average annual growth rate of 137.94%.
In fact, 2021 has decided to become a key year for the shared power bank industry.
Monster charging completed its listing on NASDAQ and said it would continue to invest its financing income in “horse racing enclosure”, attract talents and look for M & A opportunities. Xiaodian technology also submitted its prospectus twice to seek capital market support for “horse racing enclosure”, purchasing more charging equipment and developing digitization.
Jiedian and soudian were directly merged and reorganized into “zhumang technology”, which has become the largest shared charging treasure brand in China. According to the announcement, the number of users of zhumang technology after the merger exceeded 360 million, and the peak value of daily orders reached 3 million. In September 2021, the company announced that it had more than 1 million online shops of shared power bank across the country, ranking first in the country.
With meituan no longer focusing on the field of shared charging treasure, now the “little bamboo beast” has become a new pattern of industry competition.
However, since 2020, with the superposition of the impact of the epidemic in the fierce competition among many parties, the shared charging treasure brand has also “suffered heavy losses” while going to the capital market. Among them, the net loss of Xiaodian technology was 104 million yuan, and the net profit of monster charging was 75.427 million yuan, but the net profit loss attributable to the shareholders of the parent company was superimposed to 3.131 billion yuan.
layoffs, price increases, survival is the key
It is worth noting that because the industry has been unable to find a better “hematopoietic” model, it has to try to “live” by raising prices and layoffs
Since 2017, the shared charging treasure has charged 2-4 yuan from half an hour free to half an hour, and the charges in some scenic spots have reached 10 yuan an hour. If the customer forgets to return it, the brand rental deduction is even far higher than the selling price of the power bank itself.
What is more serious is that many people are dissatisfied with the industry due to the fact that the shared charging treasure brand transfers the marketing cost to consumers. Specifically, the security of personal information, arbitrary deduction of fees, unclear pricing and franchise fraud have become the focus of consumer complaints.
The chaos of savage growth attracted the attention of regulators. In the middle of 2021, the State Administration of market supervision required the rectification of monster charging, small power technology, call, street power and other shared charging treasure brands on relevant price issues. To some extent, it has curbed the competitive chaos of brands.
In the whole business closed loop, the sharing of hundreds of yuan of shared charging treasure per month has little impact on offline merchants, but whether or not to cooperate and who to cooperate with often determine the “life and death” of brands, making brands always in a weak position.
A restaurant owner said in an interview that no one pays attention to the brand of the power bank. What if there is no power bank? Guests come to dinner instead of sweeping the power bank. Once the cooperation is unhappy, businesses can even quietly remove the brand charging cabinet without informing the brand.
This makes the brands of shared charging treasure forced into internal friction. Even if they lose money, they may not be able to consolidate the scale effect and reputation, and it is very difficult to establish brand awareness and user stickiness.
Since “open source” cannot be avoided, “throttling” is the focus of major brands. Layoffs, reduction of direct operating costs, transfer of agency, transformation and expansion of the second growth curve have become a new trend.
Over the past year, the monster has sold the Baijiu liquor, the unmanned retail and intelligent hardware of the technology, and the development of cloud hardware management and digital supply chain system by small electric technology.
Like the “money burning war” that has been staged many times before, the end point of “profit giving” and “horse racing enclosure” is to wait for the opponent to make a mistake and exit, and the brand reaps profits in addition to the merger of strong powers and the birth of a monopoly oligarchy.
Judging from the loss rate of major brands today, the industry seems not far from the “decisive game”.
