Text | Pencil road
In 2021, one of the key words of the internet is "harder."
There are still 8 days to enter 2022, but Internet companies and employees are sad. Following iQiyi, Kuaishou and other Internet manufacturers, Mushroom Street has also followed in the footsteps of layoffs. It went public in December 2018 with a market capitalization of about $1.5 billion (10 billion yuan).
"As the countdown to 2021 comes, I was laid off by the company."
Recently, a number of Mushroom Street employees broke the news on the workplace social platform that Mushroom Street plans to lay off employees, of which the technical department will lay off 80%, and the overall layoffs will be about 30%. Some employees said, "Talk about needs in the morning, and be laid off in the afternoon." ”
In fact, this is not the first large-scale layoffs in Mushroom Street. In April last year, Mushroom Street laid off 14 percent of its workforce, bringing the number to 140.
From shopping guide e-commerce, sea shopping, cross-border e-commerce, to social e-commerce, vertical e-commerce, and now live e-commerce, Mushroom Street has almost always been on the road of transformation. Although it locked in the live e-commerce business in 2016, it does not have a first-mover advantage in the field of live e-commerce. Resources and traffic have been concentrated in the head, and it is becoming increasingly difficult for enterprises in the middle waist to divide the cake. After the head anchors such as Via and Sydney were banned due to tax issues, there was also some uncertainty in the live e-commerce industry.
"In the industrial chain of live streaming with goods, anchors, brands, and MCNs with goods have successively overturned, and the platform will not be without impact." An industry analyst told Pencil Road.
Mushroom Street was founded ten years ago, and now it has suffered from card points. In the live e-commerce track with fierce competition and strict compliance requirements, how to find your own "killer"? Looking forward to Mushroom Street getting out of the predicament as soon as possible.
Mushroom Street layoffs for the winter
Layoffs are a topic that Internet manufacturers cannot avoid at the end of the year.
First, iQIYI employees broke the news that iQIYI laid off 20%-40% of employees in the pulse, and then Kuaishou was exposed to lay off 30%. This time, it's Mushroom Street's turn again.
Recently, a number of Mushroom Street employees broke the news on the workplace social platform that Mushroom Street plans to lay off employees, of which the technical department will lay off 80%, and the overall layoffs will be about 30%. Some employees even said that after the adjustment of the technical department, only more than 30 people (including all technical personnel such as front-end, back-end, client, algorithm, etc.) were left, only 3 people were left in the operation and maintenance department, and only 2 people were left in the product post.
A laid-off employee said on the Internet, "Talk about needs in the morning, and be laid off in the afternoon." According to him, Mushroom Street gave priority to laying off employees who had been employed for less than 1 year, and some old employees were also involved, and the compensation for layoffs was N+1.5, and the compensation for some old employees could reach more than 100,000 yuan.
For the above information, a person close to Mushroom Street confirmed to the media that the layoffs were true, mainly for the technical team, but the specific proportion was not determined.
At present, Mushroom Street officials have not officially responded to this matter.
"Anxiety came suddenly." A user certified as a "Mushroom Street Java Engineer" shared that "when I was ready to go out, I remembered that I had been laid off yesterday. The mushroom coffee that used to come to a cup in the morning is gone, the mushroom bread is gone, and the Feishu account is gone. ”
At that time, Chen Qi, the founder of Mushroom Street, said in an internal letter that layoffs were normal business structure adjustments, in order to focus more on live e-commerce and optimize non-core business personnel.
As for the reasons for the layoffs, Chen Qi stressed in the previous internal letter that Mushroom Street is currently focusing on the e-commerce live broadcast business, and the company's business driving force has shifted from being driven by traffic procurement to being driven by operational activities. As a result, due to historical reasons, some of the company's business modules deviate from its core business and are unable to deliver significant customer value; the COVID-19 pandemic has hit the fashion consumer market hard, and consumer purchasing power and commodity supply chains have been seriously affected. The company's operation is facing great challenges, and it is necessary to gather resources and open source and reduce expenditure.
Chen Qi also promised employees to do their best to provide higher than the conventional compensation plan, and will also provide employees with help within their ability, including working with headhunters to recommend job opportunities for employees, and solving specific difficulties for departing employees through "mushroom home".
And this layoff, a relevant person speculated that it is still the same reason. In his view, the current capital chain of Mushroom Street is not as tight as the outside world says, and the root cause of the layoffs is based on the response of the team and the current situation of the industry.
The above-mentioned employee who is certified as a "Mushroom Street Java Engineer" also said, "I think the layoffs are also forced by the company." "Her biggest feeling this year is that Mushroom Street's business performance is getting worse and worse." Q1 business needs are particularly numerous, and although Q2 has made a lot of breakthroughs, the market environment and the company can only be like this. ”
It has been transforming and there has never been a breakthrough
Founded in 2011 by Chen Qi, an employee of Taobao No. 51 and working at Alibaba for six years, Mushroom Street was originally known as a women's shopping sharing and shopping guide community, mainly for the diversion of Taobao station, as a "shopping guide e-commerce". According to the data, at that time, Mushroom Street had more than 6 million female buyers, and 80,000 transactions were imported into Taobao every day, and the conversion rate was 8 times that of peers.
But Taobao soon realized the crisis of traffic being divided up by third-party shopping guide platforms. Around 2013, Taobao began to block external websites, and Mushroom Street was forced to transform into an e-commerce platform. Since then, Mushroom Street has been bumping on the road of transformation, and has tried a number of development directions such as sea shopping, cross-border e-commerce, social e-commerce, and vertical e-commerce.
According to the former employees of Mushroom Street who left the company, at that stage, the business adjustment of Mushroom Street was very frequent, and it was necessary to re-replace the project in one month to two months, constantly overturning the business that had been done before. Instead of optimizing and upgrading, I started doing it again with a new business.
After many transformations, Mushroom Street has not found a path that can support its development. After tossing and turning for a few years, Mushroom Street finally started its live e-commerce business in 2016. Although Mushroom Street entered the market at the earliest, it still held a testing mentality in the early stage, and the investment was not large, so in fact, it missed the early outbreak dividend of the industry. It was not until 2019, when almost all e-commerce platforms began to focus on live streaming with goods, That Mushroom Street decided on a strategy for the comprehensive transformation of live e-commerce.
Going around, live streaming has become the core growth driver of Mushroom Street. According to the financial report, from April to June this year, the total GMV of the Mushroom Street platform was 2.864 billion yuan, of which the live GMV reached 2.600 billion yuan, accounting for more than 90%.
But live streaming hasn't improved Mushroom Street's profitability either. Over the past five years, Mushroom Street has been in a state of loss, and public data shows that it has accumulated a loss of 4.535 billion yuan in 5 years. Among them, the largest loss in fiscal 2020, a one-time loss of 2.224 billion yuan.
Total revenue in fiscal 2021 fell again to $482 million, down 42.25 percent year-on-year, and the loss narrowed to $328 million.
By August this year, according to the first quarter report of fiscal 2022, the total revenue of Mushroom Street fell to 91.968 million, down 30.57% year-on-year. The loss narrowed to 95.497 million yuan. In addition, official data shows that the number of its active users is only more than 30 million.
In the capital market, the performance of Mushroom Street is also difficult to describe. Since its listing, Mushroom Street has been repeatedly evaluated as "the most miserable Chinese stock" and "immortal stock". This year alone, its stock price has also fallen from $2.24 at the beginning of the year to $0.41 today, with a total market value of only 41.01 million, a 98% reduction from the valuation of $3 billion at its peak.
At the beginning of July last year, relying on the temporary life-saving straw of live e-commerce, Mushroom Street also ushered in a 104.8% counter-trend rise, but it was only a flash in the pan after all.
The "Mushroom Streets" ushered in the darkest hour
Over the years, the live e-commerce industry has changed several times.
The live e-commerce industry ushered in rapid growth from the second half of 2020 to the first half of this year, and Taobao Live created a record of 500 billion GMV in fiscal 2021. Moreover, Douyin and Kuaishou, which entered the live broadcast industry later than Mushroom Street, have achieved scale growth. Among them, in 2020, the GMV of Douyin e-commerce will exceed 500 billion yuan, the GMV of live e-commerce will be more than 100 billion yuan, and the GMV of Kuaishou will be 381.2 billion yuan.
In contrast, the first-mover advantage of Mushroom Street has not appeared.
When it comes to Mushroom Street, many people will add a "small and beautiful" label to him. But in fact, Mushroom Street, which comes from a vertical category, has always faced the problem of a small crowd and difficult to get out of the circle. The plight of this small and beautiful company in Mushroom Street is also the epitome of many waist companies in the e-commerce Red Sea.
On the one hand, because the resources and traffic of live e-commerce have been concentrated in the head, it is increasingly difficult for enterprises in the middle waist to divide the cake.
On the other hand, Internet companies with traffic are also eyeing the fat meat of live streaming with goods. According to people close to Station B, Station B is preparing to launch the "Little Yellow Car" function in the live broadcast room, allowing users to place orders while watching the live broadcast.
After fierce internal trial and error, today's Mushroom Street is very firm in its own route: not to be the biggest platform, to take the red attribute route. "In the context of no brand appeal, Mushroom Street can only drain traffic by cultivating anchors." A Mushroom Street insider said in an interview with the media.
It is understood that there are currently 32.8 million active buyers on the platform, more than 22,000 active fashion anchors, and more than 1,000 anchors with mature cargo capabilities. However, the platform also lacks anchors who are famous in the whole network, relying only on the middle waist anchor, and the process of carrying goods is relatively slow.
In addition, in the eyes of industry insiders, brand self-broadcasting may usher in spring. The rise of the head anchor has brought unlimited traffic, and the brand would rather lower the price and give the anchor a commission in order to go to the live broadcast room of the head anchor. However, with the emergence of the anchor trust crisis, e-commerce live broadcasting has gradually returned to its essence, and displaying goods and communicating with consumers have become the main tasks. Mushroom Street, which does not have big brand resources, may have a hard time catching up with this wave of dividends.
The traffic dividend Mushroom Street did not enjoy, but it caught up with the background of the compliant operation of the live streaming industry. Recently, after the head anchors such as Via and Sydney were banned due to tax issues, the environment of live e-commerce has changed greatly.
Ten years after its founding, Mushroom Street ushered in its darkest hour. How to find their own "killer skills" in the live e-commerce track with highly fierce competition and increasingly stringent compliance requirements has also become a problem faced by "Mushroom Street".