Behind the layoffs of Mushroom Street: fully develop the live broadcast business, and have lost money for consecutive years in the past five years

Recently, the e-commerce platform Mushroom Street was rumored to lay off employees, and a number of pulse users who authenticated as Mushroom Street employees posted that Mushroom Street has begun to lay off employees, of which the technical department has the highest proportion of layoffs. On December 23, a Mushroom Street employee told Nandu reporter that the news of the layoffs was true, and the overall layoff rate was about 30%, which was caused by business adjustments, and "there will be innovations in the direction of the business side." Nandu reporter noted that Mushroom Street has been in a state of loss in the past five years, and in the three years since its listing, the market value has evaporated by more than 1.45 billion US dollars. In recent years, efforts have been made to develop live broadcasting services, and live broadcasting services have contributed 90% of GMV.

Mushroom Street exposed about 30% of the layoffs due to business adjustments

On December 23, an employee working in Mushroom Street told Nandu reporters that the news of the layoffs was true, and Mushroom Street had begun to lay off employees, and the overall layoff rate was about 30%. Among them, the technical department has the highest proportion of layoffs, about 80%, and after the layoffs, the technical department has changed from more than 140 people to more than 30 people.

The employee revealed that the layoffs of Mushroom Street did not cause major disputes, and the company will give certain compensation to the laid-off employees and help the laid-off employees find new jobs. According to the employee, some of the laid-off employees of Mushroom Street have begun a round of interviews for new jobs, "new and old employees have helped to find (jobs), or departing employees to help push inwards." Other companies can't do this, and all employees recognize it."

As for the reason for the layoffs, the employee said that it was due to business adjustments, resulting in personnel changes, and "there will be innovations in the direction of the business side", but the specific content of the business adjustments is not convenient to disclose. The employee also revealed that the layoffs will not have a greater impact on Mushroom Street, and the existing technology sector can meet business needs.

Nandu reporter noted that Mushroom Street has also had large-scale layoffs before. In April 2020, Mushroom Street issued an internal letter announcing the layoffs, and about 140 employees were affected by the layoffs, accounting for about 14% of all employees. Mushroom Street said that the layoffs were due to the focus on the live e-commerce industry and the need to optimize some non-strong related businesses.

In the past five years, the live broadcast business has contributed 90% of the GMV

The news of the layoffs on Mushroom Street was on the hot search, and some netizens sighed that "the website is still (operating)". In the early years, Mushroom Street was very popular, and the website was initially known as a women's shopping sharing and shopping guide community, bringing goods through the community network, and importing traffic into Taobao to earn commission shares. As early as the concept of "planting grass" was not yet emerging, in 2011, Mushroom Street was launched in the form of a consumer sharing community. According to the data, at the beginning of 2013, Mushroom Street had nearly 4 million UV (unique visitors) per day and nearly 200 million PV (visits).

In December 2018, Mushroom Street landed on the New York Stock Exchange with a market capitalization of $1.5 billion, and was called the "first stock of fashion technology" by the outside world. As of December 23, 2021, the market value of Mushroom Street was only $41.7703 million, and the market value of mushroom street evaporated by more than $1.45 billion in three years.

Nandu reporter combed the financial reports of the past years and found that Mushroom Street has been in a state of loss in the past five years, and the biggest loss is the 2020 fiscal year, with a loss of up to 2.224 billion yuan. In the third quarter of fiscal 2021 (October 1, 2020 to December 31, 2020), Mushroom Street achieved a single-quarter profit for the first time.

Live streaming has now become the strategic focus of Mushroom Street. Although Mushroom Street is one of the earliest e-commerce platforms to lay out live broadcasting business, it entered the live broadcast as early as 2016, but the initial investment was not large, and it was later overtaken by competitors. In July 2019, Mushroom Street made large-scale optimization adjustments to the business level and announced that it would "fully embrace the live broadcast business". According to the financial report, in the first quarter of fiscal 2022 (as of June 30, 2021), the contribution of the Mushroom Street live broadcasting business GMV (total turnover) to the total GMV of the platform has exceeded 90%.

Mushroom Street is fully betting on the live broadcast business, which means that it not only has to compete with head live broadcast platforms such as Taobao and Douyin, but also faces the challenge of latecomers such as Xiaohongshu and b station. In the first quarter of fiscal 2022, mushroom street adjusted net loss was RMB24.3 million, compared to RMB14.4 million in the same period last year, not in accordance with US GAAP.

Written by: Nandu trainee reporter Fang Shiqi intern Zeng Han