Bo Hu nodded: Will the listing become the "straw" for the survival of fast dogs?
Text | Tang Bohu
Bohu Finance learned that kuaigou taxi recently passed the hearing of the Hong Kong Stock Exchange and plans to go public in Hong Kong.
However, under years of losses, the progress of the IPO is probably difficult to alleviate the anxiety of fast dog taxis.
GOGOVAN+ 58 Express: Off-site marriage
In 2014, 58 Express," a sub-brand of 58 Tohome, was launched in Chinese mainland, which was the predecessor of Fast Dog Taxi.
At the end of 2016, as the moving business grew in size, the management of 58.58 home decided to separate it from the group's main housekeeping business. However, the 58 Express at that time required a strong management team.
At the beginning of 2017, 58 Home CEO Chen Xiaohua accidentally met STEVEN Lam, the founder of GOGOVAN. The first time the two met, they hit it off. Chen Xiaohua was attracted by GOGOVAN's development story from scratch and was interested in its diverse team composition. Steven Lam was also impressed by Chen Xiaohua's sincerity and clarity of thought.
In addition, the two companies naturally complement each other geographically and in terms of business composition. 58 Express focuses on the mainland and has a great advantage in the C-end market; GOGOVAN mainly fights overseas markets and has rich experience in the to B business.
As a result, 58 Express and GoGoVan Cayman, a logistics service platform in the same city of Hong Kong, were successfully integrated in this year and became the main body of the prospectus "58 Freight Inc".
After the merger, the two sides will not only be able to fully leverage synergies under the leadership of the new team, but also become the number one short-haul freight platform in Asia. This gave Chen Xiaohua and Steven Lam a lot of confidence, and the two were determined to make the new company the world's first in the industry.
In 2018, 58 Express changed its name to "Fast Dog Taxi". "Fast Dog" is the Chinese name of GOGOVAN (Fast Dog Express), and the operation team hopes to use this new name to upgrade the brand positioning from "pulling goods fast and saving money" to "pulling goods and moving things".
In layman's terms, the initial business of 58 Express was limited to pulling goods, which is a B-end business, and individual users with needs will not use it. The "taxi" is the daily consumption behavior of C-end customers, and after the name change, the platform easily breaks the "dimensional wall" between the platform and individual users.
This bold approach works well. At the end of 2018, Chen Xiaohua revealed to the media that after the name change, the platform "added 3 times more customers, more than 100 million people knew, and aroused the attention of hundreds of media."
A more intuitive manifestation is the growth of performance. According to the prospectus of Fast Dog Taxi, its revenue increased from 453 million yuan in 2018 to 530 million yuan in 2020, and in the first quarter of 2021, it was a sharp increase of 50.88% over the same period in 2020.
Most of the new revenue comes from the C-end market. The service revenue of the fast dog taxi platform was 168 million yuan in 2018 and 226 million yuan in 2020, accounting for 42.5% of the total revenue from 37.1%.
(Source: Network)
The cake that can't be kept
Corresponding to the booming platform services, the enterprise service sector is stagnant.
The revenue sources of Fast Dog Taxi mainly include enterprise services, platform services and value-added services. The performance of value-added services has always been less prominent, never exceeding 4% in the reporting period, but enterprise services are the modules that contribute the most.
However, this part of the revenue did not achieve significant growth during the reporting period, and its proportion of total revenue was even reduced. In 2018, the revenue of corporate services accounted for 61.6%, but this proportion fell to 54.6% in 2020.
This change is mainly due to the sharp decline in the revenue of fast dog taxi in the mainland market. The figure reached 188 million yuan in 2018, but only 90.34 million yuan in 2020.
The explanation for Fast Dog Taxi is that the impact of the new crown pneumonia epidemic, the decline in average transaction volume per order and the company's strategic adjustment of the corporate customer structure have led to the poor performance of this part of the business.
Is this really the case?
According to Frost & Sullivan, the total amount of transactions contributed by SMEs and large companies in the Chinese mainland same-city logistics market continued to grow from 2016 to 2020.
That said, the first two reasons are not enough to have a significant impact on the industry.
As for the last one, Fast Dog Taxi described the "strategic adjustment of the corporate customer structure" as "focusing on large and reputable enterprises and terminating the business of a number of reputable corporate customers".
Will this part of the "enterprise customers with poor reputation" cause the income gap of 90 million yuan on the platform? Is the reason for the change in revenue the optimization of the platform or the active departure of customers?
In recent years, the same-city freight track has gradually become crowded. In addition to platforms such as Lala, Fast Dog Taxi, Didi, Manbang, SF, etc. have also poured in.
They expand their visibility through large-scale marketing, seize users with large subsidies, and quickly open up markets. Under this way of playing, the stickiness between the platform and the driver and the user is actually not solid. Once there are new platforms that can offer more attractive conditions, old players are likely to face a situation where they can't retain people.
The industry position of fast dog taxi itself is not stable enough. According to the total transaction volume in 2020, Lalala occupies 54.7% of the market share, while the second fast dog taxi has only 5.5%. The "old third" and "old fourth" followed, with 3.1% and 2.5% respectively.
In this way, walking on thin ice is a state that is more suitable for the situation of fast dogs. It has no reason to cede to rivals "discredited" corporate customers that generate large amounts of revenue.
What's worse is that the influence of fast dog taxi in the C-end market is also affected by the industry reshuffle. Hidden beneath the surface of its revenue growth is the decline in both monthly active users and consignment orders of platform shippers, and this trend has not improved until the end of 2021.
The reason for the change in the indicators, the customer's active departure is on the one hand, on the other hand, the number of drivers who leave the platform is quite large.
The "wool" of the driver
Chen Xiaohua has publicly expressed the importance of the driver group. He said that fast dog taxi is first of all a transportation platform, followed by professional logistics providers. Its logistics services are built on the transportation capacity platform, and the scheduling ability of freight truck drivers in the same city is its core competitiveness.
Understandably, on the one hand, drivers are the productivity of fast dogs taxis. With drivers, the platform can quickly roll out and pave the offline logistics network, thereby increasing the possibility of order transactions. Drivers, on the other hand, are direct vehicles for generating revenue for the platform.
Therefore, Fast Dog Taxi has more than once publicized its care for the driver group, including the establishment of a driver service committee to enhance the sense of belonging and overall quality of drivers, the implementation of the "City Hero Care Plan" to buy insurance for drivers, the implementation of the "old with the new" platform partner plan, and so on.
However, when the driver is "wool", the fast dog taxi is never soft. During the reporting period, the commission rate of the platform increased year by year.
The first is the C-end market, from 2018 to the first quarter of 2021, the commission rate of Fast Dog Taxi in the Chinese mainland has risen from 5.8% to 11.7%, and the overseas market has also increased from 4.5% to 8.7%.
Secondly, the B-end market also shows a trend of reducing driver service fees. In 2018, the subcontracting fees of fast dog ride-hailing logistics service providers accounted for 59.2% of revenue, but this proportion fell to 49.2% in 2020.
The rift between the platform and the driver has a long history. On the black cat platform, there are more than 3500 complaints about fast dog taxis, and most of them come from platform drivers, and their contents are not lacking in the platform to seize the driver's security deposit, false order judgment errors, difficulties in withdrawal, and so on.
The relationship is already crumbling, and the annual increase in commissions has directly become the fuse for drivers to leave. In 2018, Fast Dog Taxi had 210,000 drivers, but only 100,000 remained by the first quarter of 2021.
Why did Fast Dog Taxi choose this kind of monetization path of drinking doves to quench thirst?
Bohu Finance believes that the main reason is the loss situation that it has not been able to reverse for many years. In 2018, 2019 and 2020, its adjusted net losses for the years were $784 million, $397 million and $185 million, respectively, and it still incurred a loss of $51.78 million in the first four months of 2021.
The way to narrow losses is nothing more than open source and throttling.
In terms of throttling, Fast Dog Taxi will compress the sales and marketing expenses, general and administrative expenses and research and development expenses from 926 million yuan in 2018 to 382 million yuan in 2020.
As for open source, customers do not increase but decrease, so that fast dog taxi is slightly helpless in expanding revenue. As a result, charging drivers more commissions and membership fees has become the most direct way for them to increase their monetization income.
What fast dog taxi ignores is that the "cake" of moving drivers is actually weakening their competitiveness. The number of drivers has decreased, the platform capacity has weakened, and it is difficult for customers' transportation needs to be met in a short period of time with high quality and efficiency.
The final situation is that the increase in revenue is only a small fight, and the loss will continue to expand.
Even if it is successfully listed, it is impossible to retain the driver's fast dog taxi, and no matter how abundant the funds are, it will not be able to create a new story.
References:
1. Business and life: Chen Xiaohua: The ambition of 58 Express is to be the world's largest short-distance freight platform| entrepreneurial story
2, DoNews: 7 years of hard work, fast dog taxi to achieve freight practitioners happy home
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