Edit | Yu Bin
Produced by | Chaoqi Network "Yu see column"
At the moment when the three-child policy is landed, the introduction of the double reduction policy undoubtedly makes the education and training industry of "Daily Entry Doujin" enter the winter overnight, not only the K9 track of the investment market is in mourning, but even the listed education and training institutions are difficult to be alone.
Among them, the baby bus, which claims to provide children's enlightenment services, submitted a prospectus for the first time on the CHINext board in June last year, and then a month later, the double reduction policy landed, the education and training industry "big shock", baby bus quickly applied for the removal of the 6 education APP filings just submitted, quite a bit of a taste to be separated from the "double reduction suspect".
In fact, Baby Bus is indeed not a "education and training" institution in the strict sense, in the eyes of the industry, it is more like a technology company that relies on traffic to monetize. At present, Baby Bus has resubmitted the updated prospectus to enter the listing review process. So, can Baby Bus really double the halo of survivors and succeed in an IPO? The answer may not be that simple.
The hidden concerns behind the business model
A closer look at baby bus prospectus shows that baby bus's profit model is based on traffic, and advertising space is sold. Among them, nearly 70% of the revenue comes from APP cooperation promotion, which is commonly referred to as "traffic realization".
In fact, many people in the industry are puzzled that the baby bus has nearly 100 million monthly lives, and is still keen to make a profit by selling advertising space. After all, one step further is the education and training industry where everyone wants to share a piece of the pie, and the baby bus has not been able to take the first step for a long time, and it has caught up with the double reduction policy with one foot at the door, which is somewhat of the taste of Sai Weng's loss of horses.
But judging from the current situation of baby bus IPO on the road, the taste of double reduction survivors is still there. So, can Baby Bus really rely on enlightenment digital content to support IPO ambitions? Maybe the answer isn't as good as it should be.
Baby Bus's business model is actually very well understood, as an Internet education platform, it has been doing "simple" traffic business, through the "free content + advertising monetization" model, but accidentally avoided the impact of the double reduction policy.
In this model, from 2018 to 2020, Baby Bus's revenue was 254 million yuan, 526 million yuan and 649 million yuan, net profit was 111 million yuan, 267 million yuan and 261 million yuan, gross profit margin was as high as 94.76%, 96.55%, 95.24%, and net profit margin was as high as 43.59%, 50.86% and 40.18%. Such a high profitability, together with Moutai, does not seem to be inferior.
As we all know, operating income - direct cost = gross profit, for the advertising business of baby bus, the direct cost from getting the advertisement to the listing advertisement, almost no cost is incurred. The operating income mainly comes from four parts, APP cooperation promotion, content authorization, IP peripherals and others. Among them, in 2020, APP cooperation promotion revenue accounted for 76.76%, and content authorization accounted for 20.04%.
However, through the prospectus, it is not difficult to see that the channel for the realization of baby bus traffic is relatively single, and from 2019 to 2020, the company's sales to Baidu advertising has exceeded 50%, which obviously has the hidden danger of relying too much on Baidu.
Although Baidu occupies a leading position in the domestic advertising alliance, as the Internet penetration rate hits the ceiling, advertising revenue slows down, and even large companies such as Baidu and ByteDance cannot do anything. Looking at the over-reliance on Baidu's baby bus, although sitting on nearly 100 million monthly lives, it may be difficult to turn the tide, after all, the baby bus competition, BabyTree Group from 2019, two years of loss of 960 million yuan of the previous car is still in the past.
In fact, the baby bus business model looks "simple", but behind the simplicity may be a crisis, after all, the simpler the monetization model, the worse the corresponding anti-risk ability, with the increasingly changing competitive environment, the realization pressure will be greater and greater, and the profitability will be gradually weakened.
Therefore, although Baby Bus has avoided the impact of double reduction by virtue of its identity of Enlightenment Education + "Advertiser", the weakness of its business model still exists, and problems such as a single monetization model and too much dependence on a single customer may make Baby Bus's future IPO road full of variables.
Can the survivors of the "double subtraction" really sit back and relax?
With the need to "help parents with children" is getting stronger and stronger, it is more prominent that the positioning of the baby bus is very "clever", one foot on the mother and baby track, the best two types of money are included.
Compared with the mainstream content community, Baby Bus is mainly based on original IP content, which does contribute a lot to its harvest of nearly 100 million months, and the infant enlightenment content just avoids the double reduction storm, it seems that everything is just the right choice, in fact, it is not so good.
First of all, the "gold-absorbing dafa" of baby bus is inseparable from original professional content, which is almost completely self-developed and self-created, which is bound to bring high research and development costs. In 2020, baby bus research and development expenses were 155 million, an increase of 46.2% year-on-year.
Moreover, this part of the original content is almost a "hammer deal", few users will repeat the viewing, in order to continue to attract users to stay on the platform, it is necessary to constantly update the content, so that R & D expenditure is likely to remain high.
Secondly, Baby Bus has always positioned itself as a provider of digital content for children's enlightenment, and the enlightenment content involved in the application introduction of related APPS is designed according to the "age + ability" system, which is known to be conducive to the harvesting of knowledge for babies of different ages and the comprehensive development of babies.
"Free to use" is also a big selling point, so that baby buses quickly gained a wave of popularity among preschoolers. However, it is understood that the evaluation of the two apps of Baby Bus World and Baby Bus has always been full of "game" and "fun", and the official response is only to express gratitude.
This has to make people wonder whether the so-called enlightenment education of the baby bus also includes the realization of mobile games. Will such a "fun" baby bus make preschoolers "addicted"? Studies have also shown that electronic products can destroy children's vision and concentration. Whether we can get rid of these practical problems may be the key to whether the baby bus can laugh to the end under the double reduction policy.
Finally, I have to mention the monetization model of baby bus again, although it cost a lot of research and development costs to create an accurate Internet platform of nearly 100 million monthly active, but the realization ability of baby bus is somewhat disappointing.
Take Station B, for example, the monthly active scale of baby buses has reached half of Station B, but the revenue is less than a fraction of That Station B. To a large extent, this is only a simple diversion with the ads implanted by the baby bus, and the conversion of advertising revenue through clicks seems simple, but in the hundreds of millions of user platforms, but also backed by the golden track of mother and baby, education, but can only rely on the costly free content to attract traffic, it is really a bit of a big deal.
Moreover, although the baby bus is a survivor under the double reduction policy, the overall direction of the policy has become a foregone conclusion, referring to the industry compliance problem, the baby bus has always been difficult to enrich the teaching content, so even if the baby bus is backed by the education golden mountain, it is difficult to make a big move after all, and it is always imminent to find a new growth curve.
Where is the moat of the baby bus?
Baby bus business model is single, seemingly avoiding the impact of double reduction, but its own problems are still difficult to solve, if you can not consolidate the moat in time, in the near future, it is likely to face traffic capping, price war, profit gradual weakening and other risks. Fortunately, baby buses have some accumulation in building a moat, but whether they can accumulate thick and thin is not praised.
From the perspective of product output, Baby Bus has created original IP images such as "Strange", "Wonderful", "Super Baby JOJO", "Monkey Sheriff", etc., and also sold IP image toys, picture books and other derivative products through online flagship stores, and the best response is Super Baby JOJO's picture books and plush toys. But before that, Super Baby JOJO was once caught in a plagiarism storm.
Therefore, in order to improve the monetization ability of digital content, the core is to improve the industrial differentiation and monetization ability of IP licensing, from the current proportion of licensing revenue of baby bus, it is still in its infancy, and there is still a considerable distance from giants such as Disney and Nintendo, compared to IP images such as Hello Kitty and Mickey Mouse, the IP image of baby buses is much less popular, and it is easy to be replaced by updates, and the influence and monetization model are not mature enough. In general, although the prospects of the children's industry are very good and there are unlimited business opportunities, the accompanying competition cannot be underestimated.
Baby bus's current profit model is single and too dependent on advertising business, C-end free, B-end profit ideas do not seem to be too much of a problem, but in the long run, if C-end resources can not be well developed, as B-end traffic realization touches the ceiling, it is difficult to support the C-end free demand.
Although C-end users have the willingness to pay, how to get rid of the "game" edge ball, form a transition from To B to To C within the scope of compliance, and smoothly transition from free to paid smoothly may not be so easy.
The construction of private domain traffic should also be one of the effective measures for Baby Bus to consolidate the moat, based on the parent users corresponding to the child is the real customer of Baby Bus, and the use of social mode to improve user activity and interaction frequency is the future direction. However, the real private domain traffic construction, often can not be limited to online, need offline activities to support, which will involve more investment, how to carry out offline activities, how to further enhance user viscosity, although the prospect is very good, but the difficulty is also proportional.
epilogue
As an Internet company dedicated to providing enlightenment digital content, Baby Bus has its own positioning and business model, and it is understandable to rely on advertising revenue sharing to make a profit. It's just that baby buses rubbed shoulders with the booming education and training industry in the early years, and also missed the industry's era dividend. Fortunately, by 2021, it has also dodged the head-on blow of the double reduction policy.
Thirty years east of the river, thirty years west of the river. The dividends of the education and training industry are gone, but baby buses are still limited by multiple dilemmas such as a single business model and high content research and development costs. Perhaps this is also the fundamental reason for its rush to the secondary capital market.
It is foreseeable that the IP influence of baby buses that focus on content research and development will gradually strengthen, and its free model will continue to gain a group of loyal fans. However, whether the future baby bus can find a new curve of realization under the premise of adhering to its own advantages is still an important breakthrough point. And because of how baby bus reverses the current dilemma, there are still many variables, and whether baby bus can successfully land on the capital market and continue to tell its entrepreneurial story is also very exciting.