Source: Visual China
Author 丨Lius
Edit | Kang Xiao
Produced | Shenzhen Network Tencent News Xiaoman Studio
Since last year's contraction of orange heart preferred, to this year's knife to adjust the travel business, Didi is cutting off its arm to save itself.
The layoffs caused by the hitchhiking incident a few years ago have been staged again, but this time the situation is more critical. "Delay" previously reported that Didi has opened a layoff plan that covers almost the whole company and accounts for about 20%, involving R-Lab, an innovative business unit that has incubated Didi takeaway, as well as travel businesses such as online ride-hailing, two-wheelers, and freight. As of press time, Didi officials have not responded to this.
According to the "Deep Net", affected by multiple factors such as listing storms, internal operations, and competitive environment, after a large-scale adjustment in the country, Orange Heart Preferred only retains C-end business in a few areas, and the rest of the provinces and cities are changed to group approvals, which are internally regarded as "retaining tinder".
Looking back at Didi's establishment, 2021 is the most difficult year.
Because of touching the regulatory red line, Didi was notified by the Cyberspace Administration of China within 2 days of listing, and within 10 days, 25 of its products were removed from the shelves, which directly led to the loss of order decline drivers; in the capital market, Didi's stock price broke on the day of listing, and the stock price fell from a maximum of $18 to $4.1 as of press time, and the market value evaporated by $65.3 billion (about 414.4 billion yuan).
2022 is a critical year, and Didi is about to start the Hong Kong stock listing process from the US stock market. After adjusting the main business and suspending the second growth curve, can it turn the tide?
Travel slipped
The contraction of Orange Heart Preferred means the failure of Didi's new business exploration, but it cannot completely shake The foundation of Didi. But when the main travel business went into trouble, Didi's situation was really no longer clear. "Delay" recently reported that Didi's layoffs began with the layoffs of R-Lab's domestic business, in which the international takeaway technical team was merged into the international department, and at the same time involved online ride-hailing, two-wheelers, freight and other travel businesses.
Compared with the stagnation of new business exploration, the biggest risk is the setback of the main travel business. This is already manifested in the business.
At present, in Didi's revenue, China's travel business contributes more than 90% of revenue, including (China's online ride-hailing, taxi, substitute driving and ride-hailing businesses), and the rest is international business (international travel and takeaway business) and other businesses (shared bicycles and motorcycles, car services, freight, autonomous driving and financial services).
Since July last year, the listing storm has led to Didi's total revenue and profit falling into weakness in the second half of the year.
Total revenue fell from 48.2 billion yuan in Q2 2021 to 42.7 billion yuan in Q3, of which the revenue of China's travel business fell from 44.8 billion yuan to 39 billion yuan.
Net loss widened from $24,271 million in Q2 2021 to $30,375 million in Q3, compared to a profit of $70 million and $665 million for the same period in 2020, respectively.
Didi Chuxing's dilemma leaves competitors with opportunities. Travel platforms such as AutoNavi Travel, Meituan Taxi, Cao Cao Travel, and T3 Travel have increased their promotion and activities since the second half of 2021, trying to compete for the market share that Didi has ceded.
According to data from the Ministry of Transport, in December 2021, the orders of the online ride-hailing platform changed from the previous month, T3 travel increased by 51.7%, Caocao travel increased by 25.1%, Meituan taxi increased by 16%, and Didi Chuxing increased by only 4.6%.
The pieces become discarded
Giving up the orange heart that requires a lot of capital investment can alleviate Didi's current huge pain to a certain extent.
In Fenghua's mobile phone, there is a photo of him and his colleagues wearing orange vests, and a dozen people sitting around a conference table reviewing it, and the clock on the wall pointing to 1 a.m.
The photo was taken at the end of 2020, and Orange Heart Preferred spread nationwide in Chengdu, Sichuan Province. At that time, Kunming, Yunnan Province, had just been launched, and Fenghua joined as the first batch of employees. In order to fire the first shot of Kaesong, Didi sent the first provincial head from Hangzhou. Fenghua still remembers that the person in charge has more than 100 work numbers, is keen on shaping the sense of picture, and pursues data and GMV.
Didi, Meituan, Ali, and Pinduoduo have entered the community group purchase track for similar times, and have huge funds to expand their territory. The boom didn't last long, and the industry changed dramatically in just one year.
The middle of 2021 is an important turning point.
Since the second half of the year, a number of community group buying enterprises have withdrawn, Tongcheng Life has attracted a large number of suppliers to go to Suzhou headquarters to ask for payment due to capital turnover problems, and finally filed for bankruptcy; The Ten Hui Group has been merged into the Ali Datao system, and the team has been reduced from tens of thousands of people to less than 1,000 people; AndHare will have no choice but to transform into a community snack convenience store.
The only people left on the track are the richly funded giants, but they are not at ease. In 2021, community group buying has entered the era of strong supervision, abusing independent pricing power to carry out vicious price competition, abuse of market dominance, false publicity and commercial slander, and the chaos of big data "killing" has been put on the table, and fines have been sent to Orange Heart Preferred, Duoduo Buy Vegetables, and Meituan Preferred.
Behind the industry reshuffle and policy tightening, a large number of community group buying practitioners silently left. Cheng Wei's bold words at the all-staff meeting a year ago that "there is no upper limit on the investment of orange heart preferred, and strive to win the first place in the market" were not mentioned.
Under the increasingly fierce competitive environment and the tightening of the regulatory situation, in just one year, Orange Heart Preferred has experienced a large-scale expansion to a full-business contraction. Coupled with Didi's deep involvement in the listing storm, Orange Heart Preferred took the lead in falling among all the giants that entered the game.
Looking back at the regulatory storm caused by Didi's listing in July 2021, orange heart preferred to transfer from the original Chengdu headquarters in July, and launched a nationwide layoff in September, which was less than two months before and after.
"Along the way, there are a lot of happy things and meeting a lot of people who make people happy. But the regimental leaders and colleagues who had worked together for less than a year left. There were 120 colleagues in Kaesong, and less than 1/3 of them will be left in 2021. This is called big waves. Fenghua sighed at "Deep Web".
On the eve of the listing, Cheng Wei, Liu Qing and other senior executives attach great importance to the new retail track. At the end of 2020, Liu Zicheng, president of Orange Heart Preferred, said in an interview with Tiger Sniff, "Didi has made some achievements in the field of travel, but in terms of organization, talent and funds, it still needs more diversified capabilities and new growth curves." ”
"Deep Net" learned from insiders that the middle and high-level executives had stated downward that the travel business was basically stable, hoping to make the market bigger through the orange heart single volume data. But when strategy is transmitted from top to bottom to the front line of the business, it becomes "data-oriented." "If you want any data, you can use money to smash it," an orange-hearted person told the Deep Web.
With huge investment and no financial return in a short period of time, Orange Heart Preferred is bound to drag down Didi's main travel business and affect its financial data. Didi spun off in its last pre-listing billing cycle the day before March 31, 2021.
However, the first financial report unveiled the "hole" of this new business, the third quarter of 2021 due to Orange Heart Preferred caused Didi investment losses of up to 20.8 billion yuan, a net loss of 30.6 billion yuan; the first quarter of 5.5 billion yuan of net profit is also achieved by the divestiture of Orange Heart Preferred, the actual loss after adjustment is 5.5 billion yuan.
air castle
In all of Didi's businesses, the travel business is an unshakable foundation, and community group buying is a foreseeable growth in the future. But at least in the past two years, both Didi and the market have given it high expectations.
From the end of 2020 to the first half of 2021, the orange poster brushed up the circle of friends of orange heart preferred employees.
In September 2020, the daily single volume of Orange Heart Preferred Sichuan-Chongqing region was 500,000, and the national daily single volume exceeded 2.8 million; in November, the daily single volume exceeded 7 million, and the double 11 exceeded 10 million.
Looking back, all the numbers are nothing more than castles in the air. Fenghua told the "Deep Web" that their assessment standard is data, "as long as the data is achieved, no matter what way." ”
Ten days before the opening of some cities, BD can earn 10,000 or 20,000 yuan; and the regimental commander used a credit card to buy more than 100,000 yuan of Nongfu Mountain Spring, and the rebate point alone was as high as 20,000 or 30,000.
"Deep Web" learned that from the end of 2020 to the beginning of 2021, after most cities officially opened the city, Orange Heart Preferred readjusted the assessment standards and required the head of the group to produce actual purchases.
Yan Tao recalled that the Number of New Year's Rush orders was the most ferocious, and the normal pulling of new and regimental leaders could not meet business objectives, so they simply bought things on the platform and then sold them to the regimental commander. In this way, the goods are still circulating in the supply chain, but the revenue and single volume have been formed. He estimated that the actual purchase volume of the platform may be less than 40%.
"Deep Web" learned that in the second half of 2021, Orange Heart Preferred shifted from pursuing order volume to pursuing GMV. 36Kr has reported that the overall target for 2021 is 100 billion. After the spring, the brush performance object changed from a small commodity to a high-priced commodity such as rice and flour grain and oil.
Subsidies are the strongest driving force, but as market regulation tightens, the amount of orders has also plummeted. In the first half of 2021, orange heart preferred orders fell by 20% at one point.
Yan Tao told "Deep Net" that the essence of community group buying is to do high-margin goods, rather than low-margin daily necessities, but when major platforms are playing these categories, not doing it is equivalent to "waiting for death". Of course, this will bring immediate results to a certain extent, but the high investment regardless of the cost also hides a crisis.
Didi's competitor Meituan pointed out in the third quarter of 2021 that the operating loss of new businesses including Meituan Preferred was as high as 10.9 billion yuan, resulting in the company's overall net loss expanding by 11.3% year-on-year to 5.527 billion yuan, the largest single-quarter loss since the listing.
In the final analysis, community group buying is not something that can be smashed out by money, and ultimately tests the supply chain capabilities, supply sources, logistics and transportation, warehousing and distribution.
A community group buying practitioner analyzed the "Deep Net" that in the second half of 2021, the value of traffic play in community group buying continued to decline, and the refined operation of each company was put on the agenda; 2022 will be an important year for the upgrading and iteration of the infrastructure of the whole link, including supply chain, central park, grid station, store, etc.
The next step is to return to Hong Kong stocks
Although the travel business has been hit hard, Didi still basically maintains its original business and management structure internally. "Deep Web" learned from Didi insiders that there has not been much change in the organizational structure in the past year, and each business department is still performing its own duties.
Didi's business group includes the Urban Transportation and Service Business Group, which consists of freight division, substitute driving division, two-wheeler division (bicycle and motorcycle), errand business division, online ride-hailing platform company, small orange car service, and orange heart preferred. The general heads of each business group reported to Cheng Wei and Liu Qing, and Luo Wen, the head of the R-lab innovation division who was dismissed this time, was transferred to be responsible for the relevant work of Didi Car.
The contraction of the main business led to the stranding of the original "0188 Plan".
The plan was proposed at the beginning of 2020, specifically as "0 major safety accidents, serving more than 100 million orders per day, the penetration rate of domestic full travel exceeding 8%, and the global service user MAU exceeding 800 million".
Among the targets of 100 million orders, four-wheeled vehicles bear 50 million singles, two-wheelers 40 million singles, and international 10 million singles. The above insiders expect that didi's orders were not half when the plan was proposed in April 2020, and now that orders have declined, the "0188 plan" may be difficult to complete within the original schedule.
"Delay" has reported that as of January 2022, Didi's average daily single volume is about 20 million, which is 1/5 lower than the 25 million orders disclosed in the listing prospectus.
In addition to the contraction of business and personnel, Didi has started the delisting work of the New York Stock Exchange and is preparing for listing in Hong Kong. The program will start in the second quarter of 2022.
"Deep Web" learned that due to this impact, the option unbanning time of Didi employees has also been extended.
After returning to Hong Kong stocks, will Didi be better? At least for now the answer is unclear.
Didi's main crisis over the past year has stemmed from security censorship, and this unresolved factor is the biggest obstacle to turning around, investors are leaving the market, even those who are interested in it will be cautious.
Unlike Ali and Baidu, which have been listed for the second time in Hong Kong stocks before, choosing Hong Kong stock listing is a choice that Didi had to choose. If after returning to Hong Kong stocks, the relevant departments still did not give the final result of The audit of Didi, and the product has not yet recovered, then even if the secondary listing is completed, it will be difficult for Didi to reverse the current situation.
On the contrary, if the regulatory requirements can be met after the Listing of Hong Kong stocks, then the loss drag of Orange Heart Preferred has been lost, and Didi still has the opportunity to return to value. However, in order to give the capital market the second growth curve, Didi also needs to find a successor to orange heart.
(The interviewees in this article are pseudonyms)
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