Wen 丨 Number Science Society, author 丨 柠溪
Adjusting the posture, reducing costs and increasing efficiency due to changes in the external environment, and using bullets in key battles are the keys to surviving the cycle.
In the era of Uka, all businesses need to look for a stable and sustainable second growth curve.
Recently, when Tencent's financial report was released, founder and chairman Ma Huateng put forward an intriguing point of view: "China's Internet companies are ready to spend the winter." ”
In a series of subsequent interpretations of this remark, Ma Huateng vaguely said that Tencent should work intensively to find the second growth curve of enterprise development.
Tencent, which is deeply rooted in technology and ecology, is still like this, let alone other companies. Weimob, which has always existed as the top three saas, has just released its 2021 financial report, which also revealed the signal of finding a second curve development direction and increasing its efforts to transform to this development path.
Due to revenue growth and changes in key business segments, Weimob's financial report this time has many highlights, and even some content points out that Weimob is leading the development of consumer SAAS.
In fact, in addition to Weimob's exploration of the development of the second curve, other unresolved problems and possible risks contained in the financial report cannot be ignored.
01 Revenue growing against the trend
On March 28, Weimob Group released its 2021 financial report. Weimob Group's adjusted total revenue reached a record high of RMB2.686 billion, with an adjusted gross profit of RMB1.517 billion, up 51.3% year-on-year.
Good data mainly originates from 2021, Weimob Group focuses on the digital transformation and upgrading of enterprises, continues to strengthen the development of multiple product lines, and further promotes the three major strategies of "large-scale customization, ecology and internationalization", and achieves counter-trend growth in revenue.
According to the financial report, in 2021, Weimob Group's digital business revenue was 1.967 billion yuan, an increase of 70.9% over 1.246 billion yuan in 2020. In the past, the digital media revenue of the main revenue project was RMB719 million, an increase of only 10.3% year-on-year.
The core advertising business grew by 44.2% compared with the digital commercial revenue core product subscription solution SaaS business, which was much lower. In the financial report, Weimob also made it clear: "From 2020, the management has decided to focus more on the digital business business, in which precision marketing services will be provided to merchants as part of the overall digital business solution, so the digital media business will support a small number of advertisers to purchase advertising traffic, and it is not expected to become the strategic focus of the company's new strategy." ”
Weimob 2021 financial report
Behind this passage, Weimob also rarely pointed out that in March 2022, its latest operating system platform "WOS New Commercial Operating System" was officially publicly tested, which will become a powerful engine driving the future growth of Weimob Group. This is also seen as Weimob formally establishing the development strategy and direction of the second curve, and has made the first phase of product adjustments.
Reflected in the earnings data, the core product of the new platform, Weimob Digital Commercial Revenue, did indeed show growth beyond expectations. Among them, the revenue of Subscription Solutions (SaaS segment) of Weimob Group reached 1.188 billion yuan, a substantial increase of 90.9% year-on-year, the number of paid merchants 102813, an increase of 5.0% year-on-year; the average revenue per user increased significantly by 57.7% to 11553 yuan.
During the reporting period, Weimob Group's SaaS product matrix was further expanded, and new industry solutions such as Micro Assistant, ShopExpress, Smart Supermarket, and Smart Fresh were released successively, and the SaaS business map was continuously expanded.
In terms of sub-sectors, as of December 31, 2021, the number of catering merchants in The smart catering sector of Weimob reached 8,406, and the revenue of smart catering was 53.616 million yuan, an increase of 19.6% over 44.817 million yuan in 2020, accounting for 4.5% of the revenue of subscription solutions; The average order revenue per user of catering merchants was RMB17,000.
At the same time, with the continuous advancement of TSO's full-link marketing strategy, the merchant solutions in Weimob Group's digital business sector have performed well.
According to the financial report, in 2021, the revenue of merchant solutions increased by 47.5% year-on-year to 779 million yuan; the gross income of 10.95 billion yuan of precision delivery increased by 12.1% year-on-year; the number of paid merchants increased by 26.7% to 57,909, with an average revenue of 13,454 yuan per user.
It is worth mentioning that by empowering merchants to upgrade the whole basin connection, the full link marketing upgrade and the omni-channel operation upgrade, in 2021, there will be nearly 500 TSO full-link merchants of Weimob Group, including more than 50 KA merchants, 2 billion yuan of GMV of TSO merchants, and 50 million yuan of merchant solution income.
02 The direction of transformation with vigorous investment
In Weimob's financial report, what is equally eye-catching with the growth of total revenue is the rapid increase in losses. The net loss of 853 million yuan and the adjusted net loss of 566 million for the full year of 2021 are about 700 million yuan of operating losses compared to the adjusted net profit of 108 million yuan in 2020.
Regarding the loss, Weimob pointed out in the financial report that it was due to large-scale investment in scientific research and employment, which promoted the rapid development of enterprises in the direction of transformation of choosing the second curve.
According to the financial report, general and administrative expenses increased from 261 million to 812 million, an increase of more than 3 times. The financial report explained that first, R&D investment led to an increase in staff costs of about RMB383 million in 2021; second, rent and property service expenses increased by approximately RMB28.2 million; third, depreciation and amortization increased by approximately RMB56.0 million.
The most notable thing is actually the R&D expenditure. R&D investment in 2021 increased by 208.8% from 251 million yuan in 2020 to 775 million yuan in 2021. The financial report shows that a key reason for this part of the investment is that the acquisition of new R&D employees brought by Haiding has increased R&D expenses by about RMB136 million.
In addition, the number of R&D personnel will continue to increase since the second half of 2020, and its annualized cost effect will lead to an increase in R&D expenditure by about RMB111 million, and in order to normally launch new products, especially to develop and improve industry vertical solutions to serve large and medium-sized merchants, establish and upgrade the PaaS solution "WOS" and develop products and solutions for cross-border exporters, the number of R&D personnel is still rising in 2021, resulting in an increase in R&D expenditure of about RMB278 million.
This can be very clear to see that Weimob has made great efforts in the second curve, especially the launch of the PaaS solution "WOS", and has invested heavily in research and development and promotion.
The results are also remarkable.
In terms of developer ecology, in 2021, The Wimob Cloud PaaS platform will continue to empower ecological partners, adding more than 50 high-quality ecological partners and more than 400 new cloud market applications.
Although the new system has just started, but the resources and foundation are available, Weimob has actually taken a very solid step towards the platform.
03 It's time for intensive farming
However, this does not mean that the development of Weimob is worry-free.
There is a data item in the earnings report that attracts attention. The cash flow from Weimob's operating activities in 2021 was negative at 614 million, which is nearly three times the negative cash flow from operating activities in 2020.
To some extent, this means that Weimob's increasing revenue, as well as the corresponding business adjustments, are actually about to lose in the face of high costs.
There are a few more numbers to be wary of. First of all, the financial report shows that sales and distribution expenses increased from 919 million in 2020 to 1.715 billion, nearly doubling.
Earnings reports are a thriving attitude towards this. It is believed that the effect of the increase in expenditure is immediate. According to the data, as of December 31, 2021, the number of Weimob smart retailers reached 6,126, and the smart retail revenue was RMB426 million, an increase of 193.6% over the RMB145 million in 2020, accounting for 36% of the subscription solution revenue.
Among them, there are 1,003 brand merchants, and the average order income per user of brand merchants is 234,000 yuan. Weimob Smart Retail accounts for 44% of China's top 100 fashion retailers, 40% of the top 100 commercial real estate, and 35% of the top 100 chain convenience stores.
However, from another perspective, this actually means that most of these newly increased large customers and commercial revenue are brought by marketing and advertising. In the future, whether this merchant can renew its contract depends on the changes in their business, and the other is also related to whether the corresponding services of Weimob are replaceable and sustainable.
This may be the reason why Weimob saw this and urgently launched a new commercial operating system of "WOS".
However, due to the fact that Weimob's system is a brand new product, it takes time and cost to carry out a series of education and promotion for users, and allows users to accept and be familiar with such product planning, some insiders judge that the cost of Weimob advertising and marketing in 2022 will not be less than in 2021, and even increase exponentially.
Secondly, Weimob's financial report shows that Weimob's products and services have opened up Platforms such as WeChat, Douyin, Kuaishou, Alipay, Baidu, QQ, QQ Browser, Video Number, Xiaohongshu, Tencent Huiju and so on. In fact, the product advantage that Weimob has now formed is to provide marketing Saas system + service capability + traffic acquisition, which is the so-called TSO.
This means that future traffic embedded in these platforms must find ways to help enterprises obtain it. The need for commercialization of these platforms is now becoming more and more obvious, which means that if you don't pay, the possibility of relying solely on natural access to traffic is becoming less and less.
So the cost of spending on these traffic platforms in the future will be on an upward trend. Whether the cost of this part of the cost is listed in the market fee or passed on to the user remains to be seen. However, it is certain that this part of the cost will have a certain adverse impact on the new products promoted by Weimob in the new year.
From this point of view, in the state of Internet companies on the verge of wintering, Weimob should also find ways to achieve intensive farming. Optimize for marketing expenses, R&D expenses, administrative expenses, etc. After all, Weimob's subsequent new products also need certain market cost support, so in addition to finding ways to increase revenue, the control of other costs is also a goal that must be achieved.
We hope that Weimob's new products will be successful, after all, this is in line with the trend of Saas platforming. The increase in revenue and profit growth of Weimob is also a goal that must be achieved, otherwise the sustainability of the enterprise cannot be achieved.
As Ma Huateng said when referring to the theory of "Internet enterprises wintering", enterprises should do a good job in two points: First, adjust their posture, reduce costs and increase efficiency due to changes in the external environment, and use bullets in key battles. "The second is to strengthen internal collaboration, rather than going it alone."
This is also of deep significance to the current development of Weimob.