Image source @ Visual China
Text | Most talked about FunTalk, by | Yingying Sun, Editor | Wang Fangjie
Before Singles Day in 2021, a huge sense of crisis swept through Youzan. At that time, Kuaishou had already informed the company that it wanted to cut off the link to the product that was a backlink.
Of course, there was anger, and for a while I thought about making things bigger. After all, in the war between eggs and stones, people will most likely choose to side with eggs. A departing employee who praised him remembers the scene.
But this is emotionally, intellectually, and there are many more things to weigh. For example, as a retail saas service provider parasitic on multiple traffic platforms, although Youzan charges merchants, the relationship with giants is also very important. If Zhen and Kuaishou tore their faces, how would other traffic platforms look at it?
The problem is so urgent, it is not a few days before the double eleven, to break the chain at this time, a large number of merchants who use praise will not be able to sell goods on Kuaishou.
The above-mentioned employee told "Most Talk", at that time, Bai Crow (youzan founder, chairman) called Su Hua (co-founder and chairman of Kuaishou), and the final result was that the external link was still to be broken, but the time was delayed to November 15th.
The result of this matter was ultimately reflected in the 2021 report with praise, and the company's actions in 2022.
On March 29, Youzan released its 2021 fiscal year performance report. This financial report gives praise to the super-fast growth and rapid expansion in the past four years, and presses a back button.
According to the financial report, as of December 31, 2021, Youzan's revenue in 2021 was 1.57 billion yuan, down 13.74% year-on-year.
This data directly broke the soaring revenue trend of Youzan for 4 consecutive years. According to the financial reports of previous years, the revenue of Youzan in 2017, 2018, 2019 and 2020 was 190 million, 586 million, 1.171 billion and 1.821 billion yuan, respectively.
At the same time, as of December 31, 2021, Youzan's annual loss was about 3.293 billion yuan, an increase of 503.5% year-on-year. This also makes Youzan in a passive state.
A more dangerous signal is that as of the end of 2021, Youzan's book cash balance is 872 million yuan, which is almost equivalent to its net cash outflow from operating activities (846 million yuan) for the year, that is, if Zan's fundamentals have not improved, the company will be exhausted within a year without external help.
Layoffs have become almost a necessity. Recently, a favorable photo of the layoff scene was circulated between the Networks, a transparent box was piled up with departing employee badges, each badge had photos on it, and behind it were living workplace people. In a way, together with the company, they paid for the failure.
At the earnings report, Youzan also responded to the "value" of layoffs in the company - "It is true that we have recently optimized about 20% of the personnel, and this part of the reduction of our overall annual expenses will be about 30%. ”
On the same day, Youzan CEO Bai Crow sent an internal letter in which he reflected on the additional needs brought by the epidemic, which allowed Youzan to unexpectedly achieve nearly 100% growth in 2020, so he set an aggressive growth target, which led to a sharp increase in cost and expense input from the fourth quarter of 2020. "Next, we will fully run towards the annual target of 500,000 per capita for all employees, and more than 3,000 people with praise should achieve positive cash flow together."
Objectively speaking, the question of having a like is not personalized. As the three giants of retail SAAS service providers, there are Zan, Weimob and Weidian, and the road to SaaS services is not very smooth, of which the net loss of Weimob in 2021 reached 958 million yuan, compared with Youzan, Weimob's biggest advantage is that there is still a lot of cash on the books. The micro-store began to transform earlier, and saas services are no longer even the company's core business.
Behind this is also because of China's special network ecology. Foreign online retail to independent stations as the main model, so it will achieve shopify such independent saas service providers, and China's online retail industry is basically divided by several traffic platforms, and therefore, China's retail SAAS service providers must be parasitic under the traffic platform, such as Youzan started from the WeChat ecology, grew on the Kuaishou platform for the second time, and recently cooperated with Xiaohongshu.
Of course, there are advantages to living under the giants, but it also gives half a life to the unknown.
It is rare for a company to mention another company's name so frequently in its own earnings report.
After the incomplete statistics of "The Most Talked", only in the earnings report meeting on the evening of March 29, the frequency of "Kuaishou" appeared no less than 10 times.
Here is a clear concept, in the revenue composition of Youzan, its revenue mainly includes subscription solution income, merchant solution income and other revenue.
The financial report will mention that in 2021, the revenue of the subscription solution of Youzan was 974 million yuan, compared with 1.048 billion yuan in the same period last year, a significant decline. "The main reason is the loss of Kuaishou's business."
In 2021, the revenue of merchant solutions was 585 million yuan, of which the transaction fee was about 303 million yuan, in addition to the revenue of merchant solutions was 282 million yuan, compared with 326 million yuan in the same period last year, "mainly due to the loss of Kuaishou business, resulting in a decline in the revenue of Zazanks".
Of course, there are praises and are also fed back. According to the SPDB International Research Report, from the fourth quarter of 2019 to the first quarter of 2020, the GMV from the Kuaishou platform accounted for 40% of the total GMV.
In 2020, with the outbreak of the epidemic and the rise of short videos and live broadcasts, live shopping has become the hottest phenomenon-level application in Chinese business for a while. This has created the best "time and people" for Kuaishou's e-commerce empire, and Youzan has also ushered in ultra-high-speed development.
But in the same letter, White Crow also examined the after-effects of this explosive growth: "I remember when I was a child, I said to my grandfather, 'If only I had a jackpot in the lottery', and my grandfather said, 'Suddenly making a windfall is not necessarily a good thing, because it will disrupt the path you should have taken', and I couldn't understand it at that time. Now, got it. ”
At the same time, with the increasing prosperity of the commercial street on its platform, Kuaishou also began to think about its own efforts to consolidate the e-commerce empire.
A person who has been working in the 2B industry for many years told us that this kind of game between giants and professional Saas is actually very common, for example, in the early days of the development of Douyin, it was embracing professional software such as love editing. But as the platform grew, it also began to launch its own editing tools.
In addition, the situation of new merchants is also difficult to hide. In the first half of 2021, the number of new paid merchants in Youzan reached 19,054, compared with 32,359 in the same period last year.
At the earnings report meeting at the time, There were praises that the GMV in the first half of this year was not ideal, mainly due to the decline in GMV from the Kuaishou channel.
But if things had only stopped at this point, everything might not have gotten so out of control. On November 15, 2021, Kuaishou E-commerce announced that it will perform third-party broken chain operations on Youzan and will no longer support third-party products with likes in live broadcasts.
How directly does this move have?
This is information that can be seen by the outside world.
02 Parasitic development
The two keywords that you can't do without are "e-commerce" and "private domain traffic".
"In fact, Youzan has been telling a story of private domain traffic in the retail SaaS ecology," a former employee of Youzan told "Most Talk" The essence of this story is around "DTC", that is, direct to consumer.
"The story of this private domain traffic told to the merchant is actually to say that if you buy through the way of traffic procurement, the cost is getting higher and higher, and the public domain traffic purchased cannot be reused for yourself, only if you operate your own private domain, the cost can finally come down." It's cheap and unconstrained. ”
But the problem also arises, because Uzumaki, as the provider, or the tool itself, does not provide public domain traffic, nor does it have public domain traffic. In addition to the merchants themselves, Youzan has to rely on the public domain traffic platform to help the merchants build their own private domain traffic pools.
"It is definitely necessary to drain traffic from the public domain traffic platform first, such as various measures such as through trains, buy rankings, etc., to divert users to private domain traffic, which has its own various ways of playing."
This constitutes a contradiction in the development of things, making Youzan have to cling to the major public domain traffic platforms.
In addition to the Kuaishou mentioned above, the initial Zan's own start was also the result of attachment to the WeChat ecology.
According to public information, in March 2014, WeChat Pay was fully opened, and the WeChat e-commerce ecosystem officially ushered in the spurt growth of merchants, and Youzan also found his own foothold to provide e-commerce SaaS services for WeChat pool merchants and quickly establish e-commerce malls. In November 2014, Youzan released the Youzan distribution platform, and in February 2015, Youzan Micro Store was launched.
According to the information released by Youzan, in May 2016, Youzan has officially completed commercialization and achieved sustained large-scale profitability. This development trend was extended to the Listing of Hong Kong in 2018, and Youzan was also packaged with the concept of "weChat ecological first stock".
However, on July 14, 2020, WeChat announced the official launch of the WeChat Small Store capability, providing merchants with basic e-commerce functions such as product information release, order and logistics management, marketing, settlement, and after-sales service. And because of the video number function that Comes with WeChat, weChat small stores also have a big publicity selling point, that is, the live broadcast capabilities that come with small stores. Even in terms of fees, weChat small shop is free.
Although weChat officials also replied afterwards that "WeChat still welcomes all third-party service providers to join the ecosystem and provide diversified services for merchants", and according to the "Most Talk", the third parties such as Youzan are more granular than the services provided by WeChat small shops, but WeChat's move still makes the capital market full of worries about the survival of Youzan.
On July 15 and 16, the disclosure of the incident, Youzan's stock price fell one after another, falling by more than 8%.
In fact, according to "Most Talk", based on the entire open strategy, Tencent is still open to third-party saas software in terms of smart retail, and even Tencent's smart retail team has said to customers that Youzan is a subsidiary of Tencent. Although this statement is inaccurate, it is also an endorsement of Youzan. But it is said that the Youzan team is very repulsive to this statement.
For Youzan, it has always claimed to be the Chinese version of Shopify, and Shopify has indeed come to a very forefront position abroad. But a different consumption background is that foreign consumption habits themselves are independent-stop culture, consumers want to buy a brand mostly to the brand's own independent website, while domestic is the consumption habits of centralized e-commerce platforms.
Such cultural differences have led to B-end merchants wanting to enter a large e-commerce platform through Youzan, rather than operating their own independent consumer websites through Youzan, so the trust between Youzan and B-end merchants is not high. Once the link between the zan and the big e-commerce platform is broken, or the big e-commerce platform directly embraces the B-end merchants, just like Kuaishou personally goes down to make subsidies, then the B-end merchants with zan will have a large area of loss.
The data is also proving this.
Youzan's 2021 fiscal year financial report will reveal that its total number of small and micro businesses accounted for 59%, the renewal rate is only 13%, although there is a problem of small and micro enterprises surviving under the epidemic, but from the past financial data, the renewal rate of Youzan has been at a low level.
"Not only the epidemic, many small and medium-sized businesses do not understand the refined operation, complex private domain operation is the need for some very professional knowledge and ability to do, and the logic of this private domain is not short-term is very effective, it takes a long time to see the effect." Then in this process, small and medium-sized businesses are willing to believe and join, and it is still more difficult to firmly take this road. Previously, an employee who was closely connected to the business revealed to "The Most Talking".
The financial report also mentioned that in 2022, there will be a special team responsible for the expiration renewal of merchants, hoping to optimize the process and experience goal of merchant expiration renewal, which is to improve the demand rate of these merchants.
Of course, in the list of customers with Youzan, there are also some well-known brands that are familiar, such as Perfect Diary and Yuanqi Forest, and it is understood that Youzan has provided some customized marketing SaaS services for them.
However, the above-mentioned person told "The Most Talking" that large customers are not the core customers of Youzan, and in the past, many large customers communicated with Youzan to talk about cooperation, but when they talked about it, they realized that the technical threshold was very low, and they did it themselves.
"Moreover, from an economic point of view, Youzan may get money from a large customer, compared to the resources it has invested in customizing for this large customer, it is not cost-effective at all."
For the above reasons, after bidding farewell to Kuaishou, Youzan focused the core direction of e-commerce SaaS on climbing more new traffic platforms and looking for new traffic parasites.
For example, the Little Red Book.
As early as October 2020, Youzan already has some system interconnection links with Xiaohongshu, and Youzan will support its praise industry stores (the first batch of life service merchants that will focus on supporting nail art, eyelashes, hairdressing and other life services) to access the Xiaohongshu enterprise number to achieve the closed loop of transaction conversion of "content planting grass - appointment order".
In November 2021, the month when Kuaishou broke the chain, the cooperation between Youzan and Xiaohongshu was further deepened.
In the same month, Youzan announced that it would fully open up the Xiaohongshu platform, and the two sides would jointly launch an e-commerce solution based on the Xiaohongshu Mini Program. Through the docking of Youzan, merchants can quickly access Xiaohongshu without even development, and at the same time, they can use the tools provided by Youzan to obtain customers to achieve refined operation.
At that time, Youzan also said that it was expected that at the end of November, all merchants with praise could apply for access to the internal test, and in mid-December, all merchants could apply to open the Xiaohongshu Mini Program in the background.
At the 2021 fiscal year earnings report, Youzan also said that the GMV from other channels was 85.4 billion yuan, accounting for 87% of the total, an increase of 30% year-on-year, "We have basically fully digested the impact of the loss of the Kuaishou channel on us." ”
Just, is it really completely digested? The crisis behind this outward prosperity has been perceived.
"When the 'e-commerce street' of Little Red Book is set up, won't it be done by yourself?" In fact, The Little Red Book is the next fast hand, and in the end, Zan may have done a 'free to sell users to the giant' business, especially suffered losses, especially sad. I have been working for others for free, and Youzan is this role. A departing employee with praise lamented to "The Most Talked".
For Youzan, this is almost a gray rhino-like risk. Under the background of the slowdown in the growth of total retail sales in the whole society and the peaking of the scale of online retail, a zero-sum game relationship has been formed between major platforms. Everyone wants to close the e-commerce business on their own platform, on the one hand, of course, for the current income considerations, on the other hand, to prevent future risks.
Service providers like Youzan are like a ship traveling at the sea level of flow, filled with small and medium-sized merchants. Since one day, the ship will sail into the Kuaishou Sea, then one day, it will also sail to the Little Red Book Sea. Maybe in the future, it will head towards other seas.
It's hard to say if white crows are aware of this risk. The entrepreneur, who is considered "China's most cattle product manager", naturally has his stubborn side.
A very interesting small example is that the core value of Youzan is POSER (P is more professional, O take the initiative, S sincere service, E collaborative execution, R creation), and POSER itself is an English word, meaning a person who pretends, so there are successive employees who propose to modify this value, but in the end it is not resolved.
03 The last to land?
Although their respective origins are not exactly the same, in the long development cycle, Youzan, Weimob, and Weidian (an independent integrated private domain e-commerce solution provider) have come to the same track and become so-called competitors.
Especially Weimob.
To say, how deep is the fate between Youzan and Weimob?
Youzan's founder Bai Crow and Weimob's founder Sun Taoyong, one from the Ali department and one from the Baidu department, almost at the same time chose to start a business based on the WeChat ecosystem, and then listed at almost the same time.
However, Youzan is the Gem board of the Hong Kong Stock Exchange in April 2019, and Weimob is the main board of the Hong Kong Stock Exchange in January 2019. It should be noted here that Youzan is not satisfied with the financing scale of the CHINext board, and has planned to complete the privatization by the end of January 2022 and realize the listing of its holding subsidiary Youzan Technology on the main board of the Hong Kong stock market. It was only in the end that the plan was forced to shelve.
Again in April 2019, Weimob announced that a subsidiary of Tencent had purchased 96.82 million shares of the company's common stock. After the increase in shareholding, Tencent held about 155 million shares, accounting for about 7.73% of the company's existing issued share capital, becoming the second largest shareholder of Weimob.
Just over the past day, Youzan also announced that it has completed a new round of nearly HK$1 billion financing led by Tencent.
But behind this years of entanglement, it has actually pointed to a different path of survival. For example, when Youzan has not given up the dependent parasitic road of social e-commerce SaaS, micro-stores have long been ashore.
"The micro-store can be said to have completely transformed to sell cotton dolls, which can earn 300 million yuan a year, and the previous SaaS business has become less and less important to him." In the field of selling cotton dolls, the micro-store may already be the first on the track. A person close to the micro-store revealed to "The Most Talking".
After the "Most Talk" review, the cotton doll business of the micro-store has indeed done a lot, and at present, it has created a doll community with more than 20w fans, gathered many rice circles and two-dimensional enthusiasts, and a large number of young women constitute an army of "raising babies". According to statistics, the online transaction volume of cotton dolls in 2021 has exceeded 1 billion yuan.
"Simply put, if you buy a nude doll with a size of about 20cm and a product price of about 100-200, you need to buy clothes, accessories, and so on. It's a bit like raising a child, this part of the user base is very large, which is a kind of emotional sustenance. The above-mentioned person told "The Most Talking".
On the other hand, Weimob is also gradually iterating towards a more refined model that focuses on more vertical fields.
According to a person familiar with the matter, "In general, Weimob has done two things right compared with Youzan, one is to do a lot of financing when there is no shortage of money, and the other is to acquire many companies that have been deeply involved in the subdivision industry for many years." ”
According to public information, in November 2020, Weimob acquired Haiding for 510 million yuan, cutting into offline commercial retail; in November 2021, Weimob acquired 51.89% of the equity of Shanghai Xiangxinyun, a digital service provider of pan-retail operations, for a total of 220 million yuan, and Xiangxinyun became a subsidiary of Weimob Group and was included in the listed company system...
From this dimension, players who are refined enough and deep enough will naturally provide more accurate and delicate services to B-end users, and will eventually be reflected in the renewal rate.
"There are likes and some subdivisions of verticals, but there are more likes of investment and equity, which is a different strategic choice." The above-mentioned insider analyzed, "This may also be related to the different origins and backgrounds of the management of the two companies." ”
In the face of this parasitic crisis, Youzan is clearly more inclined to go the other way.
In June 2020, Youzan acquired the e-commerce broadcast shopping platform "Love Shopping", trying to build its own e-commerce system, connecting the two ends of the anchor and the merchant through the Zzank sales rebate model, and carrying out product promotion and sales. In addition, Youzan has also launched its own e-commerce platform Youzan Selection for C-end consumers.
"But there is no splash, and there are no consumers who can buy it." The essence is still to like itself without traffic. A former employee with a praise revealed to "The Most Talking".
A new e-commerce system, a new 2C platform, to rise need to pour a lot of resources. Apparently, there is a window of opportunity for Zan to lose it.
Time back to 2015, that year's just established Pinduoduo, and still very young Youzan, are doing business on WeChat. Just one wants to import traffic into their own APP, and one just wants to make some money through marketing services on WeChat.
Everyone starts from the same place and goes farther and farther. Today, one competes with Ali and JD.com, and the other is a wanderer between traffic platforms.