The shared charging treasure is also "out of power"?

Image source @ Visual China

Text | At the forefront of entrepreneurship, the author | Yin Taibai, Editor | Egg total

Since the outbreak of the epidemic, the number of people traveling, eating out and entertaining has been greatly reduced, and the vast majority of offline formats have been affected, and the shared charging treasure for store customers has also been affected.

In just 40 days, 15 shared charging treasure companies have obtained financing from more than 40 investment institutions, with a total financing amount of 1.2 billion yuan, almost 5 times the financing amount obtained by the shared bicycle industry in the same period - this is a highlight moment in the history of the development of The shared charging treasure industry in China.

But a prosperous scene soon came to pieces with the collapse of the first shared charging treasure company. In October 2017, Letian announced that it would stop operating the shared charging treasure business and recover all shared charging treasure devices, and also remind users to withdraw the unrestricted deposit in a timely manner.

At this time, only half a year after the glorious moment of the shared charging treasure industry, the industry has not yet entered the dividend period, it has first begun the shuffling period, and the industry has thus triggered the collective question of the public: is the shared charging treasure the real demand of consumers, or the false bubble speculated by the capital side?

If you look at the superficial development of the industry, the shared charging treasure industry seems to be more difficult to get rid of the suspicion of "false bubble". As of December 2017, more than a dozen shared charging treasure companies have fallen from the outlet of the sharing economy and turned into the dust of history.

However, from the perspective of industry data, the demand of consumers to use shared charging treasure is real, in 2021, the scale of shared charging treasure users is close to 400 million people, the market size is close to 20 billion yuan, and even a listed company was born.

On April 1, 2021, two major events occurred in the shared charging treasure industry: first, monster charging with a market share of more than 34% successfully landed on the NASDAQ, becoming the "first share of shared charging" as desired, with a total market value of 2.129 billion US dollars on the first day of listing; second, Street Power and Sodian Charging announced the merger, and the parent company was named "Zhumang Technology", and the new board of directors jointly decided on the development strategies of the two major brands.

However, after a year, the calm was broken again.

In February 2022, the shared charging treasure industry was pushed to the forefront of public opinion due to rumors of "small electricity layoffs of 2,000 people". In response to the rumor, Xiaodian responded that the company not only did not lay off employees, but also had a new upgrade in business form, and said that Xiaodian's business positioning this year is to develop a "direct operation + agency" model, for which the company's organizational structure and positions have been adjusted and optimized.

Shared charging treasure enterprises mainly rely on the direct operation model and the agency model to expand the market. Prior to this, more than 90% of the points of Xiaodian were directly operated, and the other side of Xiaodian's transformation was that most of the shared charging treasure companies were still mired in losses, and in the absence of financing, the weight of the direct operation model could not be borne.

An observer of the shared charging treasure industry told the "forefront of entrepreneurship" that the point advantage of owning merchants is the key factor for the success of shared charging treasure enterprises, but due to the difficulty of grasping the bargaining power of the point, it can only be forced to increase the entrance fee and commission to the merchant, so the marketing costs caused by the direct operation model continue to rise and eventually become a "black hole of profit". Monster Charging, Meituan Shared Charging Treasure and Zhumang Technology have slowly abandoned the direct operation mode and embraced the agent model to "reduce the burden".

The shared charging treasure industry, which was once labeled as "pseudo demand" and "single profit model", has become a survivor in the tide of the sharing economy after experiencing brutal growth, reshuffle, price increases and transformation, but the days after surviving seem to be more difficult, actively transforming self-help or sharing the main theme of charging treasure companies in 2022.

1. Who still uses a shared charging treasure?

In the era of mobile Internet, mobile phones have long become an important carrier of life, work, shopping and entertainment, at the same time, mobile phones bring more and more extreme user experience, such as 2K resolution, 120Hz refresh rate, 1500 nits peak brightness and 5G, etc., but behind the ultimate user experience, often at the cost of huge power consumption, especially in transportation hubs, bars, shopping malls, scenic spots and other places that need to use mobile phones frequently, the shared charging treasure that can be seen everywhere has become a necessity.

After 90s Internet practitioner Xu Lou believes that he suffers from a serious "mobile phone power anxiety disorder", after a experience of not being able to sit on the subway and brush the elevator because the mobile phone is out of power, Xu Lou changed the habit of never checking the remaining power of the mobile phone when going out in the past, "Now I will always look at how much remaining power there is, sharing the charging treasure is essential, and it can save lives in an emergency." ”

"Although you can accomplish a lot of things through your mobile phone, and even go out without even having to carry an access control card, the convenience at the same time makes the mobile phone out of power a synonym for difficult to walk." Xu Lou complained, "Especially when you don't have cash or access control cards with you, maybe even going home will become a luxury." ”

Yu Yang, a college student, is also a fan of sharing charging treasures, and he told the "forefront of entrepreneurship" that because there are too few sockets in the school teaching building and the dormitories are regularly powered, it is very common to charge mobile phones by using their own charging treasures with shared charging treasures. But overall, shared charging treasure is still indispensable. ”

One of the changes that has quietly occurred is that although many consumers are still willing to accept the shared charging treasure after successive price increases, the use scenario and frequency of use seem to have become emergency and low frequency.

Data at the macro level can provide some corroboration. According to the data released by the Brocade Research Institute, in 2018 and 2019, the average rental time of China's shared charging treasure users was 2.3 and 2.1 hours, respectively, and the number of leases was 1.39 billion and 1.56 billion, respectively. In 2020, the average rental time and rental times of shared charging treasure users were 1.3 hours and 1.62 billion times, respectively, and the average rental time fell significantly, while the growth rate of rental times slowed down significantly.

Correspondingly, the rental price of shared charging treasures is continuing to rise. Frost & Sullivan's report shows that the average order price of shared charging treasures increased from 1.3 yuan in 2017 to 2.3 yuan in 2018, 4.1 yuan in 2019 and 5.3 yuan in 2020.

There are also consumers who have to endure successive price increases in shared charging treasures. For Wang Yu, a sales person who is on a business trip all year round, the shared charging treasure can bring him enough security, "the work needs to often answer calls and take pictures, the power consumption of the mobile phone is very large, and the shared charging treasure has ensured that the mobile phone has enough power countless times in an emergency." ”

But even if the shared charging treasure is heavily dependent, Wang Yu also directly called out that now has lost the "freedom of sharing the charging treasure", "Now it takes more than a dozen dollars to charge the mobile phone once, but as long as it does not rise particularly outrageously, it will continue to be used, after all, it is not enough to bring a self-use charging treasure." Wang Yu felt helpless.

The price of shared charging treasure has exceeded the psychological expectations of consumers. After visiting several business districts in a third-tier city in Shandong, "Entrepreneurship Frontline" found that 3-4 yuan / hour has basically become the starting price of the shared charging treasure, and the rental price of street electricity is 3 yuan / hour; the rental price of the Meituan shared charging treasure is 3-5 yuan / hour; the rental price of monster charging and incoming calls exceeds 4 yuan / hour.

"In the past, shared charging treasures were often used, but now they will not, if they cannot be returned in time due to various unexpected circumstances, the money for charging electricity once is more expensive than eating a meal, which is not cost-effective." Xu Lou believes that the increasing price of shared charging treasures has made many consumers daunted and seriously weakened user stickiness.

And it is. Data from Ai Media Consulting shows that the scale of China's shared charging treasure users increased from 0.8 billion in 2017 to 290 million in 2020, but the annual growth rate fell from 104.9% to 56.3%, and then to 15.6%, and the user growth rate slowed down significantly.

On mainstream social platforms, "the shared charging treasure is finally going to start cutting leeks", "hurry up and earn another one before it gets cold", "It's better to buy one directly" and other arguments are endless.

A user who has long abandoned the shared charging treasure told the "forefront of entrepreneurship" that the price is actually the most obvious factor in consumer perception, and if the shared charging treasure company cannot create a service corresponding to the price increase, then the price increase will definitely lead to a significant reduction in the scale of users.

However, the rising price of shared charging treasures eventually attracted the attention of regulatory authorities. In June 2021, enterprises such as Xiaodian, Incoming Call, Street Power and Sodian participated in the administrative guidance meeting in the field of "shared consumption" held by the Price Supervision and Competition Bureau of the State Administration for Market Regulation, together with the Anti-Monopoly Bureau and the Cyber Supervision Department. The meeting pointed out that at present, there are generally improper behaviors in the field of "shared consumption" such as unclear pricing rules and irregular price marking, requiring enterprises to enhance their awareness of compliance and regulate price behavior and competitive behavior.

2. Why are you "forced" to transform?

After the price increase was urgently stopped, the shared charging treasure once again fell into an impasse, and an important factor in the deadlock was that the profit model of the shared charging treasure enterprise was extremely single.

Taking Xiaodian as an example, it pointed out in the prospectus that the company's current revenue sources mainly include charging treasure service business, charging treasure sales and online and offline advertising business.

From the perspective of revenue composition, in 2018-2020, the revenue of Xiaodian's charging treasure service business accounted for 97.8%, 98.8% and 97.3% respectively, and other shared charging treasure companies were roughly the same as Xiaodian, that is, the revenue contributed by the charging treasure service business accounted for more than 95%, and the revenue contributed by the charging treasure sales and online and offline advertising business was almost negligible.

Therefore, if the shared charging treasure enterprise wants to achieve sustainable development, it can only give priority to hollowing out the mind in expanding the revenue of the charging treasure service business, and the continuous price increase and point expansion have become the most direct and effective way.

"In the shared charging treasure industry, there is no skill in point expansion, mainly relying on high entrance fees and commissions to open the way." The above-mentioned observer told the "forefront of entrepreneurship" that "in the face of high-quality points, the entrance fee paid by shared charging treasure companies can account for 40%-50% of the cost, like in many people's huge traffic bars and nightclubs, even pay millions of yuan a year." ”

Xiaodian's prospectus reflects this phenomenon from the side. According to the prospectus, in 2018-2020, the incentive fees paid by Xiaodian to the point partners and channel partners were 105 million yuan, 715 million yuan and 1.013 billion yuan, accounting for 25%, 44% and 53% of the total revenue, respectively. Among them, the sharing fees were 100 million yuan, 574 million yuan and 710 million yuan, and the admission fees were 4.25 million yuan, 141 million yuan and 302 million yuan respectively.

The competition for points has become extremely fierce with the entry of the US group. In 2020, Meituan once again restarted the shared charging treasure business, relying on 6.2 million active merchants, Meituan quickly removed an acre and three points of land from the territory of "three electricity and one beast" at that time, and by the end of 2020, its market share once exceeded 10%.

But even meituan, can not always bear the huge entrance fees and commissions, in July 2021, after the head of the meituan shared charging treasure business left, all 33 self-operated city points were taken over by agents.

The way to burn money in exchange for point expansion is obviously not sustainable, and the entrance fee and commission have remained high for a long time, which has greatly eroded the net profit of shared charging treasure companies.

iResearch's "2020 Shared Charging Treasure Research Report" mentioned that in the direct operation model, the gross profit margin of shared charging treasure can reach at least 24.85%. Among the various costs, the cost of equipment is only 15.4%, and the cost of merchants accounts for the largest, nearly 48%. In short, half of the money earned by shared charging treasure companies is taken away by merchants.

In the face of an unbalanced profit model, shared charging treasure companies have to abandon the direct operation model and explore the agent model to expand the market. The above-mentioned observers believe that the agency model has at least three advantages, one is to reduce expenses and alleviate cash flow pressure; the second is to pass on operational risks; the third is to accelerate channel expansion and market sinking.

Up to now, Zhumang Technology and Meituan Shared Charging Treasure have directly abandoned the direct operation mode and embarked on the route of pure agent mode, while monster charging and small electricity are continued to advance through the way of "direct operation mode + agent mode", "The proportion of direct operation mode in the future will gradually decrease, and the agent model will become the mainstream playing method." The above-mentioned observer revealed.

However, how far the agency model can go is still unknown, some agents said, "the competition in the shared charging treasure industry is very fierce, so the share of the agent is getting lower and lower, the purpose is to compress operating costs, but also squeeze the profit margins of the agent, the agent is doomed to be unable to do it for a long time." ”

"Whether it is a direct operation model or an agent model, it cannot change the situation of a single profit model of shared charging treasure enterprises." The above-mentioned observers believe that "the technical barriers of the shared charging treasure industry are not high, the profit model can be easily copied, and it is not easy for shared charging treasure companies to stand out." At the end of the day, in addition to constantly grabbing the spot, we need to find a second growth curve. ”

3. What new stories can be told?

The single profit model is the "hard wound" of shared charging treasure companies, but another more fatal problem is that there is no obvious difference between brands caused by the homogenization of products and services.

After the sharing economy outlet has passed, the capital side has to re-examine the shared charging treasure industry. A typical phenomenon is that since the second half of 2018, there have been few financing incidents in the shared charging treasure industry, and only Monster Charging has completed two rounds of financing in 2019.

Mired in losses and lack of hematopoietic capacity, and losing the boost of the capital side, it is imperative for shared charging treasure companies to find a second growth curve.

In April 2021, Monster Charging launched the liquor brand "Kaihuan", and used offline point resources and user resources to promote; in the previous prospectus, Monster Charging also mentioned to be a gift machine, smart retail cabinet, electronic cigarette, IP toy cabinet, etc., but the development of these new initiatives has not yet been disclosed.

Xiaodian has set its sights on digital marketing services, and said in the prospectus that Xiaodian will carry out strategic cooperation with short video companies to provide short video and live broadcast marketing solutions for partner and other businesses at the point, including organizing content creators to produce short video and live advertising; providing short video upload and live broadcast publishing tools; and providing real-time sales consulting services to point partners.

Zhumang Technology decided to make efforts in the field of intelligent hardware. At the "Meeting Teacher Conference" 100 days after the merger of Sodian and Street Power, Zhumang Technology announced that the company has developed and launched intelligent hardware products that meet the needs of new scenes, such as mask machines and AED in vitro defibrillator integrated machines.

In the view of the above observers, the future of shared charging treasure or is not clear, on the one hand, although the shared charging treasure enterprises are also constantly looking for a second growth curve, but the current effect is very limited, the new business is difficult to take on the heavy responsibility; on the other hand, the model of the shared charging treasure industry is very heavy, the need to continuously invest in the cost of manufacturing equipment, laying equipment, as the stall is getting bigger and bigger, its maintenance costs and operational risks will increase accordingly.

"In my opinion, the shared charging treasure is not really the sharing economy, but the hardware rental. It is difficult for the shared charging treasure industry to have a new story to tell. The person said.

What the end of the shared charging treasure industry may be difficult to predict, but it is predictable that the future of the shared charging treasure company has nothing to do with the shared charging treasure itself.

*Note: The names in this article are pseudonyms.