In March 2022, the commercial territory of Monster Charging (EM.US) will be next to the next city.
The company has reached a cooperation with Universal Beijing Resort and become the "Official Supplier of Shared Charging Treasure in Universal Beijing Resort". According to the agreement between the two sides, tourists can enjoy easy-mobile charging services at universal studios Beijing theme park, Universal City Avenue Beijing and two resort hotels.
This is the second time that Monster Charging has cooperated with a world-class theme park since holding hands with Shanghai Disney Resort, which shows its strength. Looking back, it is this positive layout that has brought about a rapid increase in monster charging points and the number of users over the years - as of the end of 2021, monster charging has 845,000 points (POI), an increase of 27.3% year-on-year; the cumulative number of registered users reached 286.9 million.
Source: Monster Charging Prospectus, 2021 Financial Report, Historical Data
Of course, other shared charging players are not idle.
For example, Xiaodian Technology has recently reached a cooperation with Beijing South Railway Station to lay a small electric charging treasure large-screen machine at each inlet; as of 2021Q3, according to Zhumang Technology, its total POI nationwide has reached the level of one million.
In this sense, the industry is still in fierce competition.
01
Snow thick slopes long war
The sharing charging industry, which is currently fiercely competing, can be said to be one of the only remaining fruits of the "sharing economy".
Compared with the wind and fire 5 years ago, many concepts that have appeared, such as sharing umbrellas and sharing cars, have gradually faded from people's sight due to the falsification of demand. The need for shared charging has been confirmed in practice.
This demand comes first from a large mobile phone user base. According to the data of the Prospective Industry Research Institute, as of 2020, the number of shared charging users will reach nearly 290 million, the user penetration rate will be 21.41%, and the conversion rate will still have a large room for growth.
The demand for mobile internet access is also growing steadily. According to the statistics of mobile data and analysis company App Annie, the average daily use time of Chinese mobile phone users in 2021 will reach 3.3 hours, ranking nearly 17th in the world, and also has a lot of room for improvement.
However, today's mobile phone batteries are difficult to support these needs. The demand for more powerful functions has forced the computing power of mobile phones to continuously improve, bringing greater energy consumption; safety and lightweight have become important considerations for mobile phone products, but battery technology has not made a revolutionary breakthrough, and energy density has entered a bottleneck. Shared charging can resolve the contradiction between mobile phone demand and insufficient power supply, and there is still no more efficient alternative.
Therefore, analysts are still optimistic about the expectations of the shared charging industry at present.
Euromonitor International's "Shared Charging Industry Report for the First Half of 2021" pointed out that the transaction volume (GMV) of the 2021H1 industry was about 5.28 billion yuan, an increase of 5.9% month-on-month; the 2021H2 point continued to increase, the holiday time was long, and the number of travelers was expected to rise, and it is expected that the GMV may exceed the scale of 10 billion.
iResearch believes that the size of China's mobile device charging service market is expected to grow to 106.3 billion yuan by 2028, with a compound growth rate of 36.2% from 2020 to 2028.
Source: Monster Charging Prospectus
02
Survival of the fittest racing
Where there is growth, there will be players entering the game, and the war on shared charging will continue.
And it is foreseeable that the intensity of competition will increase over time. From the perspective of the revenue scale of 2021H1, the industry's first monster charging accounted for 40.1%, and its position was very stable; the proportion of CR5 brands was about 95.3%, which was slightly higher than the share at the end of 2020. In contrast, although other brands have also improved, the POI coverage area is relatively limited. The accelerated development of head players in recent years seems to have brought the industry into the liquidation stage, and player mergers and acquisitions have even begun to spread from the waist and ankle to the head.
Mergers and acquisitions can bring networks, cash and technology reserves into the same position, enhancing POI and long-term development potential. Among them, the POI coverage is the most direct and core moat of the shared charging brand in the initial stage.
In fact, looking back at the rise of monster charging, it is not difficult to find that the rapid expansion of POI coverage brought about by strong channels and operational capabilities is the key ability to stand out.
Monster Charging built a highly competitive operation team, achieved the first stage of rise by single-point attack POI, and later expanded the promotion focus from single point to joint partner (KA), covering core scenarios such as catering, leisure and entertainment, hotels, and shopping from surface to point. In 2021, Monster Charging has reached cooperation with star KA such as KFC, Ajisen Ramen, eLong Hotel Management Company, and Indian Power Group, and the business scale continues to expand.
Then the company will increase the point delivery to places with high traffic and low point density such as hospitals and transportation hubs, and achieve full scene coverage through the connection between scenes. The business layout of the whole scenario will produce a chemical reaction with scale effect, bringing about both traffic and stickiness growth.
But then again, the shared charging industry has developed to this day, and some pain points cannot be solved by the expansion of POI.
For example, a unified and smooth service system.
For users, a smooth usage experience is the core advantage of shared charging treasures.
In the past, due to the different standards of charging boxes between players, the coverage was different from each other, and the charging treasure "had difficulty borrowing and returning" occurred from time to time. Only perfect coverage and unified technical standards, coupled with a certain vacancy rate, can allow users to find the point of borrowing and returning the charging treasure anytime and anywhere, avoiding unnecessary trouble.
However, after the player's merger, the installed facilities cannot be unified, and if these facilities are not upgraded, they will have to re-take the "input-output" curve, increase capital expenditure, and profits will be postponed. In the accelerated liquidation stage of the market, how many players can withstand such a regression?
Another example is to enhance the attractiveness of users through personalized and customized products and services.
Business is the scene in itself today. The key is to meet the real needs of users; create a very immersive atmosphere and "addictive" local experience; and create real social value, so that users feel that they should have it all now.
At Universal Beijing Resort, Monster Charging incorporates POI into the scene. In the Kung Fu Panda Gestapo Scenic Area, the monster charging cabinet body is covered in Chinese red, echoing with the pavilions, colorful lanterns and other elements; in the future water world scenic spot, the "monster charging drift box" in the drifter's pavilion seems to be a "civilization relic" that drifts with the waves to this place and is picked up by the wisdom islanders.
By "disguise" the product and going deep into various scenarios, Monster Charging has enabled users to have an immersive consumer experience.
At the same time, the experiential, emotional, and social value that goes beyond the service itself determines the premium of the service.
In recent years, Monster Charging has made every effort to build a young brand, realize online traffic diversion and conversion, use the power of the fan community to attract the active participation of the target circle and word-of-mouth communication, and improve the stickiness of users to the brand with three-dimensional marketing.
In contrast, mergers between players can bring about a merger of physical resources such as POI and cash reserves, but it is difficult to make two very different genes and value orientations compatible with each other.
The battlefield of shared charging will be a deadly battle between service standards and even corporate genes, there are no prisoners, there is no option to surrender, only the strongest genes can laugh to the end.
At present, Monster Charging seems to be the player with the largest winning rate in the shared charging arena.
03
Risk resistance from the outside in
Development expectations are optimistic, and the industry's clearance frequency is accelerating. The shared charging industry has experienced from the outbreak period, to the shuffle, silence and later prosperity and development, and now it has come to the stage of optimized development. Whether the business model can ensure long-term development has been the focus of all players.
The cost issue behind the business model has always been on the minds of players. The improvement of profitability is nothing more than open source and throttling, occupying the user's mind, achieving brand expansion, and then improving coverage and user stickiness, which is the category of open source, so the two-way rush to achieve open source and throttling can be transformed into the driving force to put the company's operation on the right track.
This is also why, the current shared charging players have increased the proxy mode.
The penetration of shared charging operators into downstream POIs is mainly carried out through two ways: direct operation mode and agent mode.
Under the direct operation mode, the brand can better control the user experience and brand image, and directly and effectively obtain market and customer information, so in the early stage of the development of the shared charging industry, the direct operation model has become the choice of most players. But its high entrance fees increase the company's cash flow and financial burden. In contrast, the point competition and profit pressure of the agency model will be shared by the agent, and the agent management model is lighter, which is conducive to rapidly expanding the sinking market, but the corresponding brand control will also decline.
In short, the stage of transition of the shared charging industry from the growth period to the maturity period, the advantages of the agent model for cash flow control are highlighted, and in the sinking market, this model can help players penetrate the target users faster and deeper and open up the market.
In fact, Monster Charging began to explore the agent model very early, and its direct operation and agent ratio are more reasonable and balanced. The prospectus information disclosed by Monster Charging shows that Monster Charging accounted for 68% and 61% of the direct sales points in 2019 and 2020. Xu Peifeng, COO of Monster Charging, said in the 2021 performance report that Monster Charging can improve point coverage and market share faster by combining the advantages of direct operation and channel modes.
Source: Monster Charging Prospectus
Through the investment in KA, Monster Charging has achieved an increase in the number and revenue of POI; with the help of the proxy model, the resilience of profit margins has been brought about, as well as faster point coverage and market share increase.
According to the 2021 performance data, although the overall environment has been greatly affected by the epidemic, the revenue of monster charging has increased by 27.6% year-on-year to 3.6 billion yuan, which has also set a record high.
Facing the future, Monster Charging strives to continuously improve the efficiency of its business model and achieve its own efficient development in the optimal development stage of the shared charging industry.
Monster Charging CFO Xin Yi said at the 2021 performance meeting that the challenges brought by the epidemic will continue in 2022, so Monster Charging has also taken some measures to improve the efficiency of asset use, while reducing the proportion of fixed expenses to total expenditure, including optimizing the empty position rate of cabinets, reducing equipment costs, improving personnel efficiency and optimizing fixed expenditure management.
On the same occasion, Cai Guangyuan, CEO of Monster Charging, stressed that the impact of the epidemic is temporary, and he is still confident in the long-term development prospects of the mobile device charging market. "We believe that the services we provide are very important to the lifestyle of most people in the country today."
04
epilogue
The shared charging industry is still a track with long slopes and thick snow, but under the fierce competition, the speed of the industry has been visible to the naked eye. 2022 may be another critical window period for the industry to win.
Monster Charging grasps the core role of POI on competitiveness, deeply understands the needs of users, and continuously digs into the company's long-term moat with strong determination. With its own strong ability, Monster Charging successfully landed on the NASDAQ exchange in 2021, becoming the "first share of shared charging". In the past few years, in the face of the treacherous consumer market and the impact of the epidemic, the company has also had a relatively clear grasp of the market context, and has still achieved revenue growth during the epidemic.
This is also the fundamental reason why it has accelerated its rise in the past few years, gradually become an industry leader, and continue to maintain its advantage in the next stage of the industry's development. Therefore, monster charging is an excellent sample to observe the future development trend of the industry.
Facing the future, under the theme of stable growth, double circulation and consumption promotion, with the gradual reduction of the impact of the epidemic on the economy, leading players are bound to have stronger resilience in the overall reversal of the industry.
And what will be the theme of the next stage? What kind of player can have the last laugh?
An obvious direction is that players need to constantly gain insight into user use and emotional needs under the scale effect of POI, improve their supporting service capabilities in addition to providing charging treasures, and establish a good dialogue relationship with consumers.
Of course, more importantly, although consumption expectations are stable and improving, we cannot rule out the possibility of more black swans. The good top-level design born out of insight polishes time into the precipitation of business model, so that a company can seize the determination of opportunities in the crisis, move forward in the adverse current, and cross the thousand sails of the wind and lingdu.