* Text/Spades with long sword
Fast dog taxi, this head of the same city freight platform is getting closer and closer to the Hong Kong Stock Exchange.
On April 24, Fast Dog Taxi officially submitted a listing application to the Hong Kong Stock Exchange for listing on the main board of the Hong Kong Stock Exchange. According to the Hong Kong Stock Exchange, the valuation of the listing of Fast Dog Taxi is about US$3 billion (about 19.6 billion yuan), with a fundraising amount of US$400 million to US$500 million, and the co-sponsors are CICC, UBS, BOCOM International and ABC International.
To this day, we can often see red and white fast dog vans and small trucks in the city, and many people are accustomed to it, thinking that it is a city freight platform that grows independently like Lala , but it is not the case.
From the prospectus information, it can be seen that 58 Tongcheng holds 70.7% of the shares of 58 Daojia, an affiliated company of Fast Dog Taxi, while 58 Daojia holds 50.51% of the shares of Fast Dog Taxi Holdings Co., Ltd. Although it has not yet reached the level of complete control, 58.com still has a great say in the interior of the fast dog taxi.
This is exactly the case - the predecessor of the "half" of fast dog taxi is the core express transportation business of 58 to home under 58 Tongcheng, which is generally called 58 express. At the beginning of its establishment in 2014, 58 Express entered the same-city freight market with "moving" as the core, and grew rapidly in the following years; as of 2017, 58 Express has 3 million users and 1 million registered drivers.
The predecessor of the other half of the fast dog taxi can be regarded as the "hometown" of the goods Lala. In July 2013, Steven Lam founded GOGOVAN in Hong Kong, and in December of the same year, Shing Chow's Lalala was officially established, and the two were rivals in the field of freight transport in the same city.
Early on, GOGOVAN declared itself "Asia's first mobile-app freight logistics platform" to connect individuals, business users and truck drivers to address real-time logistics needs. In the following years, GOGOVAN not only entered the mainland, but also gradually expanded its market to Singapore, South Korea, India and other countries.
If all goes as usual, 58 Express and GOGOVAN may not have any intersection at all, except for competing with each other. But fate is uncertain, and a meeting between the leaders has brought the two companies together since then.
In 2017, 58 Tojia CEO Chen Xiaohua wanted to split the express business and operate it separately, but suffered from the fact that there was no suitable leadership team within the company to take over, and could only seek help from the outside. In the end, under the recommendation of the middleman, Chen Xiaohua found Lin Kaiyuan and his GOGOVAN. Fortunately, the two sides hit it off immediately, so in August of that year, 58 Express and GOGOVAN officially merged, with Chen Xiaohua as the chairman of the new company and Lin Kaiyuan as CEO.
In 2018, the new company after the merger was officially renamed "Fast Dog Taxi", which was said to be operated by consulting company Trout. At that time, Chen Xiaohua had said that the name change had tripled the company's customers, and nearly 100 million people knew about the new brand; but the name change caused controversy among the driver group, many drivers thought that the name was degrading to dignity, and even organized a group to protest at the branch.
Of course, the protests of a small number of drivers have not had much impact on fast dog taxis, and after 2018, the company still has a lot of basic plates. According to the prospectus data, in 2018-2021, Fast Dog Taxi has about 14.5 million, 19.8 million, 24 million and 27.6 million registered shippers, respectively, and the number of registered drivers in the same period is 1.3 million, 3 million, 4.2 million and 5.2 million, respectively.
Since its establishment, Fast Dog has completed a total of five rounds of financing, including angel rounds, and in addition to the incubator 58 cities, there are also well-known enterprises and investment banks such as Tencent, Ali's Cainiao Network, and Sequoia Capital. The most recent round of financing was in July last year, which was conducted by BOCOM International and raised nearly US$100 million.
Since the basic disk is large enough and the capital is favored enough, the income-generating ability of the fast dog taxi must not be too bad, right? Unfortunately, if an investor comes with such hopes, he may be disappointed - there is still a long way to go in making money.
From 2018 to 2021, the revenue of Fast Dog Taxi was 453 million yuan, 548 million yuan, 530 million yuan and 660 million yuan, and the gross profit was 100 million yuan, 173 million yuan, 183 million yuan and 242 million yuan, respectively; however, fast dog taxi was in a state of serious loss in four years, with losses of 1.071 billion yuan, 184 million yuan, 658 million yuan and 873 million yuan respectively, with a total loss of about 2.786 billion yuan in four years.
From the perspective of splitting, the culprit that caused the continuous loss of fast dog taxi is undoubtedly marketing. Over the past four years, its marketing and sales expenses have been 524 million yuan, 296 million yuan, 195 million yuan and 335 million yuan, respectively. In 2021, its marketing expenses accounted for 50.7% of revenue. Among them, the salaries of sales staff and user subsidies are the majority.
As an Internet freight platform, Fast Dog Taxi's approach to revenue generation is no different from that of intermediaries – increasing commissions, and in order to make up for the increasingly high expenses over the past four years, it has repeatedly raised commissions in recent years. In the mainland market, the average commission rate has increased from 5.8% in 2018 to 12.0%, and in overseas markets, it has also increased from 4.5% to 9.2%.
The way to play with one hand relying on subsidies and increasing the commission rate with the other hand is certainly helpful to profitability, but fast dog taxis also need to be cautious. After all, today's consumers value quality services, and the role of subsidies is visibly decreasing; on the other hand, competition from Lala, Didi Freight and increasing commissions will also make drivers think of "another master".
This can be seen from the number of active users of Fast Dog Taxi, although its total number of drivers is growing as mentioned above, but the number of active users has been showing a significant downward trend. From 2018 to 2021, its average domestic shipper monthly active users were 691,100, 667,600, 494,700 and 456,200, respectively; in addition, the number of its consignment orders also decreased from 26.23 million in 2018 to 21.94 million in 2021.
In general, it may not be wise for fast dogs to continue to hit the C-end demand.
Previously, in order to grab users, the platform scrambled to set a lower price than the opponent, which led to them not being able to make money from the user side, only increasing the commission, and the "squeezed" driver had to repeatedly harass customers in price in order to ensure normal revenue, which formed a vicious circle. Previously, we have witnessed the occurrence of vicious cases such as the "Cargo Lala Jumping Incident", if we continue to roll down this road, can Fast Dog, Cargo Lala, and Didi Freight guarantee that the next similar incident will never occur?
Compared with the C-end market, the B-end market is obviously more in line with the future development of freight platforms. According to a statistical report, the scale of personal freight has grown the smallest in the entire freight field, basically maintaining the scale of 200 billion yuan in recent years; in contrast, the demand scale of small and medium-sized enterprise freight in 2020 will reach 370 billion yuan, and the demand scale of large enterprises will be as high as 670 billion yuan. This means that the growth of the domestic same-city freight market depends largely on the needs of enterprises.
Fast Dog Taxi is also aware of the importance of the enterprise market, and the declining proportion of platform service revenue and the rising proportion of enterprise service revenue in recent years are very illustrative. However, at present, Fast Dog Taxi has developed more well in the overseas enterprise service market, accounting for 37.7% of the total revenue in 2021, which is slightly inferior in the mainland market.
Overall, fast dog taxi can further expand on the basis of overseas stocks in the future, of course, it can also find increments in more promising domestic markets. But on the other hand, many domestic small and medium-sized enterprises are still accustomed to maintaining a solid cooperative relationship with individual truck drivers, as an Internet platform, whether fast dog taxi can gain the trust of these enterprises still needs time to prove.
*Images from corporate prospectuses and corporate publicity