Author | Zheng Yue
Edit | Zheng Xuan
Carrying the hope of the 58 series of the whole village, the fast dog taxi "World War II" Hong Kong Stock Exchange.
In 2020, 58 Tongcheng's poor performance was delisted from the US stock market, and Yao Jinbo did not choose to return to Hong Kong or return to A-share listing, but after splitting off several core businesses, he sought an independent IPO. However, in the six months after 58's delisting, its three vertical platforms split off — housing intermediary platform Anjuke, housekeeping service platform Swan to Home, and online same-city logistics platform Kuaigou Taxi — all failed to impact the IPO.
On April 24, Fast Dog Taxi re-submitted the form at the Hong Kong Stock Exchange and updated the financial data for 2021. However, during this period, the financial data of Fast Dog Taxi did not improve significantly, and even the market share retreated from second to third. Not only failed to surpass the industry boss Lala, but also squeezed down by Didi Freight, which was killed in the middle of 2020.
If you want to compete with Lala and Didi for the market, burning money can not be stopped, for the asset-liability ratio has exceeded 100% of the fast dog taxi, impacting the IPO is an inevitable choice.
But the question facing Fast Dog and other 58 series platforms is: After several consecutive IPO failures, how many opportunities do they have that they have long been no longer the darlings of capital?
0158 Series: From the fourth pole of the Internet to the split listing
In that era when BAT was in full swing and TMD had not yet risen, 58 Cities, which had a moment of glory after the merger and catch-up in 2015, was once regarded as one of the seed players of the "Fourth Pole of the Internet".
Looking back at the 58 series, it can be found that after experiencing crazy expansion to form a "large and complete" "ecosystem", and then to the loss of delisting, splitting into "small and specialized" to seek listing of the whole process, its essence as an "information traffic trafficker" has not changed at all, that is, through high information density matching transactions, earn the value of information.
Founded in 2005, 58.com has expanded wildly since the acquisition of Anchor in 2015. According to the data, in March 2015, 58.com acquired Anjuke Group for US$267 million; in April 2015, 58.com strategically invested in Catch-up.com; in May 2015, 58.com announced the acquisition of China Talents Network.
58 Tongcheng has split 7 independent businesses from its own business, namely Swan to Home (formerly 58 to home), Fast Dog Taxi (formerly 58 Express), Transfer, Doumi Part-time, 58 Tongcheng University, and Many Cars.
Among them, the predecessor of Fast Dog Taxi, 58 Express, was established in 2014 and separated from the parent company in 2016. In 2017, 58 Express merged with Hong Kong-based GoGoVan Cayman. In August 2018, it was officially renamed as "Fast Dog Taxi", which is committed to providing users with short-distance freight and transaction service platforms such as pulling goods, moving, and transporting things.
Fast Dog Taxi currently operates in more than 340 cities in five asian countries and regions (Chinese mainland, Hong Kong, Singapore, South Korea and India) and has two brands: "Fast Dog Taxi" in Chinese mainland and "GOGOX" in other countries and regions.
The predecessor of Fast Dog Taxi, like 58's other businesses, originated from the collective information matching transactions in the early days of the Internet economy. At this time, 58 Tongcheng made the asset-light Internet business bigger and bigger, but in the era of mobile Internet, 58 Tongcheng began to fall behind. The way of information matching transactions has changed from extensive to refined, the way of pushing information has become focused and precise, and the traffic order of the original large package in 58 city has been broken.
The pre-delisting financial report shows that the revenue growth rate of 58.com began to slow down from 2015. In 2014 and 2015, the revenue growth rate of 58 could reach 80% and 170%, but by 2018 and 2019, it had dropped to 30% and 18%.
In September 2020, 58.com completed the privatization and delisting from the US stock market, when founder Yao Jinbo said, "After the entire company was returned, I upgraded the company's organizational structure, from a horizontal classification information platform to a platform of 3 or 5 vertical industrial Internet, independently able to go to the capital market, have an independent management team, and are deep enough in each industry."
58 Same City Advertising | Visual China
Yao Jinbo quickly fulfilled his promise. In 2021, the three vertical platform housing intermediary platforms spun out of the 58 series are Anjuke, the housekeeping service platform Swan to Home, and the online same-city logistics platform Kuaigou Taxi have all sought listings one after another.
Now it seems that the plan is not going well. On 8 April 2021, Anchor submitted a prospectus to the Hong Kong Stock Exchange, which was "expired" in October six months later. During this period, the "fake listings" that Anjuke has been criticized for, it is difficult to regulate information review, and it is still notified by the regulatory authorities many times.
However, Anjuke is already the only profitable of the three companies that have hit the listing. From 2018 to 2020, the revenue of Anjuke was 6.216 billion yuan, 7.579 billion yuan and 8.052 billion yuan, respectively, and the net profit in the same period was 1.907 billion yuan, 2.306 billion yuan and 1.955 billion yuan, with a net profit margin of 30.7%, 30.4% and 24.3%.
Swans arrive home and fast dog taxis continue to lose money. When the prospectus was submitted on July 3, 2021, Swan arrived home with the expectation of "the first share of the family service platform", but the listing road lasted 17 days and stopped in front of the New York Stock Exchange. As the only leading leading enterprise with market share after the split of the 58 series, its prospectus shows that the total transaction volume of Swan Home in 2020 is 8.828 billion yuan, accounting for less than 1% of the trillion home economics market.
From 2018 to 2020, the net loss of Swan Home was 591.2 million yuan, 615.6 million yuan and 614.7 million yuan respectively, with a cumulative loss of more than 1.8 billion yuan. The first quarter of 2021 resulted in a loss of $143 million, an increase of 21% year-over-year compared to the first quarter of 2020.
After the swan arrived home and the Settlers failed one after another, the fast dog taxi became the last hope of the 58 series.
02 bleeding listing of the old third
Fast Dog Taxi first submitted the form in August 2021, passed the hearing of the Hong Kong Stock Exchange in February 2022, and was once rumored to be listed in March, but failed to do so. On April 24 this year, 8 months after the first submission of the table, Fast Dog Taxi once again tried to hit the Hong Kong Stock Exchange.
According to the prospectus, the revenue of fast dog taxi showed an upward trend, and in 2018, 2019, 2020 and 2021, the revenue was 453 million yuan, 548 million yuan, 530 million yuan and 660 million yuan, respectively. Gross profit for the Period was $100 million, $173 million, $183 million and $242 million, respectively.
The loss of fast dog taxi has been serious, with 1.071 billion yuan, 184 million yuan, 658 million yuan and 873 million yuan in the past four years, respectively. It can be seen that it has narrowed sharply in 2019, but the net loss will widen again in 2020. The total loss in the four years reached 2.786 billion yuan, almost exceeding the total revenue of these four years.
Fast Dog Taxi Revenue Breakdown | Prospectus
Fast Dog Taxi wrote in the prospectus, "The previous decline in revenue was mainly due to the negative impact of the epidemic and the fierce competition in the industry. In 2021, the negative impact of the epidemic was alleviated, and there was a growth trend."
The explanation of "fierce competition in the industry" also appears in the monthly active user data. The total transaction volume of Fast Dog Taxi consignment orders fell slightly from 2.69 billion yuan in 2020 to 2.67 billion yuan in 2021, and the prospectus states that "the decrease is mainly due to the intensification of competition in the Chinese mainland online logistics market", and mentions company B, "the mobile technology platform is a new York Stock Exchange listed company, through its subsidiaries in Chinese mainland operate online freight services", it can be speculated that company B is Didi Freight.
The losses of Fast Dog Taxi have also been invested in marketing expenses prepared for market competition. According to the prospectus, from 2018 to 2021, Fast Dog Taxi invested 524 million yuan, 296 million yuan and 195 million yuan and 335 million yuan in sales and marketing expenses, accounting for 115.7%, 54.0%, 36.7% and 50.7% of the total revenue of the year, respectively.
Fast Dog Taxi explained that this is due to the fact that its same-city logistics business is still in its infancy, and the company needs to invest heavily in capital to drive business growth.
However, the fast dog taxi burned so many marketing expenses still did not retain its position. According to the prospectus submitted for the first time in August 2020, "We are the second largest online same-city logistics platform in Chinese mainland, with a market share of 5.5% (after participants with a market share of 54.7%), and we are also the market leader in Hong Kong with a market share of 52.8%."
According to the prospectus resubmitted on 24 April 2021, the second largest became the third largest, with a market share of 3.2% (after participants with a market share of 52.8% and 5.5%), and a share of "Hong Kong market leaders" to 50.9%.
Combined with the notes in its prospectus and the current situation of the industry, it can be seen that the boss is Lala, and the second person who kills is Didi Freight.
It seems difficult for fast dog taxis to continue to sustain fierce competition for a long time. According to the prospectus, as of the end of 2021, the total liabilities of Fast Dog Taxi were 3.236 billion yuan, the total assets were 3.034 billion yuan, and the asset-liability ratio had exceeded 100%.
Has been pressed by the goods Lala, and now by Didi Freight to rob the position of the second oldest, want to grab the market and continue to burn money, for the fast dog taxi that has been "insolvent", the listing is the last straw to save lives.
03 Only the story of burning money
The future story that fast dog taxi can tell, or burn money to open up the market in order to make money.
The business model of same-city freight is not complicated. According to the prospectus, the three business segments of Fast Dog Taxi are platform services, enterprise services and value-added services, and there are two market activities in Chinese mainland and overseas respectively. Among them, platform services and enterprise services account for more than 95% of revenue.
The fast dog taxi business model | prospectus
Platform services and enterprise services can be simply understood as toC and toB services. The platform service is to match the driver and the shipper on the platform and collect a commission from the driver. Enterprise service refers to providing services to enterprises with consignment needs, and signing orders with enterprises to negotiate to charge service fees to enterprises.
Fast Dog plans to expand into new markets from both domestic and foreign aspects. It can be seen from the prospectus data that in the domestic market, the proportion of platform service revenue is higher than that of enterprise services, while in overseas markets, the proportion of enterprise service revenue is higher than that of platform services, which also allows Fast Dog to choose different ways of power at home and abroad.
Compared with the last prospectus in August last year, a sinking market has been added to the new prospectus of Fast Dog Taxi. Fast Dog Taxi said it plans to provide services in more than 90 other lower-tier cities in Chinese mainland by 2025 and expand into new overseas markets in the Asia-Pacific region. The sinking layout of Fast Dog Taxi began in 2020, but Lalala also publicly stated in 2020 that it will continue to expand the market, especially the business sinking to fourth- and fifth-tier cities will accelerate.
It can be seen from the prospectus data that the revenue of various domestic businesses of Fast Dog Taxi has experienced a brief decline in 2019-2020, and returned to a small growth again in 2021, but the overseas businesses have not been affected and have maintained a rapid growth rate. In 2018, 2019, 2020 and 2021, the revenue generated by the overseas business of Fast Dog Taxi accounted for 26.5%, 35.4%, 47.1% and 48.0% of the total revenue, respectively, which was almost half of the country.
"The increase in total consignment order transactions in overseas markets was mainly due to the increase in online penetration of the same-city logistics market in Asia and the strong demand for logistics services."" However, the same problem is that there are still goods in overseas markets that cannot be hidden.
There is also a point that can be said about fast dog taxi, which is the commission rate. The average commission rate of fast dog taxi has been rising, from 2018 to 2021, the average commission rate in China was 5.8%, 8.2%, 9.8% and 12.0%, respectively, and the average commission rate in overseas markets was 4.5%, 6.8%, 8.2% and 9.2%, respectively.
Calculating the net commission rate, the domestic 2021 is 2.6%, compared to 8.3% in 2020, which is explained by "a significant increase in the rewards we provide to trading users of the platform", reflecting "fierce competition in the Chinese mainland-line logistics market" and also reflecting the "fiasco" in the competition of Fast Dog Taxi.
The prospectus will still be losing money by the end of 2024|
The commission rate has always been a double-edged sword for Internet platforms - low can not make money, the report is not good, high worry about market share, loss of public opinion.
The same city freight industry, like all Internet platforms that need capacity, faces the risk of labor security problems. In the risk column of the prospectus, Fast Dog Taxi wrote, "If the way we define the identity of the driver is successfully questioned or if we have to classify the driver as an employee rather than an independent contractor, our business will be adversely affected."
As of December 31, 2021, Fast Dog Taxi has about 5.2 million registered drivers. According to the prospectus, from April 2021 to March 2022, Fast Dog Taxi was interviewed six times by the Ministry of Communications, the Shanghai Transportation Commission and other departments, mainly involving public safety, driver rights and interests protection and other issues.
On May 14, 2021, the national regulatory authorities conducted joint interviews on issues such as high percentage of commissions on platforms such as Lala, maliciously lowering freight rates, and arbitrarily increasing membership fees, and clearly required platforms to take the initiative to reduce the percentage, reasonably set and take the initiative to reduce information fees, and rectify business behaviors that infringed on the rights and interests of employees.
These problems may not be solved overnight after the listing of Fast Dog Taxi, but it seems even more impossible to solve without listing.
*Header image source: Visual China
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