Lalala, fast dog taxi: no gentle walk into the night

Zebra consumption Ren Jianxin

Pinduoduo small and medium-sized sellers "fried the store", B station UP main initiated the stop tide, what is the fundamental reason? In the context of slowing growth, the platform has broken the relative balance between merchants-platforms-users out of the need to improve performance.

In the intra-city logistics market, the conflict caused by this contradiction has already occurred. In recent years, in the intra-city logistics market, the overall growth has slowed down, competitors such as Didi have continued to pressure, and platforms such as Lalala and Kuaigou Taxi have had to improve their performance by increasing the commission rate, which directly leads to upstream and downstream voting with their feet, aggravating the growth crisis of the industry and forming a vicious circle.

Ideally, the Internet platform collaborates upstream and downstream to improve the operational efficiency of the entire industry and obtain incremental value from the industry. However, in the intra-city logistics market segment, which relies heavily on offline, relatively traditional and more scattered, the cake has not become bigger, and the Internet platform that dominates the distribution right wants to cut a bigger piece.

Lala vs Fast Dog Taxi

Ten years ago, mobile Internet and "Internet +" were in the limelight, and everyone believed that all industries were worth redoing with the Internet. Didi, a ride-hailing platform, and Meituan, a group buying platform, all stood out in that era.

The market is also huge, but the more decentralized upstream and downstream intra-city logistics market has also ushered in a game breaker.

IN 2013, GOGOVAN WENT LIVE IN HONG KONG, BECOMING ONE OF THE FIRST LOGISTICS PLATFORM APPS IN ASIA. In the same year, an intra-city logistics platform under the name EasyVan began to operate in Hong Kong.

Intra-city logistics refers to the transportation of large-tonnage goods of more than 30 kg in the same city. The reason why these first crab eaters were born in Hong Kong should be related to the high and developed urban economy, dense distribution of commercial areas, and high freight demand.

In 2014, 58 Home officially launched 58 Speed Operation as a short-distance freight transaction service platform; EasyVan changed its name to Lalamove and began to carry out intra-city logistics business under the Lalala brand in Chinese mainland.

In 2017, 58 Express merged with GOGOVAN, and then unified the brand name, changing the Chinese mainland market from "58 Express" to "Fast Dog Taxi", and other markets from "GOGOVAN" to "GOGOX".

At this point, the pattern of cargo Lalala + Lalamove, fast dog taxi + GOGOX, and the two giants of the intra-city logistics market has officially formed.

After that, Kuaigou took a taxi (02246. HK) targeted an IPO on the Hong Kong Stock Exchange and was finally listed at the end of June 2022 after several disclosures and hearings. However, the company's shares broke through immediately after listing, and the latest share price has fallen by 90% from the issue price, and the market value is only about HK$1.4 billion.

Lala Technology Holdings, the parent company of Lalala, planned to list in the United States in mid-2021, but after terminating for some reason, it disclosed its IPO prospectus at the end of March this year, officially launching an impact on the Hong Kong stock listing.

Fast dogs take a taxi and fall behind

Lala VS fast dog taxi, the pattern of logistics in the same city has been stable for many years, in fact, they have a large gap.

The main reason is that Lalala is a professional intra-city logistics platform, which constantly enriches industrial value through application scenario expansion, market scope expansion, and business scope extension.

And fast dog taxi, no matter how the brand name changes, is only one of the widely planned monetization channels of the 58 series, subject to the parent company, it is difficult to show its strength.

When 58.com, the traffic overlord of the PC era, fell behind in the mobile Internet era, it incubated/acquired a number of business-oriented companies in an attempt to enhance the business competitiveness of the 58 series, such as Anjuke in the field of real estate transactions, home service platform Swan to Home, melon seeds in the field of second-hand cars, and second-hand goods trading platform transfer.

However, the core of the 58 series is in decline, and most of these business platforms in the ecosystem are the second and third oldest in the industry, and the overall competitiveness is limited.

Kuaigou Taxi disclosed in its IPO prospectus that in 2020, the company was the second largest online intra-city logistics platform in Chinese mainland, with a market share of 5.5%; Its largest competitor, Lalala, has a market share of 54.7%, a difference of ten times.

One year later, the market share of Lalala and Kuaigou Taxi has declined, and the gap has widened, 52.8% and 3.2% respectively.

It turned out that after Didi entered the intra-city logistics market in June 2020, with its own platform advantages and operational capabilities, it was fully firepower in 2021, winning 5.5% of the market share in one fell swoop, and rapidly rising to become the second largest intra-city logistics company. Didi has to look for increments outside the ride-hailing market due to its own growth bottleneck, and it is expected that this trade-off will continue to deepen.

Rely on commissions to improve performance

When the total growth rate of the intra-city logistics market slows down, the two giants face the crazy attack of competitors, and the operation data is challenged.

From 2018 to 2021, in the business segment of Kuaigou taxi platform, the monthly active users in the Chinese mainland were 691,100, 667,600, 494,700 and 456,200, the number of orders decreased from 26,236,100 to 21,942,800, and the GMV was 2.481 billion yuan, 2.417 billion yuan, 1.885 billion yuan and 1.753 billion yuan, respectively. In the first four months of 2022, operating indicators further declined, and the number of active drivers, orders and GMV in the platform business segment decreased by 6.1%, 12.9%, and 23.4% year-on-year, respectively.

After listing, the company did not disclose the number of active users and drivers. The latest results announcement disclosed that in 2022, the company's order volume will be 26.4 million and GMV will be 2.541 billion yuan, which will recover, but it is difficult to grow.

The overall operation of Lalala is better than that of Kuaigou Taxi, but key indicators such as the number of active users and drivers, order volume, and total transaction volume have also entered a growth bottleneck.

Even so, the two companies have maintained their growth. Last year, the revenue of fast dog taxi was 773 million yuan, a year-on-year increase of 17.0%; From 2020 to 2022, Lalala's revenue was US$529 million, US$845 million and US$1.036 billion.

The main reason is the increase in commission rate. From 2018 to 2021, the commission rate of Fast Dog Taxi was 5.8%, 8.2%, 9.8% and 12.0%, respectively, and the commission rate in overseas markets also increased from 4.5% to 9.2%, which directly promoted the company's gross profit margin from 23.0% to 36.6%.

Lalala has launched a richer commission portfolio: the core business of intra-city freight, non-member drivers have a commission rate of 18%, and if they pay 189 yuan, 489 yuan and 739 yuan per month to become a member, the commission rate is 14%, 11% and 8% respectively.

From 2020 to 2022, the realisation rate of Lalala's domestic business in China was 8.0%, 7.6% and 9.7%, respectively, and the monetization rate of overseas business increased from 12.4% to 14.5%. In the past three years, the company's gross profit margin has been 38.5%, 39.4% and 53.7% respectively.

With the help of significant sales and marketing expenses, Lalala also achieved positive operating profit in 2022, and the company's net loss also fell to US$49.091 million from US$2.086 billion in the previous year.

After burning money to cultivate the market in the early stage, forming a relatively monopolistic market position, and then improving performance by raising prices and commissions. This business model, regardless of the industry, has been tried and tested.

However, once the balance between driver-platform-user is broken, it will encounter upstream and downstream backlash. Lalala has been put on the cusp of public opinion several times in recent years, and this is the root cause.

The underlying logic of this contradiction and conflict is the same as Didi's previous taxi incident, and at present, the group with complaints has become truck drivers.

Recently, Pinduoduo was "bombed by sellers", and station B UP collectively stopped changing and denounced, the fundamental reason is also that in the context of slowing user growth, the platform has broken the relative balance between merchants-platforms-users out of the need to improve performance.

Seek new growth points

The stubborn problems of the stock market need to be solved, where do the Lalala and fast dog taxi go to seek increments?

Within the intra-city logistics business, each company is enriching application scenarios and looking forward to gaining more users and more frequent use. Taking Lalala as an example, after launching corporate services in 2017, it began to focus on moving scenes in 2019. Therefore, the most daily contact of C-end users is the moving service of Lalala.

The second is to replicate the business model established in mature markets to other markets. Because Lalala and Kuaigou Taxi both originated in the Hong Kong market, their overseas business expansion was earlier and their results were more eye-catching.

At present, Kuaigou Taxi has expanded to more than 300 cities in Chinese mainland, Hong Kong, Singapore, South Korea and India, becoming a major online intra-city logistics platform in Asia. Lalala's market is broader, not only in Asia, but also in South America - its prospectus discloses that the company is the world's largest intra-city logistics platform in terms of revenue.

The development of intra-city logistics overseas will also encounter growth bottlenecks at a certain stage, after all, there are still a few main competitors, and the market competition environment is more complicated.

In addition to the replication of scenarios and markets, intra-city logistics platforms have also been taking business expansion as one of the key points of exploration, such as cross-city logistics business and even online car hailing business. In this regard, the more stressful and more windy cargo pulling action is frequent, and the fast dog taxi is more conservative.

Lalala's cross-city freight business can be regarded as invading the hinterland of the Manbang. The Manbang also entered the same city logistics, and gave back to the other in the other way.

In mid-2021, Lalala began to support the ride-hailing platform Xiaola Travel, and has invested billions of yuan. But so far, this product has still not made a splash in the ride-hailing market. It looks more like Lalala's response to Didi's intrusion into the intra-city logistics market.

Attack on all sides, make enemies on eight sides. Cargo Lala, fast dog taxi, as well as Manbang, JD Logistics, SF, etc., the midfield melee in the freight market has begun.