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- Source/Brand Officer
- Author/Brand Officer
Introduction: When it comes to Shuidi Chip, I believe everyone will be familiar with it, it has become one of the most popular online public welfare fundraising platforms in China. However, the financial report for the third quarter of Shuidi Chip came out, and as a result, the net profit plummeted by 80% year-on-year! Sure enough, as CEO Shen Peng's previous statement said, Shuidi Chip is neither a public welfare nor a charity, and has not made a profit for 7 years.
As a user who used to launch fundraising or donations on the Shuidi Funding platform, seeing this news, I can't help but have some questions in my heart.
Where did all the money "drop" go? If we donate money, will they be misappropriated? How does Shuidi make a profit? Could it be that the commercialization has gone too far and has deviated from the original intention of public welfare?
A long time ago, there was some negative news about water drop chips on the Internet, Wang Leehom's father took the letter to complain about his son, the fundraising of the disciples of Deyun Club caused an uproar, and the platform crowdfunded more than 100,000 yuan, but only 30,000 yuan was received...... Looking at the negative news full of water drops in the circle of friends, are you like me, full of curiosity and questions about the inside story behind it. Will Shuidi Chip still be able to win back its credibility and firmly sit in the first place of personal crowdfunding platform?
01. The parent company has been profitable for 7 consecutive quarters, but Shuidi has been losing money for 7 years
Some time ago, the financial report of the parent company behind Shuidi Chip came out, making profits for 7 consecutive quarters, and achieving a net profit of 36.33 million yuan in the third quarter, an increase of 67.4% from the previous quarter;
It turns out that the main business of Shuidi Company is online insurance, and it makes money by selling insurance. Shuidi Chip is just a free public welfare project, mainly for Shuidi Company to attract traffic to sell insurance. As soon as you hear this, you can understand that Shuidi Chip will definitely not make money, and can only rely on the subsidy of the parent company Shuidi Insurance to operate.
Source: Shen Peng, CEO of Water Drop
In terms of specific data, the net profit of Shuidi Company in the first three quarters of this year was only about 36 million yuan, which was more than 80% lower than the 170 million yuan in the same period last year, which is really a sharp decline. The adjusted net profit was only 7.48 million yuan, more than 20 million yuan less than last year.
Shuidi Company is engaged in online insurance, so its profit model should be to make money by collecting premiums. We buy insurance and pay for it, and the insurance company makes money. Water Drop is a similar model, selling insurance products online to users who need it.
As one of its public welfare projects, Shuidi Chip mainly relies on the financial support of the parent company. As of September 30, 2023, about 445 million people have donated about 61.3 billion yuan to more than 3.03 million patients through Waterdrop Medical crowdfunding. However, according to the company's financial report data, Shuidi Chip not only did not make a profit, but even lost more than 60 million yuan in a quarter. However, it can attract traffic for the water drop company, and then promote insurance products such as "water drop insurance" and "help and help compensation".
There is no problem for Shuidi to make money by selling insurance, why is this quarter's financial report so bleak? Is it because of the epidemic, everyone's insurance demand has declined? Or is there too many competitors and users are lost?
However, I heard that the platform supervisor has stepped in to check the flow of funds, at least the security problem should not be big. As a public welfare platform, can it continue to develop when it is difficult to make a profit, and how long can it be "drip"?
02. The loss has expanded significantly, and the water drop has raised 3% of the service fee, where is the money "dripping"?
As a well-known mutual medical platform in China, Shuidi Chip has served tens of millions of patients over the years and has accumulated a considerable number of users. However, judging from the recently disclosed financial report data, its business has been in a loss-making state. The high loss in the third quarter makes people wonder where all the money raised by Shuidi Chip goes, and why is the platform's own profit model unsustainable?
In fact, the nature of public welfare determines that there is no direct profit mechanism for water drops. The flow of hundreds of millions of donations can be said to be "clear" - all of them go into the accounts of fundraisers to pay for medical expenses. The platform itself not only does not charge commissions, but has to bear various operating costs such as website maintenance and manual services.
The only channel through which the platform generates revenue is through service fees. Starting from April 2022, a service fee of 3% of the amount will be charged for each successful fundraiser, with a maximum cap of $5,000. The service fee income cannot cover the huge expenses of the platform's operation.
The overall operating costs of Shuidi mainly include operating expenses such as R&D expenses and customer service staff salaries. These expenditures are necessary to ensure the operation of the platform, but the current revenue scale is seriously mismatched with it. This is also confirmed by the spot checks of the flow of funds by the monitoring organizations. The fundraising cases they viewed for the elderly in the Five Guarantees households showed that the platform fully subsidized the cost of the service.
The supervisor checked every link of the money flow by looking at the background data and bank statements of Shuidi Chip, and found that the donation would go directly to the bank account of the fundraising patient, and the platform only charged a very small third-party payment fee. It also proves the public welfare attribute, but also reflects the lack of service fee income.
It can be said that the public welfare attribute of Shuidi Chip is destined to make it difficult to be self-sustaining. So, why doesn't the parent company, Shuidi Insurance, give more financial support? This seems to be contrary to the original intention of public welfare, and it also shakes the trust of the public. All kinds of signs show that on the road to commercialization, Shuidi Chip is facing many difficulties. In the absence of profit, can Shuidi Chip stick to its original intention?
03. Frequent crises of trust, "charity" on the left hand and "business" on the right hand
Once upon a time, Shuidi Chip won the recognition and support of the general public with its innovative model of mutual medical care. However, in recent years, this "raft ship" of public welfare has frequently encountered a crisis of confidence, will the hull capsize?
There are signs that there is a crack in the social credibility of Shuidi Chip. In 2019, it was revealed that there were illegal intermediaries on the platform who sought high commissions through false fundraising information. After the service fee reform in 2020, there were also complaints that users were wrongly charged service fees. In 2021, Shuidi Chip's local pushers from many hospitals were exposed to illegal operations in the fundraising process. In March this year, the Haikou police exposed a case of fraud through Shuidi chips, announcing the detection of the country's first case of counterfeit "Shuidi chips"! All kinds of negative news have dealt a blow to the public's trust in Shuidi chips.
Source: CCTV News
Source: Haikou police detected the country's first case of falsifying the "water drop" fraud case in March this year
Specifically, in May 2019, the fundraising incident of a disciple of Deyun Club falsely reporting his illness made the public suspicious of the fundraising review. In 2020, it was reported that the water drip was pushing personnel to omit the fundraising verification link, which caused concern about the flow of funds. This year, it is suspected that someone has used PS medical records to pass the fundraising review. Cases illustrate loopholes in the fundraising review process that don't effectively identify false information.
In addition, there are also problems with the platform's supervision of the use of funds. In 2022, a number of missing donations occurred, which directly led to the public's questioning of the platform's ability to supervise. The lack of follow-up monitoring of the flow of funds is to blame. The implementation of the newly introduced service fee policy is also not in place, which increases the confusion of users.
It can be seen that these various management mistakes in daily operations have directly led to serious damage to the social reputation of the public welfare brand. Now there are many cracks in the company, and there is a strong sense of public distrust of it. It is urgent to revitalize public credibility and establish sound management.
Shuidi Chip must face up to its own problems and take measures to fill and plug loopholes. Only by improving the information verification process, establishing a fund supervision system, and improving policy implementation can we gradually rebuild public trust.
Otherwise, it will really become the "rat crossing the street" that everyone shouts and beats in the mouths of netizens, the "bizarre operation" of cheating donations, pulling orders, and turning the left hand into the right hand, and the exposure of the chaos pushed by the water drops, which has chilled the hearts of many people!
04. Commercialization deviates from the original intention, and individual crowdfunding platforms need to adhere to the moral bottom line
Looking at the fundraising cases recommended on the homepage, one can't help but think of what this crowdfunding platform looked like in the first place.
At that time, it was a small website with very few monthly fundraising projects. Some "old users" have difficulty in curing their illnesses and regard it as a life-saving straw, although they don't know each other, they empathize. Every dime I donate, I silently say "I hope to be with you" in my heart.
Now the surging fundraising seems to have become a marketing tool. Patients are just props to be used, and our emotions are traded as commodities. Such a change is embarrassing.
In fact, we also understand that commercial operation is the need for the sustainability of the platform. The introduction of the service fee system by Shuidi Chip is reasonable to some extent, but in the pursuit of profit maximization, it should also examine the extent to which it deviates from its original intention. Such "success" has swallowed up too much hard-won goodwill.
What is even more worrying is that in order to attract traffic, there are reports that the platform sent people into the hospital ward to mobilize fundraising, which seriously violated the privacy of patients. It's a far cry from the warmth they get when they first arrive. I still remember that at that time, although many people did not have a lot of monthly income, they insisted on donating to those in need every month. Those hard-won mutual aid and care cannot be valued by money.
We can't ask you to go back to the way you were before, but at the very least, please don't let patients become tools for your profit. We are not commodities, but objects of your services. The bottom line of this human care must not be erased. You and I are ordinary people, and we may one day be in desperate need of help from others.
Problems such as excessively high commissions and false fundraising emerge one after another. These moral hazards also raise questions about commercial operations. It is true that businesses need to make a profit, but profit is not the only pursuit. Your social responsibility should not be limited to the legal bottom line, what the public expects is your moral bottom line.
05. Walking in the vague area of public welfare, what is "pushed" is the love that is consumed
The significance of the existence of the crowdfunding platform is to let love gather and let the vulnerable groups in difficulties feel care and support. As ordinary people, we participate in crowdfunding in the hope that a little of our heart can become a force to change the fate of others.
However, when some crowdfunding platforms begin to deviate from their original intentions and go against the spirit of public welfare in order to grow and make profits, our goodwill may be exploited and misinterpreted. The proliferation of false help-seeking information on the platform, and the fact that those who really need help may not receive the funding they deserve, has touched the nerves of the public, and everyone is strongly angry and dissatisfied with it.
As ordinary users, we certainly hope that the crowdfunding platform will uphold the initial goodwill. For example, establish transparent internal management, accept social supervision, cooperate with non-profit organizations, and increase positive guidance...... If a crowdfunding platform is only blindly commercialized and forgets its social responsibility, it will eventually lose the recognition and support of the public.
In fact, successful crowdfunding platforms often pay attention to maintaining and expanding their public welfare attributes while operating commercially. They will go out of their way to provide genuine help to those in need, rather than simply making money from donors as customers.
We should also remain cautious and rational, and actively supervise and promote the healthy development of crowdfunding platforms in the right direction. After all, there is so much goodwill in this industry that we can't let it degenerate into a tool to trick sympathy.
06. Love does not tolerate "miserable water", and consuming kindness is the biggest evil
If Shuidi Chip gradually deviates from the original public welfare attribute in the process of commercial development and excessively pursues profit maximization, it will not only intensify the trust crisis of the enterprise, but also make the love of donors be "miserable", and this kind of consumption kindness is the biggest evil in itself.
For the healthy development of the individual crowdfunding industry, enterprises themselves must adhere to the bottom line of morality, and return the platform to credibility by improving governance, optimizing operations, and cooperating with non-profit organizations. At the same time, the public should also remain rational and not blindly criticize, but work with enterprises to promote the sustainable development of individual crowdfunding under the framework of the rule of law and business ethics.
When enterprises and the public can coexist harmoniously and interact rationally, and individual crowdfunding platforms can not only play a commercial role, but also serve public welfare undertakings and spread more positive energy, then the industry can embark on the road of sunshine and create a win-win situation.
We look forward to that day, of course, how to make individual crowdfunding platforms regain credibility, refuse to over-consume love, and truly promote the healthy and steady development of China's philanthropy is a topic that requires the joint efforts of the whole society.
Ladies and gentlemen, what do you think of the crowdfunding platform? Have you ever donated money on the water drop chip? Welcome to leave your opinions and opinions in the comment area.
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