Following Ruqi travel, another platform is about to go public!
Recently, Cargo Lala submitted a prospectus to the Hong Kong Stock Exchange to be listed on the main board IPO, which is also the third time that Cargo Lala has hit the IPO. According to the latest prospectus, the 10-year-old Lala will finally turn a profit in 2023 and achieve a profit of $973 million.
Prior to this, there had always been a "loss" label on Lala. According to the prospectus, in 2020 and 2021, the cumulative loss of Cargo Lala was 786 million US dollars, which Cargo Lala explained was due to its continuous large investments in scale and geographical expansion, user growth and engagement, and product innovation.
Indeed, like the online car-hailing industry, with the entry of platforms such as Lala, online freight has also become a business that burns money and grabs traffic.
In 2021 alone, nearly 1 billion were burned. In 2021, the "New Year Shopping Festival" will subsidize 100 million yuan, the "Shopping Welfare Month" in April will subsidize 500 million yuan, and then the "2021 Golden Autumn Shopping Festival" in September will subsidize 300 million yuan again, with a high proportion of marketing expenses, which also directly affects the profitability of Lala.
At present, the fierce competition of online freight is no less than that of online car-hailing, why can Cargo Lala turn around against the wind in 2023 and successfully turn losses into profits?
On the one hand, there is the growth of gross profit margin. According to the prospectus, from 2021 to 2023, the gross profit margin of cargo pulling will be about 39.41%, 53.66%, and 61.23% respectively, showing a continuous growth trend.
On the other hand, the cargo lala exchanges "drivers" for growth, and increases revenue by increasing commissions. At present, there are two main sources of revenue for Lala, which is a membership fee from drivers and a commission from drivers after an order is completed. According to the prospectus, from 2021 to 2023, the commission income in the cargo platform services is increasing year by year, accounting for 5.7%, 28% and 33.3% of the total revenue, respectively.
In other words, in 2023, when Lala turns a profit, 33% of its income comes from commissions.
For a long time, Lala has implemented a membership system, the higher the membership fee paid by the driver, the higher the membership level, and the lower the commission ratio. Moreover, in 2023, Lala will also raise membership fees at all levels, with a monthly increase of 50 yuan, respectively: 239 yuan, 539 yuan and 789 yuan.
Before the driver earns the freight fee, the cargo lala has already earned the membership fee in the driver's pocket. Relying on the "driver's wool", the gross profit and gross profit margin of Lala have increased simultaneously in recent years, and Lala has finally made a profit.
In fact, perhaps in preparation for listing, in the past two years, as a freight platform in the same city, Cargo Lala has frequently cross-border new business, and has entered the moving, errand and other markets, and as early as 2021, Cargo Lala and the cooperation platform Xiaola Travel jointly opened the online car-hailing business, although the market volume is not large, but it also covers more than 20 cities such as Nanchang, Taiyuan, Fuzhou, etc., and the number of monthly active drivers has reached 150,000.
The operating model of the company has also been transplanted to Xiaolaxing. Non-member drivers can only grab two orders a day, and pay to buy members in order to get more opportunities to grab orders, as well as a smaller commission ratio.
At the same time, the addition of Xiaola Travel has also upgraded the involution of online car-hailing. In order to recruit drivers, Xiaolaxing has come up with a large number of subsidies - after the old driver invites 1 new driver to join and complete the first order, he will receive a bonus of 60-140 yuan, and the new driver will receive a cash reward of 88 yuan if he completes a certain amount of orders within 7 days. Xiaola Travel focuses on price "preferential" and is also the initiator of the fixed price model of online car-hailing.
The same pattern brings the same problem. Problems such as price opacity, safety risks, and compliance that have existed for a long time in the freight market also exist with Xiaola. In less than two years after it was launched, there have been nearly 3,000 complaints related to the black cat complaint of Xiaolaxing.
Among them, the complaints on the passenger side focus on the driver's failure to deliver to the designated place, the driver's arbitrary charges, and the driver's request for a fare increase. The complaints on the driver's side focus on the platform's non-refund of the deposit and the non-reward of the driver, and there are many complaints that the low-price promotion of the platform that disturbs the market by Xiaolaxing is disrupted.
From July to November 2021 alone, Xiaola Travel was administratively punished more than 200 times by the Fuzhou Transportation Comprehensive Law Enforcement Detachment for failing to obtain the "Online Reservation Taxi Transportation Certificate" for providing service vehicles, with a fine of more than 270 yuan.
The "Sword of Damocles" still hangs high above its head, but the ambitious Cargo Lala is still developing more diversified businesses, and the first purpose of the sprint to go public is to "conduct precise online and offline marketing and promotional activities to acquire drivers and merchants, including incentives and coupons, online advertising, and brand marketing activities".
It seems that Lala plans to "burn money" to seize another wave of market seizure, where will the war burn?