Yuanwang Technology: Traffic Utopia and Dilemma

In November last year, the topic of "a company in Hangzhou with an annual salary of 100,000 to recruit shopping experts" was on the hot search on major platforms.

The job was posted by MCN company Yuanwang Technology (002291.SZ), and the recruitment information showed that a total of 4,400 positions were recruited, and you only need to go shopping for more than five hours a day to receive a salary.

A month later, Yuanwang X27 Theme Park officially opened in Linping, Hangzhou, and MCN's celebrities and anchors came to the scene to support, bustling and crowded.

The predecessor of this building, Qiaosi Mall, had been unfinished for nearly ten years before Yuanwang Technology took over.

After Yuanwang Technology took over, it claimed that it would build an "online + offline" new consumer commercial complex with a construction area of about 260,000 square meters, connecting online and offline consumption, reconstructing people and goods yards, and not closing 24 hours a day.

"This will be a huge 'live broadcast room', and the 'online and offline traffic barrier' will be completely broken, and consumers will be shopping at the same time, but also in the 'live broadcast room', truly realizing the 'what you see is what you get' live shopping experience. ”

It all sounds beautiful and utopian.

However, beautiful and grand dreams often carry a heavy burden of reality, and the theme park that is eagerly hoped for by Yuanwang Technology has become the "culprit" of its performance loss.

According to the 2023 annual performance forecast released by it, the expected loss in 2023 will reach 800 million ~ 1.2 billion, compared with the loss of 265 million yuan in the same period last year, the loss hole has tripled.

At the beginning of February, when Yuanwang Technology explained the reasons for the performance loss, it was clearly stated that the Yuanwang X27 theme park was "a major reason for dragging down short-term performance", and the promotion of the X27 project increased the operating cost by 140 million ~ 166 million yuan.

It is still unknown whether this complex has the ability to make long-term profits, but in the case of live broadcast e-commerce entering a bottleneck period and the main business under pressure, Yuanwang Technology, as the head MCN, spent a lot of money to develop the second growth curve at this time, and whether the new model can run through has become the focus of attention from the outside world.

The star effect is weak

Looking at the technology out of the circle, starting from binding with stars.

At the first e-commerce festival held by Kuaishou in November 2018, Sanda Ge's live broadcast brought 160 million goods in 10 hours, a figure that shocked Xie Rudong, CEO of Yuanwang Technology, who had previously invested in a game live broadcast company and ended up losing money.

Xie Rudong saw the business opportunity of live streaming and thought it was an excellent opportunity for entrepreneurs.

The first star of Yuanwang Technology cooperation is Wang Zulan.

In May 2019, on the first day of Wang Zulan's broadcast, the number of online users reached 1.2 million, which gave Xie Rudong confidence, and he subsequently signed Cecilia Cheung, Jia Nailiang, Lou Yixiao and other stars.

Since then, Yuanwang Technology has also stepped on all kinds of outlets, and it can be said that where there are hot spots, there are them.

In June 2023, during Messi's trip to China, Messi parachuted into Taobao's live broadcast room for a short broadcast of ten minutes.

This move was frantically complained by fans, but taking advantage of this wave of popularity, Yuanwang Technology settled in Taobao Live, covering the three major platforms of Douyin, Kuaishou, and Taobao in one fell swoop, and also expanded its popularity.

Since then, the variety show "Let's Farm the Land" jointly produced by Yuanwang Technology has brought the idol boy group to the fire, and has become an "emerging factory" and "fairy company" that has attracted the attention of post-00s fans.

Unexpectedly, Yuanwang Technology, which relied on star effect, was "counterattacked" by star effect.

Financial data show that the net profit of Yuanwang Technology in 2022 is only 270 million yuan, while the net profit of Dongfang Selection, whose revenue is less than 1/3 of it, is as high as 585 million yuan.

According to public sources, in 2023, the sharing ratio between Jia Nailiang and Yuanwang Technology is 82 points, and Yuanwang Technology makes wedding dresses for celebrities quite colorful.

A staff member of the e-commerce department of a sports brand told the 21st Century Business Herald reporter that stars with strong delivery ability like Jia Nailiang are a minority after all, and many celebrities' ability to carry goods is not as good as that of professional anchors, so they will choose carefully when placing and use data to speak.

The reality is that with the end of the epidemic and the recovery of the film and television industry, celebrities have withdrawn from the live broadcast room and returned to their old jobs. The rise in costs and the lack of star effect have also forced Yuanwang Technology to open up a new growth curve.

Slim new consumption

Yuanwang Technology's ambition is not only to become an MCN company.

According to the company's 2023 semi-annual report, Yuanwang Technology has upgraded its brand positioning to a "new consumer service platform driven by technology".

What is a new technology-driven consumer service platform?

Yuanwang Technology claims that with the advantages of live broadcast e-commerce, it will extend its business to the upstream industrial chain, open up online and offline, and reconstruct people and goods yards.

According to its official public account, Yuanwang Technology has opened vertical live broadcast rooms such as wine and jewelry and its offline physical space, independently developed the digital platform "Yuanwang Cloud" for the whole process of live broadcasting, deeply cultivated SaaS business, and successively built multiple industrial belt bases such as Yuanwang Tianmen live broadcast operation base and China Shoe Capital (Wenzhou) digital ecological industrial chain base.

Among them, Yuanwang X27 PARK is described as a benchmark project of "new consumer service platform" and a new business model of "online business + offline travel".

The ultimate goal is to focus on the supply chain of the apparel industry, aggregate the resources of the online and offline apparel industry chain, gather national apparel anchor institutions, designers and brand owners to settle in, and create a cluster of high-quality brand men's, women's and children's clothing flagship stores.

Although Yuanwang Technology tried to enhance its brand power and market vitality through X27 PARK, it faced many challenges in its implementation, and the actual operation was not ideal.

The façade of the entire complex feels like a giant alien spaceship, full of futurism, but the traffic on each floor of the mall is sparse, mostly staff, and only occasionally there are residents with babies around, although the traffic of the mall on weekdays will be much less than on weekends, but the empty floors are still a little surprising.

The staff of a bubble tea shop told reporters that because it is far away from the city center, the location is too remote, and there are no supporting restaurants, so the customer flow is very low, and most of the people who come to consume are the staff of the shopping mall. For merchants, although there is the attraction of rent-free and decoration, if there is no offline customer flow, it will be unattractive for a long time, and the operation will be unsustainable.

So for external anchors, is the venue attractive here?

Yuanwang officials previously said that small and medium-sized anchors renting the venue of X27 PARK can solve the problems of difficulty in attracting investment, weak team ability, rough set, and poor live broadcast atmosphere, and help small and medium-sized anchors find high-quality sources of goods and greatly increase the average GMV of each game through standardized operation and scene upgrades.

Wang Qing (pseudonym), a Taobao merchant who intends to live broadcast goods, told the 21st Century Business Herald reporter that renting a studio here is far less convenient and cost-effective than building scenes at home or AI digital scene changing.

The reporter walked into several stores and found that the clothes could not be sold on the spot, and the clerk asked whether he was here to choose products as soon as the reporter entered the door, which also made many consumers think that they had gone to the wrong shopping mall.

Chen Lu (pseudonym), who lives nearby, told the 21st Century Business Herald reporter that many brands of shops here have never been heard of, and the quality of the clothes is average. But she found that there was a sports bra brand store that she frequented online.

She said, "This store is actually very good, because I didn't know that there was an offline store before, and the offline clothes and fabrics can be touched, which is more convenient to choose." ”

To Chen Lu's disappointment, the store in Yuanwang's physical store really couldn't sell it, and the clerk told her that she could place an order in the live broadcast room, and the price would be more favorable than offline.

According to the data, in the first three quarters of 2023, the operating cost of Yuanwang Technology was 3.318 billion yuan, a year-on-year increase of 41.4%, of which the management expenses were 357 million yuan, a year-on-year increase of 50.41%.

In December last year, when Yuanwang X27 PARK opened, Yuanwang officially announced that it was estimated that its sales scale could reach 30 billion to 35 billion yuan in the first year after its official operation.

As for whether Yuanwang X27 PARK can achieve this expected goal, the 21st Century Business Herald reporter called Yuanwang Technology in the name of investors, and the response from the staff was to wait for the company's annual report released at the end of April.

Consecutive loss dilemma

There are many slogans posted in the company of Yuanwang Technology, the most eye-catching of which are the words "Yuanwang Duxing".

You can see the figure of distant view in almost every wind outlet. Recently, Yuanwang Technology has proposed to start the layout of AI, virtual humans, "short dramas", concerts and other popular businesses.

But it is not so easy to really do it.

The grand vision will also become less "sexy" in the face of real business data.

According to its third quarter report in 2023, in the first nine months of last year, Yuanwang Technology's net profit was a loss of 450 million yuan.

Coupled with the losses of 700 million yuan and 265 million yuan in 2021 and 2022 respectively, the cumulative loss of Yuanwang Technology in the past three years has exceeded 1.4 billion yuan.

The continuous loss of performance has made the market doubt about the profit model of Yuanwang Technology.

On February 27, the Shenzhen Stock Exchange issued a decision to criticize Yuanwang Technology and related parties, and the violations involved in the company and related parties include the inconsistency between the book value of the company's inventory and the actual situation from 2021 to 2022, the improper recognition of some revenue from 2019 to 2020, and the inflated income, profit and accounts receivable collection.

Zhang Shule, an analyst of the Internet industry, has publicly stated that Yuanwang Technology has excessively rubbed hot spots in the so-called virtual digital human, artificial intelligence and other black technology fields, and created the so-called new profit model, which will bring a chaotic rhythm and casual operation to the outside world, and indirectly affect the long-term confidence of the capital market.

He also believes that the core of Yuanwang Technology's revenue is still live streaming, and it is still driven by Internet celebrities, and has not formed more derivative scenarios and closed-loop industrial chains.

The skinny feeling and stress of reality are inevitably transmitted to everyone in the group.

Xiao Min (pseudonym), a former employee of Yuanwang Technology, told the 21st Century Business Herald reporter that the KPI of his department was set very high, every employee was full of pressure, and some work plans were also changed day and night, which made employees very confused. Previously, it was once revealed that many anchors had disputes with the company due to unfair salaries and reward and punishment mechanisms.

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