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Shared power bank faces new challenges
Time: April 28,2021   Hits: 2321 
Since 2021, the topic of "shared power bank" has continued to be hot.
On the other hand, starting from April this year, Monster Charging became the “first share of shared power bank”, then Xiaodian Technology went to Hong Kong for IPO, and then Street Power and Soudian completed the merger—previously at the top of the industry. New developments have been released one after another in the "Three Electricity and One Beast".
The outside world has linked these dynamics with the survival of shared power banks. Some people believe that this indicates that the industry has entered a new stage of development; there are also opinions that listing or integration are both appearances, and it does not mean that shared power banks have gained a firm foothold in the Internet economy.
In fact, if you want to analyze the current situation and future of shared power banks, you might as well return to the most down-to-earth topic-price increases. In other words, in the process of trying to answer why shared power banks are becoming more and more expensive, you can also get a glimpse of the context and problems of the development of the industry.
When it's time to rise
"The industry has developed so far, and price increases are actually a very normal result." In April 2021, the monster charging staff said in an interview with "Xinmin Weekly". It went public on Nasdaq in the United States that month, making it the "first share" of shared power banks in China.
At the beginning of May of this year, Soudian issued an announcement stating that Jiedian and Soudian have completed the merger, and the parent company of the two major shared power bank brands officially named "Zhumang Technology" to continue to cultivate the shared power bank market. At the same time, after the merger, its user scale has exceeded 360 million, surpassing Monster Charge.
Just a few days before the merger, Xiaodian Technology, another one of the "three powers and one beast", submitted a prospectus to the Hong Kong Stock Exchange on April 30, becoming the first shared power bank service provider to sprint into the Hong Kong stock market. .
However, before taking turns to enter the capital market this time, several major domestic shared power bank head companies have actually been silent for a long time after experiencing rapid initial growth.
When people turn their eyes back to 2017, they will see the amazing situation of shared power banks in the early growth stage: 40 days, 11 financings, nearly 35 institutions have poured in, the total financing amount reached 1.2 billion yuan, and the financing efficiency It is 5 times that of the rise of shared bicycles in 2015.
Since sharing bicycles opened the curtain of the domestic sharing economy, shared power banks, shared umbrellas, shared massage chairs, shared KTV, and other projects with the concept of shared entrepreneurship, have emerged one after another. While people discovered that "everything can be shared", the debate in the field of public opinion about their true needs and false outlets has never stopped.
However, at that time, capital obviously regarded the shared power bank as the next outlet. As for why shared charging treasures seem to have more vitality than shared bicycles, perhaps one sentence can explain: In modern society, people can have no bicycles, but most of them cannot do without mobile phones.
According to the data from Tianyan Check, in the two months of 2017, the small power company alone raised three rounds of financing with a financing amount of nearly 500 million yuan. Street Power also received 5 rounds of financing. Monster Charge came from behind, and won three rounds of nearly 600 million yuan in financing at the fastest speed. The lineup of investors behind it is also quite luxurious, with more than a dozen investment institutions such as Hillhouse, Shunwei, Xiaomi, and Qingliu.
Many of the money from this financing is used by shared power banks to expand their "points", so some people think that this industry is essentially a "local industry". Each company continued to expand its "territory", but the financing boom soon stopped.
From November 2017 to April 2019, for a total of 17 months, Monster Charging, which had been financing a round of funds in an average of three months, did not disclose any further financing news. In 2019, in the entire shared charging treasure industry, only Monster made a round of financing-Hillhouse Ventures made a US$20 million internal round of lead investment for Monster.
The reason is to return to the attributes of shared power banks. The corporate competition in the shared power bank industry is still a typical "Internet" competition, first enclosing the market, and then raising the price. This also means that who can get more financing at the beginning, who can take advantage of the starting stage on this track. Later, what each other thinks about is how to run farther.
Therefore, it is precisely now that shared charging treasures have gone from the early "burning money and enclosing land" to the stage of pursuing "profitability" and seeking sustainable development. Therefore, the most direct and effective way of "recovering blood" by price increases has become better than before It must be "normal" at any time.
The price increase is not only the intuitive feeling of consumers, but also supported by data. According to the statistics of consulting firm Frost & Sullivan, the average price per order of domestic shared power bank services (excluding free orders and orders of RMB 99 or more) has increased from RMB 1.3 in 2017 to It is 2.3 yuan in 2018, 4.1 yuan in 2019, 5.3 yuan in 2020, and is expected to reach 8.0 yuan in 2025.
So why does the price increase occur in the first half of 2021? Industry insiders pointed out that the sudden outbreak of the new crown epidemic in 2020 once severely damaged the shared power bank industry and made it feel pressure to survive. At that time, major business districts, communities, restaurants, hotels, tourism, cinemas and other public places with high traffic were strictly regulated, and the use of shared power banks dropped sharply and revenues fell precipitously.
Tang Yongbo, the founder of Xiaodian Technology, said in an employee letter last year: “The company’s revenue has plummeted to a freezing point. With the salary of more than 5,000 employees, as well as the supply chain and various office rental costs, the company is facing a test. ."
This kind of external unpredictable factors has accelerated the reshuffle of the shared power bank industry, causing it to start the process of price increases, listings, and mergers at this point in time.
Single profit model
For shared power bank companies, price increases may not be a long-term solution, and a single profit model is the most important problem to be solved.
Currently, shared power banks are mainly directly operated in first- and second-tier cities, while in third- and fourth-tier cities and the sinking market, they mainly rely on agency models. The most important source of income in the shared power bank industry is the rental income of shared power banks. After excluding entrance fees and commissions, depreciation, labor costs and other expenses, the rest is profit.
Take Monster Charging as an example. Its prospectus shows that in 2020, product leasing revenue will be 2.711 billion yuan, accounting for 96.5% of total revenue, while power bank sales revenue will be 78 million yuan, and other revenue will be 20 million yuan, accounting for almost Can be ignored.
Xiaodian Technology's prospectus also shows that its three major businesses are shared power bank business, power bank sales and advertising services. However, in the past three years, more than 97% of Xiaodian’s revenue came from the leasing business of shared power banks.
Since most of the income comes from the lease of power banks, the pressure on revenue after the bonus period has fallen on consumers. In addition, shared power bank companies have been caught up in the game of sharing with merchants in terms of revenue.
According to data from iResearch, the cost composition of shared power banks is: payment processing costs accounted for 0.5%, warehousing logistics costs accounted for 2%, BD costs accounted for 10.5%, equipment costs accounted for 15.4%, and merchant entry costs accounted for 46.8%. It can be seen that the merchant's entry fee accounts for a large proportion of all costs.
Generally speaking, shared power bank companies need to rely on their own local push to negotiate cooperation with merchants to get the opportunity to settle in. Some industry leaders previously stated that their initial share with merchants was 4:6 (the brand gets 40% of the profits and the merchants get 60%); but with the fierce competition with each other, they have changed the share of some merchants. It became 3:7.
A restaurant owner in a well-known Shanghai business district said in an interview with the media that his current cooperation with Xiaodian Technology is a 3:7 share, and his shop currently only has Xiaodian rental machines. And if you want to guarantee the "exclusive" entry of its own power bank, the brand also needs to give the merchant an "entry fee."
In addition, for different venues, shared power bank companies will also be roughly divided into A, B, and C levels. Among them, airports, KTVs and other places with high passenger flow are classified as A-level places, so the merchants have high prices, and consumers’ Leasing fees have also risen accordingly.
Cai Guangyuan, the founder of Monster Charging, responded to this, saying that the company's pricing strategy is against Nongfu Spring. "Nongfu Spring gives everyone the freedom of water. It sells for one or two yuan in some scenes, and it is more expensive in some high-end scenes, maybe 5-10 yuan."
Some people argue that the essence of shared power bank is a "small track business" with low ceilings and low barriers. Therefore, a single profit model seems inevitable. From a corporate perspective, there is no way to escape this core issue. In fact, the leading companies in shared power banks have already started the "second growth line" attempts.
At the beginning of this year, Monster Charging has incubated a new brand of liquor-"Kaihuan", which is currently on sale online and offline simultaneously. Liu Chunsheng, an associate professor at the School of International Economics and Trade, Central University of Finance and Economics, believes that from the perspective of customer portraits, there is a certain logic to connect consumers who share power banks with consumers of liquor, that is, users who use shared power banks and drink small liquor are all white-collar workers. Mostly. However, it remains to be seen whether this cross-border attempt can change the single profit structure of the industry in the future.
In addition, on April 22, the power bank service was launched nationwide. The first batch of all points and devices connected to monster charging, consumers can use the App to scan the code to borrow and return the power bank. For Monster Charging, has the second most offline merchant resources in the country. Through this kind of cooperation, it can effectively enter those offline stores that are closely related to
This operation of charging monsters by the outside world is benchmarked against previous attempts by Meituan in the field of shared charging treasures. In 2020, Meituan established a shared power bank division, and since then began its own market expansion. Since it has a large number of merchants, Meituan also promises merchants during the promotion process, as long as it signs a contract with its own power bank, whenever a consumer uses the Meituan power bank in the store, the merchant's Meituan ranking will rise accordingly.
After the merger of Soudian and Jiedian, "Zhumang Technology" was established, positioning it towards a broader "innovative consumption scene." In addition to the shared power bank business, Zhumang Technology has launched smart terminals such as mask machines and body temperature monitors in an attempt to make gains in the field of smart hardware.
The future to be tested
From the perspective of the development of other revenue models and listings, regardless of future development, shared power banks are working hard to relieve the pressure of survival.
Industry analysts pointed out that the market pressure faced by shared power banks has made listing a general trend. However, judging from the performance after listing, the industry is far from reaching the stage of once and for all.
On April 1, 2021 local time in the United States, Monster Charge officially landed on the Nasdaq exchange with an opening price of US$10. As of the close of US stocks on May 7, Monster Charger closed at US$7.6, a decrease of 0.78%. The total market value was approximately US$1.896 billion, which was more than 10% off the first day of listing.
Xiaodian Technology, which chose to list on the Hong Kong Stock Exchange, is still losing money. According to Xiaodian Technology's prospectus, its net profits in the past three years were -45 million yuan, 194 million yuan and -107 million yuan. Distribution and marketing expenses account for the largest proportion of small electricity costs and expenses. In 2020, distribution and marketing expenses will be 1.472 billion yuan, a year-on-year increase of 39.8%, which is much higher than the 16.8% year-on-year growth rate of revenue during the same period.
In addition to high marketing costs, as an emerging product of the Internet economy, shared power banks are also facing the challenge of new technologies. Some netizens pointedly pointed out: "The technology of power bank is constantly upgrading. Now people buy a portable power bank by themselves, and the price is much cheaper than in previous years."
Liu Chunsheng also said, “The application scenarios of shared power banks are inherently small, and their technological content is not high. From the demand side, one is that users can replace them with self-purchased power banks, and the other is that with the battery life of mobile phones. With the popularization of technologies such as enhancement and ultra-fast charging, mobile phone batteries are becoming thinner and lighter, while the power storage capacity is increasing."
From the frenzied financing in the early days to the current price increase and listing, the lively topics are after all appearances. The competition of shared charging treasures has already bid farewell to the earlier expansion of the scene and increase the market coverage to carry out local promotion or financing. Whether it can seek to increase investment in research and development so that shared power banks can be faster, cheaper and have more ways to play, these issues really determine the future direction of the industry. (Reporter Wang Zhongyun)
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