Consumer Daily Net Financial News, Meidi Huier, the water seller behind Mead Johnson or the person who sells jeans-Ruo Yuchen , Is about to land on the secondary market. On September 8, the Shenzhen Stock Exchange disclosed Ruo Yuchen’s (003010.SZ) prospectus.
The development of Alibaba not only allows Handu Yishe When a batch of”Amoy brands” came into being, even the e-commerce agency operating companies that followed the brands to”sell jeans” also got a share and flocked to the capital market. Baozun e-commerce landed on the Nasdaq market before, and Yiwangyichuang landed in A shares. In addition, Liren Lizhuang and Ruo Yuchen also caught up with the train that went on sale in September.
This time landing on the small and medium board stage, if Yuchen plans to issue 30.43 million new shares, it is estimated that 717 million yuan will be raised to increase the main business. Including the following five projects:new brand incubation and cultivation platform construction, agency brand marketing service integration construction, e-commerce operation supporting service center construction, enterprise information management system construction, and supplementary working capital.
As an e-commerce service provider for international brands in the field of fast-moving consumer goods such as maternal and child, beauty and personal care, and health products, Ruo Yuchen’s main business includes online agency Operation, channel distribution and brand planning. From 2017 to 2019 (hereinafter referred to as the reporting period), Ruo Yuchen’s performance has increased year by year. The company’s operating income was 671 million yuan, 931 million yuan, and 959 million yuan; the net profit attributable to shareholders of the parent company was 57.6352 million yuan, 77.417 million yuan and 85.804 million yuan.
In the first half of 2020, if Yuchen’s performance grew steadily, operating income was 554 million yuan, a year-on-year increase of 25.28%; after deducting non-recurring gains and losses, the The net profit of shareholders of the parent company was RMB 38,609,300, a year-on-year increase of 14.42%.
Although Ruo Yuchen is about to usher in the market highlight, there is still a lingering shadow compared with the industry.
If Yuchen is the last in the same industry, he has trouble saying
Ruo Yuchen’s main business income can be divided into online agency operating income, channel distribution income and brand planning service income. Among them, online generation operations and channel distribution revenues are the boost to drive higher performance. During the reporting period, both revenue accounted for more than 93%of the total revenue. Among them, the online agency operation business was mainly, and the channel distribution revenue was mainly,
From this From a point of view, both of these are inseparable from the support of the brand. From the perspective of the relationship with the brand, Ruo Yuchen’s right to speak is weaker than that of his peers. This can be seen from the company’s gross profit margin.
In each period of the reporting period, the company’s comprehensive gross profit margin was 33.41%, 32.79%and 34.25%, which remained basically stable. But compared with the same industry, Ruo Yuchen’s gross profit margin pales in comparison. During the reporting period, the average gross profit margins of the same industry were 42.08%, 44.77%, and 47.22%, respectively. Ruo Yuchen ranked at the bottom of the industry.
(Image source:company prospectus)
Why Ruo Yuchen’s gross profit margin is so low? Looking through the prospectus, it is not difficult to find that Mead Johnson is the number one”heritor”.
As far as online agency operations are concerned, Mead Johnson is undoubtedly holding up half the sky of Ruoyuchen’s performance. During the reporting period, Mead Johnson’s sales contributions to Ruo Yuchen were 998 million yuan, 127 million yuan, and 117 million yuan, accounting for 30.63%, 33.41%, and 33.09%of the same revenue in the current period.
(picture description :The sales revenue of the top six customers in 2019)
Compared with the contribution of “enhanced” performance, Mead Johnson’s gross profit margin can be described as “mean”. During the reporting period, the gross profit margin of Mead Johnson was 20.99%, 20.78%, and 19.24%, respectively, which decreased year by year.
Mead Johnson’s gross profit margin has obviously hindered Ruo Yuchen, but if Mead Johnson is given up, Ruo Yuchen’s situation will be even worse. Because no matter from the scale of revenue or market share, Ruo Yuchen cannot occupy the top three positions. On June 23, the third-party data agency iiMedia Consulting released the”2020H1 China Brand E-commerce Service Providers Comprehensive Competitiveness Ranking List”, the report showed Baozun E-commerce (BZUN.US) ranked first on the list with a score of 94.2. Yiwangyichuang, Beauty Beauty, with a comprehensive competitiveness score of 93 and 90.3 points, ranked second and third.
In addition, from the perspective of revenue, the Matthew effect within the industry has become more apparent. From 2018 to 2019, Ruo Yuchen’s online agency operating retail business revenue decreased by 6.80%year-on-year, a slight decrease. Comparable companies’ Baozun E-commerce online agent operation retail business increased by 35.97%year-on-year, OneNet One Creation online generation operation retail business increased by 30.92%year-on-year. According to the information disclosed by the two, there are more new brands, such as OneNet One Creation Newly added Herborist and black toothpaste in 2019 , Gillette and other brands.
(Image source ：Company prospectus)
On the one hand, it is to stick to the position, and on the other hand, it is the gross profit margin. If Yuchen can only exchange profit with increments.
Pack lightly to capture new additions If Yuchen is not well prepared
The middleman makes the difference, which is a story told by e-commerce operators. But its biggest problem is that it is constrained by the brand. Before foreign brands paid tuition due to information asymmetry, are they willing to continue to pay now? From this point of view, seeking a better development path is the inevitable way to get rid of the dealer’s dilemma.
Going lightly and seizing new business volume is the key to getting out of trouble. The so-called light-packing refers to the use of funds for online marketing services, which require a large amount of promotion fees. Online management services do not occupy funds, and the way to promote cooperation with brand owners is more flexible.
In short, the asset-light model relies on the strength of the company’s industry leaders to quickly expand more brands and also has a higher gross profit margin.
From the experience of industry leaders, we can see the feasibility of this direction. In 2018, Baozun’s operating income was 5.393 billion yuan, and revenue from service models reached 2.876 billion, accounting for more than 50%.
In addition, according to the open source securities research report, brand online marketing services and online distribution are combined into a “buy-out service” that occupies cash flow. Shanghai Management Service is listed as a”non-buyout service” that does not account for cash flow. According to the latest data, it is found that Baozun E-commerce Span>”Non-buyout services” accounted for the highest proportion of revenue, at 53%.
(data source :Open Source Securities Research Institute)
Obviously, YiwangyichuangAt the beginning, they focused on”lightness”, but Liren Lizhuang and Ruo Yuchen didn’t seem to jump out of the old way of making the difference. During the reporting period, Ruo Yuchen’s asset-light brand planning services accounted for 5.02%, 8.51%, and 6.68%of total revenue, respectively, accounting for a very small proportion.
The purpose of light assets is incremental acquisition. The key to success in e-commerce agency operation is traffic, and the current traffic dividend comes from two aspects. One is the live streaming of short video platforms such as Douyin and Kuaishou, and the other is a rookie e-commerce platform represented by Pinduoduo, focusing on the sinking market. Either way, attracting new traffic requires investment in promotion, and brand online marketing services, because the promotion costs are borne by the company, which makes it necessary to be more cautious in choosing promotion channels and methods.
According to the prospectus, Ruoyuchen’s promotional expenses in 2019 were 77.712 million yuan, accounting for 47.32%of the current sales expenses. Compared with the beauty and makeup and baozun e-commerce, which is backed by Ali, Ruo Yuchen can’t match it on the Tmall platform. Ruo Yuchen’s development should learn from Yiwangyichuang and expand on multiple platforms. If you want to deploy short video products, promote The cost continues to rise, just around the corner.
The asset-light model means that the promotion cost is borne by the brand owner. On the one hand, it can better obtain new traffic on and off the site, and increase the exposure of operating stores; on the other hand, light assets can also obtain faster operating income growth and higher gross profit margins. Of course, Ruo Yuchen was not unprepared. The bulk of the funds raised this time will be used in the construction of the new brand incubation platform.
The listing is a new starting point. With the three wolves in power, there is not much time left for Ruoyuchen.