The shared power bank, which was born with the wave of the sharing economy in 2015, entered an explosive period in 2017.
It's strange that today's consumers are paying more and more for small power banks, but power bank companies may not be able to make a lot of money because of this.
On April 1, 2021, Monster Charge (NASDAQ: EM) officially landed on Nasdaq and became the first share of shared charging treasure.
For more than a year after its listing, the stock price of Monster Charge has generally shown a downward trend.
As of July 7, 2022, its closing price of $1.18 per share has fallen by more than 85% from the issue price.
At the financial report level, Monster Charge has lost money for three consecutive quarters, and it shows a trend of expanding losses.
Why is the usage fee of shared power bank more and more expensive, but the monster has not made any money?
Highly dependent on human traffic?
Declining revenue and widening losses
Monster Charge was established in May 2017. In November of the same year, it completed a series A financing of a total of 100 million yuan. Since then, it has continued to grow with the continuous help of capital.
According to the financial report, as of the end of 2021, the cumulative number of registered users of Monster Charge has reached 287 million, of which the number of new users in 2021 will reach 67.5 million.
In the first quarter of 2022, Monster Charge achieved revenue of 737.1 million yuan, a year-on-year decrease of 13% and a month-on-month decrease of 12%.
In this regard, Monster Charge blamed it on the impact of the epidemic.
Due to the outbreak of the epidemic in first- and second-tier cities such as Shanghai, Beijing, Hangzhou, and Changchun, the power bank has been separated from the user's life scene, the flow of people has dropped sharply, the frequency of use has dropped, and the income has also dropped.
However, although the shared power bank is highly dependent on the flow of people, the monster charging revenue has been trapped for a long time.
The financial report shows that in the second and third quarters of 2020, monster charging revenue achieved a quarter-on-quarter growth of 97% and 45%, and the overall quarterly revenue growth rate was limited thereafter.
In the second quarter of 2021, after the monster charging revenue slowly reached a high of 972 million yuan, the single-quarter revenue continued to decline.
Compared with the 731 million yuan in the first quarter of this year, the total quarterly revenue has fallen by 241 million yuan.
In terms of year-on-year data, in the first quarter of 2021, monster charging revenue increased by 162.5% year-on-year, and the revenue growth rate has continued to decline since then.
There will be negative year-on-year revenue growth in the fourth quarter of 2021 and the first quarter of 2022.
Judging from the income structure of Monster Charge, a single business model is the main pain point of the company.
In the first quarter of this year, more than 97% of Monster Charge's revenue came from the mobile device charging business. Over-reliance on this business has weakened the company's ability to resist risks.
From the perspective of profitability, in the first quarter of 2022, the loss of Monster Charge was 96.41 million yuan, which was the third consecutive quarter of losses for Monster Charge, and the loss continued to expand.
From the perspective of net interest rate, since the third quarter of 2020, the net interest rate of monster charging has continued to decline until the net interest rate continues to be negative.
Convenience and disadvantages of direct sales High marketing costs, difficult for enterprises to make profits
To understand why monster charging is losing money, we must start with its operating mechanism.
At present, Monster Charge has two expansion modes: direct mode and agency mode.
The direct sales model is generally used in big cities, and it is necessary to pay incentive fees to POI (online shop points) merchants, including admission fees and commission fees.
According to the prospectus, the incentive rate is 50%-70%.
The agency model generally appears in relatively scattered cities or county-level areas. Monster charging only needs to pay the agent a certain percentage of the rent collected from the consumer.
According to the prospectus, its commission rate is 75%-90%.
The advantage of the direct sales model is that it can obtain user information better and more directly, and increase user payment.
The advantage of the agency model is that the point competition and profit pressure will be shared by the agency, which is a relatively light asset model, but the disadvantage is that the brand control will also be reduced.
At present, monster charging is still mainly based on the direct sales model. According to the prospectus, the proxy points in 2020 will only account for 38.9%.
Huge merchant commissions and admission fees also keep the marketing costs of Monster Charge high.
The financial report shows that from 2019 to 2021, the entrance fees and commissions paid by Monster Charge to merchants accounted for 48.2%, 58.3%, and 61.1% of the power bank revenue, respectively.
Although marketing expenses have been controlled, under the circumstance that revenue is difficult to increase, the marketing expense rate of Monster Charge has always been high, reaching 89.55% in the first quarter of 2022.
Today, in order to relieve financial pressure, monster charging is also increasing the agency mode.
However, under the fierce market competition, whether the agency model can achieve rapid staking, enterprises will still face considerable challenges.
After all, consumers have no loyalty to power banks. Generally, it is the principle of proximity, which is convenient and trouble-free.
Merchants generally don't care about the brand of power bank they enter, but more about how to maximize their own interests.
Selling liquor across borders
Over 100 million charging users ≠ over 100 million drinkers
According to iiMedia Research's research report, as of 2019, the layout of the shared power bank industry in the first- and second-tier markets has tended to be perfect.
What Monster Charge can do is to seek high-quality core locations in first- and second-tier cities on the one hand, and expand agents in cities below third-tier cities on the other.
However, on the one hand, the income of users in the sinking market is relatively lower and they are price-sensitive; on the other hand, the users in the sinking market are small in scale, have poor liquidity, and have relatively few social and entertainment needs, so the usage scenarios of shared power banks are relatively popular. limit.
Therefore, whether the agency business in the sinking market has the ability to make money in the later stage remains to be seen later.
In April 2021, Cai Guangyuan, the founder of Monster Charge, grandly launched his new product, "Kaihuan" liquor, to the public, trying to take advantage of the larger number of outlets and users to use liquor as his second growth curve.
However, from the perspective of market acceptance, the cross-border attempt of monster charging has not achieved satisfactory results.
Observing the data of the flagship store on Tmall, it can be found that the monthly sales of all Kaihuan liquor products have not even exceeded 100, the market popularity is not high, and the sales can be said to be bleak.
It is difficult for Monster Charge to make baijiu cross-border, because it is difficult to have market recognition, and it does not have brand power in the baijiu industry.
It seems that Monster Charge has more than 100 million registered users, but in fact, the power bank is more to provide convenience for consumers, and it has nothing to do with liquor. The so-called user base is actually difficult to use.
Going around in circles, but not being able to tell a new story, the pressure of the monster charging has increased a little bit.
Chengdu Business Daily-Red Star News reporter Yu Yao and Liu Mi