A scrap-buying social e-commerce platform Taojiji announced bankruptcy in the early morning yesterday.The company issued a formal announcement saying that because the funds had not arrived on time, it had to declare that the current round of mergers and acquisitions had failed, and the company would then seek bankruptcy liquidation or bankruptcy reorganization. . In fact, in October, Taoji Ji was caught in a storm of misappropriation of goods and was concentrated by the merchants. The problem of tight capital chains was beginning to emerge. The method given at that time was to seek mergers and acquisitions and reorganization. Taojiji went online in August last year, and once had hundreds of millions of registered users and received tens of millions of dollars in financing.
However, from the beginning of the business, to the darling of capital, to the news of bankruptcy today, it only took more than a year, what is the problem? Under the capital winter, is Taojiji just a case? On the evening of December 9th, the CCTV Financial Review program invited Internet industry expert Bao Ran and financial commentator Wan Zheng to jointly analyze.
1. Going bankrupt in one year just because you burned money too fast?
Internet industry expert Bao Ran: I think the biggest problem of Taojiji is that it has completely misunderstood the essence of social e-commerce. It has used ultra-low prices plus super generous user subsidies as the so-called magic weapon for social e-commerce. So what is social e-commerce? It was originally a fight-or-buy or group-buy. Organizing users through social networks has become the so-called social e-commerce. The first thing I played was Pinduoduo. After the success of Pinduoduo, a lot of imitators appeared, including Taojiji. If you take a look at this app, you will find that there are one yuan and two yuan products everywhere. However, there are many user complaints, because things are cheap, but the quality is very poor after receiving. Social e-commerce does not mean low price and low quality, but it should be cheap. So if you just stare at the cheap and give up Wumart, and push the price far below the cost price, then the user has no experience, and the entire operating mode cannot form a benign closed loop. Sooner or later, something will go wrong, and the company will never burn the day when it keeps its cash flow positive or profitable.
Wan Yan: Expansion of scale has not kept up with the speed of burning money
Financial commentator Wan Yan: We said that Taojiji has a lot of competitions, so why does it fight so much? It is because the past models basically believed that the biggest goal of a new enterprise is to acquire new users. As long as they get traffic, they can get everything. Because as long as the traffic is continuously obtained, the company can tell other investors that the future is likely to be realized. At one time, Taojiji had hundreds of millions of registered users and reached more than 40 million monthly jobs. So it raised $ 42 million in Series A funding, with a valuation from $ 250 million to $ 800 million, soaring so high in such a short period of time, nothing more than it showed you very strong customer acquisition capabilities. Many successful companies in the past have followed this path. But now this operating model is being challenged. Can the acquired users turn into reasonable profits? Once the speed of scale expansion cannot keep up with the speed of burning money, this model will be difficult to continue.
2, the capital burn model under the cold winter is not working?
Internet industry expert Bao Ran: The method of burning money is absolutely wrong, and the efficiency of burning money is completely the opposite. What is a company that really burns money? Some companies also burned a lot of money, but they burned their own logistics system and burned the world's largest cloud computing center. The potential imagination of this kind of business growth is enormous. This is not to blow the air, but to outline the vision and vision of a company's development. Burning money simply and rudely like Taojiji is just satisfied with how much the company's daily activity has risen today and how much tomorrow's monthly activity has risen. Registered users may be over 100 million, but can this user be retained? Is there a repurchase? Does it become a silent user when it comes? The company didn't bother, it was all about the development of all the enterprises, so as to get more money, as long as users want to slap the company's wool. This method of burning burns even more money.
Mandy: Investors have a hard time
Financial commentator Wan Yan: In the past, investors were willing to burn money, but the problem is that investors themselves are having a hard time. If we look at the data, we will also find that 2017 was actually a high point for fundraising, but the cold winter has already arrived in 2018. Investors have become more rational now and have taken their purse more seriously. And everyone also saw that the long-term so-called money-burning war can bring profit returns? In fact, there are doubts. So at this time, it is better to put money in your own pocket and invest in something that can be understood.
A rapidly expanding social e-commerce company with 130 million users has "suddenly died", which is regrettable and even more thought-provoking. Once upon a time, the use of demographic dividends and the use of "free" or even "cash redemption" to capture users has become the rule of China's Internet entrepreneurship; but the other side of the coin is rough copying, simple follow-up, and trying to use money at no cost Crushing, covering up the lack of innovation in core technologies and business models. However, there is no endless money or no peak traffic in the world. The simple and rude money-burning model is whether today can still be played today when the cost of funds has become higher and the financing window has been narrowed. Fan again.