Source | Capital Detective
Author | Ding Zhiren Wang Bangge
Under the epidemic, Tuniu, a leisure travel booking platform, has entered a mode of doubling the difficulty.
On April 9, Tuniu released the fourth quarter and full year financial report for 2019. The financial report showed that Tuniu ’s fourth quarter revenue was 451 million yuan, a decrease of 4.2% year-on-year; the net loss attributable to ordinary shareholders was 367 million yuan. The net loss for the same period in 2018 was 64.7 million yuan.
This unremarkable financial report worsened Tuniu under the epidemic.
Affected by the overall market of the US stock market and its weak performance, recently Tuniu's stock price has fallen below one US dollar, and the current total market value is 112 million US dollars (about 790 million yuan).
Just over a week ago, Tong Yilong released its latest financial report. In addition to the growth of core business and key indicators, it is predicted that its adjusted net profit in the first quarter of 2020 may remain profitable, bringing a difference to the gloomy industry. sound. Benefiting from this, although the tourism industry has been hit hard due to the epidemic, the share price of Tongcheng Yilong has been stable in the recent period, and the current market value is 23.85 billion Hong Kong dollars (about 21.7 billion yuan).
After three or four years, Tuniu and Tongyi Yilong are still players with similar positions. However, in the past few years, the gap between this former rival and the opponent has become more and more obvious.
Regardless of market value or business, the former star company Tuniu has fallen out of the OTA first camp. However, falling out of the first camp is not the most important issue for Tuniu. The more urgent challenge is that, according to Nasdaq regulations, if the price of a listed company's stock is less than one dollar per share, and this state lasts for 30 trading days, The Nasdaq market will issue a pre-loss warning. If the company that is warned cannot take corresponding measures to save itself within 90 days of the warning, it will be announced to stop trading.
Today, Tuniu's share price has fallen below the red line. More seriously, its market value has shrunk by more than 80% in one year. In addition to the overall dive in the US stock market, the more important reason is the weak performance of Tuniu's own business. Under the influence of the epidemic, Tuniu ’s main business was severely damaged and its difficulties intensified.
In other words, under the current situation, Tuniu has few chips that can change the stock price.
Since its listing in 2014, the question about Tuniu ’s continued loss has never been cut off. Tuniu ’s management has tried to win market recognition by telling the story of high investment for high growth, but the continued expansion of the loss is unsustainable. Even if a strategic contraction is intended, Tuniu ’s growth and profitability remain worrying. In the past year, Tuniu ’s share price has always shown a downward trend, and the arrival of the epidemic has given him a blow.
Tuniu stock price trend in the past year
Nowadays, its own business has been slow to improve. Under the epidemic, the group tour market has entered an ice period, and the internal and external factors have doubled. Tuniu has come to a dangerous moment.
Unburnable future
Before falling into today's situation, Tuniu had its highlight moment.
"To travel, find a way to cattle."
A few years ago, Tun Niu spokesperson Lin Zhiying missed the six-character slogan video advertisement, which had been put in a large number of channels in subway stations, video websites, TV stations and other channels.
In 2015, in addition to Lin Zhiying, Tuniu also announced the signing of Jay Chou as a brand spokesperson, implementing a dual spokesperson system. Subsequently, advertisements for performances by Jay Chou were also put on large scale. On the rhetoric of public opinion, Tuniu has been in the limelight for a while.
Tuniu founders Yu Dunde and Jay Chou
But now, these ads have long disappeared.
The contrast between the high-profile at that time and the current desolation is even more disappointing.
In October 2006, 25-year-old Yu Dunde and 24-year-old Yan Haifeng co-founded Tuniu Travel Net. Against the background of the growing leisure vacation market, Tuniu, which focuses on this subdivision track, has attracted capital. There are many well-known institutions and companies such as Ctrip, JD, Temasek, Sequoia and HNA.
In May 2015, Tuniu received a total investment of US $ 500 million from JD.com
Tuniu went public in the United States in 2014. Under the OTA boom, the limelight is booming.
After the listing, Tuniu founder and CEO Yu Dunde said that achieving profit in the medium and long term is not a problem, and the relationship with Ctrip will be more differentiated and complementary. Together, they will expand the cake of China ’s online travel market share. The goal of a market value of 100 million US dollars. However, six years later, Tuniu not only failed to achieve profitability, but also has a growing gap with Ctrip.
Holding high and playing high was a methodology popularized on the Internet a few years ago, and Tuniu once believed in the way to burn money.
After the listing, Tuniu spent a lot of money to sign stars, put ads, acquire users, and once wrestled with the OTA boss Ctrip who is the No. 1 player in the market for leisure travel.
While investing heavily in marketing, Tuniu has accelerated the pace of layout offline since its listing in 2014.
In the second quarter of 2014, Tuniu had five offline regional service centers. One year later, the number changed to 85. By the end of 2015, Tuniu offline service centers exceeded 150, ten times the pre-IPO 2014. After Ctrip and Qunar merged in 2015, offline travel companies are considered to be the next important source of traffic, and Tuniu chose to launch quickly.
However, the rapidly expanding offline stores have significantly dragged on Tuniu ’s gross profit margin. In the first quarter of 2015, Tuniu ’s gross profit margin dropped from 6.6% in the previous quarter to 4.1%. According to the caliber of Tuniu ’s financial report, Tuniu ’s gross profit margin The reason for the decline is Tuniu ’s investment in the price area, as well as the increase in the costs associated with the addition of regional service centers, product lines, and second- and third-tier cities.
The high-profile market launch and aggressive offline strategy are one of the aspects of Tuniu's strategy of replacing high growth strategies with large investments after listing.
In 2015 and 2016, Tuniu embarked on a rapid expansion. At the same time, marketing and offline "burning money" brought Tuniu a corresponding high growth, but the continuous expansion of losses also caused Tuniu to be in doubt. . In 2015, Tuniu ’s net loss attributable to ordinary shareholders was RMB 14.594 billion (US $ 225.3 million), compared with RMB 463.5 million in 2014.
The data shows that since Tuniu went public in 2014, the company has been in a loss for most of the time.
In the eyes of some analysts, Tuniu ’s main business is group tours, and the repurchase rate of group tours is low, and the cost of Tuniu ’s customer acquisition is too high. The high growth in return for such high investment is not sustainable. Entering 2016, Tuniu was caught in a situation where the growth rate slowed down and losses continued to expand.
Seeing the problem, Tuniu chose to step on the brakes.
In 2016, Tuniu held its 10th anniversary strategy conference. Yu Dunde, Yan Haifeng and the important business leaders of Tuniu all attended the meeting and announced a series of new measures, including group development and membership strategy. That high-profile press conference became a turning point in Tuniu ’s publicity strategy. After the 10th anniversary press conference, Tuniu ’s aggressive strategy contracted in an all-round way, accompanied by a continuous slowdown in business growth.
After the magic of high-speed growth failed, the ever-expanding losses seemed unacceptable to the capital market. Under the environment in which Ctrip unified OTA rivers and lakes and the capital market paid more attention to the input-output ratio, the capital market gradually lost patience with Tuniu.
Where is the road?
The embarrassing situation in front of Tuniu is that although Tuniu has made a lot of efforts to reduce expenditure since it actively stepped on the brakes in 2016, it still cannot change the reality of sustained losses. This is also Tuniu ’s entry into the capital market today. The most important reason for a dangerous situation.
Public information shows that since the strategy was changed in 2016, Tuniu began to transform its offline stores. The main strategy is to increase the store sales function (open source) and reduce the size and number of people in a single store (throttling). Although the investment in a single store has declined, Tuniu has increased its store coverage rate, and it has also put a heavy cost burden on it, mainly in the direct mode.
Judging from the financial results of 2017 and 2018, Tuniu's efforts have had little effect. In order to reverse the status quo, Tuniu once again seeks to change.
In 2019, Tuniu developed S (Supply Chain platform) 2 B (Business) 2 C (Customer) model. For S2B2C, the company will adopt three main sales models:
First, through flute distribution, Tuniu distributed to small B, and then small B was distributed to C end;
second, through community marketing, the owner opened the store, and sold to other C end users through small B big C;
third, extension Zhang Xian joined the store and penetrated into the lower-tier cities.
The above strategic objectives are obvious: through a variety of attempts, expand the source of traffic as much as possible and reduce the cost of customer acquisition. However, judging from Tuniu's transcripts in 2019, the above strategies have not worked.
According to Tuniu ’s third quarter 2019 financial report released on April 9, Tuniu ’s revenue for the quarter was 451 million yuan, a decrease of 4.2% year-on-year; the net loss attributable to ordinary shareholders was 367 million yuan, and the net loss for the same period in 2018 It is 64.7 million yuan. At the same time, Tuniu predicts that due to the impact of the new crown epidemic, net income in the first quarter of 2020 will decline by 65% to 75% year-on-year, from 114 million to 160 million yuan.
From 2014 to 2019, the company has accumulated losses of nearly 6 billion yuan. The high cost is the main reason for the loss. It can be seen from the financial report that although the R & D investment has been reduced through team adjustments, the overall rate of Tuniu is still at a high level due to the expansion of the store and the continued marketing investment. related.
In the domestic online travel market, Tuniu is a rather special existence. Unlike other online travel players, which mainly rely on transportation ticketing and hotels, group tour is the main source of revenue for Tuniu.
Tourism is a matter of decision-making, and unlike products such as air tickets and hotels, group travel products involve a long time, high unit prices, and complex products. Therefore, decision-making costs are higher and the repurchase rate is low. Therefore, the mode of following the group tour as the main business determines that Tuniu must pay a higher cost in obtaining traffic.
Tuniu's previous rush on offline stores is related to this. Because the group tour involves a series of products, users need to consult a lot during the purchase process, and offline stores can provide better services. However, the full roll-out of offline stores also caused Tuniu's cost to rise sharply, which in turn aggravated the loss.
At the same time, a group tour product involves multiple supply links. Tuniu used a platform model to sell other travel agency products in the early stage to collect commissions. Later, it gradually deployed a direct mining model to improve the control of upstream resources, which also brought The risk of inventory backlogs requires greater control over its own resources, and it also intensifies its competitive relationship with other travel agencies.
In the fierce market competition, the prices of tourism products have been repeatedly lowered. Despite the high unit prices of group travel products, the actual profit margin is not large. The bigger trend is that in the context of the rise of a new generation of consumers, free travel has become a more popular way of travel, more like the previous generation of travel products compared to group travel.
However, in public speeches, Yu Dunde has always maintained a firm and optimistic attitude towards group tours, especially in the sinking market, and a large number of users still need to follow group tours.
However, the reality that Tuniu must face is that in the business model based on group travel, it has not yet achieved a balance between input and output, nor has it shown the potential for growth.
In the vast tourism market, group tours are just one of the categories. Compared with head players such as Ctrip, Tuniu is in a weak position in terms of brand awareness and traffic acquisition. Tuniu has not accumulated much in the fast-growing free-traffic business. Compared with the second echelon players such as Ma Honeycomb that are free-traveling businesses, Tuniu has also merged in traffic acquisition, brand recognition and business organization structure. No advantage.
The bad reality is that the generous burning of money after the listing did not burn the future for Tuniu, and the subsequent strategic changes did not achieve real results.
Nowadays, Tuniu, who has been cultivating the group travel market for a long time, has faced the fact that the online travel market dividends have subsided, and its main opponents have firmly occupied the reality of online and offline traffic entrances. It is very difficult for business transformation.
Between advancing and retreating, the way is a dilemma, and the new attempt has not yet seen results. Between the move, there is not much time left for Tuniu.
