Abstract: The release of the new financial report may bring a carnival or a storm. Can Qijia.com, which is in a downturn, still get out of the predicament?
Produced | Dali Finance
On August 6, Qi Yi Technology (1739.HK), known as the first stock of the vertical platform of China's domestic installations, released its 2020 interim results report.
The report shows that in the first half of 2020, Qijia.com's total revenue from continuing operations was 310 million yuan, of which core platform business revenue was 207 million yuan, and the adjusted net profit was 6.871 million yuan. In terms of users, Qijia.com maintained a growth trend in the number of monthly unique visitors in the first half of the year, increasing by 9.1% year-on-year to 60.1 million. The number of recommended users increased by 14.1% from the same period last year to 257,801.
These data show that under Qijia.com's seemingly acceptable performance, revenue is actually hidden, gross profit declines, and digital upgrades are weak. According to the financial report, in the first half of 2020, the revenue of Qijia.com's platform business, material supply chain business, self-operated interior design and construction business and other three main businesses decreased by 8.0%, 29.2% and 26.7% respectively compared with the same period in 2019. .
Of course, there are reasons for being affected by the epidemic, but the biggest root cause may have to be traced back to Qijia.com itself.
01
Not glamorous reports, it’s hard to tell the truth about the data decline
Specifically, the revenue generated by the Qijia network platform business decreased by 8.0% from RMB 224.6 million for the six months ended June 30, 2019 to RMB 206.7 million for the six months ended June 30, 2020. A year-on-year decrease of 17.9 million. Qijia.com said that this was mainly due to the decrease in average revenue of platform services per referral user due to its provision of temporary sales discounts to merchants.
As for the material supply chain business, its revenue decreased by 29.2% from RMB 28.9 million for the six months ended June 30, 2019 to RMB 20.5 million for the six months ended June 30, 2020. In this regard, Qijia.com also gave a statement: mainly due to the reduction of sales orders due to the inability of service providers to enter the premises during the epidemic period, resulting in a reduction in the demand for building materials;
Self-operated interior design and construction business and other aspects, its revenue decreased by 26.7% from RMB 112.9 million for the six months ended June 30, 2019 to RMB 82.7 million for the six months ended June 30, 2020 . Qijia.com also claimed that it was mainly due to the decrease in construction sites affected by the epidemic in the first quarter of 2020.
However, in addition to the decline in revenue from these three main businesses, the gross profit and gross profit margin of Qijia.com's three major businesses are also decreasing. According to the financial report, Qijia.com's total gross profit decreased by 18.3% from RMB 253.3 million for the six months ended June 30, 2019 to RMB 206.8 million for the six months ended June 30, 2020. The overall gross profit margin decreased from 69.1% for the six months ended June 30, 2019 to 66.7% for the six months ended June 30, 2020.
Specifically, in the first half of 2020, platform business gross profit margin decreased by 9.6% compared with the same period in 2019, material supply business decreased by 37.7% compared with the same period in 2019, self-operated interior design and construction business and others decreased by 72% compared with the same period in 2019.
In terms of users, the report shows that the number of monthly unique visitors of Qijia.com maintained a growth trend, increasing by 9.1% year-on-year to 60.1 million. In terms of merchants, Qijia.com also attracted a large number of decoration companies during the epidemic. In the same period last year, the number of 11042 companies increased to 13,624, an increase of 23.4%.
The appearance of these data seems to be thriving, but is it really the case?
In fact, in the face of the impact of the epidemic, Qijia.com has also taken a lot of remedial measures, such as online order acceptance, free trial of online design software, service training, online design software authorization, Online live marketing and other initiatives are hoped to enhance the platform’s attractiveness to merchants. In the material supplier chain business, Qijia.com also launched an integrated digital system to improve the ability of partners to acquire customers.
However, Qijia.com's goal of increasing sales, reducing operating costs and facilitating transactions to reduce liquidity pressure through online digital initiatives is still unable to conceal its weakness in the face of the fact that revenue and gross profit have both declined.
Among them, the lack of stress resistance of the three main businesses of Qijia.com is the inherent shortcoming: whether it is platform business, material supply chain business, self-operated interior design and construction business and others, it is itself vulnerable to changes in market and merchant demand As a result, Qijia.com has not yet been able to establish an effective business guarantee mechanism.
Even though Qijia.com tried to remedy merchant acquisition and user orders through various digital measures launched during the epidemic period to increase sales, reduce operating costs, and facilitate transactions to reduce liquidity pressures, overall it has not reached the desired level. The desired effect.
The reason behind it needs to be pondered.
02Partner
problems are frequent, and the negative aspects of Qijia are endless
In a 2019 home improvement industry report, it was revealed that the negative feedback from consumers on Qijia.com far exceeded the positive. As the "first share of the Internet home improvement company", Qijia.com has frequent problems. If you don't know or don't know, if you dig deeper, it will scare you: Qijia.com has even greater problems.
There has been such a set of data on the official website of Qiyi Technology (Qijia.com). In 2018, the user satisfaction of Qijia.com was as high as 90.6%, and the satisfaction ranks first in the industry. However, the face is that in November 2018, a report by China Quality Miles showed that it had received more than 30 complaints about Qijia.com's consumption. Most of them were buying home building materials and choosing decoration through Qijia. After-sales problems caused by services, and most consumers contacted Qijia.com for the first time but failed to reach an agreement.
At that time, according to a media report, a user said that Qijia.com "a 80-square-meter house told me that the estimated cost is about 12,000, and the total cost of the work is 26,000. It is all routine."
According to a report from China Net Finance in March this year, many owners in Beijing encountered renovation suspensions on Qijia.com and difficulties in refunding money. It is reported that from July to November 2019, many owners in Beijing signed a decoration contract with Beijing Qingzhou Xingfu Yijia through Qijia.com, and signed a "Qjiabao" supervision guarantee agreement with Qijia.com to guarantee payment of 4,000 yuan. However, in October 2019, consumer Mr. Chen was told by Qingzhou Xingfu Yijia and the company's designer that the capital chain was broken and the workers ran away.
According to the designer, Qingzhou Xingfu Yijia has been in arrears with the designer's salary and supplier money since August 2019. Because Qingzhou Xingfu Yijia breached the contract earlier, Mr. Chen terminated the decoration contract with him in November 2019, and Qingzhou Xingfu Yijia promised to refund Mr. Chen's renovation cost on December 20, 2019. But when the agreed refund time was reached, Mr. Chen was told that the Xingfu Yijia loan had not been approved and the refund time was extended to January 20, 2020, and he was compensated for his loss of 5,000 yuan.
Since then, when a financial reporter from Chinanet visited the headquarters of Qingzhou Decoration several times, they found that the company was empty. It is understood that Mr. Chen contacted Qijia.com during this process, hoping that Qijia.com would come forward to resolve the refund issue. After Qijia.com stated that it would "solve the matter as soon as possible", there was no more news. The 4000 yuan "Qijiabao" is currently It was not returned either.
In fact, scattered in various media reports, there are many situations similar to Mr. Chen: In 2019, Shanxi Evening News received complaints from citizens about the overall home improvement experience of Qijiadianshang Home Improvement Company in Xiaodian District. The center signed a contract to renovate the new house. Not only was the quality of the construction difficult to guarantee, but halfway through the project, the decoration company encountered a vicious incident of "rolling away 5 million yuan".
In the malignant incident reported by the Shanxi Evening News, although the owners contacted many times, the merchants were reluctant to come forward; they contacted Qijia.com, a well-known decoration website joined by the company, and the website did not give a solution. Until now, most of the owners have not recovered the arrears. In desperation, the owners can only defend their rights through various channels, but the progress is not smooth.
In addition, Qijia.com has been litigating since its listing. According to data from Tianyan Check, Shanghai Qijiawang Information Technology Co., Ltd. has 56 court announcements and 43 legal proceedings. Since 2019 alone, Qijia.com has 16 court announcements and 13 legal proceedings, and the content is mostly service contract disputes, decoration contract disputes, disputes over the network dissemination of information infringing works, disputes over sales contracts, etc.
Other complaints are also emerging in endlessly. There are complaints about Qijia.com and third-party decoration companies recommended by Qijia.com on the decoration complaint exposure platform, black cat complaint, and Aiqicha. There are even some original merchants in Baidu. Waiting for the platform to complain to Qijia.com: "The source of Qijia.com's order is unknown. It was said before signing the contract that he turned his face and refused to recognize the person when the money was received. The order was messy and it was a fraud."
Some people in the industry have pointed out that major crisis events will inevitably lead to changes in consumer concepts, preferences and behaviors. In the crisis, companies should make anticipation of these changes and concentrate on improving their management capabilities, product and service quality, so that they can accumulate after the crisis and form a long-term competitive advantage.
Qijiawang play routines, refunds are difficult, and there are many complaints! This theory seems to have been verified on Qijia.com. In the past, there were “fires” in offline stores and merchants ran away. Later, there were complaints from users. The user reputation of Qijia.com was almost collapsed.
03
While chasing dividends, it ignores the fundamentals of quality
Obviously, Qijia.com is in a difficult situation, it is by no means a cold day, but behind it is actually the problem of platform management and insufficient consumer experience. After all, no matter what era or industry, consumers’ shopping experience should always come first.
As the "first share of China's Internet home improvement platform", Qijia.com originally took advantage of the traffic dividend era to enter the game, trying to e-commerce traditional home improvement and become a platform to make the difference between the middlemen. However, it is not only intentional or unintentional. Qijia.com ignores that unlike other products that are e-commerce and rely on traffic to drive goods, the home improvement industry is not a simple one-shot transaction. The entire transaction process has a long cycle, involving many staff, and the supply chain. Complicated, the qualification review for merchants is more stringent and cumbersome than other product categories.
Home improvement itself is a low-frequency industry, and there are very few repeat customers. Between the decoration company and the client, it is often a one-off transaction, and a suite is often decorated only once. For this reason, many decoration companies often sell at one stroke, and often have problems such as poor construction quality, inconsistent construction schedules, additional items, missing items, secret replacement of materials, shoddy goods, after-sales service, shirking responsibility, etc., causing complaints from customers .
This should have been a lesson for Qijia.com. However, it is not difficult to see the incident involving a similar netizen who sue the decoration company of Qijia.com by posting thousands of words on Weibo. From beginning to end, Qijia.com has not given any effective solutions to protect consumer rights. .
With a bad reputation, how to acquire new customers? Without the growth of new customers, would it be a dead end for Internet companies that rely heavily on traffic for survival and development? Honesty and quality are the foundation of a company's survival. Losing this foundation is like water without a source, a tree without roots.
Perhaps in the early days when the market was good, the Internet home improvement platform could be very moisturized by diverting home improvement companies. However, when the market increment peaked and the customer acquisition cost reached the range of 1400-2500, the platform revenue Encountered Waterloo. This is exactly the actual dilemma behind the seemingly beautiful data in the latest financial report of Qijia.com.
04
As both an athlete and a referee, will Qijia.com continue to be "false"?
Regarding the platform's development dilemma, Qijia.com did not work hard and tried to take measures to deal with it, but at present, it seems that the results have been minimal.
If you look at the history of Qijia.com, you can see that from around 2014, Qijia.com has opened up its own decoration business, and the following year, in 2015, Qijia.com started its decoration platform business again. Attempts to attract users' attention by summarizing the quotations of all participants in the home improvement market and details of the decoration projects, and then take advantage of the platform to recommend third-party decoration companies to users. In this way, Qijia.com has established a platform + self-operated business structure.
However, although Qijia.com's approach is both a platform and a self-operated business, it has not come up with a trick to balance the relationship between the two.
In this regard, senior media commentator He Xi once commented, “Although the business structure has been set up, because of the failure to balance the relationship between the platform and the self-operated business, Qijia.com has made itself a drape. Pseudo-platform's decoration company. The platform is not like the platform, and it has not been able to do it independently."
At the Qijia.com 2020 strategic upgrade conference, Qijia.com proposed the 2020 "Torch Upgrade Plan", stating that it will select 1,000 high-quality installation companies across the country, and the first batch of 100 star-rated installation companies will be launched to form the Qijia.com “Torch Library". Qijia.com will provide support for high-quality installation companies from five aspects: marketing, design, informatization, operation, and finance.
However, some home improvement companies have a lot of criticism about this. In their opinion, Qijia.com's recommendation mechanism is countering the company's brand image.
Some people even reported that Qijia.com’s AI recommendation mechanism will screen out high-quality customers and recommend Qijia’s self-operated home improvement platforms first, while the remaining “wrong melons and bad dates” for the cooperative home improvement companies ".
In addition, in April this year, Qijia.com also made a move, which is to carry out deep bundling with Haolaike. The strategies adopted by the two companies are: First, the two parties purchase each other’s shares with 80 million Hong Kong dollars to achieve cross-shareholding; then the two set up a joint venture to purchase customized home furnishing products from Haolaike and sell them through Qijia.com. . In this way, the interest relationship between Qijia.com and Haolaike can be said to be further. In addition, including the previous investment in Seagull Sanitary Ware, and the subsequent acceptance of the investment of Seagull Sanitary Ware, it is also the deep binding of Qijia.com in the field of building materials.
The idea is wonderful, but the more realistic problem seems to be deliberately ignored: when many home improvement brands or suppliers enter Qijia.com, how can we ensure that everyone is treated equally?
It has to be said that if Qijia.com is unable to effectively balance the interests of the major businesses and tries to simply bundle them together, the consequences of such a platform may be unpredictable. After all, if you want to be both an athlete and a referee, Qijia.com is not what users want to see.
Finally, looking at the current issuance status of Qijia.com, it is also worrying: On July 12, 2018, Qi Yi Technology was officially listed on the Hong Kong Stock Exchange with an issue price of HK$4.85. However, after two years, Qi Yi Technology's stock is now only about 2.19 Hong Kong dollars, the market value has been slashed, and the total market value is only 2.595 billion Hong Kong dollars.
Faced with such a declining predicament, especially now that the mobile Internet dividends are dwindling and customer acquisition costs continue to rise, when will Qijia.com, which has racked its brains to remedy it, get out of the predicament?
How long can the stimulus brought by the new financial report be stable?