Economic Observer Network reporter Xie Chuchu On April 22, the “first share of Internet celebrity e-commerce” Ruhan (NASDAQ: RUHN) announced that it had completed the privatization transaction. From the listing of Guangxi in April 2019 to the privatization now, Ruhan has ended its two-year listing journey.
With the privatization and delisting of Ruhan, how the Internet celebrity company maintains sustained and healthy profits has also become a topic of concern in the market.
Share price has shrunk 72%
According to public data, the affiliated company of Ruhan is Hangzhou Ruhan Holdings Co., Ltd., which was established in 2001. It is a celebrity e-commerce service provider. It is mainly engaged in the operation and establishment of social e-commerce online stores of Internet celebrities, with a fixed style. , For users whose personal brand has been formed, provide them with basic operation services such as supply chain management. In April 2019, Ruhan was listed on the Nasdaq, known as the “first share of Internet celebrity e-commerce”, and its well-known Internet celebrity “Zhang Dayi” appeared at the listing site.
Zhang Dayi is also the core of Ruhan. In 2014, with the first internet celebrity Zhang Dayi to establish a clothing store on the Taobao platform, Ruhan created a new model of “Internet celebrity e-commerce” and won SAIF Asia’s Series A financing in the same year. Subsequently, Ruhan gradually transformed from a single “Internet celebrity + supply chain” to a “Internet celebrity + Internet celebrity incubation + supply chain” model. At present, Zhang Dayi, the co-founder of Ruhan Holdings, is also the CMO of Ruhan Holdings. The clothing store “My Favorite Wardrobe”, founded by Zhang Dayi and opened the door to Ruhan, currently has more than 10 million fans; in 2016, Zhang Dayi opened an underwear shop and a make-up shop on Taobao; June 2018 , Zhang Dayi founded his own beauty brand BIGEVE BEAUTY, with more than one million fans.
Behind Ruhan, Alibaba is also the key. According to official website information, Ruhan is the only MCN (Internet celebrity economic operation model) institution in which Alibaba has invested. In 2016, it received hundreds of millions of C rounds of financing led by Alibaba, and landed on the NEEQ in the same year.
Although it is the “first share of Internet celebrity”, Ruhan’s performance in the capital market is not good. Ruhan’s issue price was US$12.5, but it broke at the opening. As of the end of the day, it fell 37.2% to US$7.78, with a market value of US$649 million.
Pursuant to the terms of the merger agreement, on the effective date of the merger (the “effective time”), each American depositary share (“ADS”) of the company representing the company’s five Class A common shares will be issued and the U.S. deposits circulated immediately before the effective date. The depositary receipts and the related shares represented by such American depositary receipts are cancelled in exchange for the right to receive $3.50 in cash (without interest) per American depositary receipt. This price is a far cry from Ruhan’s issue price (US$12.5) two years ago.
Behind the delisting
Why do we have to exit quickly after only two years of listing? What plans will there be in the future? In this regard, Ruhan responded to the reporter of Economic Observation Network, and all the announcements shall prevail.
According to Ruhan’s financial report, as of the third quarter of 2020, the company’s revenue was 249 million yuan, a year-on-year decrease of 9% from 272.7 million yuan in the same period in 2019, and a net loss of 31.2 million yuan. According to external analysis, Ruhan’s loss and delisting were due to the fact that, on the one hand, too many resources were concentrated on the head, such as Zhang Dayi himself; on the other hand, he missed the live broadcast.
In fact, when Ruhan went public, Wang Sicong, the son of Wanda Group CEO Wang Jianlin, once commented: “The monetization of Internet celebrity KOL is not the problem, but Ruhan’s company. Ruhan’s business model has three problems: first, The large amount of marketing expenses is puzzling; secondly, relying too much on the top-brand internet celebrity Zhang Dayi; thirdly, no new internet celebrities have been cultivated, and the internet celebrity marketing model has not been successfully verified.”
The “reliance on top-brand internet celebrity Zhang Dayi” is also reflected in the company’s financial performance. According to public information, from 2018 to 2020, the stores of Zhang Dayi, the leading internet celebrity of Ruhan Holdings, accounted for more than half of the company’s revenue. In April 2020, Zhang Dayi’s negative incident occurred. On the same day, Ruhan’s stock price plummeted by 10%, and its market value lost $22 million overnight. In the third quarter 2020 financial report, Ruhan also attributed the significant reduction in product sales to Zhang Dayi’s negative publicity impact since April 2020.
According to Qixinbao data, on May 29, 2020, Hangzhou Ruhan Holdings Co., Ltd. undergoes an industrial and commercial change. Alibaba (China) Network Technology Co., Ltd. and other 8 corporate shareholders withdraw from the investor sequence. After the exit, the company has a total of 4 The natural person shareholders are Feng Min, Annan, Shen Chao and Zhang Yu.
Regarding the problem of missing the live broadcast outlet, according to the reporter of Economic Observation Network, Ruhan has always emphasized that it attaches great importance to the value of “live broadcast”, and will start to deploy its live broadcast business separately in the second half of 2019. In addition, since 2017, Ruhan has begun to sign external celebrities, gradually extending from a single self-operated Taobao store model to a platform model where third-party brands and stores bring goods. As of September 30, 2020, there are nearly 180 celebrities in the head, middle and lower parts.
According to Ruhan’s 2020 third-quarter financial report, the proportion of revenue from live broadcast to platform model revenue has increased from 2% to 26%. From the perspective of the income of celebrities, the top celebrities are still the main force in generating income. The financial report shows that as of September 30, 2020, Ruhan has 8 top celebrities, generating about 28% of the total income; there are 24 central celebrities, and the income is similar to that of the top celebrities, accounting for about 33% of the total income. %.
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