Ruhan, the first online celebrity e-commerce company, wants to save itself by delisting.

The negative news of its major KOLs continues to affect performance, and the stock price continues to fall. When can Ruhan break the curse of Internet celebrity dependence?

It was learned that on November 25, Ruhan Holdings issued an announcement stating that the company’s board of directors received preliminary non-binding privatization proposals from the three founders Feng Min, Sun Lei and Shen Chao (buyer group). At a price of US$0.68 per share, all issued Class A common shares of the company that the buyer’s group has not yet held will be acquired. At present, the company’s board of directors has established a special committee composed of three independent directors to conduct follow-up evaluation and review of the transaction involved in the proposal.

Affected by this news, as of November 25, Ruhan’s stock price was $2.89, a decline of 6.17%.

In fact, Ruhan Holdings, an MCN institution that relies on incubating Internet celebrities as e-commerce companies, has continued to slump since its listing in 2019. The current company’s market value has shrunk from approximately US$1 billion at the beginning of its listing to 256 million.

Especially in April this year, the leading influencer, CMO Zhang Dayi, who contributed nearly half of Ruhan’s GMV for three consecutive years, was plagued with negative news, which had a greater impact on Ruhan’s performance. According to the financial report released on the 23rd of this month, the total net income of Ruhan in the second quarter was 249 million, a year-on-year decrease of 9%, a decrease of about 11% from the previous quarter, and a net loss of 31.2 million. The financial report said that the sharp decline in sales of self-operated stores opened in the name of Ruhan’s Internet celebrities was the main reason for the decline in net income this quarter.

In addition, some Internet celebrity self-operated stores that copied big-name branding, poor quality but ridiculously expensive, are slowly losing the trust and attention of consumers. Last year’s Double Eleven, Zhang Dayi’s “My Happy Wardrobe” was the second largest seller of Taobao women’s clothing stores. However, affected by the scandal, according to statistics from the business staff, Zhang Dayi’s trading index this year is only half of that of last year.

Image source: Ruhan official website

For the rise of Weibo, Ruhan, who is familiar with the path of incubation of Internet celebrities, makes decisions about the company’s strategy and business structure at this time. Appropriate adjustment is very necessary. According to the founder Feng Min in an interview with the media before, the transformation to the platform business has now become Ruhan’s main development direction, that is, through its contracted celebrities to provide third-party brands and platforms with promotion and other related services. According to Ruhan’s official website, the company currently has 180 exclusive contracted celebrities, with 295 million followers on the entire network and 1,423 service brands. The second quarter financial report shows that the service revenue from Ruhan platform business has increased by 84% year-on-year to 119 million yuan.

Nowadays, the online celebrities doing live broadcast e-commerce are obviously more attractive to consumers to “plant grass” to place orders than in the past with pictures and texts. Wei Ya and Li Jiaqi from the Tao Department, Quick hand Simba, and even Sydney, which became popular at the same time as Zhang Dayi Become a competitor that cannot be underestimated in the live broadcast industry.

The road to platform transformation has just begun, and the high marketing costs brought by the continuous increase of incubating new Internet celebrities are also one of the problems that Ruhan needs to solve urgently. In any case, it is definitely not an easy task to recreate a “Zhang Dayi” in the live broadcast business with many leading Internet celebrities.