This article is from WeChat official account:Gelonghui New Stock (ID: ipopress)< span class = "text-remarks">, author: by the wind, formerly titled “Wish company, a ten billion dollar market value of the unicorn has begun to take shape,” from the title figure: vision China
race track
Since the 1990s, the period of universal income growth in the United States has ended. The Internet bubble and capital market boom have led to unequal income distribution.(income inequity)< /span>Intensified.
The change in median income of each degree in the United States in the past 30 years
It can be seen from the figure that the income of “graduating in grade 9” has increased from 15,000 to 25,000 in the nearly 30 years from 1990 to 2018, only an increase of about 10,000 US dollars. On the contrary, the income of doctorate and professional qualifications has increased by 70,000 and 80,000 US dollars respectively in 30 years. As an intermediate-level undergraduate (bachelor), the median income increased from 50,000 to 95,000, an increase of 45,000.As of 2018, (older data), the median income of associate’s degree and below is still hovering below $60,000.
The change in median income of each state in the United States in the past 10 years
The inequality in income distribution across states is equally significant. From 2007 to 2017(older data), the three states with the fastest income growth rate were Washington Columbia Region(Washinton DC), North Dakota (North Dakota) and South Dakota Kota (South Dakota). The sharp increase in income in the Washington region shows that the United States is turning to politicization. The surge in income in North and South Dakota is due to the employment opportunities created by the shale oil revolution.
However, in addition to these individual cases, other fast-growing states have returned to the economically developed northeastern regions such as New Jersey, Massachusetts, and Connecticut, as well as the traditionally rich western regions such as Washington, California, Alaska, and Hawaii. area. These states not only rank among the top growth rates, but also rank among the top in absolute value of median income. The growth rate of traditional agricultural states such as Louisiana, Delaware, New Mexico and West Virginia was the bottom, and the absolute level of median income was also the bottom.
The third is the scissors between GDP and incomedifference. After the 2008 financial crisis, GDP returned to its pre-crisis level in 2012; however, the median income did not return to its pre-crisis level until 2016.
These phenomena all show that the United States is currently experiencing sluggish economic growth, the polarization of the rich and the poor, and the expansion of income polarization. The logic behind this is the consolidation of classes. This is a phenomenon that has occurred in the economies of Japan and Europe since the 1990s; in the United States, this trend is not obvious due to the technological Internet boom and the real estate boom. But after the subprime mortgage crisis, the United States has inevitably fallen into the social scene of Japan’s “lost thirty years”. In this environment, consumption stratification is an inevitable phenomenon.
Consumption stratification brings business opportunities. “Sinking the market” is the biggest business opportunity. Few people in the United States mention the “sinking market”, but for American society, the characteristics of this market are actually sufficiently obvious:
1. Reduction in conspicuous consumption
2. Consumption focuses on practical functions
3, cheap goods are very popular
China has no ethnic issues. The median income of Latinos and blacks in the United States is relatively low, while whites (non-Latinos) and Asians have always had higher incomes. Industrial workers among whites earn lower incomes, while jobs in technology, internet, finance, and venture capital industries earn higher incomes. Asians generally have the highest income because they are mainly engaged in higher education and high-tech industries.
The ancestral homes of Asian races generally have relatively strong economies(China, Japan, Korea, Hong Kong, Macao and Taiwan), and most people don’t travel far away U.S. employment; therefore, the Asian race living and working in the U.S. should belong to the top of the world’s food chain.
Therefore, all these determine that the sinking market in the United States is more complicated than that in China. Different races, different linguistic and cultural backgrounds, living in different states, and the nature of the work they belong to will cause their consumption propensity to vary greatly. Therefore, China’s sinking market has one face of a thousand people, while the sinking market of the United States is bound to be “one thousand people”. This requires that the platform of the US sinking e-commerce must effectively distinguish and label users to improve efficiency.
player
The sinking markets in Europe and the United States, combined with China’s labor cost advantages, have formed a unique business model of “Chinese goods + sinking global markets”. So the question is, is there any company in this market?
The answer is: yes.
In fact, cross-border e-commerce (Chinese goods + global market) has already had many companies in the business, including the Internet The figure of a giant.
(1) AliExpress (AliExpress)
It is not difficult to know that there is an “Ali” in the name. AliExpress is a cross-border brand under the e-commerce giant Ali.
AliExpress is an extension of Alibaba’s business model to the international market. According to my understanding, his logic is to “let the world and China have no difficult business”, but it is not positioned in a sinking market in a certain country. Currently, AliExpress mainly targets Russia, Israel, and third world countries (Brazil, etc.).
AliExpress was launched in April 2010, and the logistics mainly uses postal services.The main feature is low cost, but the problem is that the delivery cycle is too long, and the phenomenon of missing parts occurs from time to time, and the after-sales cost is high. It is generally difficult to use this method for fresh food and small items.
The product range is wide, ranging from ballpoint pens, lighters, socks, underwear to automobiles and even CNC machine tools. For example, in the first quarter of 2019, AliExpress launched the first “Buy Online” project in Russia. The user places an order online, delivers a deposit, and then ships it from China, and then stores it temporarily in a designated store; the user picks it up at the store, and delivers the final payment to drive the new car away. Currently known cooperative brands include Anhui Chery, etc.
(2) Ebay
eBay is an American e-commerce giant, founded in 1995, and its markets are mainly the United States and Europe. In recent years, it has provided cross-border e-commerce services to Chinese businesses. Because it is a US company, it pays more attention to compliance, and the product listing and review process will be longer; it has done a lot in consumer protection.
(3) Amazon
Amazon adopts an asset-heavy approach, and many Chinese businesses have established warehouses overseas. But to sum up, whether it is Alibaba, eBay or Amazon, there is currently no business model specifically targeting the US, Europe or even the sinking global market. However, according to the previous analysis, the sinking market in Europe and America is a very large and promising market.
In short, the current cross-border e-commerce track is in the ascendant, especially in the sinking US (Global) market. There are huge business opportunities. Has the potential to run out of 100 billion market capitalization companies. And the company we want to introduce below: Wish, is one of the unicorns that is expected to emerge in the subdivision of the US sinking market.
Wish’s business model analysis
Wish was founded in Silicon Valley by Chinese-born Zhang Sheng and European Peter Szulczewsk. It was formerly a technology service company called ContextLogic, oriented towards mobile advertising.
Wish entered the field of foreign trade e-commerce in 2013, focusing on mobile APP operations, mainly selling “ultra-low price” small items, such as women’s clothing, watches, sneakers and jewelry. Most of the platform sellers are from Asia.
According to the prospectus, the current number of merchants on the Wish platform is 500,000, the average number of monthly active users is 100 million, the number of products is 150 million, and the average number of products sold per day is 1.8 million. The number of goods that have been distributed is 640 million.
According to the data of MarketplacePluse, a US statistical agency, 94% of Wish merchants are from China, and Guangdong sellers account for 27%.
Different from Amazon’s positioning, Amazon pays more attention to the improvement of search functions, while Wish focuses more on technology and algorithm driving. In the prospectus, Wish attributed its advantages to “a rich and ever-growing database of transaction behaviors of merchants and users, and continuous optimization of transaction and decision-making behavior based on this.” Translated into human language, that is, Wish will match the behavior of users and merchants, help merchants guide users, help users recommend merchants, and achieve “a thousand people with a thousand faces” to improve efficiency.
Of course, there are also some interesting games. For example, the brush volume problem. Some businesses will hire a bunch of single young men to buy women’s underwear, stockings and other goods; then the result of the final user match is that the Wish platform will automatically push feminine products to this user group of “single young men”. This is obviously a mismatch. Of course, the most unwilling to see such a result is the business.
In short, Wish uses an algorithmic optimization model to target businesses-Optimizing user relationships is an interesting attempt.
According to the stage theory of technology company development, Wish is still in the stage of “expanding traffic” and has not made obvious loss control or profit attempts.
The prospectus shows that Wish’s revenue in 2017, 2018, and 2019 were US$1.1 billion, US$1.728 billion, and US$1.9 billion respectively; it is in a trend of continuous expansion. The losses reached US$147 million, US$223 million, and US$144 million in 2017, 2018, and 2019, respectively.
The operating loss in the first nine months of 2020 was 120 million U.S. dollars, and the operating loss in the same period last year was 24 million U.S. dollars. According to linear calculation, this year is estimated to be around 160 million US dollars.
The nature of Wish’s technology-driven nature determines that it must be a money burning machine. Up to now, Wish has raised a total of 1.6 billion US dollars. Investors include General Atlantic, Founders Fund and GGV Capital.
Wish completed more than US$500 million in financing in 2015, with a valuation of approximately US$3 billion. In 2017, it received F round of financing. Investors include Temasek, DST, Third Point Ventures, Founders Fund, Everbright Capital, etc.
In August 2019, Wish received a US$300 million Series H financing led by Pan Atlantic, with a valuation of US$11.2 billion. This is Wish’s current highest valuation. According to the current exchange rate, the market value of Wish has exceeded RMB 70 billion, which is equivalent to the current size of the Bank of Jiangsu. If placed in A shares, the market value can be among the top 200.
Such a high valuation reflects the market’s recognition of Wish’s model. This is because the valuations of listed companies such as Pinduoduo and Meituan that are sinking the market according to the same mode of play have reflected the marketTheir recognition. After all, such a high market value does not mean that the growth space has been closed; on the contrary, the reason why the market gives these companies extremely high valuations is precisely that their growth may have just opened up.
It is reported that Wish will also launch a localized “Wish Local” project, cooperating with local (US) physical retailers, consumers will be able to Pick up products in these physical stores so that the products are closer to the consumer group and can also drive the traffic of physical stores. See if you don’t see it, there is already a bit of “community group buying” here.
By the way, the community group buying model has become a meat grinder for giants and capital in China, and the blood flowed into the river; however, Europe and the United States are still in their infancy.
Conclusion
In the current round of Internet boom, Chinese companies are undoubtedly leading the world. The root cause is not difficult to understand.
In the United States, it is hard to imagine that some counties that are already large and sparsely populated have several families living in one square kilometer, and what business model will be used there. This is not the case in China. China’s huge population base and complex grassroots social network provide “scene-driven” Internet companies with the world’s richest scenarios and profit models based on these scenarios.
In fact, many of the business models that have run through in China, on the contrary, are still in a state of no one in the European and American markets; In this sense, Chinese Internet companies are moving to Europe and the United States.(even Indo-African)The possibility of “model output”.
In 2020, in the cross-border e-commerce brand Wish, we will see the possibility that this kind of thinking from the Internet in China will form a “dimension reduction blow” on the European and American markets. This is probably the reason why this company can get so many top global venture capital funds.
Wish filed a prospectus in the U.S. last Friday and will soon be listed on the Nasdaq. The amount of funds to be raised this time is US$1 billion. The founders are Chinese-American Zhang Sheng and Polish-Canadian Peter Szulczewski. The latter was born in 1981 and was named Canada’s youngest billionaire by Forbes.(billionaire).
(The two founders of Wish, picture source: Hustle)
This article is from WeChat official account:Gelonghui New Stock (ID: ipopress)< span class = "text-remarks">, author: by the wind