People’s lives are more and more inseparable from mobile phones, and the shared power bank relieves everyone’s mobile phone battery anxiety. However, recent changes in the industry have attracted attention. Some people say that various factors have caused the shared power bank to be “out of power”; others believe that although the shared power bank industry is facing challenges and pressures, the consumer demand is stable and there is still considerable market prospects. What is the current development of the shared charging treasure industry? Under the normalized prevention and control of the epidemic, what kind of dilemma is it facing, and how will it break through?
With the upgrade and iteration of smart phone software and hardware, people’s use of mobile phones is increasing, and heavy usage scenarios are increasing. Power bank has become one of the indispensable supplies for many people when they go out. However, due to factors such as convenience, safety and personal habits, many people are still reluctant to carry or forget to carry power banks. Shared power banks have successfully alleviated people’s anxiety about using mobile phones with their advantages of “borrowing, returning and leaving” and charging on time.
While enjoying the convenience brought by the shared power bank, people are also troubled by some problems. The price is getting more and more expensive, the product is forced to buy after the timeout, and some after-sales services are not in place… Why do these problems occur? And how does it reflect the survival situation of the company? Where is the development path of the shared power bank enterprise? With these questions, Economic Daily reporters visited many shared charging treasure application scenarios to investigate.
Say goodbye to the one-dollar era
Wen Li, a Beijing consumer, still remembers the pleasant experience when she first came into contact with a shared power bank. “Using a shared power bank makes charging time and space more free. In the past, I had to bring my own charger when I went to a restaurant to eat. I often stared at the mobile phone charging at the counter while eating, which was very inconvenient.” In addition to convenience, favorable prices It also impresses users. Xiao Zhu, who has worked in Beijing for two years, has been using shared charging treasures since 2017. “At that time, many brands of shared charging treasures were subsidized, and the mobile phone could be fully charged for less than one yuan.”
At that time, as a new track in the field of sharing economy, shared power bank was a blue ocean in the eyes of capital and enterprises. The “2020 Shared Power Bank Industry Research Report” released by iResearch shows that after the initial exploration of the operation strategy and the determination of the main product types, the shared power bank industry ushered in an explosive period in 2017. According to incomplete statistics, there were more than 30 industry financings this year. In the following three years, more than 300 shared power bank companies have been established one after another.
Driven by capital, all kinds of power bank cabinets have entered supermarkets, cinemas, hotels, scenic spots in first- and second-tier cities… People have become accustomed to the convenience brought by this sharing economy product.
At the same time, industry manufacturers are gradually widening the gap in the fierce competition. On the one hand, the elimination of small manufacturers is accelerating, and on the other hand, leading companies are moving towards merger or listing. After several years of development and industry reshuffle, on April 1, 2021, Monster Charge was listed on Nasdaq. On the same day, Jiedian and Soudian announced their merger and officially named Zhumang Technology on May 6. Since then, the industry has gradually formed a competitive landscape dominated by leading companies such as Monster Charge, Zhumang Technology, Xiaodian Technology and Meituan.
In the process of industry development, several price hikes have pushed shared power banks to the forefront of public opinion. The price increase in the first half of 2021 has attracted the attention of the market supervision department. Business entities, including a group of shared power bank brands such as Monster and Xiaodian, are called to participate in the administrative guidance meeting in the field of “shared consumption”, requiring companies to enhance compliance. Awareness, regulating price behavior and competitive behavior. Although the price increase in the shared consumption field has been curbed since then, and the price tag has gradually become transparent and standardized, the shared power bank has also completely bid farewell to the era of one yuan.
In May of this year, when the reporter visited a shopping mall in Fengtai District, Beijing, he found that the rental price of shared charging treasures is generally 4 yuan/hour. Previously, the reporter visited Xingtai City, Hebei Province and saw that the charging standard for shared charging treasures of the same brand is 3 yuan/hour, and individual brands reach 4 yuan/hour.
However, the price increase to a certain extent did not significantly affect the user’s demand for use. “In recent years, I use the shared power bank more and more frequently. The battery capacity of the mobile phone is not high, and it must be useful when I play outside for a day. As long as the price is not excessive, I can accept it.” Wen Li said. Xiao Zhu also said that the current availability of shared power banks is high, and you can borrow them easily when you go out. Moreover, he often uses it for an hour to fully charge it, so he is not very concerned about the price.
“For users, the loss of mobile phone power may be greater than the expenditure of 3 yuan or 4 yuan per hour. Therefore, the shared power bank cultivates the user’s habit of not using a shared power bank, but the habit of not carrying a power bank. When user habits are successfully cultivated, companies will not be too worried about the loss of users due to price increases.” Pan Helin, co-director and researcher of the Digital Economy and Financial Innovation Research Center of Zhejiang University International Business School, told reporters.
The profit dilemma behind the price increase
Why does the shared power bank increase the price? Internet industry analyst Liang Zhenpeng said, “As a shared economy, shared power banks have been operating at a loss since their inception. Enterprises rely on various venture capital to conduct price wars to seize the market, but such a business model is not sustainable. Whether it is an investment institution or an enterprise, its goal is to make a profit, and an appropriate price increase for an enterprise is to make a profit.”
The difficult survival situation of the shared power bank industry can be seen from the financial data disclosed by leading companies. According to Flush data, Monster Charge, the “first share of shared charging treasure”, will have operating incomes of 2.022 billion yuan, 2.809 billion yuan and 3.585 billion yuan in 2019, 2020 and 2021, respectively. Although the revenue has increased year by year, the net profit has shown the opposite trend, which is 167 million yuan, 75.43 million yuan and -125 million yuan respectively.
To uncover the truth of the profit dilemma of the shared power bank industry, we might as well explore from the industry’s own characteristics. Due to the mature technology of the upstream industry chain and many product suppliers, the shared power bank industry lacks technical barriers and has a low entry threshold. Lured by a considerable market size, companies are destined to experience fierce competition driven by capital.
In contrast to the fierce competition on the enterprise side, it is the scarcity of high-quality points. In order to settle in high-quality spots in some first- and second-tier cities, shared charging treasure companies do not hesitate to pay high admission fees and share fees, and the operating costs of the enterprises remain high. According to the research report of Essence Securities, in 2020, the sales cost of monster charging will total 2.12 billion yuan, accounting for 75.5% of total revenue. Among them, the share paid to merchants was as high as 1.2 billion yuan, a year-on-year increase of 45.5%.
In addition to the high cost, the single profit model is also an important reason for restricting the profitability of shared power bank companies. At present, the industry’s income mainly comes from the shared charging treasure leasing service. Enterprises are not only prone to the crisis of peaking profits, but also do not have sufficient anti-risk capabilities.
Once the stable passenger flow is lost, the defects of the single profit model will be fully exposed. After the outbreak of the new crown pneumonia epidemic, the closure of offline stores has brought a huge impact on the shared power bank industry that relies on offline leasing business for a living. While the main business income has decreased, the fixed rent, personnel, maintenance and other costs have not been reduced equally, resulting in the lower-than-expected profits of most companies.
During the visit, the reporter found that the setting of the shared charging treasure cabinet is related to the density of human traffic. In the shopping layers such as clothing, shoes and hats, generally only 1 to 2 cabinets are set up, while in the catering and entertainment layers, the number of cabinets has increased significantly, mostly 5 to 6. It is worth noting that due to the impact of the epidemic, the flow of people in shopping malls has decreased, and the utilization rate of shared charging treasures is also low. The reporter saw that only a small number of shared charging treasures have been lent, and most of them are still in cabinets.
Even so, Zhang Yuan (pseudonym), the investment manager of a brand sharing power bank, is not pessimistic about the development prospects of the industry. “The current epidemic has indeed caused a certain negative impact on the shared charging treasure industry, but the current national epidemic prevention and control measures are in place, and the impact of the epidemic on the industry is not uncontrollable. Moreover, the wide deployment of shared charging treasures is also conducive to spreading risks. Waiting for the epidemic After that, the demand for shared power banks will gradually recover.”
The industry explores the way to break through
With fierce competition for points, high costs, and a single profit model, is sharing power banks still a good business? With the impact of the epidemic in the century, where should enterprises go in the future?
“At present, there is no breakthrough in mobile phone battery technology, and people will always need temporary electricity. Based on the huge number of mobile phone users, the number of shared power bank users has been increasing in recent years, and the corresponding consumption habits have gradually formed, so There is still a very considerable market prospect for shared power banks.” Zhang Yuan said.
Reports released by a number of research institutions also pointed out that the market prospects for shared power banks are still broad, especially in the sinking markets such as third- and fourth-tier cities, which have huge growth potential. In fact, some leading companies have begun to adjust their strategies and increase the layout of the agency model.
In the early stage of the industry’s development, in order to facilitate the development of the first- and second-tier cities, shared charging treasure companies mostly adopted the direct sales model to seize the spot. A report released by Sullivan and Toubao Research Institute shows that under the direct sales model, companies directly negotiate with offline merchants, rely on their own local push teams to build equipment, and provide operation and maintenance. After the charging treasure obtains the rental income, a certain percentage of commission is paid, and for some high-quality points, the admission fee needs to be paid in advance. As the competition for some high-quality spots intensifies, their entry fees and share fees also continue to increase. The high cost pressure combined with the impact of the epidemic has led to a general decline in corporate revenue.
Under the influence of the epidemic, the direct sales model, which has always been favored by enterprises, has exposed the defects of heavy assets and high costs. The advantages of the agency model in controlling cash flow and costs are highlighted.
In the agency model, the enterprise sells the equipment to the agent, and the agent is solely responsible for the installation and operation of the equipment. Except for a small part of the service fee from the rental income, the rest is handed over to the agent for distribution. In this way, the point competition and profit pressure are shared by the agents, and the prepaid admission fee waiver also greatly relieves the company’s cash flow pressure.
An agent of a brand sharing power bank told reporters: “There are often merchants looking for cooperation with us. This is a two-way selection process. We have to consider the flow of stores. For example, in third-tier cities, at least 30 orders can be opened per month. Equipment. The profit sharing ratio is generally 30% to 90%, and the higher the turnover, the higher the profit. The profit distribution of third- and fourth-tier cities is far lower than that of first- and second-tier cities. In some popular spots in first- and second-tier cities, each The monthly profit distribution can reach 10,000 to 20,000 yuan or even higher, while some locations in third- and fourth-tier cities may only be able to share a few hundred yuan per month. For some small merchants, the most important thing is convenience users, not money.”
The reporter learned that in some leisure and entertainment places in Xingtai City, Hebei, the daily profit attributable to the agent of laying three cabinets is between 120 yuan and 140 yuan. In convenience stores, pharmacies and other places with relatively low consumption, laying one cabinet The daily profit of the cabinet attributable to the agent is about 89 yuan. The specific revenue situation is related to the pricing and traffic flow of different venues.
Even if the market size is huge and the industry has broad prospects for development, a cruel reality for shared power bank companies is that user stickiness is generally not high.
Shared power bank companies have been trying to enhance user stickiness. According to iResearch’s report, creative marketing, especially scenario-based marketing, has become one of the focuses of enterprises. Jiedian has made a lot of explorations in scene marketing and brand linkage, such as jointly launching a customized power bank with Beijing Palace Palace Cultural Development Co., Ltd., and taking advantage of the situation to plan quiz activities during the World Cup. In addition, facing the dilemma of a single profit model, there are still companies actively looking for a second growth point. In April 2021, the liquor brand “Kaihuan” under Monster Charge was officially launched, and took advantage of its resource advantages of more than 200 million users to launch its first attempt.
“To expand profit channels, companies should consider what products are suitable for the development of the sharing economy and have market demand. Within the framework of the sharing economy, create some new consumption scenarios and consumption needs. For example, make some vending machines, self-service printers, etc., Diversify the business model and increase the income per unit time.” Liang Zhenpeng said.
Pan Helin believes that the shared power bank lacks room for related diversification offline, and the best way is to do a good job in the shared power bank market. “If you must diversify, you should extend vertically to the upstream of the power bank to achieve diversification. For example, the acquisition of power bank manufacturers, or the exploration of battery raw materials, etc.”
Market regulation still needs to be improved
“Currently, the focus of shared power bank companies is still staking the field. The company is more concerned about creating a business model and promoting it. In this process, it is easy to ignore some details in terms of user experience, after-sales service, product quality, etc. “Liang Zhenpeng said.
Some problems in the use and return of shared power banks have also been criticized by users for a long time. In recent years, disputes over the protection of user rights and interests arising from these issues have frequently appeared in the media and the Internet.
Xiao Zhu told reporters about some inconveniences of using a shared power bank. “First of all, the battery capacity is relatively small. Under normal circumstances, if you want to use a mobile phone with a friend, the power may be insufficient. Furthermore, after connecting the mobile phone, you need to press the switch on the power bank, otherwise it will not charge automatically.” Xiao Zhu said.
Compared with these small shortcomings in use, what annoys users more is the problem of the return and after-sales of the shared power bank.
“Once I went out to play, I borrowed a power bank, and when I left, I asked the clerk to help me return it. But after a few days, I found that I couldn’t return it, so I was forced to spend 99 yuan to buy a power bank. When I communicated with the brand’s customer service, The other party feels like an artificial intelligence customer service, and the answer is not correct. In the end, the problem is not solved, so it can only be left to nothing.” Wen Li talked about this experience and believed that the shared power bank enterprise should take the corresponding responsibility, and the user failed to solve the problem. Give reminders and provide more complete after-sales service when returning on time.
The encounter between Xiao Zhu and Wen Li is not an exception. Up to now, there have been nearly 13,000 related complaints on the black cat complaint platform using the keyword “shared power bank” as the key word. Most of the complaints are related to poor customer service handling, difficulty in returning, and unreasonable charges.
Li Ping (pseudonym), a person in the shared power bank industry, told reporters, “From what I’ve observed, user complaints mostly focus on two issues. One is the quality of the power bank, which is caused by the use of some power banks for a long time. It is related to the loss of batteries or other components. Second, the customer service processing efficiency is not high, which may be because there are many people inquiring at the same time, resulting in the customer service processing not being timely.”
In the face of user complaints and feedback, why is the company lacking in corresponding improvement and optimization? Pan Helin believes that, on the one hand, enterprises focus their development on product coverage at this stage, and they do not pay enough attention to product complaints; on the other hand, it is because current users’ complaints about low-value consumer goods are often not active enough, and there is also a lack of complaint channels. “In order to make enterprises pay more attention and improve user experience, it is still necessary to strengthen supervision and open up complaint channels.”
Liang Zhenpeng also believes that enterprises cannot rely on self-discipline alone. Now in industries with better after-sales service, government departments have issued and improved relevant regulations and rules. “For the sharing economy, we rarely see the regulatory authorities require the complaint rate to be controlled, and spot checks on the pass rate and failure rate, etc., and there is very little quantitative assessment of enterprises. The regulatory authorities should pay more attention to the new economic field. and research, so that the industry can be regulated under government supervision.”
(Editor in charge: Ke Xiaoji)
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