Chen Qi, the founder of Chinese fashion retailer Mogujie (Mogu Street), said in a letter to employees on April 18 that in order to focus more on the core business of live shopping and brand sales, Mogujie is carrying out a new round of layoffs.
At present, the number of employees to be "optimized" is 140, accounting for 10%, mainly concentrated in the technical department, and this business adjustment is "one-time, and there will be no large-scale layoffs in the future."
But analyzing Mogujie's current live broadcast e-commerce business, Mogujie does not have an advantage, and the outlook is hard to say optimistic.
Several executives leave within one month
On April 17, multiple anonymous sources in the anonymous area of a professional social networking platform released news about Mogujie's layoffs.
They said that "2019 freshmen will be laid off and only the team leader will be left." "Those with short entry time and no contribution to the business, satisfying the above two, are basically laid off."
A month ago, several senior Mogujie executives left.
On February 28, Mogujie issued an announcement stating that Senior Vice President Zeng Xianjie left for personal reasons.
On March 31, Mogujie once again announced that CFO Wu Ting resigned. On the same day, Jin Tingting (pseudonym Loy), the head of the e-commerce live broadcast business of the main business, also resigned for personal reasons.
The new coronavirus epidemic has become the main reason for Mogujie's layoffs. An apparel supply chain-related practitioner told aicaijing.com that the epidemic has caused a significant impact on spring sales of apparel brands. At present, some apparel brands have also suspended the research and development of new autumn models.
In addition, after the outbreak of the global epidemic, US stocks melted four times and the market weakened.
During this period, on March 12, Mogujie released its Q3 financial report for the fiscal year 2020, showing that Q3's total revenue was 269.5 million yuan, a year-on-year decline of 26.6%; a net loss of 1.634 billion yuan, a loss of 42.2 million yuan in the same period of the previous year, an increase of 37.7 times.
After the financial report was announced, Mogujie's stock price fell by 30%.
As a U.S.-listed company, Mogujie's stock price has fallen from $2.12 at the end of January to $1.04 today, and Mogujie's total market value is only $110 million.
Live e-commerce is not optimistic
Regardless of the current stock price, revenue or business progress, Mogujie is not optimistic.
In 2011, Mogujie, which focuses on the shopping guide for women's fashion content, went online.
Users can directly jump to Taobao after selecting related products in Mogujie, and Mogujie can earn profit.
In 2013, Mogujie was transformed into an e-commerce platform.
In January 2016, Mogujie merged with Meilishuo, which also started with rebates, to form the Meili United Group, with a valuation of US $3 billion. Mogujie co-founder Chen Qi served as CEO of the United Group.
According to data from both parties in 2015, the combined revenue of the two companies was 20 billion yuan.
In November 2018, the merged Mogujie officially IPO, Tencent is the largest shareholder, holding 18% of the shares.
In addition, Mogujie has also established a micro-selection joint venture with JD.com, which is also a Tencent department, to focus on WeChat's social e-commerce ecosystem.
Even though it has Tencent's resource advantages, the listed Mogujie has still gone downhill.
Mogujie's revenue is mainly divided into three parts, which are marketing services, platform commissions and other income.
In FY2018, Mogujie's revenue was $973 million, a year-on-year decline of 12.3%. Among the revenue structure of the year, marketing service revenue accounted for 49%, and the number of active buyers was 33 million. Growth has stalled compared with the previous year.
Since then, the proportion of Mogujie's marketing services revenue has continued to decline, and live broadcasting has become Mogujie's "new life-saving straw."
It is worth mentioning that after focusing on the e-commerce live broadcast, Mogujie's revenue composition has changed. Among them, the proportion of commission income has increased to 52.4%, and the proportion of marketing service revenue has been reduced to 26.9%.
However, no matter from the external environment or Mogujie itself, the live broadcast e-commerce seems to have no advantage.
From the launch of the live broadcast e-commerce business in 2016, to the announcement of "all in" and the launch of the live broadcast double hundred plan in 2019, Mogujie, which recruits popular anchors and institutions, faces the current situation of declining user traffic and diminishing popularity, and cannot compete with Taobao and Jingdong.
In 2019, Mogujie's number of active buyers was 26.6 million, a 22.9% decline from the same period last year.
In 2019, which is regarded as the first year of live broadcast e-commerce, in addition to Mogujie, multiple e-commerce platforms such as Pinduoduo joined the competition, and Douyin and Kuaishou, which started with the short video live broadcast service, also continue to add live broadcast e-commerce services.
Mogujie's bet on the live e-commerce business also showed signs of fatigue in Q3 of fiscal 2019. With the departure of the person in charge, Roy, the future direction is unclear.
