In the era when everything is on the market, Weipai Hall, an e-commerce company, is going to be listed.

In a niche vertical market like Wentao, the market share of Weipai is currently the first in the industry. However, in 2021, Weitai Hall's GMV, active merchants, active buyers and other data declined, quite a hint of decline.

Micropat Hall, which is already in decline, but also has to face the impact of cross-border giants such as BABA auction, Douyin, Kuaishou Technology and other cross-border giants, where are the opportunities for Weitai Hall in the future?

A number of core data declined, and operating cash flow was negative

Climbing the Great Wall, eating roast duck and visiting Panjiayuan are three indispensable events for tourists from home and abroad to visit Beijing.

Beijing Panjiayuan is the country's largest antique secondhand market, before the epidemic, Panjiayuan is bustling, everyone is looking for their own "treasure".

Collector Ma Weidu once said that in Beijing in the early hours of the morning, two places were the busiest. One was Tiananmen Square, and the other was Panjiayuan.

Since the epidemic, the flow of people in Panjiayuan has been much less than before, but most businesses have not been idle. While selling goods offline, they use Douyin and Kuaishou Technology for live streaming. The studio and the text game e-commerce platform have become bridges between merchants and consumers.

In terms of GMV, the market size of Chinese text game e-commerce has grown from 23.3 billion to 166.2 billion from 2017 to 2021, with an annual compound growth rate of 63.4%. It is expected to grow from 192.5 billion to 434.1 billion from 2022 to 2026, with an annual compound growth rate of 22.5%.

Such a 100 billion-level market has given birth to vertical text game e-commerce such as Weitang and Toy Dezhi, and has also attracted the attention of Internet giants such as BABA, Douyin, Kuaishou Technology and so on.

In 2014, micropat founder Lin Zhiming developed Wechat stores, distribution tools and static picture and text auction tools, and introduced guarantee mechanisms such as return and exchange, drawing on the experience of large e-commerce platforms, attracting 20, 000 merchants a year.

The micro-auction hall mainly promotes the trading of eight categories of cultural collections, such as jade jewelry, handicrafts, coin stamps, purple sand ceramics, tea and wine, calligraphy and seal cutting, mainly through picture auction and live auction.

In 2017, vertical e-commerce is on the rise. With the outbreak of short videos and live broadcasts, the literary game industry has once again ushered in the opportunity to touch the net deeply.

However, the micropat hall, which has been established for many years, has not fully enjoyed the online dividends brought by the live broadcast and the epidemic. In the past 3 years, many indicators of the company have ups and downs, which means that they are going downhill.

In 2021, several core indicators from Weitaotang to GMV, active merchants and active buyers all declined. Of this total, GMV in 2021 was 40.53 billion, down 21.6 percent from the same period last year; the number of active merchants was 79000, down 28.9 percent from the same period last year; and the number of active buyers was 3.907 million, down 32.9 percent from the same period last year.

The loss of core merchants and core buyers has led to a decline in Weitaotang's GMV, which also affects the company's revenue.

The income source of micro-pat hall mainly includes platform service fee (including commission and annual platform service fee), online marketing service fee and so on. In the past three years, the commission income of the platform accounted for about 60%.

In terms of income, the income of the micropat hall doubled in 2020, directly exceeding 1 billion yuan. Of this total, commission income was 680 million, an increase of 153 per cent over the same period last year. In terms of commission / GMV, the figures from 2019 to 2021 were 0.64%, 1.32% and 1.52%, respectively.

What is even more frightening is that in 2021, the cash flow of the micropat hall will be negative. From 2019 to 2021, the company's net operating cash flow was 510 million, 310 million and-210 million respectively.

02 vertical e-commerce first, in the face of the impact of Taobao Douyin

The decline in the flow of micropat hall, in addition to its own problems, but also has the factors of intensified competition in the industry.

According to the prospectus, in the field of vertical e-commerce, there is a high degree of industry concentration. As far as GMV is concerned, Weipaitang, Tiantian Jianbao and Toy Dezhi will account for 79.6% of the market share in vertical text game e-commerce in 2021. Among them, micro-pat hall accounted for 62.5%, Tiantian Jianbao accounted for 12.5%, and toys accounted for 4.6%.

The market share of Weipai Hall is significantly higher than that of Tiantian Jianbao and Jinwu, mainly because the latter two platforms were established in 2018, and the vertical e-commerce of text games has already been taken advantage of by Weipai Hall.

Micropat Hall is dominant in vertical e-commerce, but the competitive pressure of the company comes from the outside.

In terms of GMV, the combined market share of the top five e-commerce platforms for text games in China will be 66.7% in 2021. Among them, the market share of micropat hall is 24.4%, ranking first in the industry. According to the description of the prospectus, it can be inferred that BABA's market share is 18.1%, ranking second; Douyin's market share is 13.9%, Kuaishou's market share is 5.4%, respectively; and Tiantian Jianbao ranks fifth with a market share of 4.9%.

BABA auction, Douyin and Kuaishou Technology have a total market share of 37.4%, which shows that the main competitors of Weizhang Tong are not Tiantian Jianbao and Toy success in the same field, but these cross-border e-commerce giants and short video giants. With the rise of integrated live streaming e-commerce platforms such as Kuaishou Technology and Douyin, merchants and consumers began to divert.

According to the 2021 document game e-commerce industry insight report released by Mob Research Institute, the age structure of text game e-commerce users is characterized by "small at both ends and big in the middle"-the post-70s are still the mainstay, but the rise of young people born in the post-90s has accelerated, with nearly half of the consumers under the age of 35, who happen to be the main users of platforms such as Douyin and Kuaishou Technology.

In addition, according to the data of Weipai Hall, in 2021, the company's single order sales were 475 yuan, and the unit price of active buyers was 10374 yuan. This means that most players on the platform are consumers who spend only a few dozen or a few hundred yuan to buy a cultural relic to experience or taste fresh, while those who spend tens of thousands of yuan on literary games are still a small number.

The consumption data may have something to do with the change in young people's attitudes towards literary play.

The purchase purpose and value expectation of generation Z for walnuts and handstrings is not to highlight their identity and improve their collection. It seems that what young people fall in love with is not the dish of walnuts, but the entertainment, circle, social value behind the plate of walnuts.

From the perspective of new consumer groups, Weipai's opponent is not the same kind of Tiantian Jianbao, but Douyin, Kuaishou Technology, BABA auction and other giants.

03 it is difficult to tell the true from the false, and the threshold of trust is too high.

Consumers spend tens of thousands of text games, the most afraid of buying fake goods, after all, the vast majority of consumers are not experts, the vision to distinguish between true and false is not so superb.

Data from the black cat complaint platform show that there are a large number of complaints from several major text game vertical e-commerce companies. As of June 7, the total number of complaints in Weipai Hall was 2314, that of Jianbao was 1056 every day, and that of Toy Dezhi was 4993.

One of the main problems complained about by these platforms is "fakes". A businessman who once opened a shop in Weipai Hall said, "80% of the shop sells fake goods, or the pictures are wrong."

In March 2021, the official account of CCTV Finance and Economics Wechat posted that "the annual sales are about 43 billion yuan, and this App is rampant with fakes!" The counterfeit seller refuses to admit it! CCTV reporter unveiled the black screen of the racquet platform, the article once brushed out the circle of friends of collection lovers. A reporter from CCTV Finance took a picture of the autumn rhyme in Southern Xinjiang by Li Yi, a contemporary painter and member of the artists Association, for more than 500 yuan, and contacted Li Yi himself to identify the painting. Li Yi replied: the pen is disorganized, the color is all wrong, very superficial, fake!

In June 2021, Weipai Tang was fined 1.35 million yuan by the Hangzhou Branch of the State Administration of Market Supervision for using misleading and false advertisements in promotional activities. know or should know that some merchants on the platform fail to take necessary measures to protect customers' rights and interests when selling fake, unauthorized or infringing products, fail to perform the obligation to verify registered merchants' information, and so on.

In order to solve the problem of trust and lower the threshold of consumer consumption, the Jian Zhen Pavilion has also been launched on Weitang APP, which is similar to the identification organization on the APP.

However, the appraisal results of Jianzhen Pavilion do not seem to be completely convincing.

A merchant who sold coins on the micropat hall said, "they have two coins that are not worth much in modern times, and there are no fakes on the market, but Jianzhen Pavilion gives a fake report and sends the coins to the quintessence identified by the micropat hall. The result is a high score of authentic products, but the customer service of the micropat hall said that the platform does not support the identification results of leaving Jianzhen Pavilion."

In 2019, Hangzhou Youai Investment Game Co., Ltd., a subsidiary of Weitang, bought a stake in Nanjing Baoqui, a platform specializing in the identification and rating of all kinds of coins. For the same coin, two related companies gave diametrically opposite results. Such a contradictory result eventually led to the merchant being withheld the deposit by the micro-pat hall and closing the shop for 14 days.

As the leader in the field of text game e-commerce, and a company that is attacking IPO, Weitaotang should shoulder the industry responsibility to create an ecological environment that is beneficial to consumers and merchants, rather than just thinking about collecting transaction commissions and platform service fees, otherwise, in the face of the impact of BABA auction, Douyin and Kuaishou Technology, it is impossible to go far.