Old Customers Spend 2000 Yuan A Year On A Lot Of Spells, And Hao Hit 6 Billion 900 Million, Adding 53 Million 100 Thousand Active Buyers!

More recently, the third quarter earnings report was released in 2019. During the reporting period, a lot of business revenue was achieved at 7 billion 513 million 900 thousand yuan, an increase of 123% over the same period last year, 3 billion 372 million 400 thousand yuan. Among them, the three quarter, a lot of online marketing technology services revenue of 6 billion 711 million 400 thousand yuan, compared with the same period last year 2 billion 974 million 100 thousand yuan, an increase of 126%. Platform trading service revenue was 802 million 500 thousand yuan, an increase of 101% over the same period last year of 398 million 300 thousand yuan. The cost of platform sales and marketing is 6 billion 908 million 800 thousand yuan, up 114% from the same period last year, representing an increase of 805 million 100 thousand yuan over the previous quarter of 6 billion 103 million 700 thousand yuan, up 114% yuan. In the three quarter, a lot of R & D fees increased further to 1 billion 127 million 200 thousand yuan, an increase of 240% over the same period last year.

In addition, in the three quarter, a lot of business losses were 2 billion 792 million yuan, an increase of 1 billion 269 million 500 thousand yuan compared with the same period last year. Under non general accounting standards, the operating loss of the platform was 2 billion 123 million 500 thousand yuan. In the three quarter, the net loss attributable to ordinary shareholders was 2 billion 335 million yuan, compared with 1 billion 98 million 300 thousand yuan in the same period last year. Under non general accounting standards, net loss attributable to common shareholders was 1 billion 660 million 400 thousand yuan, compared with 618 million 900 thousand yuan last year.

The results also showed that as of September 30, 2019, the number of active buyers for many years was 536 million 300 thousand, a 150 million 800 thousand increase over the same period last year, a 53 million 100 thousand increase over the previous quarter. In the three quarter, the average monthly number of active app users was 429 million 600 thousand, an increase of 197 million 900 thousand over the same period last year, an increase of 63 million 600 thousand over the previous quarter. In the 12 months ended September 30, 2019, the platform GMV reached 840 billion 200 million yuan, an increase of 144% over the same period last year of 344 billion 800 million yuan.

According to the insiders, a lot of efforts were launched in June to implement the "10 billion subsidy" plan, and quickly open the second tier market structure through iPhone, Dai Sen hairdryer and other major commodity preferences, and promote the rapid upgrading of platform GMV and user numbers. Especially during the "double eleven" period, the number of active users of the "10 billion subsidy" entry day exceeded 100 million, and there were more than 2800 domestic and foreign brands, and more than 23000 hot commodities.

According to the financial report, as of the three quarter of the 12 months, a lot of GMV was up to 840 billion 200 million yuan, an increase of 144% over the same period. After eliminating the annualized smoothing effect, the GMV increased by 110% in the single quarter. The number of active buyers reached 536 million, an increase of 39% over the same period last year, and 53 million new users in the quarter, a record high, higher than the 19 million new users in the same period. The number of monthly active users reached 430 million, an increase of 85% over the same period. In the three quarter, the cost of getting a lot of customers was 130 yuan / person, a decrease of 23 yuan, and the annual consumption of the active buyers continued to rise to 1567 yuan, of which the average annual consumption of the old customers reached 2000 yuan. In the 1-9 months, the annual passenger price of the first tier cities reached 5000 yuan; the ARPU increased to 46.6 yuan, and the price of multi unit passenger price and the per capita income generating capacity of the benchmarking Ali were still larger.

After distributing more than three quarterly reports in 2019, its marketing expenses outlay 6 billion 900 million exceeded the original expectations of the market, causing the company's share price to plummet. However, in Dongxing securities analyst Ye Sheng, it is reasonable to evaluate whether the marketing expenses are reasonable or not, or to combine marketing expenditure with its performance.

Short term performance: a lot of marketing efficiency is very high. From the observation point of view, a lot of 6 billion 900 million marketing expenses should be spent mainly in three places:

(1) advertising marketing: do online and offline advertising display, enhance brand image and build user mind;

(2) acquire new users: typical practices such as WeChat social fission, red envelope cash withdrawal;

(3) commodity subsidies: typical practices such as "billions of subsidies" aim at promoting new users' attempts to buy, increasing old customers' re purchase and category upgrading.

From the actual results, the cost of marketing expenses is very high. It is assumed that the cost of marketing is 6 billion 900 million yuan for all new users, and 53 million 100 thousand active buyers in the same period. The cost of each active buyer is 130 yuan. Compared with that, Jingdong spent 4 billion 450 million yuan on marketing expenses this quarter, increasing 13 million 100 thousand active buyers and counting every active buyer.

The cost is 340 yuan. Although the cost of acquiring Taobao is difficult to calculate, it is expected that the cost of acquiring passengers will not be lower than that of Jingdong. Therefore, the cost of acquiring a lot of customers is much lower than that of the main competitors, about 38% of Jingdong.

Ye Sheng believes that in the long run, the key to whether a lot of marketing expenditures are reasonable is whether the newly acquired users can be retained and continuously renewed, and continue to increase consumption. Excellent business models, the value of the customer in the whole life cycle (LTV) will be far higher than the initial customer cost (CAC). And if you pretended to observe the marketing expenses, the number of users and the growth of GMV: the increase in marketing costs to more than 6 billion yuan occurred in the 4 quarter of 2018, 4 quarters ago.

Over the past 4 quarters, there has been a huge increase in the number of users, which shows that the retention of users is very good. Its active buyers rose from 386 million at the end of the three quarter of 2018 to 536 million at the end of 2019Q3, an increase of 39% compared with the same period last year, while the total number of active buyers increased by 150 million. The average monthly number of APP users rose from 232 million in the three quarter of 2018 to 430 million in the three quarter of 2019, an increase of 85.4% over the previous year and an absolute increase of nearly 200 million. If there is no good user retention, it is very difficult to achieve such a good result.

In terms of GMV, it is difficult to draw conclusions at the moment. Ye Sheng expects that in the three quarter of 2019, a lot of GMV will be close to 250 billion, increasing by 100% over the same period. However, as the marketing cost of the three quarter of 2018 was 3 billion 200 million, the marketing expenses increased by 115% over the same period last year. In this case, it can be judged that the growth of GMV is driven by marketing costs. It can also be considered that a lot of marketing costs are more for new customers, and the old customers can buy them again. Therefore, we need to observe one or two quarters of data to better illustrate the problem.

Ye Sheng pointed out that from the past four quarters of performance, a lot of marketing costs have been hovering around 6 billion. During the period, the volume of customers increased significantly, indicating that the customers were in good condition. Although GMV was growing at a high speed, it was difficult to explain the problem and needed time for further observation.

The researchers said that with the promotion of some popular hot products such as iPhone in the tens of billions of subsidies, and the improvement of quality control over the whole platform. The trust of users is also increasing. Per capita GMV rose from 1467 yuan in the two quarter of 2019 to 1567 yuan in the 2019 quarter of three. According to the conference call, according to the three quarter figures, the annual consumption of first-line urban users has exceeded 5000 yuan. Although the per capita GMV of Alibaba is more than 8700 yuan, the GMV per capita is still relatively low, but the trend of per capita GMV is rising obviously, and the recognition degree of users to the platform is increasing.

Peng Yi, a researcher at Zhongtai securities, pointed out that the three quarter was the off-season sales of e-commerce. Under the pressure of competition from giants such as Ali and Jingdong, many of them had gone through a blood route with the help of "billions of subsidies". The number of new users increased to a record high in the quarter, and the unit price and GMV of customers increased rapidly. In the short term, the growth and retention of users is a strategic focus. Next, we will continue to increase subsidies to promote user experience and platform tonal enhancement. In the long run, the risk of user churn attracted by pure burning money is greater. The negative reaction of capital market to corporate losses is more intense. The long-term high investment in marketing is difficult to sustain, and the supply chain optimization measures such as category expansion, brand and C2M commodity ratio are the key to enhance the core competitiveness of Ping Tai.