CICC'S "Investment + Investment Bank" Blessing: Kunchi Group'S IPO

In recent years, the prosperity of domestic e-commerce market has not only ignited the logistics industry, but also the e-commerce agent operation industry has also risen rapidly. Brand operators such as baozun e-commerce, one net one creation, beauty beauty makeup, ruoyushen and other brand operators have landed in the capital market one after another.

A few days ago, another leading player in the operation industry of home appliance companies has emerged and entered the IPO sprint stage. On January 21, 2021, Shanghai Road jiekunchi Group Co., Ltd. (hereinafter referred to as "Kunchi group") signed a listing guidance agreement with CICC, officially launching A-share listing.

It is understood that Kunchi group mainly provides comprehensive brand operation solutions for well-known groups at home and abroad. At present, the company has provided integrated services including brand and store operation, creative marketing, information technology services and supply chain services for more than 200 brands and thousands of physical stores.

The rapid growth of Kunchi group in recent years has also attracted the attention of investment institutions. According to people familiar with the matter, CICC and its wholly-owned investment platform, CICC capital, are the only external investors of the company, holding a total of 4.3% of the company's equity.

"Although some e-commerce agents have been listed in succession, Kunchi group still has unique value. After the company is listed in the future, I believe it will be recognized by the capital market. " Yang Liu, managing director of CICC capital, said in an interview with the 21st century economic report.

By virtue of sustainability and iterative ability, CICC capital is attracted

According to the reporter's understanding, the big consumption industry has always been one of the main tracks of CICC capital's attention. Specific to the e-commerce agent operation industry, CICC capital has invested in one network and one innovation, and obtained rich returns after the company went public.

Although one network and one innovation has been listed in 2019, CICC capital judges that with the rapid development of the e-commerce market, the e-commerce agent operation industry still has a lot of room for imagination. The concentration of this industry is low, and the market is far from the world level. Therefore, Yang Liu led the team to continue to look for potential targets in the primary market. Finally, Kunchi group entered its vision. After more than one year's exchange, the two sides reached cooperation on investment and equity.

"Kunchi used to keep a low profile in its operation, but it is actually the" hero behind the scenes "for many famous brands to open up the Chinese market. We attach great importance to the company's continuity and iteration ability, and we also admire the founder's team's judgment on industry trends and insight into consumer demand. " Yang said.

With the rise of e-commerce platform, Shanghai Kunchi Trade Development Co., Ltd., the predecessor of Kunchi group, was established, and eventually became an all scene brand operator with online platforms such as Jingdong, tmall, vipshop, pinduoduo and shuoyin, but also connecting Watsons, RT mart, Yonghui, HEMA and other offline channels.

In 2011, Kunchi group cooperated with Shiseido, a well-known Japanese cosmetics group, to open an official flagship store in China, boosting Shiseido to open China's e-commerce market. Since then, Kunchi group has successively established cooperative relations with international brand groups such as Henkel, lion king, Procter & Gamble, Nestle, etc.

The 21st century economic reporter understands from people familiar with the matter that in the development process of Kunchi for many years, there have been well-known PE Institutions, brand customers and e-commerce platforms who want to invest in the shares. However, due to its good cash flow, Kunchi did not consider introducing external funds. It was not until meeting CICC capital team that Kunchi decided to introduce external investors for the first time.

"It is mainly because of the mutual recognition of the concepts of both sides, which is the basis for long-term cooperation in the future." Yang said. At the same time, CICC's industry-leading comprehensive financial service capability can help Kunchi's development from multiple perspectives.

For example, CICC has invested a lot of excellent enterprises in the big consumption track, which can promote the resource docking and cooperation between Kunchi and other invested enterprises. The investment banking department of CICC can provide guidance for the listing of Kunchi. In the future, if there are opportunities for industrial integration and cross category M & A for Kunchi, CICC can also provide corresponding services.

Omni channel, cross category operation, forming industry moat

At present, in the e-commerce agent operation industry, although many companies have gone to the capital market, Yang Liu believes that Kunchi group still has its own characteristics and advantages.

First of all, most of the e-commerce agent operators are arranged around a single platform, such as relying too much on the tmall system platform, so it is difficult to expand the new platform. When its agent brand wants to enter other platforms from tmall platform, it is very likely to need to re select brand operators. Kunchi has a more comprehensive and balanced channel, covering not only mainstream online platforms such as Jingdong, tmall, vipshop, pinduoduo and shuoyin, but also high-quality offline channels such as Watsons, RT mart, Yonghui, HEMA, etc., which can provide full scene service for brand owners, and is one of the few new retail service providers that have realized the full channel operation of online and offline. At the same time, some listed e-commerce agents only focus on a large category for brand operation. Kunchi covers personal care, beauty, mother and baby, food, fashion and other fields, with cross category operation experience and ability.

"Some e-commerce agent operators also want to expand new platforms and new categories, but different platforms will have different settlement modes, service characteristics, accounting period requirements, etc., and the consumption habits of different categories of users are also different. Therefore, it is not easy to expand. Kunchi made layout ahead of time and formed a deeper moat. " Yang said.

Second, Kunchi is also trying to cultivate its own food brand on the basis of well-established brand operation services. For example, after studying the preferences and characteristics of the younger generation of consumers, Kunchi has developed a beef leisure food with good ingredients and tastes. The product is controlled from raw materials to production, and plans to sell through online channels.

"Although it is still relatively early, the revenue and profits brought by private brands do not account for a large proportion, but it reflects the company's brand incubation ability and the gene of continuous innovation." Yang said. In the future, with Kunchi's Omni channel operation ability, the development of its own brand has great potential.

Thirdly, Kunchi also has its uniqueness in terms of service mode and income structure. The service mode of most e-commerce agent operators is to provide brand services around the online e-commerce platform, while Kunchi focuses on the new methods of marketing and flow. At the same time, as a distributor, it does not forget to strengthen the performance ability of the supply chain. Kunchi's self-supporting warehousing system, which is spread all over the country and operates efficiently, is an important killer for Kunchi to win the favor of many brand business customers. Although both modes are called "e-commerce" But the income structure behind it is totally different. The trade volume of e-commerce agent operators who do brand services will be very large, but what they really earn is only a few points of agency operation service fees, and the income ceiling is low. As a more comprehensive brand operator, Kunchi's distribution trade volume is very close to the realized income, and the profit space and brand stickiness will also be stronger.

After entering the listing guidance stage, Kunchi is working hard to prepare the final listing application materials. Yang Liu said that after the listing of the company in the future, on the one hand, it will continue to expand more brands, categories and channels on the basis of existing business. On the other hand, the company will also pay more attention to the R & D of its own brand.

"Kunchi will choose categories that do not have key services to explore the possibility of private brand. The company's development goal is to become the world's leading brand operation group providing one-stop, omni-channel services, and at the same time, to create a matrix of private brands, which is also the focus of our post investment enabling work. " Yang said.

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