Who Dominates The Auto Internet Vertical Media Industry?

Shen Junhan, researcher of the 21st century innovation capital research institute

On August 25, auto home released the second quarter of 2021. According to the financial report, the operating revenue of Q2 auto home was 1.938 billion yuan, down 16.22% year on year. The net profit attributable to ordinary shareholders was 745 million yuan, down 9.43% year on year.

Among them, the revenue from media services was 600 million yuan, compared with 932 million yuan in the same period last year, a serious decline. The revenue of clue service was 744 million yuan, which was 841 million yuan in the same period last year, and there was also a lot of decline. Only online marketing and other revenue was 594 million yuan, an increase of 10.0% over the same period of last year. This is due to the impact of daily car auction and table consolidation and the increase in the income contribution of data products.

The financial performance of automobile home makes its leading position in the industry unstable. At present, the automotive Internet vertical media industry is facing more and more cruel competition environment. After Tencent holding shares, the existing e-Car has played the role of Challenger at all costs, and has greatly caught up with and overtaken in terms of business data such as monthly live users and new users, while others such as zhichedi, aika automobile and Pacific automobile are also in pursuit.

In the future, what is the development trend of automotive Internet vertical media industry and what changes will happen to the industry structure? What are the advantages and characteristics of car home, e-Car and auto company, and what is the development space for the second tier companies like eckar and Pacific motor?

The industry penetration rate is increasing, but it is facing certain transformation pressure

The birth of automobile Internet vertical media platform is a special cross event in the era of rapid growth of China's car ownership and the rapid popularization of Internet and mobile Internet. The platform mainly provides users with automobile related information and services related to automobile transactions, and meets the needs of users in terms of automobile information, knowledge, evaluation, car inspection, car viewing, car purchasing, etc.

Compared with the automobile market, the development of automobile Internet vertical media industry still has a more obvious growth. Aurora's "insight into the automotive information industry in 2020" shows that China's auto market will be nearly cut off in 2020 due to the impact of the epidemic at the beginning of the year. After the domestic epidemic situation was under control, the consumption demand of the automobile market recovered and the policy guidance was superimposed. The automobile sales exceeded the level of the same period in 2019, and the annual growth rate of production and sales decreased slightly, and the decline rate was narrower than that of the previous year. In January 2021, the domestic automobile production and sales volume will increase again, which will change the situation that January in 2019 and 2020 will be lower than that in January in two consecutive years, which reflects the great resilience and potential under the background of the transformation and upgrading of the domestic automobile market.

According to the above report, by 2020, the penetration rate of mobile automotive information industry has increased by 1.1 percentage points year-on-year, and the growth rate of Mau has reached 28.9%. This shows that the enthusiasm of users for automobile information is increasing, and the impact of the epidemic situation is more temporary suppression and delay of users' car purchase demand.

However, some people in the industry also said to the 21st century economic report that the auto Internet vertical media industry is also facing certain transformation pressure. On the one hand, with the popularization of automobile, the improvement of automobile design level, quality level and safety level, consumers are unprecedentedly familiar with automobile brand and performance. With the rise of we media and video platforms, consumers have lost the novelty of automobile information, and the popularity of traditional automobile themes has also declined. Consumers can access all kinds of automobile information on many traffic platforms. It is difficult for automobile vertical media to make a breakthrough through heavy investment.

On the other hand, the competition of automobile manufacturers has entered the white hot competition because the dividend period of the industry has passed, and it has also been transmitted to the downstream automobile Internet vertical media industry, which is characterized by the involution of price competition, the significant decrease of profit margin year by year, and the long-term accounting period of manufacturers' pressure media. For example, individual Sino foreign joint ventures and new forces of car manufacturing enterprises have long-term arrears of media payments, and even lead to litigation, which makes the turnover of accounts receivable of auto Internet vertical media enterprises continue to deteriorate.

At the same time, the intellectualization and electrification of automobiles have accelerated the 3C, Pan Technology and hot spots of automobile media information, and the authority of professional automobile media has been weakened. In terms of information form, long video, short video and live broadcast are more and more popular with users, and more traffic is inclined to the video platform.

Capital blessing: new and old players take turns

At present, the top two players of auto Internet media are car home and e-Car. Auto home was founded by Li Xiang, the founder of ideal automobile, and officially launched in June 2005. The company has obtained the early investment of Mingshi capital Huang Mingming, lansin Asia, Australia Telecom, etc., and was listed on the New York Stock Exchange in December 2013.

In 2015, Li Xiang gradually faded out of the car home. One year later, in 2016, Telstra, the major shareholder of auto home, exited, and Ping An entered the company with us $1.6 billion to gain control of the auto home. Ping An of China appointed Lu Min as chairman and CEO of auto home, and Qin Zhi and other former management of auto home left one after another.

In January 2021, the management of auto home will change again. Lu Min Rongxiu, the former chairman and CEO of the company, will be replaced by Long Quan, the former deputy general manager of Ping An Property Insurance. In May, Zhang Jingyu, CO president of auto home, announced his resignation for personal reasons. In July, Zou Jun, the chief financial officer, informed the company of his resignation for other personal reasons.

The continuous change of management has an impact on the company's operation, which is also reflected in the stock price level to a certain extent. Auto home's share price reached a record high of $146.820 on January 27 this year, and has gradually entered a downward channel since then. At the close of the U.S. stock market on August 31, the stock price of auto home was $44.26, nearly 70% lower than the peak value of the stock price, and its market value was 5.636 billion yuan. In March this year, auto home Hong Kong stock market was listed, but the stock price trend is still irrational. At the close of the Hong Kong stock market on August 31, the share price of motor home was HK $81, nearly 60% lower than the highest value on the stock market.

E-Car was founded in 2000 by Li Bin, founder of Weilai automobile. It has obtained early investment from Junlian capital, DCM China, Bai capital, etc. In 2010, e-Car was listed on the New York Stock Exchange, becoming China's first auto Internet company listed overseas. In January 2018, Li Bin announced that he would step down as CEO of e-Car, but he would still be the chairman of the board, and Zhang Xuan, CEO of Yixin, would take over the post of CEO of e-Car.

In June 2020, Tencent acquired e-Car with $1.1 billion, and the company completed privatization in November of that year. Zhang Xuan, CEO of e-Car at that time, said that e-Car would remain relatively independent after privatization, and would try to cooperate with Tencent in different fields.

In fact, in 2019, e-Car and Tencent have already launched the "Tengyi plan". Both sides have carried out cooperation in content ecology, advertising marketing, smart 4S stores, etc. with the completion of privatization in 2020, e-Car will also accelerate its integration into Tencent ecology, and carry out in-depth cooperation in content, customer-oriented and product side, including content, sales leads, and dealer SaaS services.

In addition to the two industry giants mentioned above, there are still platforms such as zhichedi, aika and Pacific automobile, which have certain development potential.

Zhichedi was launched in August 2017, which is a one-stop vehicle media and service platform under byte beat. Its strength can not be underestimated.

Founded in August 2002, eckar automobile, as a vertical portal of automobile, has the attributes of automobile media and automobile interest social platform. At present, in addition to maintaining the influence of professional automobile media, eckar focuses on developing automobile interest communities, creating online and offline social scenes for car owners, and realizes circle breaking drainage through large-scale outdoor self driving cultural innovation IP.

Through mutual diversion with Pacific computer network, through professional traffic purchasing and exposure cooperation with Alipay, Pacific automobile has always maintained the second echelon status of auto vertical media.

Ecological assistance: home of Yi Che vs. super car

For a long time in the past, auto home has been the number one in the industry. But in the past two years, this situation has changed. With the support of Tencent, e-Car's business has accelerated, and the growth momentum of key data indicators such as dau, Mau and app monthly has surpassed that of auto home. In addition, other rising stars are also rising rapidly, leading to changes in the industry structure.

Aurora data shows that since November 2018, the dau and Mau of e-Car app have increased for 33 consecutive months year-on-year. At the same time, according to the Research Report on Q2 mobile Internet industry data in 2021 released by Aurora, among the mainstream automotive information apps, the number of mobile Q2 mobile users of e-Car series applications increased rapidly compared with the same period of last year, with an average Mau of 31.773 million, a year-on-year increase of 57.2%, becoming the first in the industry since Q4 in 2020.

In terms of measuring the new users of drainage capacity, e-Car also has a relatively prominent performance. According to Aurora's report, the number of new users per day of e-Car will be the first in 2020: the average number of new users of e-Car will reach 170000 in 2020, ranking first; The number of new users per day reached 153000, while the number of new users of automobile family was close to 150000.

However, some industry insiders have analyzed the 21st century economic report and said that e-Car has made great efforts in the direction of youth and made progress. After being acquired by Tencent, e-Car has more powerful capital support, and has also introduced some high-end talents from home, which may also have a certain improvement in the flow and energy input. In contrast, the car home is a listed company, in the flow of investment, market promotion, there must be strict profit assessment requirements.

It is worth noting that different capital forces also bring different growth impetus to each platform. For example, Tencent gives more concepts to e-Car in commercial products to obtain the advertising of manufacturers, and its big data algorithm direction also gives e-Car a good help.

Ping'an has brought about the injection of management ability to the automobile home, especially the improvement of execution ability and cost reduction and efficiency enhancement ability. However, in terms of innovation, it did not give the market a distinct impression as before Ping'an entered the market. At the same time, as a listed company, the pressure of keeping profits may affect its long-term development potential.

However, because its DNA is the attribute of traffic platform rather than automobile vertical media, its commercialization and cash ability is always backward. What's more, knowing chedi has not made breakthrough innovation in the industry. At present, it has tried to realize the clues in-depth through the self built chain city exhibition hall, which is likely to directly compete with the dealer group. It is not clear whether the business model can run smoothly.

In November 2015, Guanghui took a stake in aika automobile. Five years ago, this was a kind of layout behavior of Internet traffic resources when automobile e-commerce was the hot spot in the market. However, after the automobile e-commerce has become a pseudo proposition, the synergistic effect between them has been weakened. In the fierce competition of giants, eckar tries to grasp the main line of the car, socialize online and offline, and get out of differentiation, but the effect is not significant. However, in the field of digital marketing transformation that Guanghui is promoting, it is precisely in terms of innovating car owner service and deepening the operation in the field of private traffic. There are still new opportunities for significant synergy between the two sides.

Under the promotion of capital, how many listed companies will appear in the auto Internet vertical media field in the future? Tao Tao, a partner of cornerstone capital, told the 21st century economic report that after returning to Hong Kong for listing this year, auto home did not actually improve its valuation. If the privatization and re listing of e-Car is aimed at the A-share market, it must also have an obvious profit scale. From the perspective of the whole industry, auto Internet vertical media is already a mature industry. The valuation of domestic capital market is not very new. Under the background of no obvious innovation in the revenue mode of the platform, the domestic listing prospect of this industry is still unclear.

"However, there is still a huge space for the development of China's auto industry. Chinese auto giants and new forces have huge opportunities in the process of China's transformation from a big manufacturing country to a manufacturing power. The automobile Internet vertical media platform plays a connecting role in the funnel of automobile Internet marketing, and there is still a huge market volume and innovation space," Tao Tao said. The future development opportunities of the industry lie in seizing the Z generation population, seizing the car owners and grasping the automobile lifestyle.

(this paper is a series of research results on investment and financing of TMT industry in the 21st century innovation capital research institute.)

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