Photo source: Visual China
Compared to live streaming e-commerce companies, Yuanwang Technology is more willing to position itself as a new consumer service platform driven by technology. Compared with Oriental Select and Make Friends Holdings, Yuanwang Technology is indeed richer in structure and genes. On April 29, Foshan Yuowang Technology Co., Ltd. (Yuowang Technology) also issued the 2023 annual results announcement and the first quarter results announcement of 2024.
According to the annual report, revenue of 4.777 billion yuan was achieved during the reporting period, an increase of 22.48% over the previous year. Furthermore, in the first quarter of 2024, the company's payment GMV reached 4.5 billion yuan, an increase of about 80% over the previous year, revenue of 1,581 billion yuan, an increase of 43.44% over the previous year, and the operating cash flow was corrected to 174 million yuan.
Although the company achieved a 22.48% year-on-year increase in revenue in 2023, it is still in a state of loss, with a loss of 1,049 billion yuan for the whole year. Yuanwang Technology's financial report explained that it was mainly due to three factors, speeding up the clean-up of footwear business and accruing bad debts amounting to 270 million yuan, increased investment in new consumer projects such as Hangzhou Yuanwang X27 PARK, and a loss of goodwill of 110 million dollars.
Of Yuanwang Technology's annual revenue of 4.777 billion in 2023, new media advertising and live e-commerce together account for more than 85% of Yuanwang Technology's revenue sources. This determines that the current business model of Yuanwang Technology mainly consists of three parts: the Internet advertising business driven by KOL traffic, which provides advertising content services for “planting - decision - purchase”; Internet advertising agency services as Douyin and Kuaishou platforms; and social e-commerce service business.
Over the past few years, Yuanwang Technology has had many business locations, successively developing business in fields such as film and television variety shows, live streaming industry bases, artificial intelligence applications, and commercial real estate. Among them, on December 22, 2023, Yuanwang X27 theme park officially opened in Hangzhou. It is a commercial complex project integrating offline travel and online commerce, and is also seen as a major source of performance growth in the first quarter of 2024.
However, Yuanwang Technology also has its own problems. Since getting involved in live e-commerce, we have faced a series of problems, including a sharp increase in labor costs, inefficiency and waste due to resource concentration, and the ability to reuse live streaming operation tools that have not met expectations. The problems they have faced are the contradiction between market growth and company management, as well as the challenge of exploring commercial space.
Financial reports indicate that in order for the value of star anchors to play a greater role, the company has created a more diverse monetization matrix around IP operation, distribution of live streaming clips, and commercial marketing. On the other hand, Yuanwang took advantage of its long-term advantage in artist resources to expand its business boundaries during the reporting period, and the variety, short drama, and performing arts markets all completed the initial layout.
However, it should be emphasized that Yuanwang Technology's live streaming delivery business will also expand overseas. According to financial reports, the company has formed a Tik Tok live streaming team and plans to carry out the company's North American debut of live streaming on Tik Tok in June of this year.
In the past three years, Yuanwang Technology's GMV has nearly tripled compared to the previous period, and revenue has doubled, but it has also caused continuous operating losses under rapid development. On the one hand, Yuanwang Technology is presenting a richer and more diverse new consumer service platform to the market, involving entertainment content, advertising, and live streaming delivery around celebrity artists. On the other hand, the market also expects this company to achieve positive profits as soon as possible through improving efficiency and exploring commercial space.