Lesbians, who have been rumored to be on the market, finally got certain news this time.

On the evening of March 28th, Lala officially submitted its prospectus and applied for listing on the main board of the Hong Kong Stock Exchange. the main body of the listing is "lesbian Technology" (English name: Lalatech). Goldman Sachs Group, Bank of America Securities and JPMorgan Chase & Co are the co-sponsors of the IPO.

"first profit in 2022", "business scope has been expanded to freight platform services, diversified logistics services and value-added services", "Global closed-loop GTV largest logistics trading platform". Cargo Lala's latest disclosure of the prospectus opened a new chapter in the "capital story" of the Internet freight platform.

01

The largest logistics trading platform of global closed-loop GTV

In the prospectus of cargo Lala, "making a profit for the first time in 2022" and "the largest logistics trading platform of global closed-loop GTV" are particularly prominent.

In 2020 and 2021, the adjusted losses for the year were $155 million and $631 million, respectively. In 2022, the adjusted profit for the year was $53.23 million, turning losses into profits. This also means that lesbians who have been established for ten years have made a profit for the first time.

In this regard, the prospectus explains that the reasons for profitability lie in the following four aspects: huge network effect, effective cash realization strategy, improvement of income sources and gross profit margin, and improvement of operating efficiency. In other words, first there is enough traffic, and then continue to realize through the flow, do a few more business balance income situation, the cost can be controlled, to ensure growth.

It is worth noting that the gross profit margin of cargo lesbians in 2022 increased to 53.7% from 38.5% two years ago. In response, cargo Lala said that mainly because of the company's leading position and the scale of initial investment in technology, brand and user acquisition and experience, the company was able to grow in a more cost-effective manner.

The prospectus also shows that cargo lesbians have done business in more than 400 cities in 11 markets around the world, including Southeast Asia and Latin America. The global GTV of freighters increased from US $3.732 billion in 2020 to US $7.307 billion in 2022, with a compound annual growth rate of 39.9%.

According to Frost Sullivan's data, in terms of closed-loop GTV in the first half of 2022, freighters are already the largest logistics trading platform in the world, with a market share of 43.5%, while the top six participants together account for 73.1% of the market share. It can be seen that freighters are absolutely ahead of the closed-loop freight market. At the same time, according to the prospectus, more than 90% of the transactions completed through the cargo pull platform in 2022 were closed-loop transactions, well above the industry average.

02

Commercialize the Internet in the logistics industry

According to the official website, lesbians were founded in 2013 and grew up in Guangdong-Hong Kong-Macau Greater Bay Area. Founder Zhou Shengfu was once the first top ten winner in the college entrance examination in Hong Kong and New Territories. After graduating from Stanford University, he worked as a professional Texas poker player for seven years.

Why did Zhou Shengfu leave Texas hold'em to start Lala?

According to a lesbian employee, Zhou Shengfu told the company executive that one day he realized that Texas hold'em was a zero-sum game and was meaningless. He "won't play for the rest of his life" and should do something valuable.

In 2013, the mobile Internet entered a period of rapid development. Zhou Shengfu, who has a keen vision, soon smelled the business opportunity of "the logistics industry commercializing the Internet". Subsequently, Zhou Shengfu set up the Easy Van platform in Hong Kong and later developed into a "cargo lesbian" in mainland China and an overseas lalamove.

At that time, it was the period of O2O entrepreneurship. The mainstream way of starting an O2O business is to burn money desperately to subsidize the market, hoping to cultivate a large number of user habits in this way. The same is true of O2O freight in the same city. At the craziest time, there was even a crazy strategy of subsidizing 100 yuan in the market.

In 2016, the players of the first echelon at that time had one after another operational difficulties and fell down one after another, but it was the lesbians who were the second echelon players at that time who "left" to the end.

So, what did lesbians do right?

In addition to the internal summary of cargo lesbians pointing to "the earliest to stop subsidies and advocate winning by operation", the cautious Zhou Shengfu chose the small B and C user market and chose a conservative rather than radical strategy in urban development. it is very important for cargo lesbians to survive the 2014-2016 industry scuffle and develop.

In 2017, cargo lesbians ushered in rapid business growth, with the number of Kaesong surging from 39 to 108, rushing to the first echelon. Subsequently, lesbians received financing at a rate of almost a year.

Yunji Inc, the star of investment institutions behind cargo Lala-there are not only front-line investment institutions such as Sequoia Capital China, Hillhouse Capital, Shunwei Capital, but also Internet big companies such as Tencent and Meituan.

03

Continue to expand the "boundary" of the business

According to the prospectus, at present, the main business of cargo lesbians includes three major sectors: inter-city / cross-city freight platform services, integrated enterprise services, moving services, truckload and other diversified logistics services, and value-added services such as car rental and sale. Behind it is the strategy that lesbians have been trying new business and exploring the quadratic growth curve for many years.

According to Frost Sullivan, the GTV of China's intercity freight segment is $213.2 billion in 2022 and is expected to grow at a compound annual growth rate of 12.1 per cent from 2022 to 2027. China's cross-city freight market, with a GTV of $704.4 billion in 2022, is expected to grow steadily at a compound annual growth rate of 4.3 per cent from 2022 to 2027.

In the two huge and imaginative markets mentioned above, lesbians work the deepest and largest share of the market.

The market share of inter-city freight disclosed by GOGOX in 2022 shows that Lala accounts for more than 50% of the domestic inter-city freight market share.

In terms of cross-city freight, the prospectus shows that the technical infrastructure, operational expertise and existing large number of merchants enable Lala to successfully expand the platform and provide support for the development of cross-city freight business. Cross-city freight business is expected to become one of the main drivers of long-term growth.

According to Frost Sullivan, Lala has now expanded its cross-city freight service to more than 210 cities, while more than 70% of the first merchants are existing merchants using intra-city freight services.

In addition, as far as the same market is concerned, a core logic for cargo lesbians to develop new business is to find new business scenarios that can make use of existing resources and capabilities on the basis of the expansion of the market scale and the volume of existing business. new business scenarios that improve the efficiency of matching cars and goods and reduce the cost of bilateral customers.

Based on the above logic, cargo lesbians have been expanding the types of goods transported, lengthening the transport distance and expanding the mode of transport in recent years, resulting in cross-city freight, moving, truckload and other businesses. When the specific business has been verified in the established market, cargo Lala will try to copy the business model and operational experience to other markets to carry out similar new business.

In December 2017, the mainland Enterprise Edition of Freight Ladies was officially established, and in 2018, it expanded from providing unplanned services for small B-end customers and C-end customers to providing planned services for medium and large B-end customers. This series of services support the intensive management of corporate vehicles, and are equipped with exclusive customer service and fleet.

On March 27, 2023, cargo lesbians took the lead in running errands in Shenzhen and Shanghai, providing real-time distribution services in the same city, such as document bills, 3C digital, clothing accessories, flowers and green plants, fresh food and so on. In fact, this is also one of the main businesses carried out by cargo lesbians in overseas markets such as Thailand and India.

Through the development model of in-depth market expansion and horizontal business replication, cargo Lala has achieved the double growth of total freight order transaction volume and business income in the past three years. According to the prospectus, the total global freight GTV of Lala cargo is about $3.445 billion, $6.157 billion and $6.715 billion in 2020, 2021 and 2022, respectively.

04

Build a competitive "moat"

Now, ten years after its establishment, freighters have come to the door of IPO, but the story of freighters has not been finished-in the prospectus, they mentioned that they would use their existing experience to build a competitive "moat" to seek new growth and match more scenarios for their unique abilities.

According to the prospectus, unlike the information publishing platform, which simply shows the freight demand and the contact information between the carrier and the merchant, cargo Lala can promote end-to-end freight transactions-from order placement, pricing, advance payment, freight matching, order tracking to payment settlement and confirmation, that is, transactions completed through the cargo Lala platform are closed-loop transactions.

At the same time, Lala is also committed to solving all the core logistics needs of intra-city and cross-city freight transactions, while providing diversified logistics services and value-added services for merchants and drivers, bringing value to both ends. On the platform, merchants can obtain convenient, reliable and cost-effective freight services provided by a large number of drivers to meet their transport needs. On the other hand, the platform matches a large number of orders for drivers, allowing them to choose orders according to their own work plans and schedules, which can not only make their work more flexible, but also effectively increase their income.

This convenient one-stop experience is very beneficial to improve the customer retention rate and cultivate the long-term stickiness of users, but also helps Lala gain market share.

According to the prospectus, from 2020 to 2022, the average number of monthly active users increased from 7.3 million to 11.4 million, the average number of monthly active users increased from 500000 to 1 million, and the number of global fulfillment orders reached 428 million in 2022. According to Frost Sullivan, Lala is one of the few closed-loop digital freight platforms in the world that generate more than $1 billion GTV a year.

In addition, in terms of technology, cargo lesbians have the practice of digital intelligence of "people, cars and goods roads", freight maps, big data accumulation and so on.

For example, cargo Lala is the first digital freight platform in China to adopt proprietary digital maps optimized for freight transport. according to GPS data, proprietary maps automatically generate POI output information, making it convenient for merchants to choose pick-up and unloading places.

At the same time, cargo lesbians are promoting the "Anxinla" on-board intelligent transport Internet of things system to all registered vehicles on the platform to achieve real-time tracking and analysis of vehicles, drivers and cargoes to ensure our transparency and safety to merchants and carriers.

Cargo Lala has also internally developed integrated IoT software for HD recording, overspeed alarm, one-click alarm, accumulating a variety of proprietary data during end-to-end transactions, and constantly optimizing the company's solutions.

According to the cargo Lala's plan, the funds to be raised after the listing of the company will be mainly used for three aspects: the growth of the mainland's core business and the expansion of the types of services, global business expansion, and R & D investment.

Liu Dacheng, deputy dean of the Internet Industry Research Institute of Tsinghua University, believes that the addition of brands and capital after listing will help them promote the aggregation of resources more quickly and form a competitive moat.