Recently, there was a rumor that executives from IDG Capital and Qingsongchou have had multiple contacts with Shuidichou, urging the merger of the two companies. After the merger, the proportion of the new company will be 65% for Shuidichou and 35% for Qingsongchou. ” News of the merger between Qingsongchou and Shuidichiu has been reported earlier. In the merger rumors in December last year, the merger ratio was 3 for Qingsongchou and 2 for Shuidichi.
Whether the rumors are true or false is not yet certain, but from the following four aspects, Liu Kuang believes that a merger between the two companies is more likely.
1. The bonus period is coming to an end, and the Internet industry is ushering in a wave of mergers and acquisitions
The business logic of the Internet industry is different from that of traditional industries. The Internet industry sells mostly services. Regardless of the size of the users, the cost of the products is mostly the same. For a platform model without offline physical costs, the marginal cost of acquiring market share approaches 0. Therefore, in the end, the industry structure will often move towards one superpower with multiple powers, or the top two companies will acquire a monopoly through merger. As Amazon founder Bezos said, "There are no medium-sized companies on the Internet. They must either get bigger or be out."
It has almost become the development law of the Internet industry that one of the two top companies in a field will either be eliminated in the competition or merge. Looking back at the development history of the Internet industry, there are many such examples, such as Didi and Kuaidi, 58 and Ganji, Meituan and Dianping, Ctrip and Qunar, all of which have gone through the process from competition to hand-in-hand mergers.
Shuidichou Company and Yingshuangchou are also the two top benchmark companies in the industry. Their businesses are generally similar, including fundraising + mutual aid + insurance. Shuidichou Company has three businesses: Shuidi Mutual Aid, Shuidichou, and Shuidibao; and Yingsongchou has four businesses: Yingsongchou, Yingsong Huzhu, Yingsong e-Insurance, and Yingsong Public Welfare. The brands of Shuidichiou and Qingsongchou have similar reputations and have very high attention among user groups. Among them, the number of registered users of Shuidichou has reached 360 million as of April 2, and the number of registered users of Qingsongchou has reached 201 million as of March 8 this year, ranking first and second in the industry.
In addition, the dividend period of the mobile Internet is coming to an end, and various industries have moved from money-burning competition to refined user operations. The Internet industry is ushering in a wave of mergers and acquisitions, and mergers are the general trend. From this point of view, it is more likely that Shuidichiu and Qingsongchou will merge in line with the general trend.
2. It is better for two powerful forces to join forces than to compete with each other
Although Shuidichou Company and Qingsongchou Company have similar businesses, they have completely different market strategies. After the merger, they can achieve complementary advantages.
Easy Raising has been established early, and the types of fundraising involved are relatively diversified. In addition to serious illness fundraising, there are also fundraising projects such as dream fundraising and early adopter pre-sales. The diversified fundraising services have allowed Easy Raising to harvest a large number of users in the early stage. However, the auditing capabilities of the EasyCho platform are slightly insufficient, and this weakness has become a constraint on the growth of EasyChou. Judging from the Baidu Index, EasyChou has entered a growth bottleneck period, and the downward trend is obvious.