Lost Renren: reviving tepid parent company is in trouble again

category:Finance
 Lost Renren: reviving tepid parent company is in trouble again


On June 12, Renren, a listed company, told the CSRC that it would postpone the release of its 2019 financial statements. At the same time, it reminds us that revenue is expected to decline by 30% in 2019, the company is uncertain in terms of liquidity and capital resources, and the companys sustainable operation ability is in doubt. Four days later, Renren appointed a new CFO.

That is to say, Renren company exposes itself that the company may not be able to continue.

At the same time, Kaixin automobile, a core asset of Renren company and listed in the US stock market, said on the same day that it would postpone the release of its 2019 financial report. It is estimated that its revenue will decline by more than 20% and its inventory and prepayment will decrease by 38 million US dollars. Whether the company can continue to operate is questionable.

After the announcement, Renren and Kaixin auto shares fell 5.85% and 8.25% respectively, and the combined market value of the two companies was less than $130 million.

In addition, before self disclosure, Renrens app is suspected to be off the Internet, and cant be searched in Apples app store. The Android store displays in the internal optimization of the app, download is not available temporarily, but the official website can still be opened for use.

Of course, todays Renren social business, in fact, does not belong to Renren companys assets. It was sold to a company called duoniu media in 2018 for $60 million. At the end of 2019, Renren returned with a new app, but it didnt cause much trouble.

Coincidentally, this time, Renren app suddenly disappeared, which happened at the same time that Renren, its former parent company, was in business trouble. In addition, another social product that lost contact for 333 days immediately returned on June 11, the day before Renrens self disclosure.

How is Renren, who disappeared, returned and disappeared again, living now? Can everyone company get out of the dilemma this time?

01. Listing

To understand Renren today, we need to start from its most glorious moment.

In May 2011, Renren was listed on the New York Stock Exchange, with an intraday market value of up to $9.4 billion. At that time, Alibaba and Jingdong had not yet landed in the U.S. stock market, and renren.com became the zhonggai stock whose market value was second only to Tencent and Baidu.

It was the highlight of renren.com and Chen Yizhou. Chen Yizhou, who rings the bell in the listing hall, seems calm. It turns out that his decision to buy Renrens predecessor Xiaonei from Wang Xing when he first spent $2 million is wise. Five years ago, Wang Xing didnt make profits on the campus network. Chen Yizhou found the profit model of advertising + game.

The background of Renrens rise is that QQ was the mainstream instant messaging software at that time, and blog was the content application, but they were all relatively closed design. Only by adding friends or paying attention to each other can we see each others content. The BBS of a university is a content segmentation based on the University, and the user is just a cold ID, without personality characteristics. In contrast, Renren is an open-ended form. Users go to find classmates, sun photos and send logs, which meets the social needs of college students at that time.

Wang Xing founded the campus network in 2005, targeting college students to socialize, and sold it to Chen Yizhou the next year. In August 2009, campus network changed its name to Renren network and expanded to all users.

In that era when mobile phones are not as popular as they are today, the Internet is mostly through computers. Since it is impossible to keep online at any time, it was a great pleasure for college students at that time to brush everyone online after class. Add everyone to each other, pay attention to everyone and new visitors were hot words frequently used among users at that time.

After 2009, Renrens content began to blow out. The nouveau riche, four trillion, melamine, ginger, garlic, you are ruthless, house price bubbles, haze, coal bosses, tyrants... Behind all kinds of hot words, there are endless social hot spots. Around these national topics, Renren has created different circles and positions, and the number of users has grown rapidly.

Whats more, Renren has found a profit path suitable for itself, that is, to attract and precipitate users through content, and to cash in through games and advertisements. Chen Yizhou, who is good at capital operation, attracted the largest VC financing for renren.com at that time, and soft bank and other institutions invested 430 million dollars in renren.com.

The battle of renren.com has burned to Tencents social base. Tencent specially launched its friend network to resist the impact of renren.com. It was the golden age of Renren.

When it went public in 2011, Chen Yizhou told Renren the story: Facebook + Groupon + Zynga + LinkedIn. The story was recognized by Wall Street. The four companies were the largest social network, the largest group buying platform, the largest social game platform and the largest workplace social platform in the United States at that time.

However, from this time on, Renren began to decline.

The story of Facebook + Groupon + Zynga + LinkedIn is not easy to tell. Renren has not become a super new four in one species, or even any of them.

The business of the company has been changing. Before and after listing in 2011, Chen Yizhou led Renren company to do a lot of auxiliary business.

In 2010, group buying and entrepreneurship are on the way. Wang Xing founded meituan.com in March 2010, renren.com launched nuomi.com three months later, and nuomi ranked third in the industry.

In 2011, the long video industry represented by Youku is in the ascendant. Renren company invested 80 million US dollars in October to acquire 56 net, and entered the video track.

Group buying and video are very close business with social network. These two tracks later ran out of the star projects such as meituan, Dianping, Youku Tudou, iqiyi, and became the battleground of the giant Internet companies.

However, Renren company has no patience to develop nuomi net and 56 net into super unicorn. Nuomi.com was sold to Baidu in 2013 and 2014 by Renren in two stages, and 56.com was sold to Sohu in 2014.

In this slimming movement, Renren company began to change.

At the beginning, Renrens core business is renren.com, which makes money from advertising, value-added services and game business. Value-added services include VIP members, virtual goods, paid applications, etc. Renren branch and game branch each account for half of Renrens revenue. In 2011, Renrens annual revenue was $110 million.

Cartography / fuel Finance

In terms of content ecology, renren.com was a semi familiar social platform with photos and logs as its main content and strong interaction before it went public. Its themes covered feelings, constellations, games and other aspects. After 2011, a variety of news stories filled in, Renren original content ecology was destroyed. At the same time, with the rise of inward wechat and outward micro blog, acquaintance social media and broadcast media began to carve up Renrens user base.

In 2015, Renrens revenue has fallen to $32.51 million, less than half of that in 2011.

The core camp fell, Renren went out blindly, and started a round of business expansion for wandering purpose.

One is to do Internet finance. In 2014, Renren company entered into Internet finance to provide installment payment business for college students. Later, it became a second-hand car dealer providing credit financing.

Second, investment. According to Renren, it had more than $500 million in long-term investments at the end of 2017. For example, it invested $35 million in snowball at the end of 2014, and later invested in second-hand car e-commerce platforms such as car easy to shoot and Logitech logistics.

Fourth, make used cars. Renren started to sell used cars in 2017, which later replaced Renren as its core business. In 2018, used car sales accounted for more than 90% of Renrens revenue.

In the past, Renren, with over 100 million users and everyone competing to add friends to each other, also disappeared in peoples vision and was left in the corner.

In Chinas Internet Jianghu, there is seldom such a company that constantly does new business, constantly tries, picks up and puts down. Renren companys transformation started after its listing. Renren, which once established its position in the Jianghu, has also been diluted in endless new businesses.

In November 2018, Renren was sold by Renren company to doniu media for us $60 million (US $20 million in cash + US $40 million in shares). Compared with the market value of more than $9 billion at the time of listing, this valuation is quite low.

According to tianyancha data, duoniu media was listed on the new third board in March 2016, and it is the first media big data stock in Chinas new third board market. At present, doniu media has six wholly-owned subsidiaries, one of which is Beijing Renren Interactive Technology Co., Ltd.

Source / Tianyan

Chen Yizhou gave up renren.com. Three months before the sale, Chen Yizhou said in a long article, I dont know how to socialize anymore.

Renren said: after the completion of the transaction, Renren will focus on the second-hand car business in China and the overseas business represented by the truckerpath business and SaaS business operated in the United States. Renren still plans to maintain its status as a listed company of NYSE.

In fact, before Renren was sold, Renrens main business had become the second-hand car trade. Renrens sale only turned Renren into a complete second-hand car trading company.

From the perspective of income composition, in 2017, the proportion of used car sales in Renrens total income has reached 60%. After Renrens sale in 2018, used car sales accounted for 94%.

Cartography / fuel Finance

In addition, Renrens Internet finance business has also changed from the early college students installment loan to auto finance.

From 2016, Renren company began to lend to used car dealers. From 2016 to 2018, Renren company provided loans of 4.8 billion yuan, 4.4 billion yuan and 2.6 million yuan to used car dealers respectively. The rate range of early fees and interest charged is about 10.1% to 18%.

From the perspective of business synergy, second-hand car transactions and social networks are not so much related. If Renrens early group buying and video business was based on Renrens social business, then when Renren became a used car trading platform, it means that the company no longer has the patience to do a good social product.

Renren bet all its chips on the used car business. Now, Kaixin automobile is facing difficulties in operation, such as revenue decline, inventory and prepayment reduction, and doubt about the sustainability of operation, which leads to the dilemma of Renren company at the same time.

Chen Yizhou has said many times on different occasions that he cant accept that Renrens last surplus value is used up and it is closed. In Renren, he didnt choose to close Renren and sell it. Maybe it was the best choice for him.

04. Return

All year after Renren was sold, the market didnt hear from it again. Until the end of December 2019, new shareholder duoniu media suddenly announced that it would launch a new Renren app. Renren returned strongly after more than five years of absence.

The main slogan of renren.com is record my youth, playing the youth nostalgia card. The management team behind is very clear that renren.com, which has disappeared for many years in the past, is the most precious asset, which is the dusty photos and memories left on the platform. As long as these data are still available, those nostalgic 85 will probably come back for a look.

Sure enough, it took Renren only one day to reach the top of IOS social software rankings. The people who log in with the account password again saw those lost youth and history on renren.com and were filled with emotion.

Chen Yizhou said that to let duoniu media acquire Renren is to find a very suitable team. Indeed, compared with Renren, which has transformed the second-hand car trade, doniu media seems to be Renrens better destination.

Before 2009, Daniel media, like renren.com, was an asset of Chen Yizhou Qianxiang group. Later, duoniu media was independent from Qianxiang and operated independently with its own profit and loss. Wang Le, CEO of doniu media, acquired doniu media assets from Qianxiang group, and then made external financing, and then further developed and expanded.

Chen Yizhou, renren.com and duoniu media have met many years ago. Only in the end, duoniu media received Renrens assets.

As Chen Yizhou said, its a pity to give up shutting down Renren directly. Renrens return and rejuvenation depend on duoniu media.

But this is not an easy way. There are too many pioneers in the social entrepreneurship track. Although Renren went down after the glory of that year, after Renren, there was no second Renren in the domestic Internet industry, and it did not grow out of Chinese version of Facebook. In January 2019, Wang Xins acquaintance anonymous social product toilet MT, the headline series short video social rookie Duoshan and Lao Luos chat app Besieged wechats three English battles with Lv Bu, failed to touch wechat, and even was banned just online. The instant app, which gathered one vote of Internet product managers, was removed from the shelves a year ago and didnt return until June 11. Now, Renren has been back for half a year, but its former parent company is in trouble again, and its revival is not warm. Perhaps in the hearts of many old users, this product has really disappeared for too long. Come back, its all the past. Read Lu Zhengyaos counterattack! Ruixing will reorganize the board of directors to kick Li Hui and Liu Erhai out of the game rules dont understand? College students in the U.S. killed themselves after they saw a loss of 5 million. BMW was hit by the epidemic. Job cuts suggested that some employees retire or read books. Source: interface news editor: Zhang Mei_ NF2100

But this is not an easy way. There are too many pioneers in the social entrepreneurship track. Although Renren went down after the glory of that year, after Renren, there was no second Renren in the domestic Internet industry, and it did not grow out of Chinese version of Facebook.

Now, Renren has been back for half a year, but its former parent company is in trouble again, and its revival is not warm. Perhaps in the hearts of many old users, this product has really disappeared for too long. Come back, its all the past.