Shulou(Shulou.com)06/02 Report--

(with pictures from Canva)

Recently, Shen Peng, founder and CEO of Shuidi Company, revealed to the media that the company has made a monthly profit in the past two months.

The company made a profit in April and May, which is reminiscent of Shen Peng's previous analysis of the situation of the company. On the day he resumed work on February 24, Shen Peng said in an internal letter: "the COVID-19 epidemic is bound to aggravate the challenges of various industries, and the capital market will become colder in the coming period of time. Either we will speed up the realization of the company's profits, or it will be difficult to raise money in a situation full of uncertainty, or we will have to fall down!"

After a short period of one month of transition, Shuidi said that it wanted to make a profit, and it really made a profit. Such amazing financial performance inevitably makes people wonder, how did Shuidi do this?

The business experience of Shuidi Company

In fact, in a recent interview with Hong Kong's South China Morning Post, Shen Peng explained the main reason why the company has made a profit in the past two months: "as the main revenue segment of the company, the monthly annual signing premium of Shuidi Insurance Mall reached about 1 billion yuan in the first half of 2020, which enabled the company to make a monthly profit in April and May this year."

But Shen Peng's explanation is not specific enough. The key question is, why is Shuidi Insurance Mall the most important revenue segment for Shuidi? Why can Shuidi Insurance Mall achieve a breakthrough in revenue in the first half of 2020?

Let's answer one of the two questions:

Shuidi Insurance Mall is the most important revenue segment of Shuidi Company, which comes down in a continuous line with easy Group.

It was launched easily in 2014, mutual aid business was launched in April 2016, Internet insurance sales platform was launched in August 2016, Shuidi Mutual was launched in May 2016, Shuidi chip was launched in June 2016, and Waterdrop Insurance was launched in 2017.

By 2017, both easy Group and Shuidi have formed a commercial closed loop of "fund-raising + mutual assistance + insurance". Fund-raising projects are responsible for attracting users, mutual aid projects are responsible for retention and activation, and insurance sales are the real consumption scene. most of the income is generated.

In 2018, Shuidi Company adjusted its strategy and accelerated the development of health insurance business, and the revenue pillar position of Shuidi Insurance Mall has been further consolidated.

As for the breakthrough in revenue of Shuidi Insurance Mall in the first half of 2020, this is due to the success of the Spring Festival activities, the epidemic situation to stimulate public awareness of health protection, the collective pay reduction of senior executives of Shuidi Company, and the active exploration of live insurance sales. The results are achieved under the joint action of four major factors. Specifically:

First, the Spring Festival activities of Shuidi Company and byte beating cooperation during the Spring Festival have brought it a large number of new users. According to Shuidi earlier, the number of new users of Shuidi Insurance Mall exceeded 30 million from January to February, equivalent to the user growth for the whole of 2019. As of the end of February, the number of users guaranteed by Shuidi Insurance Mall exceeded 70 million.

Second, the epidemic has stimulated people's awareness of health and security, and the health insurance industry will be warmed up to a certain extent.

Third, during the Spring Festival, executives of Shuidi Company unanimously decided to voluntarily cut their salaries by 20% to deal with the crisis brought about by the epidemic. Reduce the financial burden of Shuidi company, can put more money into the development of business.

Fourth, since February, Shuidi Insurance Mall began to try to sell insurance live, select potential employees within the company, and incubate through training to create online celebrities in the insurance field. The best result is to sell nearly 7 million yuan of long-term life insurance products in an hour of live broadcast. In a live broadcast in May, Shen Peng's insurance sales were close to 10 million.

However, after carefully combing through the reasons for the profits of Shuidi, we have found that the profits of Shuidi in the past two months have little to do with the model of "crowdfunding + mutual aid + insurance". It has not played a significant positive role in achieving profitability in the past two months.

The fund-raising business is thankless

In fact, the company made a profit in April and May, and the fund-raising business not only did not play a positive role, but was a serious drag.

In December 2019, after the outbreak of the Shuidi "floor sweeping incident", the company announced the suspension of offline service team services. When the epidemic broke out at the beginning of the year, the quarantine measures in many hospitals were very strict, and offline fund-raising services still could not be carried out. But after returning to work, Shuidi and the easily raised offline team slowly resumed their activities. But as soon as it recovers, it will be ruined.

After returning to work, although the offline teams with water drop and easy fund-raising resumed their activities, the isolation measures in some hospitals were still strict. As a result, the number of hospitals where the two staff can move is limited, and offline team competition intensifies. In April and May, Shuidi Company made a profit by virtue of online insurance mall, but frequent conflicts broke out between offline staff and easy-to-raise staff. From bickering to physical clashes, and even fights caused the police to intervene.

Negative reports about the fundraising platform for serious illness emerge one after another. However, it is still a bit sensational that the conflict broke out directly among the staff.

This surprising situation reveals two facts about the seriously ill crowdfunding industry. First, the serious disease fund-raising platform has fallen into the dilemma that it is difficult to find incrementally, otherwise the two giants would not have "hand-to-hand combat"; second, the serious disease fund-raising industry has entered a period of recession.

The latter point does not seem to be in line with our intuition. After all, it is still normal for ordinary people not to have a serious illness at this stage. But the problem is that after many outbreaks of fraudulent donations, fewer and fewer people actually donate money.

(the picture is from the plural laboratory)

Statistics from Fudan Journalism School show that 2016 was the year with the highest target and actual fund-raising amount, and then decreased significantly.

Behind a series of donation fraud incidents and industry chaos, the public trust and enthusiasm for online fund-raising have been eroded, and the entire fund-raising industry has fallen into recession.

For industry giants such as Shuidi and easy Group, fund-raising has accumulated a sizeable user base. Industry recession coupled with the stock game, and then continue to vigorously develop fund-raising business, the loss will more and more outweigh the gain.

New exploration of dripping and relaxed business

Most companies will avoid thankless things. So we can see that recently, Shuidi Company and easy Group are trying to explore new business models.

For example, both Shuidi and easy Group have revealed their willingness to be more deeply involved in Internet health care. Even the easy Group has taken practical action.

In May this year, easy Group invested and controlled Dor Internet Hospital in Yinchuan, with a 70% stake. The Internet hospital is unknown and was not established until December 2019. But it was previously 100% controlled by the Beijing Internet Medical Alliance, but now its stake has been reduced to 25%. In other words, the easy Group and the Internet Medical Alliance have established a capital partnership.

The Internet Medical Alliance platform has 300 medical institutions stationed, more than 700 doctors signed up and nearly 1,000 consulting experts. For relaxed groups that want to get involved in Internet health care, the benefits that the Internet Medical Alliance can bring are self-evident.

Since the outbreak of the epidemic, Internet medical care has formed a huge tuyere. With the strong relationship between the business of Shuidi and easy Group and medical care, if they can be more deeply involved in the medical field, then the development of their businesses such as mutual assistance and insurance will certainly be more smooth.

For example, Shuidi and easy Group have made great efforts to promote live broadcast insurance sales in the past two months. For Shuidi and easy Group, live insurance can directly skip the link of fund-raising and diversion and realize it more efficiently, which is one of the important reasons why Shuidi can make a profit in April and May.

In a live broadcast in May, Shen Peng expressed more clearly his willingness to shift the focus of his business from crowdfunding to mutual aid and insurance. "I hope everyone will have a good sense of protection and establish a protection for themselves and their families through insurance and mutual assistance when they are in good health," Shen said. "if everyone has adequate protection against the risk of serious illness or accident, then there is no need to raise money to obtain medical funds."

In short, although Shuidi Company and easy Group have become rich with seriously ill fund-raising platforms, they do not have any obsession with the development of fund-raising business. In order to make a profit and for the better development of the enterprise, the two giants are likely to explore other diversion channels and business models more actively in the future, and no longer vigorously develop fund-raising business.

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