On November 4 last year, KK Group submitted a prospectus to the Hong Kong Stock Exchange. By April this year, KK Group failed to pass the listing hearing, and the "Prospectus" in Hong Kong had "invalidated".
According to public information, since 2016, KK Group has conducted 7 financings, with a total financing amount exceeding 4 billion yuan. The most recent financing was the F round led by JD.com in July 2021, with a post-investment valuation of $3 billion (about 19.1 billion yuan).
This company, which is backed by star capital such as JD.com, Shenzhen Venture Capital, Jingwei China, and CMC, has a valuation of US$3 billion after the last round of investment. Why did it miss the listing? In the eyes of Yilan Business, it may include the following three Aspects reasons:
First of all, the prospectus shows that in 2018, 2019, 2020 and the first half of 2021, KK Group's income (income) was about 155 million yuan, 464 million yuan, 1.646 billion yuan and 1.683 billion yuan respectively; losses during the period were respectively It is 79.485 million yuan, 515 million yuan, 2.017 billion yuan and 4.397 billion yuan. In three and a half years, the cumulative loss exceeded 7 billion yuan.
In 2019, 2020 and the first half of this year, the net cash flow of KK Group from operating activities was -381 million yuan, -314 million yuan and -356 million yuan respectively, but the net cash flow obtained through financing was 706 million yuan respectively. , 778 million yuan and 1.367 billion yuan. As of the end of June this year, the cash and cash equivalents were 1.117 billion yuan. It can be seen that the KK group has not yet achieved breakeven as a whole, and still needs to rely on financing and blood transfusion to maintain its business model. In a short period of time, KK Group could not let the capital see the hope of making a profit.
Second, there are frequent changes in business focus. Looking at the revenue structure of the KK Group during the reporting period, it can be found that the KK Pavilion was originally the main source of revenue for the KK Group. According to the income structure, the KK Group’s revenue mainly came from the sales of goods, that is, the sales of its retail brand KK Pavilion. Contribute the most.
But in less than three years, the KK Pavilion went from prosperity to decline. Yilan Business has previously reported that KKV is currently the main store type of KK Group. It usually sells daily necessities covering 18 categories such as food, daily necessities, cosmetics, skin care products and trendy toys, and 20,000 SKUs, with an area ranging from 300 square meters to 3,500. The square meters vary. In the first half of 2021, the monthly sales of a single KKV store was 811,000 yuan, with an operating profit margin of 13.4%, contributing 62.3% of the KK Group's overall revenue, and the proportion has increased year by year.
On the other hand, in the KK Pavilion, in the first half of 2021, the monthly sales of a single store in the KK Pavilion were 289,100 yuan, and the operating profit margin was only 5.8%.
In the end, it is still related to the "sale of fakes" in its own business.
01
The price was fined
Recently, a consumer broke the news that in July 2020, he purchased 20 Dior lipsticks through K+ members of KKV's online mall of KK Group. After receiving the goods, he found that the products were significantly different from the genuine products. After two years of litigation and rights protection, the court ruled that KK Group should bear the responsibility of "fake one compensation ten" as agreed.
According to the consumer, at present, he knows a total of 12 consumers, including himself, involving a total of more than 58,000 yuan in shopping payments. Except for the 2 consumers who successfully sued and received compensation, the remaining 10 consumers are in Being dragged by the kk group and coerced can only be compensated by signing a non-disclosure agreement.
Review this selling price event. After the consumer found out that he had bought a fake, he immediately communicated with the platform, but the platform refused to admit it. The consumer was forced to help, and finally chose to use legal means to protect his legitimate rights and interests.
A year later, in the absence of progress in the case, in July 2021, K+ members issued an announcement saying that a comprehensive upgrade will be carried out, and services will be suspended during the upgrade. Shortly thereafter, K+ members again announced that the platform would be shut down. At present, the "K+" applet cannot be searched on the mobile phone.
After two trials by the court, the final judgment was made by KK Group to refund the consumer 5,180 yuan and compensate him for the 51,800 yuan that he promised to "receive ten for one fake". After the court's judgment was issued, KK Group not only failed to compensate consumers immediately, but from the beginning did not admit to selling counterfeit goods, refused to return the goods for refunds, and then kicked the ball again and passed all the responsibility for selling counterfeit goods to Guangdong Tengke Company.
According to public information, Guangdong Tenke Network Technology Co., Ltd. is the main body of the physical retail operation service provider "K+". One of the main businesses of the KK Group, the KK Pavilion, was upgraded to a K+ member in May 2020, and the later operator was KK. The group was transferred to Tengke Company to undertake. In June 2020, KK Group invested tens of millions of "K+".
After the incident, although KK Group came forward to clarify that "K+" was an entrepreneurial project launched by former employees of KK Group in 2020, because it was formerly known as "KK Hall Electronic Mall", it was easily misunderstood by the outside world as being related to KK Group.
But in fact, the cooperation between the two sides has never stopped. Consumers understand and become members of the KKV online platform, which is a traffic drainage activity from physical stores. It is reported that when shopping at the checkout in the store, the clerk will remind the offline shopping to enter the fan group, you can buy shopping bags without charge, in addition, you can receive the goods for free every week, and you will be charged 8 yuan for express delivery.
In addition to this Dior lipstick incident, there are countless cases of KK Group selling fakes. When you open Xiaohongshu and search for the keyword "KK Group", you can find that the platform is full of accusations against KK Group for selling fakes, not only on its line On the platform, the fake categories are not limited to lipsticks, but also skin care products, soft drinks, wine, stationery and so on.
KK Group has been plagued by negative trends in the past two years. On June 17, 2021, the Dongshenzhen Taxation Bureau of the State Taxation Bureau reported the suspected tax violations of Kuike e-commerce. In the first half of this year, KK Group first experienced the failure of the Hong Kong stock prospectus, and was administratively fined 300,000 yuan for franchising violations.
Returning to the business itself, the KK Group has not escaped the "curse" of the new retail industry to open and close stores at the same time.
02
72 stores closed in half a year
In April 2021, because the KKV Dongguan International Trade flagship store was forcibly closed by the shopping mall, it also attracted great attention in the industry at that time. According to people familiar with the matter, it is said that the shopping mall is going to adjust its business format, so KKV is required to clear the goods and exit the market. After the negotiation failed, there was a chaotic scene of confrontation between the two sides. However, some people familiar with the matter said that the reason that China International Trade Co., Ltd. asked KKV to exit this time is mostly because KKV has not achieved the performance and rental contribution promised when it signed with the mall for a long time.
According to reports, from June 2021, KK Group has closed 72 stores in about five months. Among them, there are 19 KKV stores, 22 THE COLORIST stores, 4 X11 stores and 27 KK Hall stores.
In fact, this is not only the case with KK Group. Affected by the epidemic, the entire collection store has been collectively closed down since last year.
Yilan Business has previously reported that in the first half of 2021, THE COLORIST colorist franchise stores will close 59; in 2021, WOW COLOUR will close more than 50 stores, and NOISY Beauty will close nearly 10 stores; HARMAY’s main production and operation Cosmetics whose labels do not comply with these regulations will be fined more than 887,000 yuan; HAYDON black hole stores in Hangzhou, Shanghai, Harbin and other places are closed; MINISO's TOP TOY is also closing stores, Beijing Xidan Dayue The city store was officially closed at the end of March, and the two stores in Ningbo, Zhejiang were withdrawn half a year ago...
In addition to the large environmental impact, the collection store itself also has problems. Yilan Business believes that there are three problems that Chaowan Collection Stores are facing:
1. Shanzhai and counterfeiting are serious, which is also the problem that the KK Group headed by "The First Share of Chaowan" is facing. Take MINISO, which is used to fully benchmark with KK Group, and it has also been deeply involved in quality and infringement troubles for a long time.
2. Attracting consumers to the store by cheap price will inevitably lose user loyalty due to parity.
Second, the homogenization of collection stores is serious. Taking MINISO as an example, its four business formats of MINISO, WOW COLOUR, TOP TOY and KK Group are highly overlapping. In addition, it can be seen that the brands that are settled in are almost the same. They all work hard on decoration, but good-looking decoration can attract users for a while, and eventually return to the product itself.
The era of relying on traffic competition in the early stage has passed. Consumers have become paralyzed by planting notes and videos on social platforms. To the end of any model competition, it is still a test of products and services. At present, some collection stores have also begun to explore solutions. For example, Huamei entered the tea industry and created its own hand-made lemon tea brand introlemons; GDFS plans to set up its own affordable beauty brand G7 to create brand differentiation, etc.
How long can the trend collection stores, dubbed "flash in the pan", last?
