Why did Wanda’s e-commerce company Feifan cut its sales target by 90%?

On October 26, we learned from people familiar with the matter that the revenue target of Feifan APP, the smart life segment of Wang Jianlin’s Wanda Network Technology Group, has been adjusted from the 900 million yuan set at the beginning of 2017 to 100 million yuan. In addition, Wang Jianlin gave Feifan a task target of 2018, which is to achieve a turnover of 3 billion yuan.

In addition to adjusting the turnover target, Feifan is also undergoing internal personnel reduction.

In May 2012, Wanda E-commerce began to be established, recruiting an e-commerce CEO with an annual salary of 2 million. In December of the same year, Gong Yitao, who had served as the e-commerce technology department manager at Google headquarters and senior director of international transaction technology at Alibaba, was confirmed as the general manager of Wanda E-commerce.

One year later, on March 28, 2014, Gong Yitao announced his resignation from Wanda to start a business.

In August 2014, Wanda announced that it would join forces with Tencent and Baidu to build an e-commerce platform with a total investment of 5 billion yuan. In terms of equity distribution, Wanda holds 70% of the shares, while Tencent and Baidu hold 15% each. At that time, the three parties announced that they planned to invest 20 billion yuan in five years to build the world's largest O2O e-commerce company. Four months after its registration in Hong Kong, the e-commerce company nicknamed "Teng Million" has quadrupled its valuation to more than 20 billion yuan.

In the two years since its establishment, Wanda E-commerce’s only project was “Feifan”. Two years later, in July 2016, "Tengwanwan" broke up, Baihe and Tencent withdrew from Feifan.com, leaving only Wanda to continue its e-commerce platform. Since then, Wanda has re-registered a company called "Xin Feifan" to continue operating Feifan e-commerce.

The above-mentioned person familiar with the matter said, “Because commercial real estate is facing the dual impact of e-commerce and consumption upgrades, it must become intelligent. In this environment, Feifan emerged. So initially, Wanda E-commerce was Upgrade Wanda Plaza.”

Another person familiar with the matter told The Paper, “Currently, the merchants on Feifan are attracted by various subsidies, relying on traffic in exchange for advertising, and have been burning money. Wang Jianlin knew that Feifan would not be able to make money on its own in a short period of time, so Wanda Finance emerged. Eventually, Feifan e-commerce was transformed from just a business model upgrade for Wanda Plaza into a financial-integrated Wanda Network Technology Group.

Currently, Wanda Network Technology Group has four main business segments, including digital commerce, smart life, financial technology and public cloud services. The Paper has learned that among the current four major sectors of Wanda Network Technology Group, only financial technology is profitable. According to people familiar with the matter, Network Technology Group can achieve its overall profit target this year.

According to Wang Jianlin’s previous two work requirements for the Network Technology Group in 2017: financing of 10 billion yuan and overall profitability. In addition, at Wanda’s annual meeting at the beginning of the year, Wang Jianlin said that the network technology group will achieve revenue of 6.5 billion yuan in 2017.

However, judging from the current situation, Wanda Network Technology Group has postponed the US$1.5 billion financing plan originally planned for 2017 until at least early 2018.

The reason is that international investment banks were not very satisfied after completing a round of due diligence on NetTech Group. Investment banks believe that Wanda Network Technology Group’s business structure is not clear.

At Wanda Group’s 2016 annual meeting, Wang Jianlin said in his speech that the group approved the Network Technology Group’s development plan from 2017 to 2019 and also approved the group’s five-year capital plan. According to this plan, Network Technology Group will strive to achieve overall profitability in 2018, profits exceeding 10 billion in 2020, and achieve the overall listing of the group.

According to data, Feifan aims to plan its platform products in three major aspects: smart scenarios, Feifantong, and financial services. With the innovative marketing method of "entity + Internet" scenario interaction + fast payment, By building information infrastructure such as WiFi and Beacon for shopping malls, Feifan App can be used to realize functions such as finding a car, finding a store, queuing, etc., while also providing services covering shopping, membership, points, big data, promotional offers, etc.