Understanding Global Consumer Operations from Four Data from Kidswant’s Annual Report

Private domain operation is the point, membership operation is the line, and global consumer operation is the surface. Only by doing these three things can an enterprise achieve consumer operation, and ultimately establish core competitiveness in three aspects: cost reduction, revenue increase, and efficiency improvement. The author of this article takes Kidswant as an example and interprets the key to global consumer operation from the four data in its financial report. Let's take a look.

Yesterday, I saw that Kidswant released its 2022 financial report. There were several eye-catching data related to consumer operations, and I would like to interpret and share them with you.

When it comes to consumer operations, I have always had an argument:

Private domain operation is the point, member operation is the line, and global consumer operation is the surface. Only by doing these three things can an enterprise realize consumer (customer) operation, and ultimately establish core competitiveness in terms of cost reduction, revenue increase, and efficiency improvement.

As the old saying goes, those who do not plan for the overall situation are not qualified to plan for a specific area. Similarly, for a company's consumer operations, doing a good job in private domains and members can only be considered as single-point operations. If you cannot see and understand the overall picture of consumer operations, you will never get out of the current dilemma of private domain operations and member operations.

Of course, Kidswant does not face such a dilemma. It was rated as an industry benchmark in Tencent Smart Retail Global Operation Ranking, which also shows its success in global consumer operations.

Through long-term research and contact with it, I found that the success of Kidswant is not like some companies that do superficial things, or rely on a hot product event, and only focus on skills. Its success is the result of long-term cultivation, and it can be traced, replicated, and learned from.

At the beginning, it insisted on full-area operations, full-area sales, and full-area services online and offline to serve its consumers, and established a complete operational closed loop for the entire life cycle of consumers.

And it is integrated into the business chain, so that each operation action is related to business indicators, with clear attribution and definition. Such refined operation is currently a capability that many companies ignore and lack.

Next, we will interpret the key to omni-channel consumer operations from four data in its financial report.

01 The output value of omni-channel members is 8 times that of offline members

This data tells companies that they must integrate online and offline to facilitate consumers' borderless purchases. This will greatly increase consumers' single-customer value (LTV, annual life cycle value) and drive overall sales growth.

Image source: Kidswant 2022 financial report

Before 2016, Kidswant members could only be purchased in offline stores. Later, the Kidswant App was launched, and members could buy online from then on. In 2019, they found a data: the annual consumption of global members (members who shop in stores and on the App at the same time) was 4 times that of offline members (who only bought in stores) and 7 times that of online members (who only bought on the App).

Later, as Kidswant launched more purchasing methods such as WeChat Mall, WeChat Mini Program, O2O shopping, etc., the output value of Kidswant's omni-channel members is now 8 times that of offline members, doubling compared to 2019 .

This fully demonstrates that there is huge room for growth in connecting online and offline channels and promoting omni-channel membership operations.

So, when we talk about "global operations" now, in a sense, Kidswant is far ahead.

Today, I provide "Consumer Digital Operations Strategy Consulting" to companies. The fundamental point is to believe that sustained growth must come from omni-channel and full-life cycle operations, and both online and offline operations should not be neglected.

02 The number of corporate WeChat communities exceeded 50,000, and community performance increased by 15%

This data shows that even though there is serious internal competition in the private domain, Kidswant continues to cultivate the private domain and expand it, so the performance of the community has increased by 15%.

Pessimists may be right, but only optimists can move forward.

From public domain traffic to private domain traffic, and then to super members, the private domain itself is a stratification. This is not only about operating in the private domain, but also about screening and accumulating high-quality user assets of the enterprise. The more assets there are, the more data can be mined, and the greater the value that can be created.

Therefore, I will set an operational indicator for consulting companies, which is the identifiable scale of private domain users.

Users who cannot be identified and reached are of little value no matter how many are accumulated. Therefore, do not just focus on GMV, but also pay attention to the scale of identifiable private domain users and accumulate identifiable user assets.

Image source: Kidswant 2022 financial report

03 The single customer output value of Black Gold Plus paid members is 13 times that of ordinary members

This data shows that the value of Kidswant Black Gold Plus paid membership is very high, and the operation is correct and effective. Last year, a Black Gold member spent 11 times more than an ordinary member in a year, and today it has increased to 13 times.

Moreover, the number of Black Gold members increased by 25% last year, which further reflects the stronger loyalty and spending power of Black Gold members. One of the most important indicators for measuring the effectiveness of consumer operations is the LTV (lifetime value).

Image source: Kidswant 2022 financial report

Now Black Gold Members have become the core asset of Kidsland. Last year's data showed that it had 815,000 members, with the contribution of each customer being 4,800 yuan/year/person. According to the published data, the number of members may have exceeded 1 million, and the output value of each customer should be more than 5,000 yuan/year/person.

According to this data, we can estimate that the sales contribution of Black Gold members in 2022 is expected to be 5 billion. Based on the revenue of 8.5 billion in 2022 and the number of members of 60 million, it means that only 1.6% of Black Gold members have created nearly 60% of the sales. This is also in line with the trend of the 80/20 rule.

Because Black Gold members have higher spending power and loyalty, they are usually regarded as the ballast stone of corporate revenue and the bottom line of growth. The more Black Gold members Kidswant has, the greater their contribution, and the greater its future development potential and ability to resist risks.

This is also why I regard the number of super users (Black Gold members) and the cost-to-value (LTV) of each customer as very important business indicators for consumer operations.

04 The annual penetration rate of Black Gold members exceeds 10%

This data is the first time that Kidswant has released it. It has never appeared before and there is no reference. According to common sense, the fact that it is released now means that based on the past, the data trend is definitely rising. It also shows that this is an increasingly important business indicator.

Black Gold Members are well-deserved high-value assets. The increasing number of high-value assets reflects the company's increasing growth potential and profitability, as well as greater stability.

At the same time, Black Gold membership is also a channel for increasing revenue. At 300 yuan per membership and 1 million members, the membership fee alone would be 300 million yuan.

Image source: Kidswant 2022 financial report

At present, it is not clear what the annual penetration rate here refers to. However, you can refer to the paid membership penetration rate of other companies as a reference.

Amazon is one of the companies with the highest paid membership penetration rate in the world, with 220 million Prime members, accounting for 50% of all active users . Today, Amazon's continued growth and becoming one of the companies with the highest market value are also closely related to the number and loyalty of its Prime members.

JD.com, which is learning from Amazon, released data this year showing that it has 34 million Plus members and a paid membership penetration rate of around 7%, which still has a lot of room for improvement compared to Amazon.

From this perspective, Kidswant still has huge room for growth. It insists on being consumer-centric and conducting in-depth membership operations. The consumer operation capabilities it has established have become a moat for the company's development.

Through the interpretation of the previous four data, I believe you can learn some keys to global consumer operations.

05 Last

I believe that from now on, the ability to "operate consumers" is something that every company must have. Because the root of sustained growth lies in "consumers". In consumer operations, we need to find an ultimate goal, which is why I continue to operate.

My answer is: super users. Continuously cultivate, screen and retain super users (similar to black gold members), they are the most valuable assets of the enterprise.

By achieving super users, it will drive the operation of the entire consumer life cycle from public domain traffic to private domain traffic, improve the single-customer output value, scale, and penetration rate of consumers at each stage, and ultimately increase the company's revenue and profits.

Author: Yan Tao

Source: WeChat public account "Yan Tao San Shou"