In-depth investigation: Is shared power bank still a good business?
2024-08-19
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Chao News Client reporter Xu Yiwen intern Yao Yao
"In the past two years, I have spent nearly 500 yuan on shared power banks!"
Recently, when 31-year-old Xiao Zhou was looking through his orders, he found that in the past, it cost one or two yuan to borrow a power bank for an hour, and he borrowed it without hesitation, just swiping it and taking it, without looking at the billing time. But now, if you just scan a power bank on the street, it costs three or four yuan an hour, and if you exceed one minute, it will be deducted as one hour. The total bill is enough to buy several power banks.
When you are out and about, once your phone enters "low battery" mode, you will inevitably fall into "battery anxiety". Shared power banks have become an emergency choice for many citizens. However, consumers frequently fall into traps during use, making shared power banks a disaster area for most people to "avoid thunderbolts".
Black Cat Complaints has received as many as 26,000 complaints about "shared power banks". Screenshot of Black Cat Complaints
According to iResearch's latest research report, the scale of the shared power bank industry will exceed 12.6 billion yuan in 2023, a year-on-year increase of 25.7%, and is expected to exceed 40 billion yuan in 2029. This shows that shared power banks still have broad market potential.
So, why are young people unwilling to pay for shared power banks? What went wrong? Is shared power banks still a good business?
Expensive to rent, difficult to return, slow to charge
Shared power banks have become a hot potato
"Shared power banks can be used in emergencies, but they are indeed too expensive. They would be more affordable." Recently, a Chao News reporter found during a visit that citizens' complaints about shared power banks mainly focus on the price.
In Hangzhou's commercial districts and busy shops, shared power banks from brands such as Monster, Meituan, and Jiedian stand quietly. The price of these power banks has quietly climbed to 3-6 yuan per hour. The same brand, but in different locations, the price is twice as high. In some scenic spots with large traffic, the price is even as high as 8-10 yuan per hour, which makes renters stay away.
In addition to the price increase, users also complained about the difficulty in returning and slow charging. Resident Xiao Chen complained to the reporter that last weekend, she was having dinner with her friends at a mall and her phone ran out of power. She immediately scanned a power bank, but it charged as slowly as a snail. She only charged 10% of the power after she finished her meal. When she returned it, she went to more than a dozen places, but the battery was either full or broken. It took her more than an hour to find an empty spot.
After Xiao Chen posted his experience on social media, he found that many people had similar troubles. Some even ran 20 kilometers just to find a rental point to return the power bank. If they couldn't pay it back, they had to buy it. Some people bought more than one power bank, enough to set up a stall. "Now shared power banks are no longer serving consumers, but 'punishing' consumers!" Xiao Chen didn't know whether to laugh or cry.
On social media platforms, some consumers posted photos of themselves complaining about the power banks they had to buy because they couldn't find any. Image source: social media platform
There is a charging station every few meters, but it is full. Is this a coincidence? An industry insider told the reporter that this is the merchant's routine. Once you lend out, you will immediately replenish the stock, so that you can't pay it back even if you want to, and you have to buy it out.
However, when a reporter from Chao News consulted a leading shared power bank brand in the name of a consumer, the customer service said that consumers can contact customer service in time to verify and handle any problems they encounter with their orders. If it is indeed impossible to return the power bank, you can contact customer service to apply for a 24-hour suspension of billing, and then return the power bank at a convenient time.
Being "backstabbed" or being "fleeced"
Shared power banks have become chain assassins
At present, the shared power bank industry is in the stage of scale expansion. There is a lack of unified fee standards, and the platform, agents, merchants, and consumers have formed a chain of "fleecing" from level to level. Not only are consumers "backstabbed" by shared power banks, but as the scale of the industry gradually expands, the situation of agents and merchants is not satisfactory.
At present, the operating models of the shared power bank industry are mainly divided into direct sales and agency. In the direct sales model, the platform directly contacts merchants to provide free distribution and gives merchants a profit share; in the agency model, the agent buys the equipment, the platform will share the profit, and the agent will then distribute it to the merchant's store and give the store a profit share.
However, some platforms will steal orders and secretly take away consumers' orders in the background, making it impossible for agents and merchants to see the order, thereby reducing their profit margins.
Mr. Wu, an agent of a certain platform, told reporters that agents face high costs in the shared power bank industry, including purchasing possible refurbished equipment, bearing the cost of repairs beyond the warranty period, paying high commissions and buyout fees, as well as possible fines for violations.
These cost pressures have resulted in many agencies operating at slim margins or even at a loss.
"The agent's main income comes from the merchants, but the commission is also high. Usually, they need to give at least half of the income, and sometimes even as high as 70%-80%." Mr. Wu told Chao News reporter that he was an agent for 60 cabinets, but he had found that the platform was suspected of "stealing orders" more than once. The reason was that a friend rented a power bank in the store, but he found that there was no record of the order in the background. It was not until he complained to the customer service more than ten minutes later that the order reappeared in the background.
A reporter from Chao News learned from a sales manager of a leading shared power bank brand as a franchise agent that the platform has a total of 6-port small cabinets and 12-port large cabinets, both of which start at 30 units, and the prices are 18,000 yuan and 34,350 yuan respectively. The minimum commission for first-level agents is 90%, and those who buy 200 units at a time can enjoy a first-year commission of 96%.
When asked why the price is getting more and more expensive, the sales manager said that the agent can decide whether to charge by half an hour or an hour, and how much the price is. He also revealed that the agent can modify the merchant backend, but the data provided by the platform to the agent backend is 100% true.
Can you still make money from the shared power bank rental business?
In August this year, the "2024 China Shared Power Bank Industry Research Report" released by iResearch Consulting showed that women account for the majority of shared power bank users in my country, and young people are the mainstream consumer group, mainly concentrated in first-tier and new first-tier cities.
In 2023, the brands most frequently used by young consumers include Monster, Meituan, Jiedian, Xiaodian, Soudian, Laidian, etc. These brands have external manufacturers and their own manufacturers on the production side. For example, Soudian has its own factory, while Monster Power Bank is manufactured by Xiaomi.
The shared power bank industry chain. Image source: iResearch
The report shows that since its birth in 2016, the shared power bank industry has gone through the initial model exploration, rapid outbreak and pattern formation period. At this stage, with the tightening of capital, improving its own hematopoietic ability is the key for shared power bank companies to ensure stable development and healthy operation.
Is shared power bank still a good business?
At present, the business model of shared power banks on the market mainly includes user payment, advertising promotion and data analysis. By charging users rental fees, brands can obtain stable rental income. At the same time, using the advertising space on the power bank can bring additional advertising revenue to the brand. In addition, by collecting and analyzing user usage data, brands can provide partners with precise marketing services.
"Don't look down on the one- or two-yuan business. Some people make a fortune from it." Industry insiders told Chao News reporters that shared power banks are high-frequency, small-amount businesses that rely mainly on volume, which is the same as the early shared bicycles. How much you make depends mainly on the number of installations you make and the number and quality of locations you occupy. "If you occupy a good location, it is still a good outlet."
Mr. Cheng, an agent of another shared power bank brand, admitted that if you want to make money from the shared power bank rental business, it ultimately depends on the channel. "In the early years when the power bank service industry emerged, the locations with good traffic were already occupied, and the platform direct sales preferred to take the good locations themselves. The remaining difficult locations were handed over to agents. For companies, in addition to making money from your equipment, they also have to take a certain percentage of commission every month. After all, only a few agents can make it."
However, according to iResearch data analysis, by 2023, the number of points covered by the shared power bank industry has reached 4.04 million, accounting for 19.1% of all potential effective points in the country, a year-on-year increase of 31.8%. Throughout the year, the point penetration rate in first- and second-tier cities has reached 44.7%, but the point penetration rate in third-tier and lower-tier cities is 22.2%. In the future, the sinking market will be the main source of point increments.
Image source: iResearch
According to the data analysis of the Prospective Industry Research Institute, based on the historical changes in the number of users, the number of shared power bank users in China will further increase in the future. According to the growth rate, it is estimated that the number of shared power bank users in China will reach 610 million in 2026. Since 2023, the industry revenue of the giant players in shared power banks has also ushered in a rebound growth.
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