WEIMOB INC bids farewell to "expansion in scale"

Author | Zheng Qiao

Editor | Zhou Zhiyu

In the midst of the SaaS industry still struggling in the severe winter, leading companies are taking the initiative to optimize their business structures and move forward lightly.

Facing the industry's cold winter, WEIMOB has shifted its strategy from expanding revenue scale to pursuing improved operational efficiency.

On August 21st, WEIMOB INC. released its mid-term performance report for 2024. The total revenue in the first half of the year was 867 million yuan, a year-on-year decrease of 28.3%, with gross profit down by 29.4% to 576 million yuan. Despite the decline in revenue and gross profit, the adjusted net loss narrowed significantly by 81.4% compared to the same period last year, with operating losses decreasing from 385 million yuan to 287 million yuan.

In the financial report, WEIMOB pointed out that in order to further focus on its core business, the company divested its smart catering business in May last year and no longer includes its revenue in the financial statements. At the same time, WEIMOB also reduced its investment in the micro mall business and other small micro businesses, reduced the number of direct sales cities, and decreased its reliance on low-profit customer groups.

This is also one of the more thorough business structure optimization measures taken by WEIMOB since proposing the large customer strategy in 2022.

Industry research also indirectly confirms the boosting effect of "large customerization" on the SaaS industry. According to the "China Enterprise SaaS Industry Research Report" released by iResearch in 2024, different types of enterprises have different demands and strategies for SaaS integration. Large enterprises have a strong demand for unified management and are willing and able to invest high costs in cross-system integration.

However, domestic customers generally have a weak willingness to pay for SaaS systems, coupled with the budget contraction of customers under the macroeconomic impact, these two factors have prompted domestic SaaS companies to turn to developing large customers in an attempt to improve renewal rates and customer unit prices.

From WEIMOB's performance perspective, during the reporting period, WEIMOB's subscription solution revenue was 487 million yuan, serving 68,725 paying merchants with an average revenue per user of 7,083 yuan. WEIMOB's retail revenue for large customers was 304 million yuan, accounting for 62.4% of the subscription solution revenue.

In addition to further shifting the business focus to large customers, WEIMOB, like other SaaS service providers, is also introducing AI large models to reduce costs and increase efficiency for SaaS businesses.

In March, WEIMOB opened the basic version of WAI to SaaS customers for free; in May, it launched the intelligent operation function of WAI; in June, it released WAI Pro for enterprise customers, providing AI application technologies such as marketing insights, content creation, and business consulting.

Qiu Haoping, the head of AI at WEIMOB, once told Wall Street News, "For more than a year since the launch of WEIMOB WAI, we have been exploring how to truly solve the last mile from technology to customer application scenarios for large models and their supporting facilities. There is still a lot of room for large model application merchants to play in this last mile."

Reflected in the financial report, during the reporting period, WEIMOB WAI has covered 58 commercial application scenarios and deeply applied more than 10 large models. The number of active users of WEIMOB WAI has grown 3.6 times compared to the second half of 2023.

Huatai Securities believes that digital service provider WEIMOB continues to benefit from the implementation of AI. "As the company's AI products continue to expand application scenarios, the future commercial effectiveness of AI is expected to gradually emerge." In addition to focusing its SaaS business more on large clients, WEIMOB has also made corresponding adjustments to another core business - "precision marketing".

According to WEIMOB's financial report, the company will focus more on serving advertisers' delivery business in the future. Currently, WEIMOB's marketing has expanded its reach to platforms such as Kuaishou, Xiaohongshu, and Alipay while cooperating with the Tencent ecosystem.

Data shows that during the reporting period, Tencent's advertising consumption increased by 19% year-on-year, with nearly RMB 1.78 billion spent on video ads, a 72% year-on-year increase. In addition, annual consumption by merchants on the Kuaishou platform increased by 78%, and annual consumption for brand promotion on Xiaohongshu increased by 152%.

WEIMOB executives stated that the company will continue to optimize its cost structure, explore new business growth points and international markets, especially the vast opportunities in overseas markets.

In recent years, Chinese SaaS companies have faced a cold spell in the capital markets, relying on "cutting back" to improve their financial situation, but this is not a long-term solution. Transitioning from pursuing "revenue first" to "operational efficiency priority" is also a transformation that the SaaS industry must undergo in the face of industry and internal challenges.

Now, WEIMOB is seeking breakthroughs against the trend, hoping to regain capital favor for the SaaS industry through its own efforts