MOGU Inc. operates a key opinion leader (KOL)-driven online fashion and lifestyle destination in the People’s Republic of China (China or PRC).
The company provides people with a more accessible and enjoyable shopping experience for everyday fashion, particularly as they increasingly live their lives online. By connecting merchants, KOLs and users together, the company’s platform serves as a valuable marketing channel for merchants, a powerful incubator for KOLs, and a vibrant and dynamic commu...
MOGU Inc. operates a key opinion leader (KOL)-driven online fashion and lifestyle destination in the People’s Republic of China (China or PRC).
The company provides people with a more accessible and enjoyable shopping experience for everyday fashion, particularly as they increasingly live their lives online. By connecting merchants, KOLs and users together, the company’s platform serves as a valuable marketing channel for merchants, a powerful incubator for KOLs, and a vibrant and dynamic community for people to discover and share the latest fashion trends with others, where users can enjoy a truly comprehensive online shopping experience.
In July 2021, the company acquired Hangzhou Ruisha Technology Co., Ltd. (Ruisha Technology) as a means to explore new opportunities in the global operation of merchants. Ruisha Technology focuses on serving leading brands in the retail industry and providing brands with private domain operation and private domain product systems, etc. solutions and services. Ruisha Technology is dedicated to providing brands with one-stop brand-wide integrated marketing solutions that keep abreast of the times.
The company’s large base of KOLs is the primary source of the rich and diverse content on its platform, which is mostly in live-streaming format and distills styles and trends, often features products from its merchants and guides its users along their shopping journey from discovery to purchase. The company attracts merchant partners due to the sizeable user base of its platform, and these merchant partners incentivize and empower its KOLs to produce engaging fashion content by providing the KOLs with their fashion products, which often reflect the latest fashion trends. The company’s highly engaging content comprises live video broadcasts, short-form videos, photographs, and product reviews. The company’s users may directly purchase the products promoted or reviewed during a live video broadcast from the live video broadcast (LVB) hosts by clicking on the links to the products available in the live video broadcast channels. In addition, when a user sees a certain item featured in a live video broadcast or a short-form video, or sees it recommended by a friend or a KOL through a like or share on its platform, the user can directly purchase that item.
Users access the company’s platform primarily through mobile applications, including its flagship Mogujie mobile app, as well as through its Mini Programs on Weixin. Through its strategic partnership with Tencent, one of the company’s principal shareholders and the owner of Weixin and QQ, it also has one of the few dedicated Weixin Pay and QQ Wallet entryways that help direct Tencent’s massive base of users to its platform when they look to fulfill their fashion- and lifestyle-related needs. The company’s highly engaged user base primarily consists of young females between the ages of 20 and 30. In March 2022, on average, an active buyer through LVB on the company’s platform spent over 51 minutes per day and 16 days per month watching its live video broadcasts, and 94% of them repurchased within 30 days of their initial purchase.
The company is a technology-driven company that has relentlessly pursued the development of industry-leading AI and big data analytical capabilities to improve operational efficiency and user experience. The company’s user data is multidimensional as it relates to its users’ shopping behaviors, fashion tastes and purchasing history, which enables it to provide better and more personalized experience for them.
Starting from 2021, the company continuously provides its users, especially female users, with more products based on their fashion and beauty consumption needs, including beauty makeup, personal care, food, medical beauty, etc. on its platform. Concurrently, the company guides merchants to adjust the product structure by its platform, so that more merchants will focus on originality, design, and brand, so as to deliver differentiated fashion products to its consumers.
Online Platform
The company’s platform serves as a vibrant and dynamic community that allows people to both discover and share the latest fashion trends with others and transact with merchants for a comprehensive selection of attractive fashion products. The company’s users primarily access its online platform through its flagship Mogujie mobile app and its Mini Programs on Weixin. In addition, the company’s online platform includes its Mogu.com website.
Mobile Application
The company’s mobile applications are designed around LVB functions. When users open the company’s flagship Mogujie mobile app, they are greeted with an intuitive interface, where can conveniently search for and enter their favorite LVB channels. Users can also easily purchase products in the LVB channel, where links to product purchase are embedded and featured on screen. Once inside the channel, the company’s users can interact with each other or the LVB host in real time by typing chat messages, follow or subscribe to LVB hosts, and share any LVB content on social media. In addition, the LVB channels primarily function as a place for product purchase and entertainment, where users can complete fun daily challenges and recommend the LVB channel to their contacts to earn shopping award points and show their appreciation of the LVB host.
The company’s mobile app also features a content community, where users can browse and share fashion content, discover fashion products and find and follow LVB hosts to their liking. The community also has a fan wall comment page function that allows fans to communicate with the LVB hosts they follow outside of LVB streaming time, deepening the long-term interaction between LVB hosts and their fans and boosting content creation.
Weixin Mini Programs
Mini Program is an innovative platform built into Weixin, facilitating discovery and consumption of services and products. It is useful for discovery and quick actions, and complements full-function native apps by increasing their downloads and traffic. The company’s Mini Programs on Weixin include Mogujie and Super Shopping Center, which feature similar interfaces and functions as its mobile apps. These Mini Programs serve as additional access points to the company’s platform.
KOLs
KOLs are the main creators of the popular and engaging content on the company’s platform, which is mostly in live-streaming format. Among KOLs, the company’s LVB hosts play an especially important role as content creators, because they are very active in streaming content that features appealing fashion products or the latest fashion trends. In their live video broadcasts, the company’s LVB hosts often try out the fashion products they are promoting at various locations, including factory showrooms and brand flagship stores, so that the viewers have a more lively and intuitive experience with such products. Content created by the company’s KOLs helps shape purchasing decisions of users on its platform and encourage social interactions.
The company has invested in LVB host incubation programs that help it expand its LVB host talent pool and increase the popularity of LVB hosts. The company has a bottom-heavy LVB host tier system, where it attracts new LVB hosts from all walks of life to stream on its platform, and it discovers and cultivates new LVB hosts with potential for building a large fan base and promoting product sales. in the process. The company also holds events or competitions, such as the Duo Hundred and Migrating Bird plans it rolled out in 2019, to discover LVB hosts with good potential in large numbers so that it can focus on incubating them. Leveraging its experience in LVB host incubation, the company cultivates and supports its LVB hosts in many ways, including user traffic diversion that matches the LVB host’s popularity, continuing guidance on effective viewer interactions during LVB, supply chain support for products sold by the LVB host, user or fan data analytics, branding partnerships with its merchant partners, and otherwise promoting the LVB host in multiple media channels. In its internal system, the company defines LVB hosts who have achieved a certain level of fan following and product sales as established LVB hosts. Established LVB hosts typically possess loyal fan base, professional sales capability, and proven content creation know-how. The number of established LVB hosts were 240 as of March 31, 2022.
Users
The company’s young and engaged user base is the key to its success. The company’s users are from cities and towns all over China. Most of the company’s active buyers through LVB are females of ages between 20 and 30, who are used to viewing live video broadcasts, passionate about the latest fashion and beauty trends, active on social networks, and used to online shopping. Many of the company’s users become fans of certain LVB hosts by following them on its platform. Fans may communicate with and show support to their LVB hosts by commenting on a message wall dedicated to such hosts, where they may also like and respond to other comments, creating a virtual fan club for all participants in the process.
Business Customers
Based on the matching of user positioning and brand appeal, Ruisha Technology provides numerous services, such as private domain operation, live broadcast operation, etc. As of March 31, 2022, the number of brand merchants the company serves reached 74, of which 28 were companies with business scale of over RMB1 billon.
Fashion Content
The company’s online platform serves as a one-stop destination where it distills fashion styles and trends into engaging content tailored for its users, guide them along their journey to an informed purchase decision and allows them to effortlessly act on those decisions and fulfill their transactions. The company also makes a comprehensive selection of product offerings of its merchants and brand partners integrated with the fashion content on its platform so as to capture every purchase impulse, meet the fast-evolving fashion tastes and needs of users and deliver a seamless user experience.
The company strives to provide its users with the broadest range of high-quality and engaging original content, catering to both popular and niche tastes in fashion and helping users relate to fashion, and its content broadly revolves around different fashion and lifestyle topics, such as fashion and lifestyle tips, try-outs and reviews. The company facilitated KOLs and users in generating content on its platform, and the content is available in a variety of multi-media formats, including:
Live Video Broadcasts: Live video broadcasts are mostly hosted by the company’s KOLs and are interactive, immersive and fun. The company’s live video broadcast function has also proven to be an effective means of promoting products to its key user demographics. The company determines the total GMV contributed by live video broadcasts based on the total GMV generated through the direct product purchase function that is embedded in the live video broadcasting interfaces of its mobile apps and Mini Programs. While watching these live video broadcasts, users can interact with the LVB hosts in real time through embedded instant messaging tools, and conveniently purchase products promoted by the LVB hosts within the same interface.
Short-live Videos: A short video clip with a duration of one to three minutes featuring product demonstration by LVBs in their livestreaming channels that can be distributed as structured and tagged information to wider audience in public.
Short-form Videos: The company’s KOLs sometimes produce popular, original, short-form videos covering topics, such as fashion tips, make-up lessons and lifestyle guides. In addition, its users can also upload short-form videos after the content is vetted by the company’s content screening procedures.
Photography: The company’s users and KOLs upload photographs on its platform to express their opinions and experience on fashion and lifestyle, including global fashion.
Online Review Community: The company has established a large and active online review community. To help users make informed purchasing decisions, the company displays recent purchases of each fashion product to highlight the item’s popularity and encourage previous purchasers to share their feedback. The company’s product description and reviews include detailed quantitative analysis, photo illustrations and other visual aids.
The company’s comprehensive and rich content provides it with continuous monetization opportunities. Through products embedded within the content on the company’s platform and social network platforms, it provides marketing services to its merchants and brand partners to enable them to promote their brands and products.
Creation and Curation
The company’s KOLs mainly create original fashion content that often feature fashion products. Such content is mostly contained in the live video broadcasts on the company’s platform, which is relevant and interesting to its users. The company takes pride in having a vibrant online community of KOLs and users who actively contribute original and inspiring fashion content.
Empowered by the company’s AI and big data capabilities, it enables its KOLs to curate personalized fashion content so as to attract targeted audience more effectively and meet their diversified fashion preferences. The company studies the social and purchasing behaviors of users. Through its automated recommendation algorithm, the company integrates its curated content with the most relevant merchandise and make customized recommendation to its users, meeting their different fashion needs and creating a unique and engaging user experience.
Integration with Social Network Platforms
The company distributes its content through all major social communication, social media and content platforms in China and encourages its users to share and repost its content, which amplify its brand image and enable it to reach more potential users. The company primarily publishes its fashion content through Weibo, Weixin, Bilibili and QQ have had its content shared widely across these platforms. The company leverages the functions of major social network platforms in China to enable its users to make purchases and refer LVB hosts as part of their social activities.
Support
The company enables its merchants to open multiple storefronts on its platform to showcase their extensive product offerings. The company provides them with software and other platform-wide services, helping them promote their products and facilitate their transactions on its platform. In addition, the company’s sophisticated AI and big data analytic capabilities empower its merchants to identify their target purchasers and better curate and offers tailored products to address the evolving needs and preferences of its users. To facilitate the sale of its merchants, the company matches its merchants with the most suitable KOLs and organizes major promotional events regularly on its platform. Lastly, the orders placed through the company’s platform are aggregated before being processed by the merchants, which increases their supply chain effectiveness.
Featured Products
The company gives its users the accessibility and freedom to dress in style and confidently express themselves by offering a wide selection of fashion apparel and other lifestyle products, such as beauty products and accessories. The company supplements its fashion product offerings with a variety of carefully selected lifestyle products in order capture a broader spectrum of user demands.
While merchants are free to set their own prices on its online platform, prices of products offered on the company’s platform are attractive for its key user demographic. The company organizes a number of special sales events year-round, such as the anniversary of the founding of the company and China’s online shopping festival on November 11, and on important holidays, such as Christmas and Chinese New Year, when its merchants typically offer discounts on their products. The company also holds regular promotions for selected products for a limited period of time, such as flash sales events. Special promotions attract bargain hunters and gives its users an additional incentive to visit its platform regularly. The company has set aside special areas of its online platform for limited time offers at deep discounts. In addition, the company offers discounted products to its users under a group purchase model, offering them a varied and fun shopping experience.
Payment
In addition to accepting user payment directly on its platform, the company cooperates with leading third-party online payment service providers in China, including Weixin Pay, QQ Wallet, Alipay, LianLian Pay and China UnionPay, to enable its buyers to make payments for their purchases easily and efficiently.
Monetization
The company monetizes across the fashion value chain through a variety of means, including marketing services, commissions and financial services to users and merchants.
Commission
The company earns commissions from merchants on its platform when transactions are completed and settled. Such commissions are generally determined as an agreed percentage of the value of merchandise sold by merchants based on the sources and formats of the company’s gross merchandise volume (GMV). The company typically charges a commission rate of approximately 5% to merchants that choose its entry-level service offerings.
Marketing Services
The company provides various types of marketing services to empower its KOLs and the merchants on its platform to gain more exposure to its users. The company primarily charges marketing service clients on a cost-per-click or cost-per-mille basis.
Technology service
The company provides businesses with marketing needs with one-stop and customized services for their online operations, including various website operational services, data management platforms and other software, as well as value-added services, such as data traffic improvements and technology services to insurance companies.
Financial Services
The company offers financing solutions to its users to serve their consumption and credit needs when purchasing merchandise on its platform. The company also cooperates with third-party financial institutions and display their consumer financing products on its platform for its users. In addition, the company provides a variety of short-term financing solutions to its qualified merchants, which enable them to obtain cost-effective financing to expand their operations and improve their liquidity.
Branding and Marketing
The company promotes its platform and enhance its brand awareness through a variety of online and offline marketing and brand promotion activities. The company engages passionate and fashionable brand ambassadors and arrange for them to attend marketing and brand promotion campaigns. The company’s KOLs showcase products on top-tier variety shows, and it sponsors them for branding partnership with its merchant partners. The company cooperates with third-party app stores, popular search engines and social media platforms for online and mobile marketing. The company also conducts offline marketing primarily in the form of outdoor bulletin boards, magazines, campus promotions and television commercials.
Research and Development Expenses
The company’s research and development expenses included RMB82.6 million (U.S.$13.0 million) for the year ended March 31, 2022.
Intellectual Property
As of March 31, 2022, the company owned 16 registered patent, 1,242 registered trademarks in the PRC, copyrights to 238 software programs developed by it relating to various aspects of its operations, and 196 registered domain names, including mogu.com, mogujie.com and meilishuo.com.
History
The company was founded in 2011. It was incorporated as an exempted company registered under the Companies Law of the Cayman Islands in 2011. The company was formerly known as Meili Inc. and changed its name to MOGU Inc. in 2018.
