The CCTV 315 Party exposed the chaos in the home maintenance industry, and Woodpecker, the leader of the industry, was singled out. Although Woodpecker issued two statements in a row, saying that it would conduct a thorough investigation, it also said that it would give up public relations and accept inspection under the sun. It would disclose one improvement improvement every day, and all comment areas would be fully open. But the so-called "candid" response was directly rejected by the media.
Jimu News commented that don’t make the inability to refute so refreshing and refined. “I’m afraid Woodpecker’s ‘abandonment of public relations’ is not really candid, but because it is unable to refute. Because the problem they have is not just a temporary incident, but the company’s systematic deception of consumers from top to bottom.”
Wang Guowei, the founder of Woodpecker, once said frankly in an interview, “Almost 99% of the entire industry is full of tricks.”
He is telling the truth, Woodpecker is the head of this tricky industry. And this seemingly very simple founder started from scratch after graduating from high school, and worked from a front-line maintenance worker to the current company CEO.
Such a person who worked his way up from the grassroots level, this person who is well aware of the grayness of the industry, this person who claims to use digitalization to solve the problems of opaque prices, poor timeliness and non-standard maintenance services in the home maintenance industry, actually ends up being a dragon slayer.
After graduating from high school, I worked as a dishwasher.
From maintenance engineer to CEO of leading company in the industry
Wang Guowei was once a positive teaching material for starting a business from scratch.
In 1994, 19-year-old Wang Guowei graduated from high school and went to Guangzhou to work alone to make a living.
He had done the dirtiest and most tiring work, mopping the floor and washing dishes in the Seafood Entertainment City. He didn't have much income, and it was extremely ordinary.
Like many people, he looked for any opportunity to make big money. Occasionally, he heard that the monthly income for repairing air conditioners could reach tens of thousands of yuan, while many people's salary at that time was only 300 yuan.
Therefore, Wang Guowei resolutely resigned, returned to Chengdu to learn skills from a teacher, and began to enter the home appliance repair industry.
Two years later, he opened a home appliance repair shop in Chengdu, and the business was very successful.
Later, the business-savvy Wang Guowei began to replicate it across the country. In 2004, he officially began corporatized nationwide chain operations, and successively established maintenance companies in Wuhan, Xi'an, Guiyang and other places.
When O2O officially developed rapidly in 2014, Wang Guowei also saw the opportunity for home maintenance to move from offline to online.
This year, Wang Guowei and his sister and media personality Zhu Hongkun decided to establish a platform to provide one-stop solutions for various home repair needs, and Woodpecker Home Repair was born.
Since then, taking advantage of the trend of O2O, Woodpecker has also gained favor from the capital market.
Received 4 rounds of financing
Behind them are Xiaomi Lei Jun and 58.com Yao Jinbo
At the shareholder level, in the pre-IPO shareholder structure of Woodpecker Maintenance, Wang Guowei held 13.27% of the shares through WANGW Holding Limited; Wang Yuhua (Wang Yuhua’s sister) held 10.48% of the shares through WANGYH Holding Limited;
The prospectus information shows that Woodpecker Maintenance completed 4 rounds of financing before submitting the form, raising a total of approximately 419 million yuan. Investors include 58 Tongcheng, Shunwei Capital, Palm, Xiaomi, Liangjiang Capital, etc.
It is understood that in 2017, Tianjin Jinmi Investment Partnership (Limited Partnership), a subsidiary controlled by Xiaomi Group, Shunwei Capital owned by Lei Jun, and Yunqi Internet, which holds 88.89% of the shares held by 58.com founder Yao Jinbo, participated in Woodpecker Maintenance’s Series A investment worth tens of millions of yuan.
In 2023, Shunwei Capital invested in Woodpecker again.
58.com's subsidiaries Dream Landing Holdings Limited and Tianjin Wuba Qianmo hold a total of 16.42% of the equity in Woodpecker Maintenance; Suzhou Shunwei, Tianjin Jinmi and other entities hold a total of 3.56% of the equity.
However, according to Tianyancha, Tianjin Jinmi, Shunwei Capital, 58, Wuba Qianmo, etc. have all withdrawn from Chongqing Woodpecker Network Technology Co., Ltd. on January 4, 2024.
The blessing of the two big guys undoubtedly gave Woodpecker a strong endorsement.
On the other hand, Woodpecker has also stepped up its IPO pace, offering a high commission of 40% in exchange for a gross profit margin of 80% to cater to capital.
Two Impacts on IPO
Systemic problems cannot be solved by public relations
Woodpecker's problem is not a simple link, but a systemic problem of business model, management, and profit model.
The core of this is Woodpecker's attempt to prepare performance data to enter the capital market.
Woodpecker has hit the IPO twice.
On September 30 last year, Woodpecker Maintenance submitted a prospectus to the Hong Kong Stock Exchange and planned an IPO on the Hong Kong Main Board. The form submitted previously expired on January 29, 2024.
In this context, Woodpecker will continue to achieve revenue and profits through high commissions and encouraging maintenance personnel to charge more.
According to CCTV, a maintenance worker said: "You can only get 40% of the return, and the company gets 60%. If you want to make money, you can only make money by exchanging things."
In the prospectus, Woodpecker only said that the commission would be 40%. It seems that in actual situations, woodpeckers squeeze maintenance personnel even more seriously.
Woodpecker continues to put pressure on maintenance personnel, and even teaches maintenance personnel how to speak, and increases maintenance costs through random repairs without problems and major repairs with minor problems.
During the reporting period, Woodpecker Maintenance provided services to 4 million, 5.5 million, 9 million and 6.1 million consumers respectively, and facilitated approximately 4.3 million, 6 million, 9.9 million and 66,000 home repair orders, with total transactions reaching RMB 990 million, 1.46 billion, 2.48 billion and 1.57 billion respectively.
And because the maintenance platform controls the customer source channel and occupies an absolutely dominant position, without the platform, the masters can hardly receive maintenance orders. Therefore, the maintenance master can only be forced to join in.
The average monthly active engineers on the platform in the first half of 2024 will be 26,968.
In this way, Woodpecker provides a financial report that looks beautiful.
The prospectus shows that during the reporting periods of 2021, 2022, 2023 and the first half of 2024, Woodpecker Maintenance achieved revenue of 401 million yuan, 595 million yuan, 1.011 billion yuan and 623 million yuan respectively, and net profits of 33.431 million yuan, 6.204 million yuan, 48.870 million yuan and 38.881 million yuan respectively.
During the reporting period, Woodpecker Maintenance achieved gross profits of 323 million yuan, 484 million yuan, 851 million yuan, and 500 million yuan respectively, with gross profit margins of 80.5%, 81.4%, 84.2%, and 80.2% respectively, all above 80%.
But this approach is not intended to kill the goose that lays the goose, and it cannot be a healthy and long-lasting business model.
As a grassroots maintenance worker, Wang Guowei could not possibly know everything.
And why did he choose to ignore and indulge? Some people say that he compromised with capital and lost his true heart.
In fact, for a long time, 58.com has had as many controversies as Woodpecker, whether it’s rogue agencies, false recruitment, or routine maintenance.
Woodpecker's combo punch has a shadow of 58.
Woodpecker Company has a company song "Woodpecker Song", the lyrics read:
"We are as calm as a woodpecker. Customers are the first thing we keep in mind. Only by being honest and keeping promises can we succeed. Earning money with dignity makes us hold our heads high."
Every sentence is full of irony now.
When Wang Guowei hears this song again, there will be no ripples in his heart, and he will think of those days when he started from scratch and the simple brothers he once was.