It is said that women and children's money is best earned, and the monthly center is one of the few businesses that can take both.
90, 00 after the main new generation of mothers, no longer satisfied with the home sitting, the pursuit of a more comprehensive and meticulous maternal and child care, so that the business of the moon center more and more fire.
The highest market share of domestic monthly child center, is a listed company called Love Palace (00286.HK), relying on six branches, 505 rooms, in the first half of 2021, it was 256 million in revenue.
Stimulated by the "three-child policy", it aims to increase the number of rooms to 3,500 by 2025, a six-fold expansion in four years.
"Ten years ago, out of every 100 people, 1.2 people chose to go to a monthly child care center, and now there are 5.7 people out of 100." Zhu Yufei, CEO of Edigong, admits that it's a good time to catch up.
Behind the strong demand, in the first half of 2021, the net profit of the month of love Palace services is about 35.75 million, net profit margin of 14%. On this basis, the average room, a year net profit of 140,000 yuan.
Seemingly high-growth gold track, love emperor palace this business is actually very deep doorway, the threshold is very low.
Customer unit price of 100,000
Post-partum menstruation is a Chinese tradition, in the past, most of the elders at home or sister-in-law to help, over the years, from the middle and high end of the family to the general public from the monthly child center.
On social media platforms such as Xiaohongshu, Love Empire Palace is portrayed as a place for new parents to go.
For 15 years, Edigong has been providing monthly services, and was founded in 2007 by Zhu Yufei, who positioned it for the high-end crowd. She is a former head nurse of the obstetrics department at Peking University's Shenzhen Hospital.
According to the data disclosed by the company, Edigong has served 20,000 mothers, occupying 4.3% market share in China, ranking first in the industry, with a market share of 31% in Shenzhen.
In the promotional copy, Aide Palace said it has served star couples such as Sun Honglei, Huang Lei and Tong Dawei.
In 2019, Shenzhen Aidi Palace sold 88.5184% of its shares to Tongjia Health for 888 million yuan to complete the shell listing, the main body of the listed company was renamed "Aidi Palace", Zhu Yufei became the helmsman.
Tongjia Health originally operated natural health food, medical anti-aging and permaculture bases, etc. In the past two years, the Palace of Love divested the medical and health business, the main business shifted to the operation of high-end moon child center, in the first half of 2021, the moon child service revenue accounted for 97.22%.
If the stay cycle is extended to 60 days, the price rises to 147,200 to 389,500 yuan.
In 2020, relying on 5 monthly centers and 435 rooms (mature stores), Aide Palace's monthly service revenue is HK$578 million (about RMB 490 million), and its average guest price is estimated to be up to 100,000 yuan based on the frequency of 12 times/year per room and a 15% vacancy rate.
Mooncenters use a prepaid model, where customers need to book 3-6 months in advance and pay a 30% contract deposit in advance, with full payment on the day of arrival.
There is a way to make money
On the surface, the high unit price of customers, love Palace should be very lucrative, in fact, not.
Monthly child center is a low-frequency, service-heavy business, staff, rent, equipment, rigid cost investment. And most customers only live once or twice in a lifetime, short consumption cycle, the need to constantly pull new customers. Once the vacancy rate is too high, it is difficult to make a profit.
Some people describe this as a "half flame, half sea water" industry.
In the domestic listing of the five moon child center, the remaining four - Xixi Maternity and Infantry, Damei shares, Xi's family, Fuza Maternity and Infantry, have all been losing money for years, the latter two have been delisted, and only the Aidigong (moon child service business) to maintain a meager profit.
In the early days, all of the AIDIGONG moonlight centers were self-owned single-family house models, leasing properties and renovating them themselves, which is an asset-heavy project. Shenangang Securities estimates that the cost of a single bed in the Palace of Love is more than 500,000 yuan, but also face the opening of a long period of preparation, a long payback period and other issues.
"If the occupancy rate at the level of 50% -60% will lose money, large-scale supporting services and facilities costs are also large, the scale can not reach and can not afford this cost." Love Palace management said at the exchange.
The key to occupancy is the level of service and reputation. The cost of tens of thousands of dollars, so that customers are cautious in their decision-making, demanding service, and preferring word-of-mouth recommendations from friends and family.
The management of Edible Palace said, "Statistically, (our source of customers) is 60% by word of mouth and 40% by promotion, with a secondary occupancy rate of 85%-85%."
In 2019, the occupancy rate for the Imperial Palace Moon Center was 90%, dropping to 75% to 85% by the end of 2021 due to intentional order control and other factors.
However, with high unit prices, user expectations have been stretched and there is dissatisfaction.
On social media platforms, there are a lot of comments about the low cost-effectiveness of the Palace of Love, such as "insufficient nurses", "common ingredients for monthly meals", "promoting maternity health programs" and so on.
For the basic package, which is just needed, the Palace claimed that it would arrange four nurses to serve four rooms and three shifts, and only two nurses were on duty at the same time for each shift, which was often too busy.
"1 nurse has to take care of 4 children at the same time, and when it's busy, you need to wait longer to ring the bell." A woman in labor said on social media platforms.
Individual outlets have a low rating of 4 out of 5, which is not good value for money relative to their price.
Radical Expansion
The moonlight center industry has a low barrier to entry, the market is fragmented, barbaric growth, large and small institutions want to get a piece of the pie, professional hospitals have also begun to provide "one-stop" service, from the birth of the postpartum restoration of the whole care, love emperor Palace facing the pressure of competition is not small. The pressure of competition is not small.
According to Frost & Sullivan forecast, by 2025, the scale of domestic monthly service will reach 28.1 billion yuan, an average compound annual growth rate of 17.2%.
"You can fool a group of people for a short time or a long time, but it is impossible to fool a large group of smart people for a long time." Zhu Yufei believes that with the new wave of newborns coming, monthly child care centers will be standard for the younger generation.
In order to capture market share, in July 2021, Edigon launched an aggressive expansion strategy.
Under the original self-operated model, the cost burden was too great and the pace was slow. Love Empire Palace Explore an asset-light model, that is, leasing furnished apartments and hotel-style properties to open stores, in order to quickly replicate at low cost.
"In the past, a monthly child center with about 80 rooms had to invest 45 million yuan, but now it only needs 15 million yuan without renovation, and the cash flow reaches breakeven in about 6 months, and it becomes a mature store in about 12 months, and the payback period can be shortened from 18-24 months to about 12 months." Edigon management said in the above exchange.
In April 2021, the first asset-light model of the Edigong opened in Shenzhen OCT store, and then in the next eight months, three more stores were opened, adding 265 rooms.
By the end of 2021, Edigong had nine monthly child care centers with 712 rooms in Shenzhen, Beijing and Chengdu.
According to the target of 3,500 rooms in 2025, roughly 35 new stores will be opened, with a layout of 19 cities, focusing on the original three core cities + Hangzhou, as well as the surrounding second- and third-tier cities.
At present, the penetration rate of the domestic monthly child market is 5%, Zhu Yufei believes that the future market share of the industry's first place can reach 20%.
The challenge of off-site expansion is market education, especially into the sinking market, often 100,000 unit price, it is inevitable that people are discouraged, love Palace mentioned that in the third and fourth tier cities, taking into account the rent, labor costs are lower, the unit price will come down.
Because of the extreme dependence on manpower services, expansion of the Palace of Love, to ensure quality is not an easy task, once the negligence, the word of mouth collapsed, will cause a backlash against the brand.
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