Magic Cat Box recently announced the completion of the C1 round of US$20 million in financing. This round of financing will be mainly used to build the Suzhou R&D team, cultivate professional talents in the private domain service center, and explore live broadcasting and layout of its own brand business. Jiuhe Venture Capital invested in the angel round of MOLLYBOX and continued to increase funding in later rounds.

Magic Cat Box is a subscription-based e-commerce for cat owners. A single box contains staple food, snacks and toys. In addition to quarterly and annual subscriptions, users can also purchase it in a single month. The unit price is around 300 yuan.

Subscription-based pet e-commerce has relatively successful cases abroad. Stitch Fix, BarkBox, etc. have cultivated a group of loyal subscribers.

Ju Yi, the founder of Magic Cat Box, has a certain overseas background, and it is what he has seen overseas that makes him more convinced that subscription-based pet e-commerce has great potential in China.

01

< p>Tsinghua University dropout to start a business, optimistic about the in-demand attributes of pets

In 2008, Ju Yi, the founder of Magic Cat Box, adopted a cat when he was still studying at Columbia University in the United States. During the financial crisis in the United States, Ju Yi discovered The pet industry is very little affected by the macro economy. After several years of observation, Juyi is even more convinced that this is a good business: as long as a country is urbanizing, more young people will join the ranks of pet owners, and the pet market will continue to grow organically.

This has also been partially confirmed in the epidemic era. Many industries have been temporarily paralyzed due to the epidemic, but pet shops have seen a surge in foster care orders. After the supply chain and logistics of pet e-commerce platforms have recovered, they have also Ushering in a wave of small growth.

The logic behind this is actually very simple: pet supplies are already in urgent demand and will not fluctuate too much due to economic changes.

The price per customer in the pet industry is not high. Whether it is a user group with an income of 3,000 or 30,000, the price per customer spending on pets has a ceiling. According to the report data of the U.S. Bureau of Labor Statistics, the United States Consumer spending on pets will not exceed 1% of total household income.

But the difference between China and the United States is that there is a huge gap in pet penetration rates. The penetration rate in the United States can reach 60%, while in China it is only more than 20%. This directly brings about another core problem: acquiring customers. high cost.

The subscription system can rely on its own service system to spend less money to acquire customers repeatedly, which is where the Magic Cat Box comes from. After Ju Yi returned to China, he chose to drop out of Tsinghua University's doctoral program and founded MollyBox, China's first pet subscription e-commerce platform, in 2017.

02

The complete failure of the dog box

The idea of ​​using a subscription system to enter the pet industry is not smooth sailing. I don’t know how many people remember one dog and one dog. What about this official account?

This public account was created by Juyi and his partners at that time. The purpose was to create content to attract traffic. They learned from the practice of foreign Barkbox and sold their own boxes through content.

The box we made at that time was called WoofBox, which was a pet box for dogs, but it encountered great difficulties and consumers did not pay for it.

If you don’t tell consumers what’s inside, they won’t buy it. If you tell consumers what's inside, they will buy it when they think it matches well.

The logic behind this is that the concerns of cat and dog users are completely different. Dog users are like mothers raising children. They like to shop around to find the one with the highest price/performance ratio. Cat users, on the other hand, are more like fathers raising children and need a complete set of solutions.

Dad will have a kind of thinking, if you can help me get everything done, I am willing to pay you a certain premium. Mr. Changcheng believes that this has something to do with the fact that cats are naturally less interactive than dogs. Cats only need to prepare cat litter and cat food to accompany them occasionally, but dogs are best if you accompany them 24 hours a day, which also indirectly affects the two. consumption decisions.

At the same time, the failure of Dog Box indirectly led to the birth of Cat Box, and the method was also to use content to attract users. This was also the trump card customer acquisition method of Magic Cat Box later.

03

< p><Borrow, Create, Buy>Customer Acquisition Methodology

It can be seen that the team of Magic Cat Box pays great attention to one point from the beginning to the present: customer acquisition cost.

This may be because the founders conducted research and deductions in advance. The retention of customer acquisition costs is the key to success in the perception of Magic Cat Box. And they also have their own methodology for acquiring customers, "borrow, create, buy".

<Borrow>

How to borrow traffic from big brands? Do co-branded activities, such as co-branded products with Xiaohongshu, pet hospitals, and TV series, to trigger users' natural orders and gain a certain amount of exposure.

<Chuang>

Use good content to attract users. For example, Magic Cat Box will find many illustrators to draw the boxes and create content to gain traffic. In addition, Magic Cat Box started out as a public account and has certain creative capabilities in the pet industry.

<Buy>

Buy platform traffic, place a large amount of traffic when the platform traffic has a bonus period, and find bloggers to place the money. The difference is that Magic Cat Box established its own MCN company early on. Because it found that the pet industry has huge investment dividends during the launch, it came up with the idea of ​​buying out pet bloggers, which can give Magic Cat Box a steady stream of profits. Support will also give you a very strong sense of security.

In addition, after acquiring users at a low customer acquisition cost, only by allowing users to generate higher repurchases can the customer acquisition cost be lower in the long run. Therefore, the Magic Cat Box uses part of its profits to carry out activities with users, such as charity donations, learning to draw, online courses, etc., creating an atmosphere of "buy a Magic Cat Box if you want to raise a cat well" to ensure the long-term retention of users. and repurchase.

The concept and entry point of Magic Cat Box were very clear at the beginning, and the strategy was also very clear. It transformed the original single-time and multi-frequency purchasing habits into a group buying and packaged shopping experience, providing cats with Food, snacks, toys and pet daily necessities, one box meets the periodic feeding needs of cat owners.

Cost-performance and convenience are the main reasons that attract consumers.

Magic Cat Box also faces its own challenges, such as consumers' newness of products, supply chain integration, the launch of free brands, etc. In the context of rapid urbanization, the entire Chinese pet market still has great potential. Magic Cat Box may have the opportunity to break through the ceiling originally envisioned and gain a larger market and influence.