An investment pitch made for a San Francisco based Venture Capital Fund.

1. Hangzhou Ruhnn Holding Co.,Ltd
(NEEQ: 832887)
Investment Pitch
QI FENG

2. Hangzhou Ruhnn Holding went through backdoor listing less than
a year ago and has only one official half year report available (as
of June 2016). In addition, with the absence of its official website
and a small amount of repetitive news available online, there is
great difficulty in gathering information from public source.
As a result, individual interviews were conducted during the
research period. Python scraper code was employed to gather a
large amount of data to estimate the company’s growth and
revenue.

3. Table of contents
 Introduction of Hangzhou Ruhnn Holding
 Market conditions
 Competitive Landscape
 Business Model Evaluation
 Great Talent Under Ruhnn
 Growth and Revenue (Modeling)
 Team
 Investors
 Relevant events & Long-term Direction
 Investment Suggestions

4. Introduction Of Ruhnn Holding
INTRODUCTION
BUSINESS CYCLE
A BRIEF HISTORY OF RUHNN (MILESTONES)

5. Introduction
 Ruhnn Holding Co.Ltd is the first Blogger Incubator in China.
 It is a fashion retailer and talent management company in essence.
 Instead of outsourcing marketing to traditional advertising agency and
Baidu paid advertising (similar to Google Paid advertising), it expands
its advertising period to a whole fiscal year by contracting young,
attractive and popular fashion bloggers.
 Heavily involve in social media platforms and selling life style,
contracted bloggers are able to obtain a substantial amount of
followers (well performing ones will always hit 1 million followers) in the
first half of a fiscal year and start converting them to consumers in the
middle of the year. (Conversion rate may vary from 2% to 20%
depending on individual bloggers’ performance.)

6. Introduction
 Ruhnn sets up an online fashion store on Taobao.com for each
contracted bloggers aiming to achieve high volumes of sales, which is
the major source of Ruhnn’s revenue.
 Bloggers are the front men while Ruhnn provides them with essential
training , utilizes data analytics to monitor web traffic and handles the
whole supply chain of fashion retail.
 Sales occur throughout the year but it is highly seasonal due to the
nature of the business. Revenue from Single’s Day Sale (11.11, similar to
Black Friday) can mount up to 60% of Ruhnn’s total income.
 Timing of converting followers to consumers at the middle of a fiscal
year and the accumulation of followers also contribute to the
seasonality of Ruhnn’s Revenue

7. Business Cycle
January-June
Generating web
traffic and expanding
fan base.
June-October
Converting followers
to consumers. Starting
small amounts of sale
October – December
Realizing revenue by
conducting huge
volume of sale on
individual bloggers’
online store.

8. Brief History of Ruhnn (Milestones)
2012
• Ruhnn Trading Company was founded in Hangzhou, China, specializing in online
Fashion Retail under its own Brand called LiBeilin(莉贝琳).
2014
• Libeilin (Ruhnn) hit Top 10 Women’s Fashion Sale on Alibaba’s online retail Platform
Taobao.com, achieving at least ¥0.2 billion sale.
• Signed 张大奕Eve (4.74 million followers on Weibo) as the first contracted blogger
* Raised Series A, leading investor SAIF Partners (Private Equity) at a non-disclosed
amount

9. Brief History of Ruhnn (Milestones)
2015
Ceased operation of Ruhnn’s own Fashion Brand LiBeilin(莉贝琳)
Transition to be the first Blogger Incubator in China, with more than 50 contracted bloggers
张大奕Eve (contracted blogger) individually achieved ¥ 0.2 billion sale on Single’s Day, hitting Top 10
Women’s Fashion Category C Sale on Taobao.com
* Raised Series B at ¥120 million with leading investors of SAIF Partners, Legend Capital (VC division of
Lenovo) and Telescope Investment(VC)
2016
Backdoor Listing through NEEQ (National Equities Exchange and Quotations) @ ¥7.66 per share, value @
¥0.176 billion. (April)
•Undergone corporate restructuring : dissolved Ruhnn Trading Company, changed the backdoor listing
company name to Ruhnn Holding and founded 4 subsidiary companies specializing in different part of its
business (media, supply chain, online store management [both in mainland and in Hong Kong])
•¥0.3 billion investment from Alibaba Group right after Single’s Day Sale (11.11)
Valuating at ¥3 billion @ ¥96.43 per share

10. Market Condition
CHINESE CONSUMER MARKET
THE RISE OF BLOGGERS
STATISTICS OF THE BLOGGER ECONOMY
THE RISE OF BLOGGER INCUBATORS
INDUSTRY GENERAL BUSINESS MODEL
RISK ANALYSIS
BLOGGER INCUBATORS FUNDRAISING
SUMMARY

11. Chinese consumer market
 Strong growth of the Chinese economy increases people’s
purchasing power. (National retail volume in 2015 is 30,093.1 billion
RMB with an 10.7% annual increase)
 E-commerce has become the one of the leading factor in
increasing consumption. (National e-commerce retail volume in
2015 is 3,880 billion RMB with an 33.3% annual increase.)

12. Chinese Consumer Market (Brief
Introduction of Taobao)
 TaoBao is the largest Chinese E-commerce Platform
operated by Alibaba Group. It is similar to Ebay and
Amazon. The company reported its gross merchandise
volume of $485 billion in FY 2016, which is $3 billion
higher than that of Walmart in the same period.
 It hosts a shopping festival called Single’s Day on
November 11 every year. It is the Chinese version of
Black Friday. Single’s Day Sale in 2016 is $14.3 billion
(¥120.7 billion)
 Single’s Day captures a large percentage of Taobao’s
annual volume of sale. As a result, the growth in
Single‘s Day sale volume is a good representative of
the total sale volume of the website.

13. The Rise of Bloggers
 Fashion retail especially women’s fashion is the dominant force of
Single’s Day Sale.
 Most of Single’s Day consumers are young women born in the 80s
and the 90 living in first and second tier cities in China with easy
excess and knowledge of the internet.
 Noticing the great market potential and an ideal customer base,
individual bloggers who share life style and fashion posts on social
media platforms start to convert their followers to consumers. The
result is surprisingly good that some bloggers achieve 30 million RMB
sale on a single Single’s Day

14. Statistics of The Blogger Economy
 The Blogger industry is estimated to generate
a total of ¥ 58 billion revenue in 2016.
 Target customer base is young females born
between 70s and 95s, in which more than
60% of them are born after 1990 and 25% of
them are born between 1970 and 1980.
 Women’s fashion is the largest component
of the blogger economy still with large room
to grow but more competition.
 Area such as makeup and skincare, baby
and mother care product have relatively
smaller volume but larger room to grow with
less competition.
 Graph: Volume composition of e-commerce sale under Blogger
Economy

15. The rise of Blogger Incubators
 In 2014, a new business called the Blogger Incubators emerged as a result of the huge
profitability of the Blogger Industry.
 Blogger Incubators select, train and manage contracted bloggers. Each blogger usually
have a team to manage shared contents, web traffic, blogger’s public image, clothes
manufacturing and the blogger’s online store on Taobao.
 Blogger Incubators are similar to traditional talent agencies except that the source of
income is not advertising commissions but sales revenue from individual bloggers’ online
store. (More than 60% of the annual sale comes from Single’s Day.)
 Such systematic production system of Bloggers shortens the time for revenue realization
(the industry average of the time from training a blogger to conduct successful sale is 3 to
6 months) and thus achieve economy of scale.
 There are around 150 to 200 Blogger Incubators in China.

16. Industry general business model
Select bloggers
(Good potential
candidates are
young female with
a good sense of
fashion, skinny
figure and at least
10,000 followers on
various social
media platform)
Social Media
Management
(Bloggers interact with
followers when the
Incubators manages
their social media
account traffic
including paid
advertising and
having influential
social media
accounts to share
blog posts)
Preparation of
Single’s Day Sale
(Conversion)
(Based on the
comments of
followers collected
and current trend of
fashion, bloggers
and incubators
design women’s
outfit and show
samples on social
media platform for
publicity and
inventory
management
purposes. This is the
stage when the
incubators start
converting followers
to consumers.)
Single’s Day Sale
(Followers-turned-
consumers shop on
Blogger’s online
Taobao Store.
Monitoring the volume
of orders for different
outfits, the incubators
will have the factories
manufacture more
popular outfits. This is
when the revenue is
realized.)
Profit split
(Bloggers and the
incubators will split
the profits after sale
and prepare for
new business year.)

17. Risk analysis
 High Volatility: The Blogger Incubators rely entirely on individual
bloggers’ popularity even with diversification of risk in terms of
increasing the number of bloggers contracted and contracting
bloggers with different style.
 Easy to Duplicate: Chinese Bloggers are highly homogenized due
to Blogger Incubators’ systematic production of bloggers.
Additionally, low barrier for entry and the easy nature to copy
individual public image and style make bloggers face fiercer
competition than ever.
 Unprofessional Management: Due to the fierce competition and
the need for rapid scale up of business, blogger incubators face
difficulty in setting up an efficient management system.
 Increasing Cost in Acquiring Web Traffic: Increasing need for
social media exposure pushes up the price for advertising and
paid blog sharing service offered by influential social media
accounts.
Chinese Bloggers (All young women from the picture
above are different individuals.)

18. Summary
 Relative early stage of the blogger economy
 Still great room to grow and higher profits to gain
 More competitive because of homogenization
 Need diversification in the types of bloggers contracted to secure
the number of followers and reduce churn rate for revenue
stabilizing and business expansion purpose
 Ruhnn being the first incubator with a relatively larger number
influential contracted bloggers has a substantial market
capitalization

19. Competitive landscape
MAJOR PLAYERS
COMPETITOR’S BUSINESS MODEL

20. Major Players
Company
Name
Round Amount
(in millions, RMB)
Time Lead Investor
Fan Xing You
Xuan (繁星优选)
Series A 17.25 12/3/14 China Media
Capital
PBLAB (杭州缇苏) Series B 30 5/3/16 Beijing Enlight
Media Co Ltd.
Yu Jia Yu Le (娱加
娱乐）
Series B 100 8/4/16 Legend Capital
Ruhnn (如涵电商） Series B 12 10/26/15 Saif Partners

21. Competitor’s Business Model
 Most of the Blogger Incubators now adopt quantity over quality strategy
 Yu Jia Yu Le (娱加娱乐）
 Contracted 1000+ Bloggers
 Quantity over Quality Strategy
 Limited individual attention and thus poor performance of bloggers
 Mass production of homogenous Bloggers and thus higher default rate
 Higher risk because of high correlation between individual bloggers.
When market changes to an unfavorable direction, Yu Jia Yu Le (娱加娱
乐) does not have diversification to balance out the downfall

22. Ruhnn’s business model
BUSINESS MODEL IN DETAIL
ANALYSIS OF RUHNN’S BUSINESS MODEL AND SCALABILITY
RUHNN’S TALENT

23. Business model in detail
 Ruhnn’s business has three stages:
 Stage 1: Increase bloggers’ social media influence
 Stage 2: Start to convert the followers to consumers and direct
followers from social media platform to bloggers’ sale site (Taobao
online shop)
 Stage 3: conduct actual sale and realize revenue on Single’s Day

24. Business model in detail (Stage 1)
 Content of Training: how to interact
with followers as a public figure; how to
select and create hit topics; how to do
trendy makeup etc.
 Social Media Platform: Weibo
(Facebook), WeChat, Tudou (Youtube),
Youku (Youtube), Bilibili (Youtube)，
MeiPai (Snapchat), YY Channel (Skype)
etc.
 Partnered Influential Social Media
Account: The price for sharing blog
posts is not fixed. It can be free
depending on the relationship of
Ruhnn and those Social Media
Accounts.

25. Business model in detail (Stage 2)
 Notes:
 During stage 2, although Ruhnn’s
focus shifts to testing sample outfit
with followers and directing them
to the sale site.
 Expanding social media network
and post sharing through existing
network are still operating.

26. Business model in detail (Stage 3)
 Notes:
 Taobao’s live
webcast service
allows owners of
Taobao’s online
stores to directly
engage with the
customers in
sharing samples,
fashion trends or
just lifestyle in
general. It also
allows the viewers
to leave comments
which will be show
up on the webcast
screen. Thus the
bloggers can
interact with the
viewers during live
casting.

27. Analysis of Ruhnn’s Business Model
 Select Mature Bloggers: Ruhnn selects potential bloggers with at least 100,000 followers
on Weibo. Such process reduces the cost of training since bloggers have previous social
media experience. Additionally, the substantial amount of followers indicates the
market’s acceptance of these individuals and thus lower risk of default.
 Allow Individual Personality and Style: Ruhnn allows bloggers to have their individual
style and personality. It is different from most of the other incubators who assign identical
public image and fashion style to their contracted bloggers. The industrial general
practice cuts cost and saves time in the short run but it is not sustainable in the long run. It
is the main contributor for the homogenization of bloggers and high default rate.
(Industry default rate is 80%). Ruhnn’s strategy allow its bloggers to stand out and have a
more loyal follower base.
 Adopt quality over quantity strategy: Ruhnn contracted around 50 bloggers, which is
relatively small compare to other incubators at this scale. It allows Ruhnn to give more
individual attention and produce better outcome.
 Talent Management

28.  Quick Revenue Realization: The industry average time for a blogger to generate
sales from the start of training is 6 months. As a result, Ruhnn’s business model
generates cash much faster than most startups. In addition, most of the cost
incurred are fixed cost and overheads, which stays relatively constant when
scaling up. Thus it produces positive cash flow even in relatively early stage of
the business.
 Rapid Growth of Number of Followers: Ruhnn leverages its network of influential
social media accounts allows the bloggers to gain followers much faster. The
ability to share and utilize partners’ follower base allows the rapid growth of the
number of followers and thus greater profit.
 Lower Cost of Web Traffic: Ruhnn’s organic mechanism of increase bloggers’
social media exposure and number of organic followers has much lower cost
and higher return than traditional retail stores. Organic followers are more likely
to be returning customers (repurchase rate is 95%) while customers from
traditional retail store are prone to one-time purchase. Thus in long-run web
traffic and customer acquisition cost are lower under Ruhnn’s model.
 Business Model and Scalability

29.  Loyalty of Followers (stickiness): Bloggers’ frequent engagement
with the followers implies a mutuality in the celebrity and fan
relationship. Followers are more loyal when their idol responds.
 Preorder and Less bad inventory: Preorder and analysis of followers
response on outfit samples allows Ruhnn to accurately estimate the
sale volume and thus the quantity of inventories. The average
traditional retail inventory turnover ratio is 15%-18% while Ruhnn’s
ratio is only 2%-3%.
 Fast adaptation to market change: Frequent interaction with
followers and constant presence on social media allows the
bloggers to quickly sense the change in consumer preferences. And
thus faster adjustment to the blog post content and outfit design to
maintain Ruhnn’s market capitalization.
 Business Model and Scalability

30. Great Talent Under Ruhnn
GREAT TALENT UNDER RUHNN

31. Name No. of
Followers on
Weibo
Social Media Link (Weibo) Taobao Online Store
Link
Note
张大奕Eve 4,740,423 http://weibo.com/zhangyiev
e?refer_flag=1001030101_
https://bigeve8.world.taob
ao.com/
Hit Taobao Top 10
Women’s Fashion Retail C
Category twice; No. 2 in
Most Profitable E-
commerce Blogger Rank
大金Dajin 1,822,150 http://weibo.com/kings1992?
refer_flag=1001030102_&is_h
ot=1
https://dakin.world.taobao
.com/
Specializes in Fashion
Clothing
虫虫
Chonny
1,714,698 http://weibo.com/u/2634154
091?refer_flag=1001030102_&
is_hot=1
https://shop446571526.worl
d.taobao.com/?spm=0.0.0
.0
Specializes in Makeup
左娇娇
Rosemary
1,520,409 http://weibo.com/rosemary1
6?refer_flag=1001030101_&is_
hot=1
https://shop114107749.worl
d.taobao.com/
Specializes in Fashion
Clothing
管阿姨 1,569,971 http://weibo.com/u/1225512
093?topnav=1&wvr=6&topsu
g=1&is_hot=1
https://pastten.world.taob
ao.com/
Specializes in Fashion
Clothing

32. Growth and Revenue (Modeling)
- NOTES AND ASSUMPTIONS
- INTUITION BEHIND THE MODEL AND METHODOLOGY
- DATA SUMMARY
- DATA ANALYSIS
- COST STRUCTURE AND SCALABILITY
- SUMMARY

33. Growth and Revenue (Modeling)
 Ruhnn does not publish information regarding its revenue and growth
 Proxies are identified to estimate Ruhnn’s growth and revenue
 Bloggers’ followers are the ultimate driver of Ruhnn’s revenue
 Thus the growth of the number of followers is a reasonable estimate of the
growth of Ruhnn’s revenue, assuming purchasing power remains constant
 Since Weibo.com does not provide the history of number of followers for
individual accounts, relevant metrics under each blog post of individual
bloggers are identified to be the proxy in estimating the growth of bloggers’ fan
base
 Relevant metrics are Number of Likes, Number of Comments and Number of
Shares
 Python Scraper Code is utilized to obtain data
 Four different levels of blogging and selling performance are identified and four
representative bloggers are chosen for data analysis
 Notes and Assumptions

34.  Weibo Blog Post Example:
 Blog post contains three
metrics (at the bottom of
the picture on the left)
 The first one is Number of
Shares: 444
 The second one is
Number Of Comments:
13736
 The third one is Number
of Likes: 1114

35.  Taobao Item Sale Example:
 Taobao Item Sale contains
three metrics
 The orange one is Price : ¥459
 The one on the right is number
of items sold in the current
month (Taobao cleans sale
data every month): 281
 The one on the bottom is the
number of comments in the
past three month (Taobao
cleans data on comments
every three month) : 89

36. Four Representative Bloggers Identified for
Analysis (different level of performance)
Name No. of Followers Performance Level Social Media Link
张大奕Eve 4,738,586 Super Star Performer
(2016 Single Day’s Sale
¥0.248 billion)
http://weibo.com/zhang
yieve?refer_flag=100103
0101_
大金Dajin 1,822,825 Star Performer (2016
Single Day’s Sale ¥30+
million)
http://weibo.com/kings1
992?refer_flag=10010301
02_&is_hot=1
媌老板 Miaolaoban 996,253 Mediocre Performer http://www.weibo.com/
maimiaoerqingqing?top
nav=1&wvr=6&topsug=1
&is_hot=1 -
_rnd1482588048810
朴瑟 Puse (Korean
Nationality)
1,581,168 Poor Performer http://weibo.com/u/562
6139459?topnav=1&wvr=
6&topsug=1&is_hot=1

37. Data Summary
 Number of observations: 8472
 OLS Regressions: F-test and P-values show that all statistics are
statistically significant with an average R square of 65%

38. Intuition Behind the Model and
methodology
 Please refer to PowerPoint named “Model for Ruhnn‘s Growth and
Revenue Detail Explanation” and attached excel spreadsheets for
detail

39. Data Analysis
 Growth of Followers:
 Ruhnn Blogger Social Media Performance Data Analysis
 Individual Blogger’s Revenue:
 张大奕eve‘s 2016 Taobao Sales Revenue
 Ruhnn’s Estimated 2016 Annual Revenue:
 Sensitivity Analysis
 Detail Analysis of Sensitivity Analysis
 Ruhnn’s Revenue Projection:
 Ruhnn’s Revenue Annual Growth Rate
 Ruhnn’s Revenue Projection for the Next Four Years

40. Growth of Followers: Ruhnn Blogger Social
Media Performance Data Analysis
 R Square
 The larger the number of inorganic
followers (blogger incubators will
sometimes paid third parties for computer
generated fans who are not real people to
boost up number of followers), the smaller
the R square.
 The more inorganic fans, the higher
standard deviation between R squares. (i.e.
Extreme under perform blogger 朴瑟 Puse
has huge amount of inorganic fans. Her R
squares from different metrics varies
drastically from 1.48% to 38.30%)
 Reliability of Data
 It is technologically hard to use computers
progams to generate comments, shares
and likes on blogs while it is extremely easy
to generate fake followers.
 That being said, calculated weighted
average monthly growth of followers is
much more reliable than number of
followers.
 Thus 朴瑟 Puse's extremely low volume of
sale, growth of comments and growth of
shares do not justify her large number of
followers
 Blogger Performance
 1. Blogger-
performance
evaluation is based on
Ruhnn Standard
instead of industry
standard.
 2. Ruhnn Standard is
much higher than
industry standard.

41. Growth of Followers: Ruhnn Blogger Social
Media Performance Data Analysis
 Given high industry default rate of 80%, Super Star (4.24%), Star
(7.25%) and even Mediocre (3.90%) performing Bloggers out
perform most other bloggers even with fierce competition.
 Super Star performer does not experience slower growth as
indicated by 4.24% because of her extremely large number of
followers (almost 5 million).
 Star performer is experiencing rapid growth as shown by 7.25%
 Conversion rate for Super Star and Star Performers are all above 20%.
Given its high follower growth rate and assumption of constant
purchasing power, these bloggers’ revenue growth are equally high.

42. Individual Blogger’s Annual Revenue: 张大奕eve‘s
2016 Taobao Sales Revenue
 Only data on Nov Sale of Nov's Design (11[11]), Dec Sale
of Dec's design(12[12]), Dec Sale of Nov's design(12[11])
are actual data.
 张大奕eve is estimated to achieve ¥248 million of Sale on
her Taobao Online store during Single’s Day, which is 24%
higher than that of last year
 张大奕eve is the only blogger from Taobao Women’s Outfit
C Category (non brand, individual seller category) that is
ranked Top 10 of Toabao’s Women’s Outfit Sellers
( including all categories). It is worth noting that she is the
only C Category selling on the rank.
 Format for Monthly
Sales Category:
Rev(Month of the Sale
Occur[Month of the
Design])
 i.e. Rev(12[11])
represents the revenue
from selling
November's design
during December

43. Individual Blogger’s Annual Revenue: 大金Dajin’s
Single’s Day 2016 Taobao Sales Revenue
 Format for Monthly Sales Category:
Rev(Month of the Sale Occur[Month of the
Design])
 i.e. Rev(12[11]) represents the revenue from
selling November's design during December
 大金Dajin (Star Performer) made ¥31.4
million of sale during Single’s Day. She out
performed most other bloggers in the
market.

44. Ruhnn’s Estimated 2016 Annual Revenue:
Sensitivity Analysis

45. Ruhnn’s Estimated 2016 Annual Revenue:
Detail Analysis of Sensitivity Analysis
 张大奕Eve's November Sale is
44.6% of her 2016 Annual Sale
(247.98million/556.16million).
 Assume Nov Sale to Annual
Sale ratio for Star Performing
Bloggers are higher, assumed
to be 60% (conservative
estimation), given there are 6
Sales periods on average for
each Blogger, each Star
Performing Bloggers will be
able to generate 52.38
million Yuan Per Year. (Taking
大金Dajin's November Sale as
a benchmark, 31.426million /
60% = 52.38million)
 Thus 4 Star Performers's Total
2016 Annual Revenue is 210
million Yuan.
 Total Revenue from the rest of 45 Mediocre and poor Performers should at least
total 67.5 million Yuan with each contribute on average 1.5 million Yuan. (Rest of
the Rev - 210 million => 67.5 million yuan)
 According to the Detail analysis of Sensitivity analysis Table, 张大奕Eve's %
contribution to Ruhnn's Total income should be within range 55% to 59% and
Ruhnn's Total Revenue in 2016 should be around 900million to 1billion Yuan.

46. Ruhnn’s Revenue Projection: Ruhnn’s Revenue
Annual Growth Rate

47. Ruhnn’s Revenue Projection: Ruhnn’s Revenue
Projection for the Next Four Years

48. Ruhnn’s Revenue Projection: Ruhnn’s Revenue
Projection for the Next Four Years
1,000.000
1,047.467
1,097.188
1,149.268
1,203.821
900.000
942.054
986.072
1,032.148
1,080.376
y = 50.944x + 946.72
y = 45.085x + 852.88
0.000
200.000
400.000
600.000
800.000
1,000.000
1,200.000
1,400.000
2016 2017 2018 2019 2020
RuhnnAnnualRev
Year
Ruhnn Holding's Future Revenue Projection
Ruhnn Annual Rev (Upper Bound, in millions Yuan)
Ruhnn Annual Rev (Lower Bound, in millions Yuan)
Linear (Ruhnn Annual Rev (Upper Bound, in millions Yuan))
Linear (Ruhnn Annual Rev (Lower Bound, in millions Yuan))

49. Cost Structure and Scalability
 Other than the cost of inventory, most of costs incur are overhead
and fixed cost. Salary for talent management team is the highest
among these overheads.
 Ruhnn’s business model is highly scalable because of its cost
structure.
 During expansion, an increase in the number of contracted
bloggers will not greatly affect the overhead costs.
 Thus Ruhnn can scale up fast as it did in 2015 and achieve economy
of scale.

50. Summary
 Ruhnn Holding is estimated to experience a (4.575%, 4.646%)
monthly grow and a (4.673%, 4.747%) annual Growth, in addition to
a (¥ 0.9 billion, ¥ 1billion) revenue of 2016.
 According to the analysis above and aggressive financing activities,
Ruhnn is growing and expanding rapidly to capture more market
share.
 It is also a highly profitable company with the lowest default rate,
comparing to most of the other ones in the market.

51. Team
CORE MEMBERS
OTHER FACTORS

52. Core Members
 Founders:
 冯敏 Min Feng (CEO)
 孙雷 Lei Sun
 张舒 Shu Zhang
 All members have previous experience and held
important positions in related field, including E-commerce
and media.
 Three founders started an E-commerce fashion retail
company with a popular brand called LiBeilin(莉贝琳).
 Libeilin (Ruhnn) hit Top 10 Women’s Fashion Sale on
Alibaba’s online retail Platform Taobao.com, achieving at
least ¥0.2 billion sale in 2014 before its transition to be the
first Blogger Incubator in China.
 Realizing the high cost of marketing and high churn rate
of customers of traditional fashion retail business, the
founders altered the company’s business model to reduce
marketing cost, greatly increase repurchase rate and
obtain organic business cycle.
 The first blogger Ruhnn contracted (张大奕eve) has
4.7million followers on Weibo and achieved ¥0.247 billion
sale on Single’s Day in 2016

53. Other Factors
 Specialization of Bloggers’ Management Teams
 Highly specialized departments including talent acquisition, talent training,
photography, social media management and analytics, external relationship,
purchase and inventory management.
 Enables higher efficiency, less mistakes and better outcome for business
operation.
 Great Office Location
 Located in Jianggan District, Hangzhou, which is one of the largest clothing
wholesale market in China.
 Reduces warehouse renting cost because of advance logistics in China and a
short clothing manufacturing period (7 days on average). Most of the inventory
can be shipped out directly from the factories.
 Enables quick adaptation of market condition such as changing consumer
taste because of the same reason above.

54. Investors
LIST OF INVESTORS
STRATEGY INVESTMENT

55. List of Investors
Name (Year) Round Amount Note
SAIF Partners (2014) Series A Non-disclosed Invested in Ruhnn’s transition stage
from traditional fashion retailor to
Blogger Incubator
SAIF Partners (2015)
Legend Capital (2015)
Telescope
Investment (2015)
Series B ¥120 million Invested in Ruhnn’s expansion stage.
The company contracted from less
than 10 bloggers to more than 50
bloggers and achieved more than
¥0.2 billion Single’s Day Sale during
the Same year.
Alibaba Group (2016) NEEQ
(already went
public but
with ¥5 million
minimum
investment)
¥0.3 billion Ruhnn’s stock price sky rocked from
¥7.66 per share at April 2016 to ¥96.43
per share @ valuation of ¥3.3billion.
Alibaba Group now holds 10% of
Ruhnn’s equity.

56. Strategy investment
 Alibaba Group has access to all the sales data from Ruhnn as it
operates Taobao.com
 The Group invested 11 days after Single’s Day (11.11.2016)
 This investment is a strong indication of Ruhnn’s great performance
this year and its better performance in the following year
 Given the nature of Alibaba Group’s business, Ruhnn will potentially
have access to competitors data and thus have better knowledge
of market condition.
 Ruhnn will be able to adjust much faster to market change and will
potentially open more avenues of income

57. Relevant events & Long term direction
BACKDOOR LISTING AND CORPORATE RESTRUCTURING (FACTS)
PURPOSES OF DIFFERENT FINANCIAL ACTIVITIES AND LONG TERM DIRECTION

58. Backdoor Listing and Corporate
Restructuring: Facts
 Backdoor Listed through a shell company called 克里爱KeLiAi at the cost of
¥ 0.176 billion on NEEQ (National Equities Exchange and Quotations)
 Dissolved Ruhnn Trading Company (the original Ruhnn), changed the shell
company name’s to Ruhnn Holding Co.,Ltd and founded 4 subsidiary
companies specializing in different part of its business (media, supply chain,
online store management [both in mainland and in Hong Kong])
 IPO in NEEQ (National Equities Exchange and Quotations) has much lower
qualifications such as minimum annual revenue and wait time comparing to
IPO in SSE-A Share (Shanghai Stock Exchange A-Share)
 Minimum investment in companies on NEEQ is ¥ 5million
 There is no minimum investment on SSE-A Share

59. Backdoor Listing and Corporate
Restructuring: Purpose
 Ruhnn’s ultimate goal of going public is to be able to raise more capital
and increase enterprise value for expansion purpose
 It also gives the advantage of better financial regulation including tax
regulation, which is more appealing to more investors
 Shell companies on NEEQ are usually much cheaper
 Minimum ¥5million investment on NEEQ allows Ruhnn to remain relatively
private, which enables founders to maintain a majority of the
company’s ownership
 Corporate restructuring allows Ruhnn to better prepare for expansion as
each subsidiary company is highly specialized.
 Setting up a subsidiary E-commerce company in Hong Kong indicates
Ruhnn’s ambition of expanding out of the Mainland China’s Market

60. Purposes of different financial
activities and Long Term Direction
 Ruhnn undergone three major Financial activities in 2016: backdoor
listing, corporate restructuring and receiving investment from Alibaba
Group.
 It aims to rapidly expand its current operation into different geographical
locations including Hong Kong and Korea (the company contracted a
Korean Blogger 朴瑟Puse in 2015)
 It also intents to enter different areas of E-Commerce such as Cosmetics
as it starts contracting Bloggers specializing in makeup.
 Entering different fields of E-commerce allows Ruhnn to diversity its talent
portfolio and reduce risk due to homogenization and high default rate in
the market
 With the help of Alibaba’s Big Data, Ruhnn will maintain its dominance in
the blogger industry

61. Investment Suggestions

62.  It is expected that Ruhnn Holding’s share price will increase after
publishing its first fiscal year financial report
 Alibaba Group’s investment right after Single’s Day proofs this
speculation to be correct
 Chinese public companies usually publish their financial report from
the previous year around late January to April
 There will be 15 days to 3 months for investment decision making and
investing internationally
 Will be able to invest through institutions with QFII qualification
(Qualified Foreign Institutional Investors).
 Please refer to QFII Qualified Institutions’ List Attachment

63. The End