Wookpecker International Launches Hong Kong IP

Key Points:

• Woodpecker International has refiled for a Hong Kong listing after a 6.4% profit drop this year, reporting nearly 39 million yuan.
• The platform has notable early investors like Lei Jun and Yao Jinbo.

Lau Chi Hang

“We may not fix feelings, but we can fix nearly everything else.” This motto from Woodpecker International Inc. resonates with audiences, even those unfamiliar with its services.

Woodpecker aims to impress investors with its second attempt at a Hong Kong IPO. After a failed initial application, they submitted a new one just before China’s National Day holiday, hoping to benefit from recent market upticks.

Recognizing the struggle families face with home repairs and poor service from others, Woodpecker launched its online maintenance platform to fill this void.

The company connects users needing repairs with technicians via an online system, earning revenue through contractor fees and commissions.

Market Leader

In 2023, Woodpecker holds a 2.4% market share in China’s home maintenance sector, based on gross transaction value (GTV).

Founded by Wang Guowei in 2014 after his experience as a repairman, Woodpecker has drawn interest from significant investors like Lei Jun (Xiaomi) and Yao Jinbo (58.com).

Rapid Growth

With backing from investors, Woodpecker has expanded to over 300 cities, handling repairs for more than 300 appliances. The number of technicians on its platform surged from 7,092 in 2021 to 26,968 by mid-2023.

Transaction values also skyrocketed, with revenue jumping from 990 million yuan ($140.1 million) in 2021 to 2.48 billion yuan last year, a 58.5% growth. They processed 6.6 million orders in the first half of this year.

Despite growth, profits fluctuated—33.4 million yuan in 2021 dipped to 6.2 million in 2022, then rose to 48.9 million in 2023. The first half of this year saw profits drop to 38.9 million yuan, primarily due to increased marketing costs.

The home maintenance market in China is thriving, projected to grow from 715 billion yuan in 2023 to 932 billion yuan by 2027. Woodpecker is poised to gain as online service demand rises from 14.5% to 25.4% within the same period.

Challenges Ahead

A major hurdle for Woodpecker is maintaining service quality among technicians on its platform since it’s a middleman in the process. Management issues could jeopardize user experience and brand reputation.

Consumer complaints have arisen, with over 6,000 logged, mainly about pricing and service quality. Woodpecker competes in a fragmented market, facing rivals like Wanshifu and Laobandaojia.

By listing in Hong Kong, Woodpecker could enhance recognition and secure funds to potentially lead the industry. However, strengthening user trust in its services will be essential for success.

This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.