Image source @ Visual China
Text | Zinc scale, author | Meng Huiyuan, editor | Li Xiaolin
From the community fresh group buying war at the beginning of the year, to the successful listing of Dingdong vegetables and daily excellent fresh in the middle of the year, to the fresh e-commerce giants at the end of the year have carried out diversified layouts. During the year of 2021, the rapid development and change of the fresh e-commerce track is magical.
Throughout the development history of fresh e-commerce along the way, keywords such as "burning money", "loss", "financing" and so on have become labels that cannot be torn off and torn off, and users complain, capital abandonment, and the end of collapse has come one after another. This track, which is over-catalyzed by "money", brings reflection to relevant practitioners and investors after the wild run, far from just "don't stare at a few bundles of cabbage and grab other people's jobs".
E-commerce, takeaway, taxi... Although the Internet's general money-burning model has achieved many industries, who remembers how many dark departures are buried in the iceberg below the success. Fresh track, under the bone dry, it is difficult to find a good success.
Keyword 1 burning money: fresh track war end again, can not avoid the price of internal consumption
Recently, the "nail price" launched by Hema Xiansheng has made a lot of noise in the industry.
According to relevant reports, Hema's "nail price" covers fruits and vegetables, seafood and aquatic products, poultry meat, eggs and milk and other categories, and after comparison, it was found that the price of many of the products on the line this time, the price sold in the Hema APP is lower than that of Dingdong to buy vegetables. Therefore, in the eyes of some people in the industry, "chopping nails" is more like "chopping", and once again curbing the development of dingdong to buy vegetables through price wars.
However, he then he also explained such a statement, saying that "nail price" means "cutting the price to the point", which is just a normal preferential behavior at the end of the year to benefit the people, give back to consumers, and contribute to the stable price guarantee, and the industry does not need to be associatively interpreted.
Hou Yi, president of Hema Fresh Business Group, said in the circle of friends, "Since its establishment, Hema has never carried out a price war and has always pursued a value war. In the face of fierce competition in multiple formats in the fresh food industry, Hema also has the ability to price war, since it is fought, it is a long-term war. ”
Liang Changlin, CEO of Dingdong Grocery Shopping, responded in the circle of friends one after another, saying that business competition is normal, "the biggest dream of the second elder is to fight to the death with the boss", which is also accompanied by a screenshot of Hema Houyi's circle of friends and a screenshot of Dingdong Buying Vegetables is a data screenshot of the fresh e-commerce boss.
This rhetorical remark, you come and go, is really a wonderful drama, so that the audience is amazed.
If you focus on the topic center, although from the perspective of the platform, they do not recognize that the launch of activity prices is equivalent to fighting a price war, but if you look at the development history of fresh e-commerce along the way, it is easy to find that on these fresh e-commerce platforms, there are always daily benefits or holiday activities such as seconds, coupons, limited-time rush purchases, and full reductions, and these can be said to be all with the meaning of "price war".
In the "giants no longer "throw money", the inflection point of fresh e-commerce has arrived? In the article, Zinc Scale once mentioned that the arrival of the shuffle period of the fresh e-commerce industry, that is, the community group purchase, was created by many reasons, the most important of which was the multi-round "burning money" subsidy war launched by the giants after the crazy entry.
During that time, there were a lot of advertisements, wild coupons, pick-up points that suddenly appeared, group leaders who flocked to the group, and users who rushed to "shearle" just for "shearling"... However, the relationship maintained by simply using money is not solid, and the follow-up is often accompanied by various chaos.
The tragic situation of community group buying has shown that blindly starting a "price war" is not a wise move. Judging from the results, the general business logic of the Internet of "building a platform, burning money to drain traffic, cultivating user habits, triggering scale effects, reducing procurement costs, raising sales prices, and collecting seigniorage taxes" really does not work here.
As a result, the capital and fresh giants standing behind the community group buying platform finally found that the community fresh market hit by huge subsidies was "unreliable", and they retreated to rationality. I thought it was to learn to be obedient, but I didn't expect that in just a few months, the fresh e-commerce platform had another intention.
"Price reduction" is a common trick for fresh e-commerce
There is a view that the reason why the fresh e-commerce platform has once again enabled the "price reduction" move is related to the fact that the previous daily excellent fresh and Dingdong groceries were not given more profit returns to the market after the successful listing, but the loss was further enlarged. Because the most urgent reality in front of fresh e-commerce is how to get out of such a dilemma, rather than considering how to live better in the future when the survival problem has not yet been solved.
After all, once the subsidy disappears, the fresh e-commerce companies waiting for these low-cost drainage must be the ruthless abandonment of consumers - at this stage, whether it is poor quality control, or crude terminal distribution, or difficult to immediate after-sales service, their means of retaining customers are not smart.
Although fresh e-commerce is not an industry that can be developed by relying on a single factor, all links are indispensable in the entire fresh sales chain such as price, quality, type, and after-sales service. But building a long-lasting supply chain for the sale of fresh goods is not an overnight achievement. It is undeniable that in the short term, "price reduction" is indeed a very fast means of pulling new and attracting customers.
Behind knowing that it cannot be done, there is actually an unspeakable hidden pain in the fresh e-commerce industry.
Keyword 2 Loss: Under the tone of burning money for the market, the problem of profitability is not solved
"For nearly 21 months, the company tried to turn a profit and regroup... Due to the failure to introduce restructuring investors, the company's operation has deteriorated and is now unsustainable. After struggling for 21 months, the fresh e-commerce company "Dumb Radish" announced that it was officially closed.
This is the closest timeline to consumers among the many fresh e-commerce platforms that have left the market.
Data source: "Dianshubao" e-commerce big database
In addition, according to the relevant data of the "Dianshubao" e-commerce database, from January 2018 to October 2021, the fallen fresh e-commerce companies also include Lengyi, Shangshu Yonghui, Yiguo Fresh, Fresh Fruit Home, My Kitchen Fresh, Wonderful Life, Fresh Laiduo, Mini Fresh, TableLife One Table Network, Melon Powder Network, Fruit Camp, Caizhila, Fields Futian Network, Anxian Fruit, Young Vegetable Jun, Community Hurry, Fruit Food Gang, Ingredient Master, Rush To Buy, Three Moments 321Cooking, etc.
More data show that the failure of fresh entrepreneurship has entered the top three of the e-commerce death list.
On the occasion of the listing of daily excellent fresh and Dingdong groceries, Zinc Scale has been in the "Fresh E-commerce Battle Royale: A Doomed Loss Attempt? After analysis in the article, the fresh track takes the "leftovers as king" unspoken rules, so that the funds are stronger to stand at the end.
Even the business model exploration of fresh e-commerce has gradually developed from the traditional fresh e-commerce at the beginning to a variety of models including front warehouse, O2O, community group purchase and to-the-counter delivery. But this is only a change at the supply chain level, and also faces the cost pressure brought by heavy assets such as pre-warehouse layout and pick-up sites, and in terms of attracting users and attracting traffic, they have not been able to find a better way than "burning money", which is also an important reason for the repeated losses of fresh e-commerce.
As Cao Lei, director of the E-commerce Research Center of the Network Economic Society, analyzed, "Some of the burning subsidies are severe, and the platform itself lacks 'hematopoietic' functions, hindering the competition of peers is too fierce, and the long-term low-cost sales of products have led to some platforms defaulting on more than 200 million yuan in arrears to suppliers, resulting in a break in the capital chain." ”
However, in terms of realizing self-"hematopoiesis", according to data from the China E-commerce Research Center, there are about 4,000 entrants in the domestic fresh e-commerce field, of which only 4% of the revenue is flat, 88% fall into losses, and finally only 1% achieve profitability.
Although the daily excellent fresh and Dingdong groceries located in the first echelon have successfully landed on the capital market, the two are still in deep losses, and more fresh e-commerce platforms are still hovering on the line of life and death. This is a non-profitable business, and judging from the reaction of the secondary market, capital is obviously very aware of this, and it does not consciously reveal that it will abandon these platforms.
A news that caught the fresh track even more unprepared was that the offline supermarkets that had been robbed of their business also sounded the clarion call of "counter-attack". In the article "Offline Supermarkets "Counterattack" Fresh E-commerce", it is clear that fresh e-commerce focuses on daily fresh fruits and vegetables and other agricultural and sideline products, trying to compete for the offline market that originally belonged to community supermarkets, vegetable vendors, comprehensive supermarkets, etc. with higher cost commodities, which is by no means a correct decision.
Compared with offline, the consumer market corresponding to fresh e-commerce is smaller. Tiger International Investment Research Team said in an interview with Securities Daily that the fresh consumption industry is an industry catalyzed by the epidemic to show explosive growth, but the penetration rate of fresh e-commerce is only 14.6%.
For the consumer group targeted by fresh e-commerce, the consumer market that burns money in exchange is not irreplaceable, and aside from the gradually reduced cash subsidies and more commodity categories that are not commonly used, they will not be more attractive than offline supermarkets that have been integrated into daily life for many years.
In this case, some industry experts believe that "the key to winning in the second half of the competition is the real control of both the supply side and the consumption side, far from burning out through the stage of burning money," that is, there are stable and efficient channels for the supply chain to maximize distribution efficiency and minimize costs.
But as mentioned above, even if the loss has become an established label of the fresh industry, profit is already a big problem hindering the development of the entire industry, before considering this, whether it can survive is the key to the fresh e-commerce platform. The more you burn money, the more you lose, but you have to continue to burn money to continue to lose.
Keyword 3 Change: Accelerate industry penetration, diversification layout is underway
After a round of reshuffling, those small and medium-sized platforms either fell or were acquired, and the remaining fresh head vertical platforms such as Daily Excellent Fresh and Dingdong Buy Vegetables are integrated e-commerce grocery shopping businesses such as Taocai Cuisine and Jingdong Dajia. Although its own strength cannot be underestimated, as long as you are in the fresh track of the Red Sea state, you cannot escape the crisis of loss and bankruptcy, and there is a risk of intensified competition.
To this end, in addition to continuing to burn money and quench their thirst, fresh e-commerce companies have to explore a new feasible way.
Look at their recent dynamics: Hema announced the official establishment of the NB business department, and at the same time launched the "Hema Neighborhood" service station as a core product, through the "order + self-operated" model, the Hema products penetrate into the community, to make up for the radiation of Hema to users in different circles;
Daily Excellent Fresh continues to develop offline physical business, including improving the regional layout of discount convenience stores "Huiyixuan", and also accelerating the penetration of smart vegetable farms, empowering traditional vegetable farms with the digital capabilities of Daily Excellent Fresh, and realizing the efficient operation of merchants;
Dingdong Buy Has launched its own brand pre-made dishes in the third quarter, including the hot pot dish "Dingdong Grand Slam", which focuses on regional characteristics, and the high-end brand "Dingdong Ace Dish", and the pre-made dish has become a new focus of Dingdong buying food to improve the unit price, repurchase rate and profit margin of customers;
Multi-point continues to strengthen the output of omni-channel digital services, dmall has established in-depth cooperation with a number of enterprises such as Outlox and Zhongbai Group, digital transformation for full links such as systems, processes, and management models, and empowers physical retail transformation through digital and intelligent operating system DMALL OS.
The overall market penetration rate of fresh e-commerce is not high
From these dynamics, it is not difficult to see that fresh e-commerce companies are accelerating the all-round penetration of the industry and diversifying their business layout.
It is not surprising that such a move has been made. Internet analyst Li Chengdong believes that the ceiling of the subdivision platform is too low, it is difficult to form a large-scale realization model, the height of the ceiling determines how big its growth is, many subdivision enterprises can only target their own industries, or even can only make a fuss about their own industrial chain, and in the retail industry, all aspects of the requirements are getting higher and higher today, it is obviously not enough.
Obviously, focusing on online and offline integration, multi-scenario layout and operational refinement can not only solve many of the current pain points of the fresh food industry, but also fit with the increasingly stringent consumer demands, and allow the head fresh players to see more possibilities. According to Alibaba's relevant information, in the past few years, after Yiguo upgraded from a vertical fresh e-commerce to a fresh new retail operation platform, it has doubled the performance of Tmall Supermarket Fresh for three consecutive years.
It is worth mentioning that in terms of multi-scene layout, a number of fresh e-commerce platforms have successfully cut into the flower track, such as Dingdong Grocery Shopping, which launched the flower service in November 2020, Hema Fresh, which announced on May 20, 2021 that its flower brand was upgraded to "Hema Garden", daily excellent fresh that launched the flower business in many cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, and comprehensive e-commerce platforms containing fresh business such as Tmall and JD.com.
In "Buy Vegetables + Buy Flowers", fresh e-commerce to be the biggest spoiler? In the article, zinc scale also said that for fresh e-commerce, it is a trendy move to take flowers as the first choice for category expansion.
Because flowers, like fresh food, have the characteristics of low profits and fragile goods, and according to the wide pursuit of cost-effective needs of grocery users, online grocery users actually include a part of the users who are willing to sell flowers, adding a single product, and do not have to pay additional costs for it, why not enjoy it.
In fact, as early as the moment when the fresh e-commerce collective focused on the consumer's vegetable basket, as long as it is still focused on the daily needs of vegetables, fruits, meat, eggs and milk, even if it is exchanged for more cash in the form of IPO such as daily excellent fresh and Dingdong to buy vegetables, it is only another round of price war on the basis of the same goods to maintain or expand the existing market share.
But when they realize this, based on the current industry for in-depth layout, from the "full", "odd", "excellent" and other aspects, perhaps really got a new customs clearance password. However, to verify whether it is effective, it will take another wait.