Late exclusive 丨Metuan buys vegetables to suspend Suzhou Kaicheng plan to close some of the front warehouses

"LatePost" exclusively learned that Meituan Grocery recently suspended the Suzhou Kaicheng plan formulated last year, and will adjust some of the front-end warehouses in the four first-tier cities of Beijing, Shanghai, Guangzhou, and Shenzhen.

In 2021, Meituan Grocery has increased the number of front-end warehouses from 200 to more than 400. At present, it covers 7 cities, including the main battlefields of four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, and the three pilot cities of Wuhan, Foshan and Langfang.

Meituan's business goal for the front warehouse has always been to pursue profitability, and some of the positions with poor data and UE (Unit Economics, unit economic model) that are not as expected will be optimized and adjusted. In 2020, most of the front warehouses in Wuhan have been closed, and then replaced by the community group buying business "Meituan Preferred"; dongguan area has been closed. Adjustments will continue in 2022.

A meituan preferred mid-level level believes that second- and third-tier cities are more suitable for the "Meituan preferred + flash sale" model.

The US group is not the only one that has encountered difficulties in the pre-position model. At the beginning of 2020, Hema took the initiative to close the Hema small station in the front-loading warehouse mode. The other two companies, Daily Fresh and Dingdong Grocery, which focus on the front-loading model, went public in June last year and have fallen by 70% from the issue price so far.

The front-end warehouse model has been questioned, because it cannot meet the requirements of "more" and "province" in the "how fast and good province" of e-commerce, the price behind "fast" and "good" is the high cost of building a warehouse, the area of the front warehouse restricts the expansion of the category, and the fresh category has a low gross profit and weak profitability.

The profit improvement methods of the front-loading model include: increasing the frequency of user purchases, increasing the unit price of customers, increasing the gross profit of goods, and reducing distribution costs. Over the past year, companies have tried a variety of ways to charge delivery fees, sell memberships, launch pre-made dishes, and expand categories (more daily necessities on the shelves), but they still can't get out of the loss in the short term.

Today, whether it's platform companies or startups, their tolerance for losses and the space to burn money to educate users are shrinking. According to the scale of previous losses, the cash reserves of several startups can only last for two to three quarters or even shorter. (Shen Fangwei)