In the business of "last-mile drug delivery", Dingdang Fast Medicine has fallen into the disease of "internal and external troubles", and it seems that it is difficult to solve this problem in a short period of time.
Wen 丨BT Finance Dream Xiao
After dingdang health (hereinafter referred to as dingdang fast medicine) failed to go public on June 22, 2021, it submitted a prospectus to the Hong Kong Stock Exchange again on March 16, with CICC and CMB International as its joint sponsors.
Although Dingdang Fast Medicine has a market share of up to 8.5%, it has been questioned by many media and investors in recent years about its continuous losses.
Judging from the prospectus, the company's revenue growth has slowed down compared with the data of the previous submission, and the loss is indeed further expanding. This time to hong Kong listing, can Dingdang Fast Medicine tell the story of "last kilometer" drug delivery?
Where did the money go?
Dingdang Fast Medicine was established in 2014, as a digital health medical platform established for 8 years, "28 minutes to send medicine to the door" makes Dingdang Fast Medicine well known to the public.
According to the prospectus, Dingdang Fast Medicine has 33 million registered users. In 2020, there are relevant reports that Dingdang Fast Medicine is the largest supplier in the retail pharmacy industry that arrives at home instantly, ranking in the top three in terms of digital pharmacy revenue.
However, in order to ensure the "28-minute delivery of drugs to the door", Dingdang Fast Medicine has invested a lot of money and has been continuously building its own drug distribution system and distribution team. By the end of 2021, Dingdang Fast Medicine has a professional drug distribution team of more than 2,800 riders. Such a large distribution team requires expensive expenses. This is a big reason why Dingdang Fast Medicine continues to lose money.
Prospectus data shows that Dingdang Fast Medicine's revenue in 2019 was 1.276 billion yuan, 2.29 billion yuan in 2020, and 3.679 billion yuan in 2021, with a compound annual growth rate of about 69.8% in the past three years, but the growth rate of losses far exceeded the growth rate of revenue. The loss in 2021 further widened, from 274 million yuan in 2019 to 1.599 billion yuan in 2021. Losses increased by as much as 484% in two years. The loss in 2018 was only 103 million yuan. In the following years, the annual loss was almost doubled, and the huge loss became a shackle restricting the development and marketing of Dingdang Fast Medicine.
Dingdang Fast Medicine's continuous loss is due to the proportion of up to 20% of sales expenses and self-built logistics systems, of which logistics and warehousing service expenses were 200 million yuan, 283 million yuan and 412 million yuan in the reporting period, respectively, which also accounted for a higher proportion of total revenue.
This is typical of the asset-heavy operation model, which makes Dingdang Fast Medicine carry the heavy burden of "internal worries". During the reporting period, the total liabilities of Dingdang Fast Medicine have been higher than the total assets, as of December 31, 2021, the total liabilities of Dingdang Fast Medicine were as high as 5.536 billion yuan, while the total assets were only 2.946 billion yuan, the total equity was -2.59 billion yuan, and the total liabilities were 1.88 times the total assets.
Once upon a time, pharmaceutical O2O enterprises sprung up like mushrooms, but with the weakening of the burning of money, forcing the industry to reshuffle, most companies were forced to transform and close down due to capital ruptures, and the fierce competition in the entire industry was reflected behind the burning of nearly 3 billion yuan in four years. The Internet play of "burning money for the market" has once again been copied to the pharmaceutical O2O industry, which is destined to "bleed into a river". Dingdang Fast Medicine survived in the capital market as a survivor, but its initial listing failed in December 2021, and the capital market still has doubts about it.
Yu Yu, chairman of Rehabilitation Home, believes that in the O2O industry, Dingdang Fast Drugs has certain advantages in terms of market share or its own channels, and the industry as a whole is also a trillion-level large market, "At present, O2O is still in the growth point of traffic dividends, and the opportunity for Dingdong Fast Medicine is very large, but it is also necessary to solve its own loss problem." Their self-built logistics losses in the early stage are inevitable, just like the Jingdong Logistics of that year, the previous period of huge losses, but the market value after the listing is as high as 100 billion. ”
Single revenue buried "dark thunder"
Dingdang Fast Medicine revenue consists of two major parts: O2O drug delivery service and offline physical pharmacies.
According to the prospectus, the number of orders in the reporting period was 26.4 million, 40.5 million and 60.3 million, respectively, calculated based on the revenue of 3.679 billion yuan in 2021, the average unit price of 60 yuan is not high, and the revenue of Dingdang Fast Medicine is too single, at present, Dingdang Fast Medicine's pharmaceutical and medical health business contributes more than 95% of the revenue, including online direct operation, business distribution and offline retail revenue. Only fast medicine services contributed revenue, while other online clinics (other than online consultation) and chronic disease and health management did not generate real revenue during the reporting period. Compared with other Internet giants, its revenue is slightly single.
Dingdang Fast Medicine's smart pharmacy provides regular delivery, booking single delivery, offline pick-up and other delivery methods, in order to speed up the Internet thinking mode, Dingdang Fast Medicine full access network, currently in 17 cities to establish a huge network of 348 smart pharmacies, to ensure that drugs can be delivered to patients within 28 minutes, in order to attract users.
At the same time, Dingdang Fast Medicine also provides 24-hour pharmacist purchase guidance, providing users with online doctor diagnosis and treatment services, and the medical team mainly includes 18 full-time doctors and 73 part-time doctors, more than 800 external doctors associated with third-party medical institutions, and other medical professionals.
Dingdang Fast Medicine seems to be very professional and has a large number of medical professionals, but it is slightly weaker than its competitors.
According to Ai media data, Tmall Pharmaceutical (under Alibaba Health) has 3,000 practicing pharmacists on duty online, and Jingdong Health Internet Hospital provides consultation services for more than 120,000 people every day, and the follow-up rate is nearly 50%, such data Dingdang Fast Medicine obviously cannot be done in the short term. The total revenue of JD Health Delivery in 2020 was 19.38 billion yuan, and the revenue scale of Dingdang Fast Medicine in the same period was 2.229 billion yuan, and the revenue scale of Dingdang Fast Medicine was only about one-eighth of Jingdong Health.
O2O practitioner Wang Dong believes that this is caused by traffic, "compared with Ali, JD.com, Dingdang Fast Medicine obviously does not have traffic advantages, and Internet traffic is the premise and key to development, Dingdang Fast Medicine itself can not generate traffic, want to obtain traffic, you need to pay a cost, and will be stuck by competitors neck, from the user level, Dingdang Fast Medicine is difficult to compete with Ali and Jingdong." ”
And the competitors of Dingdang Fast Medicine are not only Ali and JD.com, Meituan and other Internet giants have also begun to enter the track, these competitors who want money and money to have traffic and traffic have appeared, and the days of Dingdang Fast Medicine are more difficult to fall into "internal and external troubles".
In order to expand the business ecology, Dingdang Fast Medicine has cooperated with several insurance companies, through cooperation with more than 4,000 pharmaceutical companies and drug distribution companies, as well as data mining, Dingdang Fast Medicine has slowly built a knowledge graph between user health, medicine and medical big data, and further provided Internet medical and pharmaceutical insurance services. Dingdang Fast Medicine has realized that compared with selling drugs, the health ecology of "medicine + medicine + inspection + insurance" is more imaginative and promising. However, the construction of a healthy ecology requires huge investment and cycle, and it is difficult to achieve it overnight in the short term.
Lack of stamina growth slowed down
According to Ai Media statistics, the scale of China's pharmaceutical O2O market will reach trillion yuan in the next few years, and such a huge market volume is also the reason why many capitals have poured into the track.
As a "veteran" who has been engaged in Internet medical services for many years, Bai Yu is very optimistic about the drug O2O model, he believes that after the offline store network is laid, Dingdang Fast Medicine can carry out more online diagnosis and treatment and chronic disease management and other businesses, although the current business has not yet achieved revenue, but it can also achieve drainage for its own fast medicine business, bringing certain traffic.
However, with the transformation of consumer consumption patterns, the O2O model of pharmaceutical e-commerce has gained a good opportunity for development, which is conducive to the improvement of pharmaceutical services, can integrate the advantages of offline pharmacies and online pharmaceutical e-commerce, cope with the instantaneous demand for drugs, and become an important link in pharmaceutical e-commerce and services.
However, in such a good market environment, the growth rate of Dingdang Fast Medicine is slowing down, which has caused concerns about capital and the market, the Internet industry pays attention to growth rate, and e-commerce giants such as Pinduoduo are also questioned by the capital market because of the slowdown in growth.
From the prospectus data, it is obvious that the growth rate of Dingdang Fast Medicine is indeed slowing down significantly. In 2019, the operating income of Dingdang Fast Medicine was 1.276 billion yuan, and the operating income of 2020 was 2.229 billion yuan, an increase of 75% year-on-year. In 2021, the operating income of Dingdang Fast Medicine was 3.679 billion yuan, an increase of 65% year-on-year. This is down 10% from the increase in operating income in 2020.
In the past two years, due to the objective reasons of the epidemic, consumers' awareness of self-protection has improved, trying to avoid going out and going to pharmacies to buy drugs, and the demand for door-to-door service has increased significantly, on the basis of which the growth rate of Dingdang Fast Drugs has slowed down significantly, and the scale of revenue has almost tripled in two years, but the growth rate has dropped to 65%. This is a slightly less than satisfactory performance for an Internet start-up.
"Compared with other Internet companies that often double or even more than ten times the growth rate, the growth rate of Dingdang fast medicine is not too gratifying, after all, because of the epidemic, the demand for sending drugs to the door will be greater, once the epidemic is stable or past, Dingdang fast medicine may even be difficult to maintain this growth rate, which is difficult for an Internet company to be satisfied." Wang Dong expressed concern about the slowdown in the growth rate of Dingdang Fast Medicine, which he believes is also one of the factors affecting the failure of its first listing.
In addition to the slowdown in revenue growth, the capital market is worried about the continuous decline in gross profit margins. According to the prospectus, Dingdang Fast Medicine's gross profit margin was 36.8% in 2019, which fell to 34.4% in 2020, while continuing to decline to 31.6% in 2021. Although the annual decline is not reached, and the highest is only 2.8% of the decline from 2020 to 2021, it is obviously not a good sign that the continuous decline is not a good sign.
Industry insiders pointed out that the self-built logistics system of Dingdang Fast Medicine can solve the problem of the "last kilometer" that plagues pharmaceutical e-commerce, make full use of offline pharmacy resources, and transform the function of the store from drug sales to experience, pick-up and distribution, meet local needs, and complete the final docking with users. This model is definitely optimistic in the future, is a trillion-level large market, but the current big problem is that in the short term, the cost will surge, the growth rate will be much higher than the growth rate of revenue, how to find the balance of profitability is the most urgent primary issue for Dingdang Fast Medicine.
It also needs to be precipitated and then precipitated
Dingdang Fast Medicine's self-built logistics system, as well as the healthy ecology he advocates, are long-term investments that are difficult to see results in the short term, which requires that in the case of huge investment, it is necessary to endure "loneliness", have long-term planning and ideals, and once too anxious, it will make the early investment in vain.
The above-mentioned industry insiders also provided risk suggestions for the self-built logistics system of Dingdang Fast Medicine: "Self-built logistics will lead to increased labor costs, huge expenses, and at the same time, it is impossible to control the quality of drugs, there is a certain legal responsibility risk, and it is impossible to control the inventory of pharmacies, and there is a risk of orders out of stock." But the most important thing is to have enough money to burn. ”
At present, Dingdang Fast Medicine has begun internal innovation, optimizing the entire chain from the service essence. After the launch of the "Guidelines for the Quality Management of Drug Online Retail Distribution (Draft for Comment)", Dingdang Fast Medicine actively explored unmanned vehicle distribution technology, which undoubtedly has a positive effect on the scheduling and distribution of drugs.
Dingdang Fast Medicine's funds are still abundant, through the Ene Cow data, it can be seen that Dingdang Fast Medicine has experienced 7 rounds of financing since the angel round on September 2, 2014 to June 8, 2021, according to the disclosed amount, excluding tens of millions of yuan in the angel round and the A round, the financing scale has reached 3.3 billion yuan (real exchange rate calculation), and according to the calculation of the undisclosed investment amount of SoftBank China on December 26, 2017 and the previous A round of the same situation, Dingdang Fast Medicine's conservative financing is 3.6 billion yuan.
But Dingdang fast medicine burned money is also rapid, only since 2018 has burned nearly 3 billion yuan, the money raised is very little, once Dingdang fast medicine failed to land on the capital market this time, at the speed of their burning money, these money is difficult to last too long.
"Dingdang Fast Medicine is currently promoting the establishment of brand image and occupying more shares before the market becomes the Red Sea, which is bound to cause huge losses by making profits and expanding marketing investment." But they must seize market share in this way, and if they lose market share, they may lose their previous achievements. Wang Dong believes that there is no problem with Dingdang fast medicine burning money, the problem is whether it can continue to burn, if the listing is not successful, in the case of "insolvency", Dingdang fast medicine needs to burn money, but it is also necessary to burn money rationally.
In the business of "last mile drug delivery", Dingdang Fast Medicine has fallen into the disease of "internal and external troubles", and it seems that it is difficult to solve this problem in a short period of time, and the prospect is not optimistic. The future direction of Dingdang Fast Medicine needs to be very carefully chosen, because the failure of the first IPO leaves dingdang Fast Medicine with few opportunities for trial and error.
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