Interview | Xie Yunzi Dong Jie
Text | Xie Yunzi
Edit | Pan Xinyi
Cover source | IC photo
On July 28, several news pushed Daily Youxian to the cusp of the storm - first "30 minutes speed to speed up the business closure", followed by "layoffs of 500 people", "financing was not successfully delivered", "the company was dissolved in situ". The former "fresh first stock", did not expect to come to the "white samurai", only waited for the darkest moment.
The "unsuccessful" financing was supposed to come from Shanxi Donghui Group, and on July 14, Daily Youxian announced that it had signed a strategic investment agreement with the group and would receive an equity investment of 200 million yuan from the latter. A "daily excellent fresh layoff recording" that was widely circulated on the afternoon of the 28th showed that the investment money had been announced and filed with the SEC (United States Securities and Exchange Commission), but it had not yet been delivered.
A daily excellent fresh employee confirmed to 36Kr the news of the closure of speed and layoffs, and revealed that on the 28th, he and some colleagues "were suddenly pulled into the Feishu group and told that today is Last Day (the last day), and most of the colleagues' salaries will be suspended."
The employee added that the company began to lay off employees in March and April, coupled with the sudden layoffs of nearly 500 people on the 28th, the daily excellent fresh original more than 2,000 employees, now less than 400. "The company's performance and wages in June have been in arrears, which were originally postponed to today's payment, but suddenly dissolved in situ, and the social security in May and June has not arrived."
The aforementioned recording also corroborates the claim that employees are underpaid. In the recording, a person in charge of Daily Fresh said: "The provident fund and social security in July are paid by Daily Fresh, and in August, employees need to pay by themselves." ”
Another insider revealed to 36Kr that Daily Excellent Fresh began to default on payments to suppliers in July and August last year, and the account period at the end of last year was extended to 3 months, while the account period of the fresh retail industry was generally 45-60 days, which also caused many suppliers to suspend cooperation with them. Some suppliers complained to 36Kr: "The companies used by Daily Excellent Fresh to sign contracts with many third-party suppliers are actually shell companies. ”
At the same time, the business line of Daily Excellent Fresh is also being cut. According to a recent report by "Finance and Economic Eleven", Daily Excellent Fresh has closed its business in 9 cities such as Hangzhou, Qingdao and Shenzhen for three consecutive days, and its sites are only Beijing, Shanghai, Langfang and Tianjin, of which Langfang has only one front-end warehouse point.
For the rumors of "bankruptcy and dissolution" that were raging on the 28th, Daily Youxian replied to 36Kr: "Under the big goal of achieving profitability, the company adjusts its business and organization. Businesses such as next-day delivery, smart vegetable farms, and retail clouds are not affected. Due to business adjustments and the departure of some employees, the company is actively seeking all possible solutions to protect the rights and interests of employees to the greatest extent. ”
Then, 36Kr learned from an employee of the Shanghai branch of Daily Excellent Fresh that the Shanghai branch was not affected, but the situation was not optimistic- "(Shanghai) Company moved three times since last year, from a large company of 500 square meters to a small company of more than 100 square meters, and has been sitting dissatisfied." ”
In the secondary market, the situation of daily excellent freshness is also a chicken feather.
In May, due to the postponement of financial reports, Daily Youxian received a warning letter from NASDAQ saying that it "did not meet the requirements for continued listing"; In June, as the stock price fell below the lowest compliant U.S. stock price for 30 consecutive trading days by $1, Nasdaq issued a delisting notice letter to it, requiring it to recover within 180 days.
As of press time, Daily Fresh was only $0.236 per share, with a total market capitalization of $55.45 million, down 98% from the IPO day. After the rumors of the collapse appeared, the daily excellent fresh stock plunged before the market, and at one point fell by more than 40%.
Break the loss record
The delay in releasing the fourth quarter of 2021 financial report and annual report also confirms the concerns of the outside world about daily excellent freshness.
On July 5, The Results of an Independent Internal Audit Led by the Audit Committee were published on the official website. The review identified some of the transactions in the next-day delivery division in 2021 that were suspicious, including undisclosed supplier relationships with customers and lack of supporting logistics information.
Daily Excellent fresh said that according to the review steps, the situation of the employees of the next-day delivery business department responsible for executing suspicious transactions has been determined, and the relevant employees have submitted their resignations. During the review, there was no evidence that the company's management was involved or aware of the suspicious transaction.
According to Tianyan's inspection, on July 18 and 19, Zeng Bin, co-founder of Daily Excellent Fresh, stepped down as a legal representative and withdrew from the company's chairman, manager and supervisor; Former CEO Xu Zheng, CFO Wang Jun and other management also withdrew from the "main personnel". In addition, Sun Yuying was added as the legal representative, executive director and manager.
In this regard, Daily Youxian said that the change of legal persons and executives is to improve the company's operational efficiency, in line with the provisions of the Company Law and related articles of association, and has no impact on the company's operations. The above-mentioned daily excellent fresh employee who was notified of leaving also told 36Kr: "The new legal person is only a pseudonym, and the substantive management is still Xu Zheng and Zeng Bin." ”
In fact, before the listing, Daily Excellent Fresh also suffered from a shortage of funds, and VC/PE investment flew like a snowflake, including many state-owned background capital.
36Kr collates drawings based on publicly available information
It is not difficult to comb through the subsidiaries of Daily Excellent Fresh, whether it is the "convenience purchase" that focuses on unmanned retail or the "daily tao" of social e-commerce, Xu Zheng, who is good at storytelling, can always step on the wind outlet, and the new projects he incubates are mostly financed in the name of subsidiaries.
After the end of this review, Daily Fresh adjusted its financial report. Its net income in the first three quarters of 2021 decreased from 1.530 billion yuan, 1.894 billion yuan and 2.122 billion yuan to 1.373 billion yuan, 1.638 billion yuan and 1.858 billion yuan, with a net loss unchanged.
Subsequently, Daily Excellent Fresh released its revenue forecast for fiscal 2021, with an estimated loss of 3.737 billion yuan, breaking the record loss since its inception.
According to public information, from 2018 to 2020, the daily fresh loss was 2.298 billion yuan, 3.096 billion yuan and 1.656 billion yuan, respectively. That is to say, Daily Excellent Fresh has accumulated a loss of 10.787 billion yuan.
In the face of tens of billions of shortfall losses, even if there is 200 million yuan of Shanxi Donghui Group, it can only slightly solve the urgent need, and the current "life-saving money" is still full of unknowns.
The lack of money in daily fresh is not without thinking about other options. Previously, it was reported that Daily Youxian was considering selling the equity of the subsidiary for financing, and that "the valuation of the subsidiary is greater than that of the parent company." ”
However, for this statement, Shen Meng, executive director of Chanson Capital, said to 36Kr that it was "nonsense", and the sale of the equity of the subsidiary was also a helpless move to maintain the operation of the parent company.
Daily Fresh E loss for fiscal 2018-2021; 36Kr is based on financial data
How did the daily fresh food, which was once popular with capital, get to where it is today?
The pre-position puzzle
The model of fresh e-commerce and pre-position binding has become the fuse for the daily fresh loss snowball rolling bigger and bigger.
Voices opposed to the front position generally believe that the front position has not been able to prove profitability, more to VC model. Earlier, Hou Yi, CEO of Hema, had publicly expressed his disapproval of this model, "If you don't burn money and don't subsidize, the front warehouse can't get enough traffic and user stickiness."
Proponents consider from the demand side and believe that the front position can achieve profitability by improving operations and increasing the unit price of customers. Under the epidemic, consumers' acceptance of the form of online grocery shopping has also generally increased.
Perhaps the original intention of Daily Fresh is to dilute the cost through large-scale operation, but the result is not satisfactory. After the number of stores increased, the curse of burning money followed.
From 2018 to 2020, the performance costs of Daily Fresh were 1.239 billion yuan, 1.833 billion yuan and 1.577 billion yuan respectively, accounting for the highest proportion of total revenue of 34.94%. The general perception in the industry is that the fulfillment cost covers manpower, logistics and distribution, warehouse rent and other costs.
Signs of inability to afford excessive assets have long emerged. A former employee of the East China region told 36Kr that starting in the second half of 2019, Daily Youxian will contract more idle warehouses and better operated warehouses to private individuals.
For this franchise model, the daily excellent fresh official called it "micro-warehouse", and played the "0 yuan as the boss" propaganda slogan. 36Kr learned that in the East China market, franchise owners need to pay 50,000-100,000 yuan of security deposits. In many media reports, the owner wants to operate a micro-warehouse, at least 100,000-300,000 yuan of upfront investment.
The franchise model may be able to return cash in the short term, but it breaks the cost effect of scale. After the opening of the franchise, Daily Excellent Fresh is responsible for the delivery of goods and does not participate in the specific operation. More costs such as manual distribution and warehouse sorting are borne by the store.
The above-mentioned departing employee revealed: "In the Shanghai market, 100 orders per day will become the threshold for the franchised position to be just profitable, and then take orders is likely to lose money." ”
In addition, the micro-warehouse model is also not conducive to quality control and management. An it-Times visit in August 2019 found that some micro-warehouses in Shanghai lack cold storage, and the overall health environment is worrying. In 2020, micro-warehouse has become the fuse of daily excellent fresh often caused by partner disputes.
36Kr collates drawings based on publicly available information
For the profit problem of the front warehouse, McKinsey has long had a clear conclusion in a research report for retailers - the fresh e-commerce players who run the front warehouse model need to consider the balance between the unit price and the order volume.
A number of respondents also told 36Kr that in first-tier cities such as Beijing and Shanghai, Daily Excellent Fresh has long been profitable, but it still can't keep up with the speed of expansion and burning money.
The above-mentioned former employee of daily excellent fresh told 36Kr: "In 2021, the average monthly cost of the 300 square meters of front warehouse in Shanghai is about 40,000 yuan, the unit price of customers is 40-50 yuan, and the single volume can reach 1,000 orders a day." ”
After the outbreak of the epidemic in 2020, the unit price of fresh e-commerce has risen sharply, but the daily excellent fresh with good revenue has stopped the expansion of East China, turned to the South China market, and accelerated the market sinking. However, the acceptance of "online grocery shopping" in second-tier cities is difficult to match in first-tier cities.
Same loss and no life?
From the perspective of business model, there is almost no difference between daily fresh food and Dingdong shopping. The same is the burning of money to expand, huge losses and successive listings, but the two have entered a different development trajectory. The most intuitive performance is reflected in investor sentiment, although it also plummeted, but the stock price of Dingdong Grocery is basically stable at the level of $5-6.
As of the end of June this year, the number of daily fresh pre-warehouses totaled 631, less than one-half of the peak period, far less than the number of pre-warehouses for Dingdong to buy vegetables. At the same time, in terms of gross profit margin and monthly active, the gap between the two has also been opened. In the first three quarters of last year, the gross profit margin of daily fresh sales was 10.9%, and the gross profit margin of Dingdong grocery shopping was 17.26%.
Daily excellent fresh, Dingdong shopping vegetables in the first three quarters of 2021 data; 36 Kr mapping
According to Questmobile data, in the first quarter of 2019, the MAU of daily excellent fresh was 6.8 million, and dingdong shopping was 810,000; In the third quarter of 2021, dingdong's MAU for grocery shopping reached 34.71 million, an increase of 94.2% year-on-year; The daily fresh MAU was 9 million, only 15.5% year-on-year.
At the financial briefing, Liang Changlin, the founder of Dingdong Buy, said that the company's growth in the first quarter of 2022 was strong, the net loss ratio was significantly narrowed, and it strived to achieve full profitability in the Yangtze River Delta region by the end of the second quarter.
According to the data, in the first quarter of fiscal 2022, the performance expenditure of Dingdong Tou In the pre-warehouse model was 1.484 billion yuan, accounting for 27.26% of the total revenue. In addition, the company's marketing and selling expenses decreased by 44.7% year-on-year.
But compared with its own highlight moment, Dingdong's business of buying vegetables is also shrinking.
Not long ago, Dingdong also reported the withdrawal from Xuancheng, Chuzhou, Zhuhai, Zhongshan, Tianjin and other cities. The loss in the first quarter narrowed, and there is no certainty that future results will be reversed.
Dingdong buy vegetables losses in the first quarter of 2020-2022; 36Kr is based on financial reports
Compared with Dingdong shopping for vegetables, Daily Fresh is likely to lose in management.
A senior industry insider told 36Kr that he has worked in a number of fresh e-commerce companies, and the biggest feeling brought to him by daily excellent fresh is "no planning and management chaos", and the pre-warehouse competition is still the refinement of the supply chain and the management level of the enterprise.
In the opinion of this veteran, the daily good working atmosphere is good, but the decision-making changes back and forth, and there is no charter. "For example, this week asked for 30 stores to expand, the next week it became 15, and the new stores did not open for several months and then all closed." One second of the payment is said to arrive, and the next second it is distributed to other business lines. ”
The most critical thing is that without solving the cash flow problem, it is difficult for Daily Fresh to continue to polish the supply chain. In May this year, the Chaoyang District People's Court enforced 5.32 million yuan in arrears with suppliers, and the deterioration of relations with suppliers will undoubtedly affect the number of SKUs for fresh goods and cause a decline in order volume.
For a long time, Daily Excellent Fresh has made many efforts to save itself, for example, the "Smart Vegetable Farm" project of Daily Excellent Fresh has attracted much attention. It is reported that daily excellent fresh will provide intelligent solutions for traditional vegetable farms through the "retail cloud" and build a data middle platform such as one-code pass. At present, the project has landed in Shandong and Guangdong. After entering 2022, daily fresh and Dingdong food have invested in pre-made dishes.
There are also critics who believe that these new moves are just a new story for financing and market capitalization. After all, if fresh e-commerce companies want to achieve sustainable development, they still have to return to the essence of business, that is, to create profits and make financial models established.
Stay tuned for more information
This article is from the WeChat public account "36Kr Finance" (ID: krfinance), author: Xie Yunzi, Dong Jie, Pan Xinyi, 36Kr is published with permission.