As of the close of U.S. stocks on April 5, Dingdong Maicai (DDL.NYSE) shares rose 45.96% to $6.86 per share; Daily Fresh (MF.NASDAQ) shares rose 14.29% to $1.28 per share.
The share price of fresh food e-commerce platforms has skyrocketed, perhaps due to the recent surge in demand for household supplies by Chinese residents due to the impact of the new crown pneumonia epidemic, and the number of orders from fresh food e-commerce platforms such as Daily Youxian and Dingdong Maicai has surged.
"After the anti-epidemic supply guarantee in 2020, this time we are very experienced in terms of operation management and personnel deployment. Although we are tired, everyone understands that early delivery will allow users to eat earlier, so they are all in Work hard." Wang Yulong, the person in charge of Dingdong's Qiangwei Station for Buying Vegetables, told the First Financial Reporter that the Qiangwei Station has increased from once a day to 2 times, and the supply of goods is relatively sufficient.
Affected by the epidemic, the number of fresh food orders such as Dingdong grocery shopping and Hema has soared.
Since April 6, Hema has opened the "self-pickup emergency channel" in Shanghai, and the first batch of 4 Hema X member stores will be launched. The service adopts the method of group purchase and self-pickup, giving priority to medical care groups and volunteer groups in urgent need of supplies. , the supply needs of special groups.
Subsequently, the self-pickup emergency channel will be fully rolled out in Shanghai Hema Fresh Store.
Stocking and capacity are two major challenges
"Post-95" Wang Yulong is the head of Qiangwei Station, and he is also in charge of the nearby Huajing Station.
The number of orders has risen sharply, and stocking and capacity are the two major challenges.
In terms of stocking, the experience of supply guarantee during the outbreak of the epidemic during the Spring Festival in 2020 has enabled Dingdong Shopping Mall to have sufficient coping capabilities.
The direct procurement from the bases in the country's multi-producing regions and the self-built cold chain supply chain can help the supply of Dingdong Maicai in the entire Shanghai area to double or more in a short period of time.
At the same time, Dingdong Maicai also quickly put on the shelves of "anti-epidemic special supply" large portions of vegetables at various sites affected by the epidemic, which greatly improved the supply efficiency.
In order to facilitate the residents of the closed community to buy vegetables, Dingdong Shopping has launched the "Dingdong Neighborhood Group" to carry out intensive supply guarantee, making basic livelihood commodities such as vegetables, fruits, meat, poultry and eggs into combined packages, which are delivered at regular and fixed points every day. Go to the self-pickup point in each community to maximize the distribution efficiency and meet the needs of residents in special periods for vegetable baskets as much as possible.
The "Dingdong Neighborhood Group" has opened services with community committees as a unit. Currently, it has covered 176 closed and controlled communities in Shanghai, and it is still increasing.
'Dingdong Neighborhood Group' preferentially covers key areas with many closed communities and high distribution pressure, such as Jiangchuan Street and Meilong Town in Minhang, Zhangjiang Town and Huamu Street in Pudong, as well as Xuhui District, Putuo District, Songjiang District, Jiading District, Baoshan District and other areas are covered.
On March 18, there were only more than 100 orders when it was launched on the first day. As of March 23, vegetable sets were delivered to more than 10,000 households every day, reaching more than 100,000 servings of vegetables.
And the number of new users and orders is still growing exponentially.
Residents of the community who have opened the service can purchase packages through the "Neighborhood Group" WeChat applet, and they can place orders from 9:00 am to 7:00 pm every day. The package of the community is uniformly delivered to the self-pick-up point in the community, and the neighborhood committee arranges for the residents to receive it in an orderly manner.
"What I'm most looking forward to now is that the epidemic will pass as soon as possible, and I will take care of my hair when I have some free time at work." Wang Yulong said that while the spring flowers are blooming, he wants to invite friends to go out on the green.
Hema also launched a community order collection service.
The so-called community order collection refers to the relevant leaders of the residential community who place orders in a centralized manner according to the commodity needs of the community residents, and hand them over to the relevant Hema docking personnel for centralized distribution by Hema Neighborhoods, Hema X Member Stores, and Hema Fresh Stores.
Initially, the community order collection service was only carried out in some Hema neighborhood self-pickup points, and the store manager of the self-pickup point manually recorded according to phone calls and WeChat. Later, it developed into a community leader who took the initiative to collect orders and collect orders in the residents’ WeChat group. (Especially in sealed-off communities), the demand for large-packaged goods and fresh goods is increasing, and Hema X member stores and Hema Fresh Stores have also joined the community order collection service.
On March 23, the community order collection was just launched at the Yanggao South Road store, and in less than half a day, the order has exceeded 2,000 people.
As of March 28, 47 Hema Fresh Stores, 4 X Member Stores, and hundreds of Hema Neighborhood Self-Pickup Points in the sealed-off areas in Shanghai have all launched community order collection services.
Front warehouse VS warehouse store integration
After several years of exploration, at the product level, the fresh food e-commerce platform has expanded its categories from a single fruit in the past to vegetables, meat, fish, rice, flour, grain and oil, etc.; at the logistics level, it has expanded from the long-radius transportation of "cold chain home delivery" in the past. Up to now, short-radius transportation represented by front warehouses and mini stores.
At the beginning of 2020, the sudden epidemic caused people to stay at home, and the number of purchases was greatly reduced. The traffic dividend during the epidemic solved the long-standing problems of fresh food e-commerce, such as low purchase frequency, customer unit price, and repurchase rate. Fresh food e-commerce provides an opportunity to explore feasible profit models.
At present, players in the fresh food business are mainly divided into two types: self-operated and platform-based. The self-operated model is further divided into front-end warehouses (such as Daily Youxian, Meituan Shopping, Dingdong Shopping) and warehouse-store integration ( Hema, Yonghui), while Pinduoduo is a platform type.
The core difference between the front-end warehouse and the warehouse-store integration model is that the former completely abandons the offline drainage, and by compressing the rent cost, it equals the high cost of purely online customer acquisition; the latter bears the higher rent cost, and the store has offline The function of draining traffic and acquiring customers from online and offline at the same time.
Regarding the cost of the front warehouse model, Liang Changlin, founder and CEO of Dingdong Maicai told Yicai.com: "The construction cost of the warehouse, the water and electricity costs of the warehouse, the sorters, safety personnel, and quality control personnel in the warehouse, and delivery to home. All costs account for about 15% of sales revenue. Now a better-run community store can achieve 15% to 20%, because the rent of community stores is relatively expensive, and it is necessary to recruit shop assistants and consider customers The environment of entering the store is comfortable and other factors.”
"Platform players can only operate some categories with a long shelf life, such as fruits and root vegetables; in addition to categories with a long shelf life, self-operated players can also operate some categories with a short shelf life, such as fresh meat and leafy vegetables." Founder of New Retail Neijen Yunyangzi told the first financial reporter that the current fresh food e-commerce has become a battleground for various Internet giants.
Regardless of the model, they all need to solve the most basic problems such as traffic, supply, and distribution.
In order to obtain a stable supply of goods, Hema, Daily Youxian, Dingdong Maicai, etc. have cooperated with various vegetable production bases.
In terms of logistics and distribution, companies use smart supply chains to minimize the circulation link from field to table and redistribute value.
From the product level, the products sold by various fresh food e-commerce companies are basically of the same quality, but agricultural products across the country are not easy to sell. The deeper reason for this phenomenon lies in the upstream fresh food brands, origins and Channel partnerships have been immature.
Take "Chu Orange", which was originally hatched in life, as an example. After becoming an Internet celebrity fruit, it is now being sold through various channels, which is not fair to the original trader's life.
Under this delicate relationship, how much motivation do channel providers have to foster real fresh food brands, or to establish their own advantageous varieties, is the core issue involving the more upstream fresh food supply chain.
"Every independent organization in business is going up. The most important thing is how much value you create for him. The real value is the part of you that cannot be replaced. Is there any? If you can be replaced, why must it be replaced? Follow you?" Liang Changlin took the company-supported Internet celebrity fruit "Wuming Huang Qinghua's Wokan" as an example. The company has provided great help to the latter in the grading of wojas. In the future, if other fresh e-commerce companies come to grab the goods , price wars are inevitable.
Regarding whether the supply chain can be bound through investment, Liang Changlin believes that if the binding is too tight, it may lose its vitality.