There is no shortage of protagonists in the vigorous fresh food battlefield. "Don't just worry about the flow of a few bundles of cabbage and a few catties of fruit." While the People's Daily comment brakes community group purchases, it also makes the field where the fresh food giant enters more attractive.
In fact, the fate between fresh produce and giants has already begun. In 2015 and 2016, fresh food e-commerce was in full swing. In March 2016, Yiguo Fresh announced the completion of Series C financing. Although it did not say the specific amount, it emphasized that this is "the largest financing in the fresh food e-commerce industry so far. ". The investors at the time were Alibaba and KKR Group.
In the past four years, Yiguo has declared bankruptcy, but Ali has not stopped its deployment in fresh food e-commerce and grocery shopping, but the objects of support have become Hema's online and offline businesses.
In 2020, fresh food e-commerce companies that have experienced the year of death will switch the main tone of "falling down" to "coming in". The “entry” of this industry that has been developing for several years is certainly not new, but the protagonists of this “entry” are no longer startups and VCs, but giants.
Entrepreneurship and VCs are active-vicious competition and market elimination-giants enter the battlefield to clean up the battlefield-oligarchs, this Internet law is once again effective for fresh food e-commerce. This industry, once considered money is not a panacea, will eventually be conquered again?
Giant admission
Ms. Lin, who lives in the South Second Ring Road of Beijing, has experienced a new era of "three times without entering the house". She placed an order on the fresh food e-commerce platform, and watched the delivery staff circling around her, passing by the house without delivering it. "It takes an hour for the card to be delivered. Where did the money from the financing go?" She wondered.
This platform is Daily Youxian, which has recently received financing. This year, grocery shopping has become almost the only bright spot in the severely damaged consumer industry. According to media statistics, in the 60 catering and food sectors in the first half of this year, of the 9.504 billion financing, there were 8 fresh food e-commerce, but the financing amount was 55.71. 100 million yuan, accounting for more than half.
Even in such an active fresh food e-commerce company this year, Daily Fresh Food has performed well. In July, it announced the completion of a new round of financing of US$495 million led by a fund of CICC Capital, which is considered the largest financing in the fresh food e-commerce industry; in December, it announced a strategic investment of 2 billion yuan. Qingdao Guoxin, Joint investment by Sunshine Ventures and Qingdao Municipal Government Guidance Fund.
Fresh food e-commerce companies once stood on the cusp of consumption and received frequent attention from capital, but that was the first two years. Since the capital cold wave in the second half of 2018, fresh food e-commerce companies with giants entering the market without seeing profit expectations have become one of the most affected industries. Therefore, Daily Youxian's first financing this year from heavy money can be said to have stirred up waves with one stone.
If this year’s first financing indicates the “resurrection” and “turnover” of the fresh food e-commerce industry, then the strategic investment from the Qingdao government in December has made the entire industry no longer surprised, because the “fish” Big, but the "water" is bigger, and there is more than one big "fish".
Since then, the fresh food industry has completely "fired", and news of giants entering the game and startup companies receiving investment frequently appears.
Since July, Dingdong Maicai has announced that its revenue target for this year has been raised from 5 billion to 20 billion; Ele.me has announced that it will upgrade from a food delivery platform to a life service platform and launch fresh food retail; Meituan will take off the original offline fresh food business The "Little Elephant Division" was renamed "The Grocery Division"; RT-Mart entered the community fresh food market and launched a mini store...
In terms of financing, in July, Yipin Fresh announced the completion of 2.5 billion yuan in financing; community e-commerce Shihui Group completed 80 million US dollars in financing; in August, fresh food e-commerce Xinfa Di Zhangxian received tens of millions of angel investment; October , Qilinxian announced the completion of 30 million yuan of A round of financing; in December, Yonghui Caishixian announced that it has received 1 billion yuan of A round of investment...
Online or offline, start-ups and giants, the Internet and traditional industries have all set their sights on people’s baskets. Of course, unlike previous startups, it is time for giants to compete.
Chen Ying, the co-founder and CEO of Shihui Group, once stated in an internal letter that after the fierce battle of thousands of startups in the first half of the community group buying, it ushered in the "second half of almost all Internet giants personally fight" ".
From online ride-hailing, to shared bicycles, to today's fresh food industry, the Internet industry is staged a plot of burning money subsidies-rapid expansion-market reshuffle-giants sweeping the battlefield. It's just that in the fresh food industry, the story goes a bit fast and a bit anxious. After all, unlike online ride-hailing and bicycle sharing, the fresh food industry is more "heavy" and more "traditional."
Flow rate: half sea water, half flame
Any industry connected with the Internet can be understood with a logic, one end is connected to B, and the other end is connected to C. It's just that because of the different characteristics of each industry, the emphasis on B and C in development is different. In the fresh food industry, B and C are equally important.
The original parent company of Yiguo Fresh Foods, which declared bankruptcy, was Yimao Information, a platform for commodity trading. It can be said that a large part of its rise depends on its B-side advantage. Since then, Ali’s capital injection has allowed it to supplement its own advantages on the C-side, relying on the flow of Ali platform.
As for its decline, it was a loss of advantages at both ends of B and C. Although it acquired Yiguo Fresh Food, Ali later established Hema and extracted traffic resources from Yiguo Fresh Food and poured it into Hema. As a result, Yiguo Fresh Food later focused on the B-side, but it was on the B-side. Its advantage is not obvious enough to let it survive alone, which became the main reason for its defeat from the fresh battlefield.
The popularity of the fresh produce field this year is actually related to the C-end. Affected by the inconvenience of offline consumption during the epidemic, fresh food e-commerce has ushered in significant growth. Even middle-aged and elderly users who were not used to online fresh consumption before have begun to try to place orders online.
Analysys data shows that in the first quarter of 2020, the number of active users in the fresh food e-commerce industry reached 47.461 million, an increase of 65.7% from the same period last year and an increase of 10.7% from the fourth quarter of last year.
This year, the Internet fresh food field conducted a flood of user re-education. After a simple survey of surrounding users by Yidian Caijing, it was found that during the epidemic, most people purchased fresh products online and used more frequently than the epidemic. Significant improvement before it happened.
For example, a user surnamed L said, “During the epidemic, almost all Internet grocery shopping was tried”, including Daily Youxian, Dingdong Shopping, etc. Previously, he had only been on Daily Youxian in 2016 and 2018. Single, once or twice a year, the frequency is not high.
The growth of users and the further development of online fresh food buying habits can be said to be the biggest opportunity the epidemic has brought to the fresh food e-commerce industry. It is also the fact that Meituan and JD.com have increased their online fresh food products. Capital once again favors fresh food. The reason for fresh e-commerce. As the impact of the epidemic disappears, some start-ups are still facing traffic growth difficulties, but the advantages of giants have become prominent.
On the one hand, as iResearch said in the report, most of the new users who are forced to flow in during the special period are middle-aged and elderly people, and the daily grocery shopping habits of these people will not change due to the short-term impact of the epidemic. "During the epidemic, the frequency of using fresh food e-commerce by family members increased, but after the epidemic became less intense, the frequency of use was falling," another user also told Yidian Caijing.
User growth, retention of new users, and increased frequency of use of old users are still a difficult problem for fresh food e-commerce companies. The Daily Youxian APP shows that every time a user invites a friend to place an order, he can get a 30 yuan coupon, which is equivalent to a single user's acquisition cost of at least 30 yuan.
This year, Dingdong Maicai, which has substantially raised its growth target, provided 108 yuan coupons for new registered users and invited other new users to register with discounts. In addition, it gave delivery staff an indicator to recruit three VIP users every day. This is a KPI evaluation index, not an incentive," a delivery officer told Yidian Caijing.
On the other hand, Internet giants such as Alibaba, Meituan, JD.com, and Pinduoduo are also traffic giants. They can divert traffic when entering the grocery shopping market and give play to their traffic advantages. They can even re-educate users in the fresh food e-commerce market with their own traffic advantages.
In recent years, fresh food e-commerce has spread from the first-tier market to the second- and third-tier markets. Analysys data shows that in 2019, the proportion of fresh food e-commerce consumption in super first-tier and first-tier cities reached 78.2%, of which the proportion of users in first-tier cities increased by 7.1%, and the proportion of users in second- and third-tier cities also increased.
"All online fresh food consumption belongs to high-end consumption. Consumers are in first-tier cities. Therefore, fresh food e-commerce can only be deployed and developed in first-tier cities." Ziyun Cloud Computing Co., Ltd. Chairman Luo Jianhui once said to " Yidian Caijing said. But now, unlike the daily excellent and fresh food that carefully develops second-tier cities, giants such as Ali and Pinduoduo are in full swing.
Half sea, half flame, this is the reality of the second half of fresh food e-commerce.
Supply chain: cold chain success, cold chain failure
When imagining the future development of fresh food e-commerce, many people emphasize the prospects of fresh food e-commerce with a penetration rate of less than 5% and an overall penetration rate of nearly 20%. But in fact, unlike e-commerce, fresh food e-commerce is facing higher cost traffic acquisition and challenges from its own fresh food supply chain.
The first is the replication challenge. In addition to being an efficient business, retail is also a scale business. Especially for the daily fresh produce with rising valuations and continuous financing, scale is a proposition it must accept. Unlike e-commerce, fresh food e-commerce has a higher copy threshold, because behind the copy in each city, cold chain warehousing needs to be laid first.
After financing, Daily Youxian also proposed a "100 cities, trillions of households" plan for scale expansion, but in the face of various realities, this plan has not been realized. After this year's financing, Daily Youxian expressed similar wishes. Partner and CFO (Chief Financial Officer) Wang Jun said that he would invest funds in smart chain technology and the creation of supply chain capabilities in production areas.
"BAT talent is not a problem, money is not a problem, and passenger flow is not a problem. This reflects some special things in this industry: it needs time to accumulate and requires long-term awareness of this matter." Founder of Yiguo Fresh Jin Guanglei emphasized the importance of supply chain construction when he obtained Ali financing in 2015.
And now, after five years of exploration, the giants have obviously learned enough from the development and collapse of startups, and have their own "experiences" in the construction of the fresh cold chain. Ali has become a box horse by himself. Pinduoduo, who entered the grocery market this year, started with fruit from the very beginning.
Over the past few years, with the frequent emergence of front-end fresh food e-commerce, the e-commerce industry has undergone a re-cultivation of fresh food, from how to acquire customers, member operations, to the construction of fresh cold chain infrastructure, and related industries have been included.
In recent years, the fresh food e-commerce market financing has spread from the front-end platform to the back-end supply chain: the fast-moving supply chain platform Xian Shiji has completed the B round of billions of financing, focusing on the frozen food supply chain B2B e-commerce platform Frozen Food Online It has received 120 million yuan in Series B investment from Shunwei Capital, and Jiuye Supply Chain, an operator of fresh food e-commerce supply chain solutions, has received hundreds of millions of yuan in Series C financing...
If the supply chain became an obstacle for giants to enter fresh food e-commerce a few years ago, then with the establishment of fresh food supply chain infrastructure in recent years, the road for giants to enter has been much smoother. However, they still face profitability problems.
Luo Jianhui told Yidian Caijing that 99% of fresh food e-commerce companies are currently at a loss. The reason is that cold chain costs are high and losses are large. Cold chain costs generally account for about 30% of fresh food retail. "The cost of self-built logistics system is relatively easy to control, but it is still high, and losses need to be considered. Sometimes even 10% to 20% losses are normal."
Daily Youxian, which has frequently completed financing this year, can be said to be a "giant" in the field of fresh food e-commerce startups, and it is self-built logistics that it chooses. After financing in July, Daily Youxian said that it has achieved a nationwide profitable growth on the cost side, and the loss rate of its front warehouse is as low as 1%-profitability cannot be separated from the "cost side" and " Pre-storage" these prefixes and modifications.
Fresh food e-commerce is still a capital and money-burning game. Supply chain operations and how to make a profit are one of the problems that plague fresh food e-commerce, whether it is for startups or giants.
It’s just that compared with startups, giants with traffic and capital have enough room for trial and error. The Hema small station once adopted a pure pre-warehouse model, which was rejected at the beginning of this year and was eventually upgraded to Hema mini.
The entry barrier for the fresh food e-commerce industry is already very high, especially for all categories, it will be more and more difficult for startups in the future. Yiguo Shengxian, who was once under the umbrella of Ali and eventually closed down, said with emotion. Fresh food e-commerce in the second half, the difficulty can be imagined, Yi Guo is only the first one, who will fall next?
Conclusion
Fresh food e-commerce is also a "winner-takes-all" industry. The so-called "winner" has two considerations. One is the C-end traffic end, and the other is the supply chain end. A standable platform at least needs to account for it. One. Of course, there are also accounts for both, but the support of giants is indispensable.
But even if there is capital, it is a giant, everything in the fresh food e-commerce field must be cautious. Capital has always been a booster, not a catalyst. In particular, buying food itself is related to the national economy and people's livelihood. Any field, any industry, will face the confrontation between the old and the new. The new defeats the old for innovation. There will be casualties in the confrontation, and the confrontation in the fields of national economy and people's livelihood such as grocery shopping requires caution.