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After all, the temporary dividend is difficult to maintain for a long time
Written by Meng Huiyuan
Editor/Chen Dengxin
2022 is about to end 3 months, fresh e-commerce is once again facing a severe test.
It is reported that in response to the sudden increase in demand in Pudong area, the order for citizens to buy daily necessities online has surged, and Ele.me has joined hands with major fresh grocery merchants, including Daily Excellent Fresh and RT-Mart, to increase transportation capacity; Hema Fresh has also docked with shandong, Yunnan and other bases outside the province outside Shanghai to avoid abnormal price increases in intermediate links and thus reduce procurement costs...
It can be seen that the fresh e-commerce companies that are caught in the white-hot competition, the relationship between either and that has eased due to the surge in online orders, they have been stuck in the bottleneck of development for a long time, and the momentum of eagerness to break through through a new round of demand is very obvious.
However, in this regard, some relevant insiders pointed out that although from 2020 to the present, the repeated epidemic has brought wave after wave of traffic dividends to fresh e-commerce, but it has not changed the essence of industry competition, and the industry reshuffle has accelerated under the intensification of competition, and if you want to truly occupy the minds of users, it is often brands that stand out from the fierce competition that are based on differentiated development.
Relying on temporary dividends is difficult to maintain a long-term development trend, and fresh e-commerce still needs to find a new long-term way.
Fresh e-commerce turned red again?
Recently, the plot of "difficulty in buying vegetables" such as grabbing food by relying on alarm clocks, buying food APP crashes, online orders are full, and all goods have been sold out has been staged in Pudong area.
In the media reports, there is not only the magic news of "the elderly in a shanghai vegetable market at 11 o'clock in the middle of the night on the 22nd to buy vegetables collectively", but also the unexpected situation of "after paying the money, the drivers who are temporarily sealed by the market are going to do nucleic acid and cannot send a single", but also the helpless reality of "the price of vegetables has risen and the freight has soared and the delivery time has gradually increased".
Of course, behind the above appearance, the fresh e-commerce that undertakes the daily needs of residents is actually very busy: Ele.me unites with major fresh grocery merchants, including Daily Excellent Fresh and RT-Mart, to increase the transportation capacity together; Hema Fresh has docked with shandong, Yunnan and other bases outside the province outside Shanghai to avoid abnormal price increases in intermediate links and thus reduce procurement costs... Unfortunately, it is still difficult to solve the problem that residents are difficult and expensive to buy vegetables.
In fact, the poor performance of the fresh e-commerce platform is not a matter of one day or two days, according to the "e-commerce treasure" big data, the scale of fresh e-commerce transactions in 2021 reached 465.81 billion yuan, an increase of 27.92% year-on-year. At the same time, the penetration rate of the fresh e-commerce industry will reach 7.91% in 2021. Despite the increase in the scale of transactions, the fresh e-commerce track is widely plagued by product quality, quality control, and profitability.
User complaints about Hema Fresh
In 2021, the "burning money method" widely used by fresh e-commerce, hema fresh, daily excellent fresh and other head fresh e-commerce is still the first choice of many users, but for consumers' most valued price, product freshness, delivery speed, after-sales and other issues, in the relevant news reports, "the delivery threshold of each platform is different and the freight is expensive", "non-new customer welfare is reduced", "only send dozens of orders", "do not reply to customers in time" and other situations are also very common.
It is worth noting that as a powerful offline supplement to the head fresh e-commerce platform, supermarkets, vegetable farms, and direct supply of origin have opened order delivery services for APP, Mini Program or public account, and they also have very prominent performance.
For example, some community owners will also spontaneously use small programs such as kuaituan to organize group purchases, and owners with sources of goods will supply goods through external sources and then pick up goods at the entrance of the community; traditional supermarkets and vegetable farm sales personnel will also provide residents with channels to buy vegetables by posting contact information and two-dimensional codes at the entrance of the community.
Mo Daiqing, director of the online retail department and senior analyst of the e-commerce research center of the network economic society, also believes that the "card position war" of fresh e-commerce will be further upgraded in 2022. In addition, the fresh e-commerce pattern is not yet completely stable, and in the future, the fresh market will present a situation in which a variety of formats such as vegetable markets, supermarkets and community fresh foods coexist.
Whether it is the fresh e-commerce in the advanced field, the gradual marginalization of community group buying, or the new players such as supermarkets and vegetable farms that are constantly entering the game, the surge in fresh e-commerce users at this stage is undoubtedly further intensifying industry competition. More importantly, when the epidemic stabilizes again, user demand will slowly return to rationality, and how to improve user stickiness is still the primary proposition for players on the fresh track.
According to Analysys data, the average number of daily openings of fresh e-commerce in the third quarter of 2020 was 3.8; in the fourth quarter of 2020, it was 3.4; and in the first quarter of 2021, the number fell to 2.9. It can be seen that the online dividend after the outbreak of the first wave of the epidemic did not bring many loyal users to the fresh platform, and under the outbreak of the epidemic in the local area, it is difficult to say how many users can be retained by the services with frequent problems.
The folding sand of platforms such as the Ten Hui Group, the Food Sharing Club, the Orange Heart Preferred, and the Life in the Same City has long proved that the epidemic is not a strong needle for the development of fresh players. The key is that positioning expert Gu Junhui once said that in the extremely competitive state of the fresh e-commerce industry, the brand polishing internal products and channels is still only a basic skill, and it is necessary to find ways to form a clear distinction with competitors in the minds of consumers.
That is to say, who can first find their own unique competitive advantage and go deep into the mind, who can survive for a long time and stand out in the fresh e-commerce competition. Differentiation is the foothold for enterprises to achieve sustainable competitive advantage, and this differentiation is built on the minds of consumers, not the inevitable result of product and channel optimization.
The story of "burning money" can't go on, selling and selling to make a living
If the poor performance of fresh e-commerce in Pudong is only a major problem for its subsequent customer acquisition and reshaping of reputation, then what shakes the foundation of its development is inevitably the long-term profitability problem they face. From the perspective of reality, the recent situation of the "fresh e-commerce first share" daily excellent fresh has once again sounded the alarm bell for the industry.
Since March, a number of media outlets have exposed the news that Daily Fresh is in arrears with suppliers. According to the relevant reports of Times Finance, a supplier who once told the supplier of Daily Excellent Fresh that from the end of 2021, he found that there were "financial difficulties" in Daily Excellent Fresh, and he himself was owed more than 4 million yuan, and he had withdrawn from the supply list of Daily Excellent Fresh after the Spring Festival: "First the payment was extended for 10 days, and then it was a month, until two months ago, the payment has completely disappeared." ”
According to media reports, they had visited the headquarters of Daily Excellent Fresh in Wangjing, Beijing: "Confirmed from the surrounding shops, there is indeed a matter of rights protection"; Shandong Business Daily also published an article reporting that Beijing Lasen Agricultural Development Co., Ltd. sued it in court on the grounds that Daily Excellent Fresh owed the payment for goods; in the love of enterprise investigation, the corporate risk of Daily Excellent Fresh has even accumulated to 792, of which 551 are related to their own risks.
The daily excellent fresh trial announcement has been accumulated to 100+ (Source: Aiqicha)
Judging from the relevant financial report data, the above crisis has long been hidden: from 2018 to the first three quarters of 2021, the loss amount of daily excellent fresh is 2.232 billion yuan, 2.909 billion yuan, 1.649 billion yuan and 3.017 billion yuan, and the total loss in three years and nine months is as high as 9.807 billion yuan.
In this regard, the feedback from the secondary market is also very direct, and daily excellent fresh has been in a "broken" state since the beginning of the listing. Its total market capitalization has fallen from $2.274 billion when it first went public to $334 million today, and its share price has fallen from an issue price of $13 to $1.41 now.
It is not only the daily excellent fresh in the capital abandonment, for the fresh e-commerce industry investment and financing, according to the statistics of The Media Data Center, the amount of investment and financing in 2020 is as high as 41.857 billion yuan. By 2021, the scale of financing will be directly reduced to 19.901 billion yuan. By 2022, the capital market has completely stopped moving.
Of course, there are also media reports that Daily Fresh has signed an agreement with foreign investment agency Yorkville Advisors, which will subscribe for $300 million worth of Daily Fresh shares over three years (Note: Yorkville Advisors was established in 2001 and mainly provides debt structure, bridge financing, asset-backed loans and equity financing).
However, Daily CEO Xu Zheng is also very clear that due to the lack of his own hematopoietic ability, he can only seek a new way out by selling assets, "The signing of this agreement will bring additional financial support for the company's strategic implementation and business promotion, and promote the company to achieve strong growth and longer-term high-quality development." This is actually the same as Hema closing some seriously loss-making stores to alleviate revenue pressure, and another listed fresh company achieving "cost" compression through layoffs.
It can be seen from the fact that there are consumers complaining about the reduction of platform welfare in this round of the epidemic, that is, there is no foreign capital to enter the rescue, and there is no strong performance support, and the money is "burned" and cannot be moved. Coupled with the reality that does not allow fresh e-commerce to continue to lose money, their choice is to continue to optimize the supply chain and increase the unit price of customers, such as relying on product richness, delivery services, after-sales response speed, product quality, etc. to retain consumers.
During the new round of epidemic period, in the case of continuous intensification of competition after more small and medium-sized players entered, the fresh food platform not only did not have a very attractive low price, but also the problems of insufficient transportation capacity and shortage of supply were widely complained by users, so can such a service really attract users to continue to place orders? As Hou Yi, CEO of Hema Fresh, recently commented in the circle of friends, "It's like a Titanic that crashed into a glacier, everyone knows that the ship is going to sink, but there is no way." ”
"Pendulum" and other deaths or struggles to survive are actually a single choice question
Looking back now, when fresh e-commerce entered the market as a new business model, with the help of the "east wind" of online consumption catalyzed by the epidemic, many unknown platforms effortlessly pried open the market door, but in order to cultivate the user's use habits, they still chose the "burning money" customer acquisition method in terms of market education.
In the fields of online car-hailing, shared bicycles, luxury leasing, takeaway and other fields, this enduring business theory has been successful many times. The new retail fresh e-commerce based on the online + offline model has been concocted in accordance with the law, but the change in user consumption habits under the high subsidy is not obvious. In this regard, Gu Junhui pointed out as early as 2018, "It is one thing to use subsidies as a tactic to attract customers, and long-term subsidies intend to take low prices as a conventional strategy, which is easy to pull brands into the quagmire of homogeneous competition." ”
The reason why this logic does not work is that fresh agricultural products have the characteristics of perishability, vulnerability, bulkiness, non-standard, seasonality and regionality of production, and instability of output and quality, and the degree of freshness in their product quality is an important indicator to determine the value of these fresh agricultural products.
For example, many fresh categories, including vegetables, fruits, and seafood, usually have a short shelf life. From ordering, receiving, handling, to storage, processing, tally and other links, it will cause losses, and the high loss rate also affects the gross profit margin of fresh e-commerce. "Fresh e-commerce has large inputs, low output and low profits. At the same time, the gross profit margin of the fresh business is very low, and it is difficult to obtain large profits through the business itself. Food industry analyst Zhu Danpeng said.
From the black cat complaints, about the daily excellent fresh, Hema fresh and other platforms only increased user complaints, fresh e-commerce in the supply chain problem has been "rotten" for a long time, but want to change the status quo is not an easy task.
On the one hand, fresh e-commerce companies have begun to optimize their own supply chains in order to increase the unit price of customers. Taking Daily Fresh as an example, the sale of $300 million worth of stocks is also to continue to optimize supply chain capabilities, strengthen commodity supply, and optimize economic models through technology-driven. That is, starting from the source of the place of origin, controlling the quality from the source, strong networking, informatization and other new technologies through their own continuous optimization of the distribution system, open up the channel for agricultural products into the city, the source of high-quality agricultural products quickly into the hands of urban consumers.
There is not much time left for the transformation of fresh e-commerce
On the other hand, fresh e-commerce is also trying to make products with higher added value. For example, the pre-made dishes that have been on fire around the New Year are gradually becoming the fist products of many fresh e-commerce platforms. According to the "2021 Box District Housing New Year Goods Trend Report" released by Hema Fresh, the annual sales volume of Hema Fresh Semi-finished Products in 2021 is 4 times that of 2020. At present, some pre-made vegetable products have been relatively mature, such as crayfish, sauerkraut fish and so on.
The prospects of these two development ideas are unquestionable, but there are certain limitations.
Although it is good to make up your mind to achieve self-evolution, but the investment in time and capital is also predictable, according to the current development trend of the market value and stock price of the head fresh e-commerce company "falling and falling", as well as the investment and financing status quo of saying "no" to all fresh e-commerce enterprises, how many people can live to achieve self-hematopoiesis?
At the same time, although the prefabricated dish is hot, it is not completely without thresholds, its supply chain and product research and development capabilities are extremely demanding, in order to make a difference in this track, quality, taste and supply chain are the core barriers, product research and development, material health and safety and quick-freezing technology, cold chain transportation management is indispensable, users will naturally use their taste buds to vote for the brand. And this means that it is a bottomless investment in research and development.
However, there is only expenditure but no income, and the market has little time left for the transformation of fresh e-commerce.
END
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