Fresh E-Commerce: Who Can Laugh Last?

An epidemic situation has brought fresh e-commerce into the spotlight again.

"I usually buy vegetables in HEMA Xiansheng or dingdong, and I can send them to my home soon. The frequency of shopping in vegetable markets and supermarkets is obviously reduced." Ms. Wang, a housewife living in Nanjing, Jiangsu Province, told 21st century economic news that there was a fresh box horse less than 800 meters away from her home, but she preferred to place an order online because it was more time-saving.

Many large supermarkets and supermarkets in the first and second tier cities have gradually lost their former style and entered the shrinking stage. Fresh supermarkets like HEMA Xiansheng, which can deliver goods, and online fresh food platforms such as Ding Dong buy vegetables have become more preferred shopping channels for people like Ms. Wang.

In recent years, the development of fresh e-commerce is in full swing. According to the "2020 (Part I) fresh e-commerce market data report of China" released by the e-commerce research center of e-commerce, the fresh e-commerce market will pick up in the first half of 2020. It is estimated that the transaction scale in 2020 will be about 364.13 billion yuan, with a year-on-year increase of 42.54%.

The giants are all rubbing their hands. In June last year, Didi launched orange heart online; in July, meituan launched meituan optimization; in August, pinduoduo went online to buy more vegetables; and Liu qiangdong, founder of Jingdong, even said that he would personally lead the team into community group buying.

However, when Internet giants have joined the "battlefield" of fresh e-commerce, many popular brands are quietly closing down.

On February 24, all stores in China except Fuzhou will be closed due to the explosion of super species. The specific closing time has not yet been determined. Although Yonghui denied the above news, saying that part of the closure of super species is a normal business adjustment, it is undeniable that super species has lost its strong momentum in the past. According to public information, in the first half of 2019, there are more than 80 super species stores nationwide. At present, super species has 23 stores in 7 cities across the country. In addition, according to media reports, in July 2019, the Wanda store of Shanghai Wujiaochang, a super species, was closed for the first time. In September of the same year, super species Beijing Zhongjun · World City store was closed. In addition to the super species, Yonghui Mini stores are also falling into the tide of closing stores. Yonghui semi annual report shows that in the first half of 2020, 88 stores of Yonghui Mini were closed. Regardless of the closing of mini stores or super species, Yonghui supermarket responded that it was a normal business adjustment. From the perspective of development trend, Yonghui may focus on online layout.

Hu Chuncai, a retail expert and founder of Shanghai Shangyi consulting, told 21st century economic reporter that in the long run, fresh e-commerce is still in the stage of fierce competition. Although the epidemic has a positive effect on the recovery of fresh e-commerce, it is not the result of normalization in the long run, and the final effect still needs time to observe.

An epidemic situation has brought fresh e-commerce into the spotlight again. -Visual China

"Three factions" compete in the world

In the market of fresh e-commerce, tycoons can be seen everywhere. With the evolution of the new retail concept, the struggle between the "three factions" is becoming more and more obvious.

At the cloud habitat conference in 2016, Ma Yun proposed the concept of "new retail". Zhang Yong, CEO of Alibaba group, believes that new retail is a new business form formed by reconstructing people, goods, markets and other elements through big data and the Internet.

And how to construct these elements, each family is making great efforts. At present, the whole market has formed "three factions", namely, three main modes of fresh e-commerce, which are warehouse store integration mode, front warehouse mode and community group purchase mode. The integrated mode of warehouse and store mainly includes HEMA Xiansheng and multipoint; while the mode of daily Youxian and dingdong shopping for vegetables is the front warehouse mode; the online community group purchase includes orange heart optimization, ten gathering group, and Xingsheng optimization.

Each mode has its own characteristics. In terms of offline store setting, the warehouse store integration mode is characterized by both on-line platform and off-line experience store.

HEMA Xiansheng, as a new data and technology driven retail platform under Alibaba group, its offline stores are mainly large stores with an area of more than 4000 square meters. The site selection is generally in the shopping center, and the business scope covers fresh food, catering, supermarkets and takeout. However, the business districts in many cities are not dense enough, so it is difficult to have a shopping center in front of everyone's home to accommodate a fresh box horse.

In this case, HEMA Xiansheng set up box pony and HEMA mini, and their positioning is also different. Box pony is jointly launched by HEMA and RT Mart. It mainly deals in fresh products such as vegetables, fruits, seafood and meat, as well as some daily and sports goods.

In terms of site selection, hexiaoma can be used as a small convenience store + a reduced version of "HEMA Xiansheng". It is mainly developed in the third and fourth tier cities. The area of HEMA shop is about 500-1500 square meters, which is larger than HEMA mini, and the initial investment cost is larger than HEMA Mini. Therefore, the location of the location is in the place with concentrated population and large flow of people. HEMA Mini is mainly bulk non-standard products. It increases the proportion of live seafood and ice seafood, and also includes cooked food. In terms of site selection, HEMA Mini is mainly divided into three parts: the first is the suburban market of the first and second tier cities, the second is in the residential communities of the third and fourth tier cities, and the last is to open stores in the fifth and sixth tier counties. In addition, the area of HEMA Mini store is reduced to about 300-500 square meters, which can reduce the initial investment cost.

On the contrary, front warehouse mode and online group purchase mode have no stores that can directly purchase offline, only select and place orders in the corresponding app, which greatly reduces the site cost.

It is understood that the fresh e-commerce such as daily fresh food and dingdong shopping are mainly based in the first tier cities represented by Beijing and Shanghai, and expand to the second and third tier cities.

Relying on the strategy of RT mart's second and third tier cities to encircle the first tier cities, hexiaoma takes advantage of the advantages of RT mart's more than 400 stores to enjoy the "door-to-door" service for nearly 3 km residents, which can be delivered within one hour, with a wider service area than HEMA Mini.

Community group buying is developing from second and third tier cities to first tier cities. On January 12, duomaicai, a subsidiary of pinduoduo, officially entered Shanghai, opening the curtain of community group buying into first tier cities. On January 18, Didi's community group buying business, orange heart, officially entered Beijing, becoming the first community group buying platform to "rush to Beijing for examination". Since then, meituan optimization has also been officially launched in Beijing, and the first batch of team leaders' self promotion points cover Chaoyang District and Tongzhou District.

The most different from the traditional supermarket is that the front warehouse mode and warehouse store integration mode reset the storage.

In terms of warehousing, these three modes have their own warehouses. The fresh e-commerce with warehouse store integration mode and front-end warehouse mode has its stores scattered in various parts of the city.

As of March 2021, there are 138 stores in Shanghai, 58 in Beijing, 48 in Guangzhou and 48 in Suzhou. The number of daily excellent fresh stores in some cities is: 69 in Shanghai, 69 in Beijing, 40 in Guangzhou, Guangdong, and 27 in Suzhou, Jiangsu. In the same four cities, the number of HEMA shops is 47 in Shanghai, 36 in Beijing, 18 in Guangzhou, Guangdong and 7 in Suzhou, Jiangsu. However, no stores were opened in Xi'an. In January 2021, daily Youxian contacted the investment promotion departments of Beilin District, Xincheng District and Qujiang New District of Xi'an City, Shaanxi Province.

In Shanghai area, the community that can enjoy the distribution of box and horse, that is, the area with box and horse door shop within three kilometers is called "box district room". According to the "2020 box District Housing report" released by shell housing, about 93% of the residential areas in Shanghai's central urban area have been covered by HEMA distribution services. According to HEMA Xiansheng statistics, by the end of 2020, the top five cities with HEMA coverage rate were Shanghai, Xi'an, Shenzhen, Wuhan and Beijing, and the coverage rate of stores in these cities exceeded 60%.

In these two modes, each store of an enterprise is a small and medium-sized warehouse and distribution center, which makes the central warehouse of the headquarters only need to supply goods to the stores. When users have demand, they can deliver the products quickly, covering the last kilometer.

However, community group buying is still to take the way of large warehouse, centralized distribution. How to deliver goods to customers is also the focus of all businesses.

For the fresh food e-commerce with front warehouse mode and warehouse store integration mode, the delivery mode is just like takeout, which is one-to-one delivery home. However, community group buying, such as orange heart and ten star group, all focus on the needs of users and distribute the goods in a centralized way the next day after placing an order. Users need to go to the designated place to collect the goods.

Various modes have different characteristics, but in addition to the shopping experience, users are most concerned about the price.

The 21st century economic reporter randomly selected three fresh e-commerce companies under the three modes, namely, HEMA fresh food with warehouse and goods integration, dingdong shopping with front-end warehouse mode, and community group buying app ten shopping groups, as well as some of their fresh products, and investigated their prices.

According to the official price of app3 on March 2, the price of every 500g yellow heart potato in HEMA Xiansheng, dingdong shopping and shihuituan is 2.2 yuan, 2.99 yuan and 2.45 yuan, respectively. There are many kinds of potatoes to choose from, such as organic potatoes, while there is only one kind in shihuituan. The prices of every 600g cucumber in HEMA Xiansheng, dingdong shopping and shihuituan are 5.9 yuan, 4.29 yuan and 3.36 yuan, respectively The price of Chinese toon per 100g in HEMA Xiansheng, dingdong and shihuituan is 11.9 yuan, 13.8 yuan and 8 yuan respectively.

In terms of fruit, the price of every 500g Shatangju in HEMA Xiansheng, dingdong and shihuituan is 14.9 yuan, 6.6 yuan and 2.5 yuan respectively. For seafood products, the price of hairtail per 500g in HEMA Xiansheng, dingdong and shihuituan is 18.5 yuan, 17.9 yuan and 8.5 yuan respectively. Different from the other two categories, the products purchased by the group are limited every day, covering fruits, vegetables and daily necessities, which are discounted on the basis of the original price.

For example, on March 3, the price of 200g kumquat in Shishui group was 0.8 yuan, while that in HEMA Xiansheng and dingdong was 4.95 yuan and 6.45 yuan; the price of 400g green pepper in Shihui group was 1.59 yuan, while that in HEMA Xiansheng and dingdong was 5.8 yuan and 4.7 yuan respectively.

At present, there are no more obvious advantages of warehouse cargo integration mode, front warehouse and community group purchase, but each has its own advantages and disadvantages. From the perspective of distribution efficiency, the warehouse goods integrated mode and front warehouse mode have more advantages. From the perspective of store cost and distribution cost, community group purchase has more advantages. Warehouse cargo integration can be said to have a lot of similarities with the front warehouse, but the cost is slightly higher. Community group buying is a completely different mode from front-end warehouse. It relies more on the intervention of people and joint stores. It has an absolute advantage in the cost of stores and distribution. However, the timeliness of distribution, that is, the shopping experience is worse.

The second half was just beginning

From the perspective of birth time, daily excellent fresh food, dingdong shopping, American cuisine and multi-point were established in 2014 and 2015 when the industry was experiencing explosive growth.

During this year's Spring Festival, affected by the epidemic situation, many people started the on-site New Year's day mode, and "contactless distribution" and mobile phone ordering have become more and more people's choice.

Under the catalysis of the epidemic situation, the transaction scale of major fresh e-commerce companies will also achieve rapid growth in 2020. According to the official data disclosed by multiple points, during the Spring Festival in 2020, Gmv (total transaction volume) increased by 232.2% year-on-year, and the number of new registered users increased by 236.3%; in January 2020, Gmv exceeded 4.2 billion yuan, an increase of 162.2% compared with December 2019.

On September 21, 2020, the State Council issued the "opinions on accelerating the development of new consumption with new formats and new models", which clearly affirmed the important role of new retail in improving the epidemic situation. At the same time, the paper also proposed: we should strengthen the organic integration of online and offline consumption, increase new consumption support, and accelerate the promotion of "fresh e-commerce + cold chain house" of agricultural products With "business. Policy support makes the development of fresh distribution industry more regular and stable.

However, many analysts pointed out that due to the low degree of standardization and high loss rate, heavy asset model and high cost of cold chain logistics, the operation of fresh e-commerce still faces many difficulties.

Although the front-end warehouse has many advantages, it also has many problems. Due to the uncertainty of the order, the loss is uncertain. At the same time, there is the problem of how to replenish.

In June 2020, in order to improve regional air quality, alleviate road traffic congestion, and ensure road traffic safety and smoothness, six Beijing regions including Haidian District, Shijingshan District, Mentougou District, Fangshan District and Yanqing District, issued the notice on adjusting traffic management measures for some motor vehicles to reduce pollutant emissions. This means that many light goods vehicles will be subject to more stringent restrictions in most areas of Beijing, which also adds difficulties to fresh e-commerce.

In addition, due to the difference of consumers in each location, there are differences in category operation and price. This is also true in many regions of a city. If it is extended to the whole country, for example, the taste of consumers in North China and East China is not the same, and the complexity will be greatly increased. The front-end warehouse is a strong operation activity, and the radiation of each front-end warehouse is not the same as that of each front-end warehouse.

The high operating cost of front-end warehouse is the second pain point. The front-end warehouse needs to establish a network to cover, and more than ten front-end warehouses may be needed to achieve full coverage in the first tier cities. At present, the platforms are mainly self built, so the initial investment is very high.

In front of the warehouse on the basis of the upgraded version of the warehouse cargo integration, also is the coexistence of advantages and disadvantages. The target customers of HEMA Xiansheng mainly include three types of middle and high-end consumers. The first group is the family users who pursue the quality of life; the second is the office white-collar workers who rely on convenience stores or light meals; the third is the parents who take their children to the supermarket for recreation and shopping at the weekend.

The target customers of "dingdong shopping" are mainly ordinary family users in the community. Dingdong's commodity composition is the core category that can meet the most basic needs of ordinary families. The dense front-end warehouse enables almost all communities in Shanghai to place orders through the "dingdong shopping app" and receive the goods within 29 minutes, which enables ordinary consumers to buy cheap fresh food materials at home. In contrast, "Ding Dong shopping" is more popular than "HEMA Xiansheng".

In addition, the income source of "HEMA Xiansheng" is not single. On the one hand, "HEMA Xiansheng" offline physical stores focus on medium and high-end goods, and meet users' instant shopping needs with rich categories; on the other hand, it serves as a drain for online app and cooperates with each other through all channels, breaking through the limitations of traditional physical stores, making offline consumer groups become consumers of online platforms. However, due to the fact that most offline stores of HEMA are concentrated in the hot business districts of the first and second tier cities, the costs of housing rental and employee wages are relatively high. At the same time, HEMA, as an innovator in this field, has to rely on their own efforts to explore and explore every step of innovation. The implementation of new ideas and strategies will also increase HEMA's capital investment and consumption, resulting in higher initial costs.

On the contrary, the income source of "dingdong buying vegetables" is relatively single compared with HEMA, which only relies on online sales. In order to improve the sales revenue, dingdong strives to improve the customer's repurchase rate based on user experience while pursuing to increase the customer's unit price and gross profit rate. Dingdong's operation mode of "front warehouse + city wholesale procurement + high quality service" can effectively avoid high cold chain distribution cost. Under this mode, the price is relatively stable, replenishment is easier, and the products are relatively complete In the meantime, dingdong does not need to handle the logistics and the source of goods by itself, which reduces the cost of management, logistics and transportation, and solves the contradiction between the low gross profit rate and the high operating cost brought by the front warehouse to a certain extent, so as to drive the growth of net profit.

Based on the development of the industry in recent years, capital investment in fresh e-commerce industry tends to be rational. According to the big data report of China's fresh food e-commerce industry in 2020, from the trend of fresh e-commerce financing frequency in the past 10 years, it reached a peak of 250 in 2015, and has been in a downward trend in the following years. In 2020, fresh e-commerce has got good development opportunities, but the financing frequency is only equal to that in 2019, a total of 33.

"Burning money" of fresh e-commerce is an open secret of the industry. On the one hand, it is necessary to attract consumers through various marketing, and to achieve the purpose of retention and repurchase. This not only needs to burn money, but also needs a complete service system to provide consumers with high-quality shopping experience. On the other hand, it is necessary to establish supply chain, cold chain logistics and other infrastructure, which is also an investment with large investment and slow cost recovery.

Hu Chuncai told the 21st century economic reporter: "in fact, the fresh e-commerce itself is mainly positioned in the enterprise management thinking of efficiency and convenience, that is, assuming that consumers buy vegetables for convenience and saving money. In fact, people go to the vegetable market to buy vegetables, not only for convenience, but also for two core selling points, one is fresh and the other is diversification. Based on this, now we go to see whether it is a front-end warehouse type enterprise or a community fresh supermarket such as aunt Qian. In fact, there is still a certain gap with this goal. Therefore, it is impossible to conclude that the direct e-commerce mode based on dingdong shopping and daily excellent fresh food will surely win, or the community fresh food supermarket like Qian Dama will surely have advantages. Everything is still too early. They can't shake the position of the community supermarket and the vegetable market. At most, they are in a state of coexistence. "

As a matter of fact, on November 22, 2019, the fresh e-commerce was officially announced as a result of poor management, which led to the shortage of funds. For a moment, there was an uproar. At that time, dairadish also received a total investment of 634 million yuan from Chenxing capital and Hillhead capital. Compared with other Internet companies that need to burn money for life, the monthly turnover of dairadish has exceeded 100 million yuan. At that time, the development momentum of dairadish was strong. However, due to the imperfect regulatory system and lack of funds, the industry research team was forced to disband due to the arrears of 30 million yuan, which in fact gave a stark warning to many fresh e-commerce companies.

In the community group buying mode, Ali has to face the competition from Tencent departments such as pinduoduo, meituan, Jingdong and Xingsheng. Moreover, due to the sinking market positioning of community group buying, it is highly dependent on wechat's social networking and payment ecology. If the competition is fierce enough in the future, for the whole Alibaba system's community group buying products, it may be subject to traffic restrictions from Tencent.

Up to now, there is no listed enterprise in the field of fresh e-commerce. However, fresh e-commerce enterprises such as dingdong shopping, daily Youxian, meicai.com, duodian and other fresh e-commerce enterprises have recently spread the news of IPO, which seems that the track has ignited a raging war again.

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