Daily Youxian is going to be listed, do you agree with Dingdong Maicai?

The two most aggressive players in fresh food e-commerce—Daily Youxian and Dingdong Shopping—are fighting again.

Image source @Visual China

First in early April, Dingdong Maicai completed a $700 million Series D financing, setting a record for the largest financing in the history of the pre-warehouse fresh track.
In addition, it was reported that Dingdong Maicai was considering listing in the United States as soon as this year; a week later, It is reported that Daily Youxian has secretly submitted its prospectus to the U.
S.

SEC not long ago, and it will be formally handed over to the public as soon as mid-to-late June.
The IPO is expected to raise 500 to 1 billion US dollars.

When these news came out, Dingdong Shopping was in some neighborhoods in Beijing, making crazy pushes.
Beijing was the base camp for daily fresh food and the base of Meituan's grocery shopping.

"Dingdong grocery shopping has been too fierce this year.
I have been chasing the daily excellent fresh food, and investors dare to burn money.
" A Meituan grocery shopping promoter said to Shen Ran.

An investor who pays attention to the fresh food e-commerce track was surprised by this phenomenon.
"I thought the industry competition was over, but I didn't expect it to fight again.
" He hasn't looked at the pre-warehouse fresh food e-commerce for a long time.

, Because "the No.
1 in the industry (Daily Youxian) has run out very early", and more importantly, he believes that "the profit model of pre-positioning has not completely worked out.

Not making money has always been a big problem for the fresh food e-commerce industry.
Founder Securities made such a statistic in August last year: 95% of the 4000 entrants across the country lost money, 4% remained flat, and only 1% made a profit.
Most of those 95% of the players who lost money were eliminated.

Daily Youxian is the representative of the fresh food e-commerce supplier in the front warehouse.
This model has been controversial in the past.
Last year, industry experts said that the unit economic model of the front warehouse was difficult to run through.

Under the professional accounting standards, it is difficult for the platform to break even.

Daily Youxian has been established for seven years and has raised ten rounds of financing; Dingdong Maicai has been established for four years and has raised nine rounds; Meituan Maicai is backed by Meituan and is also in the stage of burning money.
Without exception, they are not profitable overall.

Nowadays, Dingdong Maicai, who has received investment from Sequoia Capital and DST, is taking the same path that Daily Youxian walked yesterday—increasing front-end warehouses, pushing frantically, and poaching away users of Daily Youxian.
But Daily Youxian seems to have no intention of fighting.

Daily Fresh Food wants to make money, Dingdong Food wants to burn money; Daily Fresh Food wants efficiency, Dingdong Food wants scale.
In the narrow boat of fresh food e-commerce, these two rivals squeezed together.
But they also understand that they are all in the same boat until they find a profitable "cure".

There is a cliff in front and chasing soldiers behind

There is a cliff in front and chasing soldiers behind

"We usually don't meet the people who make daily fresh food.
They don't seem to push much, but people who often see Meituan.
" In early April, Dingdong Shopping Mall in Fengtai Fangzhuang, Beijing The staff is blocking new people.

In this very ordinary residential area, the little brothers of various fresh food e-commerce companies staged a battle of push and grab.
In September last year, Meituan Maicai won it here, and Daily Youxian has been working here for two years.
Dingdong Maicai is the latest one to come.

In terms of movement, Dingdong’s grocery shopping is a bit slower, but the momentum is very strong.
In April last year, Dingdong Maicai officially entered Beijing, opening 18 front-end warehouses in the first batch.
At that time, it had just completed the C round of financing.

Half a year later, in Panjiayuan Community, not far from this community, Dingdong Mai Cai and Meituan Mai Cai were pushed there at the same time.
At that time, Meituan Mai Cai had already been pushed to Fangzhuang Community, but Ding Dong Mai Cai did not follow up.

Dingdong Maicai is speeding up its capture of the bases of daily Youxian and Meituan grocery shopping.
Every time it takes a financing, its progress speeds up one step.

In contrast, Big Brother's daily freshness is relatively calm, and it did not appear when the local pushers of Dingdong and Meituan were fighting fiercely.

"Daily Youxian was the first to develop, and all the communities that can be promoted in big cities are almost the same.
Now just keep it.
" A Meituan vegetable market promoter told Shenran that he had done daily work four years ago.
The head of Youxian's front warehouse, at that time, Youxian was pushing and pulling new products in a large area in Beijing every day.

He never thought that he would join his old club's competitors in four years.

What more people did not expect was that fresh food e-commerce, a lifelong entrepreneurial track, would actually come back to life under the impact of the black swan of the new crown epidemic.
After the complete outbreak of the epidemic in March 2020, fresh food e-commerce companies have regained the favor of capital.
Daily Youxian received three consecutive rounds of financing in May, July, and December, but it has not received new financing for a year and a half before.

Dingdong Maicai also received two rounds of financing in March 2020 and April 2021.

The re-entry of capital has caused subtle changes in the industry structure.
One of the most obvious characteristics is that opponents dare to burn money more than ever.
The most sturdy one is Dingdong Shopping.

In terms of seniority, Dingdong is better to buy fresh food every day.
Although these two companies were both established around 2015, Dingdongmai was originally called Dingdong Community.
This was an O2O project, which failed.

It was transformed into a pre-warehouse model Dingdongmai in May 2017.
dish.

In the two-year time window, Daily Fresh Food is far ahead.
Before the transformation of Dingdong Maicai, Daily Youxian has received 5 rounds of financing, entered 8 cities across the country, and opened nearly 300 pre-warehouses.

This advantage is still very obvious until the 2020 epidemic.
Fresh food e-commerce is a money-burning business, and the front-end warehouse is still in the money-burning stage.
These two points have already scared off most new players who want to enter the game.

Therefore, on this track, there are few opponents daily, and he has always been the number one player.

In the past, there were only daily fresh foods for Dingdong.
As early as May 2019, after gaining a firm foothold in the Beijing area, Daily Youxian claimed to invest 1 billion yuan to enter Shanghai, confronting Dingdong to buy food, and to win the first market share.
And Dingdong Shopping didn't start to enter Beijing until a year later, attacking the site of daily freshness.

Judging from the results, it was clear that Daily Youxian was too optimistic.
Liang Changlin, the founder of Dingdong Maicai, said at the beginning of this year that Dingdong Maicai's market share in Shanghai is 10 times that of Daily Fresh Food.

With plenty of ammunition, Dingdong Maicai is still accelerating its expansion.
After entering the first-tier cities such as Beijing and Shenzhen last year, Dingdong Maicai entered Tianjin in March this year.
In addition to the previously covered Beijing, Tangshan, and Langfang, the Beijing-Tianjin-Hebei core areas have been deployed.

Daily Youxian is no longer the only one that can be played on the pre-carrying track.
There is a cliff in front and a chasing soldier behind.
There is a battle between Youxian and Dingdong Shopping every day.

Profitable boat, turn it over

Profitable boat, turn it over

Compared with the gunpowder-rich point battle, how to make a profit may be a bigger problem in the face of daily fresh and Dingdong grocery shopping.

Dingdong Shopping is still in the stage of burning money to grab the market, and it is impossible to make a profit.

Xu Feihong, an industry insider close to Dingdong Shopping, analyzed that in June last year, Dingdong Shopping lost almost every order.
From the warehouse to the front warehouse, each order lost about 4-5 yuan, which has not been calculated yet.
Headquarters operating costs and marketing costs.
"Taking Shanghai as an example, the average weekly order quantity is 650,000 orders, and the company's loss that week is 3.
25 million yuan (650,000 orders multiplied by 5 yuan).
"

This is still the base camp of Dingdong grocery shopping, and it is the most mature city.
"We basically don't push and pull new ones in Shanghai, we only do advertising.
" As for those newly opened cities, additional costs and warehouse construction costs have to be pushed out, and the losses will be even greater.

If Dingdong Shopping is still in the expansion period and can withstand strategic losses, then Daily Fresh Food, which has entered a stable period, cannot avoid the problem of losses.

For Daily Fresh Food, the market’s biggest concern in the past was when to go public and when to make a profit.
Regarding the rumors of listing, Daily Youxian has basically denied it every time, but when it comes to profitability, it has made some noise from time to time.

As early as July 2016, Daily Youxian announced that it had achieved regional profitability in Beijing; in May 2019, Daily Youxian CFO Wang Jun stated that Daily Youxian had achieved nationwide operating cash Flow is positive; in July 2020, Wang Jun said that Daily Youxian had achieved profitability after deducting headquarter staff costs at the end of 2019.

Each of these three messages has a different caliber.
The third one is interpreted by many as that Daily Fresh Fresh has achieved overall profit, but in fact, if all costs are included, under the formal financial accounting standards, Daily Fresh Fresh cannot be regarded as overall profit in the above three statements.

This is like a math problem.
The person who asked the question can decide the hypothesis.
Every time the condition is changed, the conclusion drawn is different.

Moreover, there are many variables that will determine the platform's break-even, such as the intensity of coupons, the intensity of ground promotion, and the scale of advertising expenses, and these variables are controlled by the platform itself.

"In fact, profit is very simple, but it depends on how much you are willing to lose.
" Xu Feihong said.

The bigger variable comes from competition.
The price that the platform chooses to make profit may be to give up some market share or lose some time window.

For example, Daily Youxian once announced in a high-profile manner that it would take the East China market.
The tactic at the time was a price war, which would definitely damage short-term profits.
The embarrassment is that even if a price war is fought, it may not be able to see results, but it also drags down profits.

After Daily Youxian lost in Shanghai, the internal review concluded that the price war at that time was not efficient.
"The main reason is that the Shanghai market continues to burn (money) very badly.
I can't do zero delivery.
I don't think the amount I can correct in the future.
I still have to throw it back.
It is not economical to invest.
So we are relatively stable in Shanghai.
Making investment.
" Wang Jun once said.

The greater uncertainty comes from the giant spoiler.

Daily Youxian and Dingdong Maicai are both start-up companies.
They are grassroots players who started from scratch and made the market one step at a time.
But after all, the capital and resource strength are limited.
If you directly compete with the giants, you may not be able to occupy them.
Upper hand.

Before the 2020 pandemic, the fresh food e-commerce track was in a mess, and projects such as Dane Carrot were shut down, scaring away many giants.
However, the industry broke out after the epidemic, and instead attracted giants who are not short of money or resources.
Nowadays, the hot community group buying circuit, the super giants such as Meituan, Pinduoduo, Didi, Ali, and JD.
com have all ended, and they are participating in Shigekura.

At the end of last year, Wang Xing said that he believes that Meituan's preferred community group buying model is the most efficient model.
In the past, Meituan tried various business models such as Xiaoxiang Fresh Food and Meituan Grocery, and finally selected Meituan as its core business.

If community group buying is a better business model than pre-storage, under the joint promotion of giants, will it cause a dimensionality reduction blow to the daily fresh products? Daily Youxian and Dingdong Shopping for food are caught in the cracks of the giants.

Although Daily Youxian received Tencent's investment, a Daily Youxian insider said, "Tencent has basically not provided us with diversion.
"

For daily fresh foods, this business is not easy at all.
The profitable boat will turn over as soon as it is overturned.
At the same time, it is necessary to guard against the sneak attack by the giants.
No one knows what the end result of fresh food e-commerce will be.

Has the "antidote" found in the front warehouse?

Has the "antidote" found in the front warehouse?

Listing may be a way out, but even if it is listed, it does not mean that the pre-position has found a profitable antidote.

The front warehouse is the main business model of Daily Fresh Food, Dingdong Food, and Meituan Food.
The platform sets up a small warehouse in a place close to consumers (such as office buildings, communities, etc.
), covering 3 kilometers around.
Products are delivered from warehouses to the front warehouse in advance, and users place orders, and delivery is as fast as half an hour.
Come home.

The biggest highlight of this model is "fast", which belongs to the "instant fresh food e-commerce" (community group buying is next-day delivery), which can well meet the immediate needs of users in big cities.

But the drawbacks are also obvious-the speed of platform expansion depends on the speed of opening the front warehouse, similar to the self-operated JD Logistics, which has heavy assets.

In the early stages of development, whether it is daily fresh food or Dingdong grocery shopping, the first task is to open the city to expand the pre-warehouse.
Through the pre-warehouse, delivery in half an hour is achieved, which is also the focus of their promotion.

In September 2018, Daily Youxian once called out the "100 cities, 10,000 warehouses and hundreds of millions of households" plan (100 cities, 10,000 front-end warehouses, and 100 million households).
Two months after shouting this slogan, they announced their results at the time: 1,500 pre-positions were opened in 20 cities.

But this plan is obviously not completed.
According to daily Youxian APP data, it currently only has opened stores in 16 cities including Beijing, Tianjin, Hangzhou, Shanghai, Wuhan, and Guangzhou.
In other words, the front warehouse only covers 16 cities.
This is too far from the goal of "One Hundred Cities and Wancang".

Why did Daily Fresh abandon the opening of large-scale front warehouses?

Xu Feihong said that the pre-warehouse model can only achieve very large development in first-tier cities and very developed second-tier cities.
"Once you go to third-tier cities, its possibility is not high, and the profit model is difficult to drive.
"

The reason behind it is also well understood.
The main product of the front warehouse is to arrive home in as fast as 30 minutes.
This is in line with the life rhythm of people in first-tier cities and some second-tier cities, but in third-tier and lower cities, delivery time is not so important.
They may value the price-performance ratio more.
It is equivalent to saying that users in first- and second-tier cities choose to use money for time, but users in lower-tier cities prefer to use time for money.

Therefore, the pre-storage model is limited to a limited number of first-tier cities and a few second-tier cities.
“One hundred cities and ten thousand warehouses” is not realistic.
The front-end warehouse cannot truly cover the national market, and when it develops to a certain stage, this business will encounter bottlenecks.

Daily Youxian seems to have found a compromise.
In cities where the front warehouse is not yet covered, users can also place orders, but they have to use third-party logistics to deliver them within 1-4 days.
This type of form is called "Yunchao Special Sale" by Daily Youxian, and it is actually similar to e-commerce platforms such as JD.
com.

This can’t help but make people curious, can’t achieve the fast daily freshness of most cities, or the daily freshness of the past?

In contrast, Dingdong Shopping does not seem to be entangled, and it seems that he intends to turn the pre-warehouse model to black one by one.

According to the Dingdong Maicai APP, it has now covered 29 cities including Shanghai, Shenzhen, Beijing, Hangzhou, Guangzhou, Suzhou, and Chengdu, far exceeding the daily fresh food, and the number of front-end warehouses has reached 1,000.
In areas covered by pre-warehouses in these cities, Dingdong shopping can be achieved instantly.

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