Burshott New Weekly
In 2015, Xu Xin, the "Queen of Venture Capital" and the founder of Today Capital, publicly said: "The one who gets fresh wins the world." Back to the current time line, most fresh e-commerce has fallen into the basic market dilemma. Is fresh e-commerce really a good business?
How long will it take from the "first stock of fresh e-commerce" to the dismal delisting? Daily Youxian may be able to hand over the answer soon.
On June 25, Youxian will land every day NASDAQ I'm afraid that the whole company will not be in the mood to celebrate the first anniversary. Since late April, the stock price of the "first fresh e-commerce share" has hit new lows in succession, with the stock price always below $1, only 1% of the peak period.
According to the provisions of NASDAQ, if the share price of a listed company is less than $1 for 30 consecutive trading days, it will receive a delisting warning. Therefore, on June 2, Daily Youxian has received the notice of "delisting" from NASDAQ. On May 19 before that, Daily Youxian also received a warning letter of "non-compliance with the requirements for continued listing" because it did not submit its 2021 annual report in time.
Since its listing, the market value of Youxian has dropped by 98% every day, hovering on the edge of delisting. In addition, Didaiyouxian was sued to the court for defaulting on the supplier's payment for goods, and was listed as the subject of enforcement by the People's Court of Chaoyang District, Beijing, with an enforcement amount of 5.3205 million yuan.
From the capital darling to the mire, is it impossible to sustain the daily fresh food?
Netizens reported that only "the next day" is available for daily excellent fresh food, while there is no fresh food available for leaf vegetables, onions, ginger and garlic.
How did Daily Youxian gradually fall down?
Like most entrepreneurial stories, Daily Youxian has a bright start.
In 2014, 33 year old Xu Zhengcong association He resigned and founded Daily Youxian. Xu Zheng's resume is bright and beautiful. At the age of 15, he was recommended to the Department of Mathematics of the University of Science and Technology of China. At the age of 28, he became the youngest general manager of Lenovo Business Unit. He is truly a "genius boy". During his work at Lenovo, he served as the head of the fruit division of Lenovo's Jiawo Group, and has rich experience in combining agriculture and the Internet. Because of this, Everyday Youxian has been favored by the capital since its inception.
Shanghai, the best food every day. Figure/Vision China According to the data, from December 2014 to December 2020, Youxian has obtained 10 rounds of financing every day. The investors include tencent Investment, CICC Capital, Lenovo Venture Capital Goldman Sachs The Group, Tiger Global Fund and other well-known institutions at home and abroad, with a cumulative amount of more than 11 billion yuan, are truly "capital darling".
Daily Youxian is not the first e-commerce company to eat "fresh" crabs. As early as 2005, a B2C e-commerce website named Yiguo opened the door to this industry. Then in 2012, "Original Life" website sold a total of 20 tons of oranges in five days due to a commercial copy of "Chu Orange Goes to Beijing", which caused a large disturbance in the capital market.
However, when it comes to the ability of Daily Youxian to make investors continuously spend money to follow up, it is the "front position" model it pioneered. In the early days of Xu Zheng's entrepreneurship, most of the fresh food e-commerce still followed the traditional e-commerce model to do the fresh food category. Daily Youxian proposed to establish a warehousing and distribution center within 5 kilometers from consumers, and the goods originally distributed throughout the warehouse and logistics center were preferentially distributed to the front warehouse.
In this way, after the user places an order on the mobile phone, the goods can be delivered from the front warehouse quickly, saving the journey and time, and delivered to the user within half an hour. Daily Youxian has thus solved the "last mile" problem of fresh food e-commerce, which has been sought after by young people who sit in offices for a long time and have no time to buy vegetables, and the front warehouse model has high hopes.
Figure/pixabay With the help of capital, Daily Youxian has expanded rapidly from Beijing to North, East, South and Central China. In the first half of 2018, the proportion of daily Youxian users in the fresh food e-commerce industry exceeded 50%; In 2019, the number of front warehouses of daily excellent fresh food exceeded 1500. In this year, the revenue of Daily Youxian also achieved a high growth of 69%, reaching 6 billion yuan, and GMV reached 7.59 billion yuan, ranking first in the industry.
However, the wealth story of Daily Youxian began to turn sharply from this, and plunged down like a roller coaster climbing to the highest point. While the scale of revenue expanded, Daily Youxian did not make a profit, but lost money year after year. In the three years from 2018 to 2020, the daily net losses of Youxian were 2.232 billion yuan, 2.902 billion yuan and 1.649 billion yuan respectively, and the accumulated losses reached 6.79 billion yuan.
The front warehouse mode is not only a player of Daily Youxian. In 2017, the previous failure in O2O project Ding Dong Buys Vegetables Taking advantage of the opportunity that Youxian has not entered the southern market every day, starting from Shanghai, it has successively marched into the Yangtze River Delta, Shenzhen, Tianjin and other places, and has also been pressed step by step with strategies such as operating fresh products, sacrificing gross profit rate, and increasing SKU.
In 2018, Ding Dong's revenue from buying vegetables was 1/6 of the daily excellent fresh food. But by 2019, Ding Dong's revenue from buying vegetables has reached about 60% of the daily fresh food. In response, Youxian Daily announced that it would spend 1 billion yuan to conquer the Shanghai market, but it did not shake Ding Dong's taste for food. According to the financial report, from 2018 to 2020, Dingdong's vegetable GMV soared from 740 million yuan to 13.03 billion yuan, with a compound annual growth rate of 319.2%.
Entering 2021, the loss situation of Youxian has not improved. In order to alleviate the operational pressure, Youxian has reduced the number of front positions every day from 1500 in 2019 to 625 in June 2021. At the same time, the number of monthly active users of Daily Youxian also dropped to the third place in the industry, with 7.89 million active users, about 780000 fewer than the end of 2020. Seeking to be listed has almost become the last lifeline of Youxian Daily.
On June 9, 2021, Youxian Daily and Dingdong Buying Food submitted their IPO prospectus to the Securities and Exchange Commission of the United States on the same day, and planned to be listed on the New York Stock Exchange and NASDAQ respectively. On June 25, Youxian rang the bell of NASDAQ every day, and the issue price was 13 dollars per share. Unexpectedly, the stock was broken at the beginning of the trading, with a closing decline of more than 25%.
By the end of the third quarter of 2021, the cash and cash equivalents held by Youxian every day were only 2.172 billion yuan, but its current liabilities were up to 3.223 billion yuan. Suppliers also began to suspend supply. Complaints about the freshness of the daily excellent products and poor service attitude were filed in Black Cat [Complaint Entrance] It is common on the platform. One domino after another fell down, pressing heavily on the daily Youxian.
What did Daily Youxian "do wrong"?
Daily Youxian is not without struggle.
In order to tell the story of listing well, Daily Youxian launched "(front warehouse instant retail+smart food market)" in June last year ✖ The "retail cloud" strategy is intended to become "the largest community retail digital platform in China". This is a more ambitious ambitious goal. There are nearly 40000 vegetable markets in China, with a total scale of more than 3 trillion yuan.
Figure/pixabay Wang Jun, the partner and CFO of Daily Youxian, once said that Daily Youxian could only occupy 6% - 7% of the market share in fresh food and FMCG at most if it continued to do pre position business. However, if we cut into the retail cloud and smart food market and launch platform businesses such as unmanned retail, we are expected to seize 25% or even 40% of the market share.
The Daily Fresh Food Program signed a long-term business contract with the vegetable market to transform the latter from a traditional vegetable market into a new smart market, provide users with SaaS service packages, help merchants achieve private domain management, and collect rents, annual fees, commissions, etc. However, to B has long been a red sea, and the advantages of Daily Fresh are not obvious. According to data disclosure, Daily Youxian has signed 58 vegetable markets in 15 cities with a revenue of 80 million yuan.
Earlier, Everyday Youxian tried different ways of playing with the help of social e-commerce, but all failed. In 2018, Daily Youxian launched Clouds In the "Daily Taobao" model, the purchase of gift bags can qualify for distribution, but with the tightening of supervision, this model came to an end. Later, Daily Youxian launched the "daily shopping" mode of "chop one knife", but the price after shopping is even higher than Daily Youxian.
This year's prefabricated food outlet, Daily Youxian, also did not miss. Industry insiders believe that the fresh food e-commerce is difficult to form scale effect due to the lack of standardized products; In addition, the low efficiency of cold chain transportation drives up the cost of supply, making it difficult to make profits. Prefabricated dishes are expected to break this situation and become a new growth point of the industry in the future. It is estimated that the scale will exceed 40 billion yuan in 2026.
At present, in addition to the daily excellent fresh food, brands such as Dingdong Buying Dishes, Hema, Guojuanshihui, etc. have all entered the business of prefabricated dishes. Daily Youxian tried its hand two years ago, inviting Xibei Jia Guolong Kung Fu Cuisine, Meizhou Dongpo and other brands to launch prefabricated dishes. However, it was not until the end of last year that Daily Youxian officially launched its own brand "Daily Signature Cuisine".
However, due to the sharp reduction in the number of front warehouses of Youxian every day, the number of products reaching the population is also limited. At the same time, Ding Dong, the rival, has been making great strides in buying vegetables. The number of front warehouses across the country has reached 1400, and the market penetration rate of prefabricated vegetables brands has exceeded 30%. At present, Daily Youxian has not established its brand influence in the field of prefabricated dishes, and the future situation is not optimistic.
Shanghai, the best food every day. Figure/Vision China Open source has no effect, but what about saving money?
Sun Yanlei, the vice president of human resources of Daily Youxian, publicly introduced that the company adopted the "12421 rule", which divided talent into five levels: A, B, C, D, and E. The top 10% and 20% are key training objects, the middle 40% are stable output talents, the bottom 20% are to be observed and promoted, and the remaining 10% will be eliminated from the bottom. Every day Youxian will conduct a performance appraisal every quarter, and then 10% of the last personnel will be "optimized".
However, after rounds of layoffs, Youxian has more leaders and fewer employees who can work reliably. The decline in the credibility of the leadership and the flight of competent employees have long been common in Youxian every day. The impact is not just within the company. After the promotion business stopped, subsidies and benefits were cut one after another, and front-line distribution staff needed to work longer than before to get the same income. What follows is resignation, insufficient transportation capacity, loss of users, and so on.
During the epidemic, the market demand rose all the way, but the daily Youxian went from bad to worse, and it was hard to control and schedule the upstream and downstream of the supply chain.
Previously, before the normal production and life in Shanghai had resumed, some netizens said that the experience of grabbing food on the Daily Fresh Platform was not very good. Not only was the price much higher than other fresh e-commerce apps, but it also depended on luck whether the food could be delivered smoothly after grabbing it.
Is fresh food e-commerce still a good business?
In 2015, Xu Xin, the "Queen of Venture Capital" and the founder of Today Capital, publicly said: "The one who gets fresh wins the world." Back to the current time line, most fresh e-commerce has fallen into the basic market dilemma. Is fresh e-commerce really a good business?
There are countless fresh food e-commerce businesses that have fallen (or are dying) over the past few years, whether it is the pre warehouse or the community group buying that has emerged later. The Squirrel Spell Business Department laid off employees, the dull radish went bankrupt and reorganized, Jijixian was suspended from business, the local life was declared bankrupt, and Shihuituan was exposed to be in arrears with suppliers
Daily Youxian has become a companion from the first in the industry, but Ding Dong, who comes from behind to buy vegetables, also suffers from serious losses. Public data shows that in the three years from 2019 to 2021, Ding Dong's vegetable sales revenue reached 35.316 billion yuan, but the loss reached 11.479 billion yuan. The more you sell, the more you get thanks. This is the bloody reality of the fresh food e-commerce industry.
In fact, since the beginning, the fresh food e-commerce has been very serious, Haitong Securities According to the research report of, if the fresh food e-commerce platform wants to be profitable, the single warehouse order volume needs to reach 1250 orders/day to achieve the break even. However, there are media reports that the daily average order volume of Youxian at a site in Shanghai can only be maintained at about 500, and the average customer price is only 40 yuan. Although the total revenue of Dingdong is higher than the daily excellent fresh food, the customer price is not as good as the latter.
The timeliness of fresh food, the matching degree of the supply chain, regional limitations and other issues restrict the development of the industry. Without an efficient profit model, fresh food e-commerce can only continue to drive traffic with subsidies and earn a lot from losses. These problems are especially obvious in the front warehouse model. The fresh vegetables with high loss and low profit are always the pain points of the front warehouse. Hou Yi, the founder and CEO of Hema, even asserted that "front warehouse is a false proposition for VC".
Some securities companies pointed out that the profit difficulty of the front warehouse model is that its gross profit is difficult to cover the performance costs, of which warehousing and cold chain transportation costs account for the most. On the one hand, because the construction of the front warehouse needs to set up a cold storage area and a normal temperature area, the construction and maintenance costs in the early stage are high. On the other hand, the front warehouse also needs to be equipped with a certain number of operators and distribution personnel, and the monthly fixed expenditure is also quite a lot. In 2020, the performance fee rate of daily Youxian and Dingdong vegetables will reach 20.72% and 35.7%.
The low gross profit rate and high performance cost of front-end warehouse of fresh food e-commerce have become the main reasons that limit their profitability. If you want to make a profit, the customer unit price and order quantity must reach a certain level before gross profit can cover fixed costs. In the general environment of normalization of epidemic prevention and control, intense competition in instant retail, heavy reliance on subsidy wars, and high human costs, it is not easy to achieve the above conditions, which is also the reason why the front warehouse track is generally losing money at present.
Figure/pixabay China Merchants Securities pointed out in the Advanced Warehouse Industry Report released at the beginning of this year that at present, the advanced warehouse track has transited from the early stage of horse racing enclosure to the stage of refined operation, and the construction of supply chain, warehousing, logistics and operation capability will be the key to win over competitors.
The analysis also believes that although the short-term profitability of the front position is difficult, the hope is still: "After the optimization of the model, we expect that the single position dimension of the front position is expected to be profitable in the second tier and above cities in 2023. At this time, the daily average single volume will reach 1000, the gross margin will be 24%, and the profit margin will be about 0.3%."
As mentioned in the Insight Report on Fresh Food E-commerce Industry released by Mob Research Institute, with the repeated fluctuations of the epidemic situation, the total transaction volume of GMV in the fresh food E-commerce industry is expected to exceed 400 billion yuan, and the platform penetration rate will increase to about 10% year by year. The industry has been shuffled, and the top 10 fresh e-commerce will cover community group purchase, store warehouse integration O2O and pre warehouse mode.
However, until now, it is still unknown who will fall behind next.
【1】. Fresh E-Commerce Industry Insight Report | Mob Research Institute
【2】. Youxian is facing delisting crisis after being listed for only one year | DoNews
【3】. 98% down in the first year of listing! Daily Youxian is facing delisting crisis, and it is also the last to eliminate 10% of its employees every quarter | Sina Technology
【4】. Capital loses confidence in Youxian Daily| Zero state LT
【5】. Advanced Warehouse Industry in Depth Report | China Merchants Securities
【6】. After burning 10 billion yuan in four years, the daily stock price of Youxian fell below the price of cabbage. Is the fresh food e-commerce a false proposition| Tencent News • Shenwang
【7】. Daily Youxian is on the verge of delisting: accumulated losses of more than 10 billion yuan, high performance cost problems to be solved | 21st Century Economic Report
