When winter comes, remember to put on a warm coat. But where is everyone's coat? In recent days, the price of Sunshine Rose grapes in the market has been surprisingly low. Once known as a "fruit assassin" at 300 yuan per bunch, the price has now dropped to 10 yuan per jin, prompting netizens to exclaim that they haven't finished the 50-yuan-per-jin grapes in their fridge, and the price has already fallen to 10 yuan. Apart from Sunshine Rose grapes, this summer, due to a large concentration of fruit on the market and oversupply, prices of many fruits have declined. Data shows that melon prices have dropped by 40%, watermelon by 30%, and Kyoho grapes by more than 16 percentage points. Multiple orchard farmers told Ling Shou that this year's fruit market conditions are generally not good, with shipment prices at historical lows, but costs remain high, and prices for many single-category fruits have even halved. The significant drop in fruit prices has not allowed consumers to transition from "can't afford fruit" to "fruit freedom." Instead, many supermarket purchasing staff say that fruit sales this year are lower than in previous years. Previously, a batch of fruit had a turnover period of 1 to 3 days, but now it might take a week to sell, leading to large-scale unsold inventory and forced price reductions. The entire fruit and vegetable supply chain is a complete closed loop. Poor sales at the terminal end inversely affect the income, shipment volume, and profits of farmers in the production areas. 01 Fruit and Vegetable Shipment Prices at Historical Lows The retail prices of fruits, vegetables, and meat are influenced by supply and demand. When supply exceeds demand, prices fall; when demand exceeds supply, prices rise. Every summer, a large number of similar fruit products flood the market, exceeding consumer demand, leading to unsold inventory and continuous price declines. However, the production volume in the production areas has not decreased, causing fruit accumulation. Additionally, as more categories and varieties of fruit reach harvest season, these factors force fruit and vegetable suppliers to lower prices to promote sales. A peach supplier told Ling Shou that this year, prices in both wholesale markets and supermarket channels are very low. Besides competition, the main reason is that consumers lack purchasing power, ultimately leading to unsold high-end fruits. From a macro perspective, the overall economic situation has shown a downward trend. According to data from the National Bureau of Statistics, from January to July this year, total retail sales of consumer goods reached 24,630.2 billion yuan, a year-on-year decrease of 0.2%. Among them, retail sales of consumer goods excluding automobiles reached 22,133.2 billion yuan, an increase of 0.2%. In July, consumer spending only grew by 2.7%, lower than the previously predicted 5%, and this was after car purchase subsidies stimulated vehicle sales; excluding vehicle consumption, growth was only 1.9%. The main reason for insufficient consumption is that consumers have no money in their pockets, which forces a shift in consumption mindset to "try not to buy things that are not necessary." Therefore, spending on high-end fruits, which are indicators of quality of life, is inevitably reduced, making unsold non-essential fruit categories even worse. On the consumption side, there is unsold inventory, and at the same time, they must face recurring epidemics and increased uncertainty. A prune supplier told Ling Shou that they originally predicted good income this year because prunes sold very well last year, but suddenly there was an epidemic in Xinjiang, and many routes have been sealed. If transportation routes continue to be sealed, very few prunes will reach the market this year, leading to high terminal prices. Currently, it is the season for large-scale fruit picking, and sudden epidemics are very painful for fruit farmers. Because picking requires a lot of manual labor, if the epidemic is severe, even with money, they cannot hire workers. But fruits cannot stay on the trees indefinitely and need to be processed in time. In the past two years, road closures due to the epidemic have made it difficult for farmers to carry out production and labor. The shortage of labor in fruit planting and management has delayed farming seasons, directly affecting the quality and yield of later fruits. Additionally, traffic controls have delayed the transportation of agricultural materials, creating a dilemma in some areas where "materials cannot come in, and fruits cannot go out." Over time, fruit farmers and dealers in urgent need of "recovering blood" have been competing to lower prices and expand sales. This method of exchanging price for volume cannot change the situation of farmers' losses. Coupled with unsold fruit and peak-season competition, fruit prices have continued to fall, but without bringing "satisfactory" sales, consumer demand remains weak. 02 Community Group Buying as the Main Shipment Channel "The price of fruit shipped to supermarkets is particularly low, and the shipment volume is also lower than in previous years." The aforementioned peach supplier said that especially in third-tier cities in provinces like Hunan and Hubei, the decline is very sharp. Northern markets like Beijing and the Northeast are relatively stable, but supermarkets and e-commerce remain the main sales channels, with community group buying growing the fastest. After the epidemic, many suppliers have clearly felt that fruit sales have shifted massively from offline to online. Various social platforms, group buying, and even high-value, low-frequency promotions attract consumers. Additionally, many fresh products have entered "internet celebrity" live streams and origin live streams, diverting some offline fruit sales channels. A banana supplier told Ling Shou that community group buying shows regional characteristics. Even in the same first-tier city, order volumes vary greatly. In the Beijing market, community group buying orders are very poor, but Shanghai consumers can even buy high-end fruits on community group buying platforms. This may be because the previous Shanghai epidemic cultivated the shopping method of community group buying, and Shanghai residents have strong trust and dependence on it. At the same time, this supplier said that there are many techniques for doing fruit and vegetable business on community group buying platforms. The most important thing is that you can only focus on volume, not on the profit per order. For large-circulation goods, the profit per order is only about 5-8 cents. For example, a pack of 3-4 bananas, after arriving at the warehouse, needs to be properly packaged, including labor and consumables. Labor costs are 150 yuan per person per day, with about 20 people hired, divided into 5 groups for assembly line packaging. The packaging method involves wrapping bubble columns around the outside of the bananas to prevent collision during transportation. The cost of packaging one pack of bananas is 30 cents. After packaging, it is delivered to the community group buying platform, costing another 10 cents. The total delivery cost increases by about 50 cents. If the original cost of a pack of bananas is 2 yuan, plus the delivery cost of 50 cents, the final price can only be 2.55 yuan per pack. In the supply chain, the profit is only 5-8 cents, and only by controlling it within this range can they supply to community group buying platforms, have a supply price advantage, and achieve nearly 10,000 orders per day. In recent years, not only have various categories of fruit flooded the market, causing diversion, but to seize the initiative, fruit merchants have downgraded their fruits, and companies have engaged in price wars. However, the selling price of fruits on the market also inversely affects the production end, influencing purchase prices. For fruit farmers, besides selling at low prices to purchasers, they have also started retailing directly to C-end consumers. The aforementioned peach supplier told Ling Shou that they will shift their business focus from B-end to C-end. Mainly because after trying to enter the Shanghai community group buying market in June this year, they found that order volumes are relatively large, and the average order value is double that of shipping to supermarkets. At the same time, they can control losses themselves. Many fruit and vegetable farmers have also tried selling through live streaming online to save seasonal fruits, minimize losses, and diversify sales channels. However, selling fruit categories online relies heavily on cold chain systems. If the loss rate of fruits is not reduced, online sales are unlikely to become the main channel for fruit sales. Moreover, the current cold chain logistics conditions and costs in China are difficult to meet demand. 03 Future Predictions Recently, many people's social media feeds have been flooded with a post by Huawei founder Ren Zhengfei on the company's internal forum, stating that the next decade will not be good globally. He believes that Huawei should change its thinking and business policy, shifting from pursuing scale to pursuing profit and cash flow, to ensure survival over the next three years. This statement directly affected the stock market, and netizens commented: "An unlisted company calls for survival, and 4,400 listed companies collectively can't survive." In fact, Ren Zhengfei is not the only one shouting such slogans. Last Friday, Gome's Huang Guangyu sent an internal letter. Gome also needs to hibernate and focus resources to survive. Before that, Midea Group Chairman Fang Hongbo also said, "The next three years will be an unprecedented cold winter." "Survive, survive with quality, and close marginal businesses if necessary" is also a true portrayal of the entire retail industry in the first half of the year. Some front-warehouse and warehouse stores once favored by capital have disappeared under the watchful eyes of competitors. Hypermarkets continue to close endlessly, and some players in community group buying have vanished. In the earnings warnings released in recent days, "expected losses" are the main theme for most retail companies. Among them, Renrenle suffered the most severe losses, with expected net losses of 220 million to 270 million yuan; Beijing Jingkelong expects net losses of 12 million to 15 million yuan. Although they still attribute losses to the long-term impact of repeated epidemics, significant changes in consumer habits, continuously declining consumer spending power, and the diversification of sales channels, which have caused serious diversion for large chain supermarkets, leading to reduced revenue and gross profit, these factors have persisted for multiple quarters and seem irreversible. The anxiety of supermarkets naturally transmits upstream. Suppliers are aware that market channels are ever-changing, and relying entirely on traditional channels is no longer viable. "Previously, the channel focus was on the B-end supply chain, supplying products to supermarkets and chain fruit stores nationwide. But this year, there has been a huge change, and we have started trying to supply to the C-end. We predict that next year will continue this trend, and the shipment volume for the C-end supply chain will double, which is a guarantee for shipment volume," the aforementioned peach supplier told Ling Shou. He also said that the current economic situation is not suitable for excessive investment in high-end fruit products, and they will adjust their product offerings in the future. Based on this year's climate issues in the south, many fruit and vegetable suppliers also predict that from the second half of the year to the Spring Festival, agricultural and fruit prices will rise. Because of this year's drought, crops like corn and rice will see reduced yields, and fruits will also be affected, increasing planting costs. Coupled with high inflation and consumption layout, the consumer confidence index will continue to decline, and consumer spending power may worsen. Perhaps the future will indeed be as Ren Zhengfei judged. So when winter comes, remember to put on a warm coat. But where is everyone's coat? Source: Ling Shou (ID: lingshouke) Author: Shili