Is fresh food suitable for e-commerce? The answer is yes. But the current path seems to have gone astray. Recently, "fresh food e-commerce" has become an industry focus again, but this time it's not about "expanding territory" or "IPO bell-ringing", but about being summoned, debt-chased, closed, and downsized... Some industry media predict this is the beginning of its collapse, but in my view, although "defeat is certain", it's not that the path is wrong, but that it has gone astray. As an industry practitioner and heavy user of fresh food e-commerce, let me share a few personal feelings and thoughts. ****Who is using fresh food e-commerce? Due to my professional relationship, I came into contact with fresh food e-commerce very early, from the earliest RT-Mart's "Feiniu.com" to Alibaba's "Taoxianda" and a series of subsequent fresh food e-commerce and community group-buying platforms. In my view, "fresh food e-commerce" is essentially the supermarket version of the "physical e-commerce" of the past. No matter how high-sounding the concept is packaged by related platforms, it's just "online selection and delivery of supermarket goods". I believe this should be the common understanding of most users. Therefore, the reasons for users to use it are almost always two points: convenience (laziness) and affordability. So, the users of "fresh food e-commerce" also show a polarized trend: "young families" (advanced version of takeout users) and "elderly customers". If you live with elderly parents or "often go home to visit", you will definitely find that "elderly customers" (mainly aged 55-65) are heavy users of fresh food e-commerce. Take my parents as an example: currently, their fresh food shopping is mainly through two channels: community member fresh food supermarkets and fresh food e-commerce. Moreover, they have downloaded almost all major fresh food e-commerce platforms, "fully exploiting wool" every day, and they also have a "group" of almost all same-age neighbors, where daily topics are nothing else but this, and they take pleasure in it. Actually, for this group, it's not just about saving money; it's more of a pleasure or a social topic. Retired at home, they have the most time, so strolling in supermarkets is like a walk, more like exercise. Therefore, for anything they can buy at nearby supermarkets (at the same price), they will choose "offline strolling shopping", leaving fresh food e-commerce only to be "exploited for wool", and it's "group wool exploitation". In this sense, as children, we should actually thank these fresh food e-commerce platforms, because they have indeed enriched the boring time of our parents' generation to a certain extent, providing much material for conversation, surprises, and joy. But as for loyalty, it's almost nonexistent. Once the price advantage is gone or "not significant", they will abandon it without hesitation (viewing it as "occupying memory"), because at that time they pay more attention to health (strolling in supermarkets). Young family customers mainly use it for "convenience", mostly because of "laziness", and some because they really don't have time. How much does price factor influence? Personally, it has some influence, but not in terms of "wool exploitation", but in terms of "splitting orders", mainly because of "free delivery for orders over a certain amount", so they pay more attention to special offers to split orders. Therefore, for fresh food e-commerce, doing these two points well is enough. But looking at these two points, they both mean huge cost investment and low "moat", unable to form core competitiveness. ******"Burning" without end** Checking relevant materials, it's indeed as expected: "fresh food e-commerce" is not "ordinary money-burning", and some are "burning without end". According to relevant media and financial reports: Dingdong Maicai's 2021 annual report shows a net loss of 6.429 billion yuan, expanding more than twice year-on-year, with cumulative losses over the past three years reaching nearly 11.5 billion yuan; Miss Fresh's cumulative losses from 2018 to the first three quarters of 2021 reached 9.9 billion yuan, with losses in the first three quarters of 2021 alone exceeding 3 billion yuan. But can such money-burning burn out a future? Based on the above analysis, "it's difficult".

  1. Its users are not "loyal" at all; they come either "for profit" or "for laziness", with seemingly strong purpose but actually not that strong, so there is almost no brand (platform) awareness;
  2. Fresh food spoilage is really high, and gross margins are really thin, even more so than other supermarket categories, coupled with higher labor and other investments on e-commerce platforms, costs are actually higher;
  3. Community supermarkets, convenience stores, category stores, etc. are becoming more diverse and abundant, seizing market share;
  4. The "information asymmetry and value" of fresh food categories is extremely low, and there is not much "platform effect" (can be compared with car maintenance categories like "Tuhu");
  5. "Fresh food e-commerce platforms" are to some extent in a competitive relationship with "takeout platforms", one rises while the other falls, and as young families become lazier, the proportion of "cooking at home" may decrease, while "takeout" proportion increases. Takeout also has errand services, so "fruit categories" can also be purchased on takeout platforms. In summary, I am personally somewhat pessimistic about whether fresh food e-commerce can "burn out a future", and I predict that "once it stops, it dies". Especially with the rapid contraction of the capital market (look at recent Chinese stock market trends), once the "milk" is cut off, it may collapse suddenly. But for consumers, there is actually no impact, which is the biggest problem and worth pondering. **The Way to "Break the Deadlock" Is fresh food e-commerce doomed? Not necessarily. It is actually very similar to the core of takeout platforms: as long as "people are still lazy", it has a market (but not too lazy; if people are too lazy, then it will be completely replaced by takeout). But there is a question that relevant fresh food e-commerce platforms must deeply consider: can it ultimately replace supermarkets or their fresh food categories? My answer is impossible. Besides supermarkets having a fuller range of categories, more importantly, supermarkets are currently the most basic and standard anchor stores for commercial projects. With the continuous densification of various shopping centers, supermarkets can only open more and closer (to consumers), and the public still needs to visit commercial projects and always go to supermarkets, which will consume a lot of demand; On the other hand, strolling in supermarkets is also a family life pleasure, especially for the "family customers" corresponding to "fresh food e-commerce". If they can cook at home, they are naturally not too lazy. If the above reasoning is correct, then the positioning of fresh food e-commerce platforms should be an extension and supplement of offline physical stores, that is, the "supermarket online ordering and delivery version" as commonly understood, not an independent platform. If they attempt to make it an "independent kingdom", it is almost a dead end. So, for fresh food e-commerce platforms, the first way to break the deadlock is to rely on offline physical stores for survival and development, such as the Taoxianda model, which puts surrounding supermarkets online; or Hema, where offline stores are front warehouses and traffic pools. But there is a core premise: the foundation is offline physical stores, not online platforms. Another way to break the deadlock is the "ride-hailing and group-buying path", that is, eventually only one remains, forming a relative monopoly, then relying on huge traffic demand to force upstream suppliers to offer better prices, coupled with deepening the "membership model" (stored value), forming a capital pool to maintain its "moat" (price advantage). But under the current national "anti-monopoly" trend, this path seems difficult to follow. On the other hand, due to the weak capital market, whether the backing capital can hold up is a big problem. I personally predict that "fresh food e-commerce platforms without a large number of offline physical stores as support (and with offline as the foundation) will almost all be integrated and reshuffled", with no room for survival or possibility of survival. When the tide recedes, we know who is swimming naked. The "capital tide" has begun to recede, and "naked swimmers" will emerge in large numbers. Rather than going all in, it's better to "stop losses in time". I think this is the voice of all "capital investors" now! Hope it provides some inspiration. Source: New Retail (ID: ixinlingshou) Author: Wu Mingyi _**-END-_