The story of Dai Luobo, why does it have many shadows of ofo? Under the influence of the epidemic, many fresh food retail platforms have seen a 300% increase in orders. In Hefei, Fresh Legend even thought it might achieve its profit target ahead of schedule. However, this wave of nationwide panic buying of vegetables did not benefit everyone in this track. Just yesterday, news came from Hefei that the local fresh food retail platform Dai Luobo entered legal reorganization proceedings. On March 11, the Hefei Intermediate People's Court published a "Bankruptcy Announcement" in the media, stating that it had accepted the reorganization case of "Dai Luobo" (Anhui Caicai E-commerce Co., Ltd.). The announcement stated that the Hefei Intermediate Court, based on the application of Anhui Caicai E-commerce Co., Ltd., ruled on January 23, 2020 to accept the reorganization case of Anhui Caicai E-commerce Co., Ltd., and on February 13, 2020 designated Shanghai Jintiancheng (Hefei) Law Firm and Anhui Gaoteng Investment Management Co., Ltd. as joint administrators for Anhui Caicai E-commerce Co., Ltd. According to local media reports, a senior executive of the company said, "Consumers can rest assured that although we have applied for bankruptcy reorganization, our operations have not been affected. Currently, 174 stores are still open for business." Users can still place orders online for groceries, and the balance in their accounts can continue to be used according to previous rules. The question is, with such diverse shopping channels available now, would consumers insist on trusting a company that has entered "bankruptcy reorganization"? Like ofo back then, shared bicycles still exist on the streets today, but the era of ofo's yellow bikes is over. Some say this epidemic saved fresh food retail, especially those startup companies. This epidemic allowed fresh food retail platforms, which were suffering from profitability scrutiny, to gain massive traffic almost at no cost. How much they can capture depends on their own abilities. But unfortunately, Dai Luobo still died in the spring. Why? **-01- The difference between trust and loyalty Fresh food retail is not easy; it's hard work, with thin margins and many control points. If you're not careful, you'll lose money. This is a premise that needs no explanation. But compared with tourism, cinemas, and many street-side restaurants, the epidemic has proven that no matter how difficult fresh food retail is, it must survive, and someone will definitely survive, because it's a rigid demand. Compared with fresh food, tourism and cinemas are almost industries that can be strategically abandoned. What does it matter if fresh food is a bit harder? Of course, it's not hard to find joy in hardship; what's hard is not being recognized or remembered by consumers. A common saying is that fresh food retail has no customer loyalty. The most frequently cited and typical example is the one given by Wang Wei, the head of Fresh Legend: consulting firms told Fresh Legend that consumers can buy groceries from up to 16 places, proving that consumers have no loyalty at all. Here we need to look at what the concept of loyalty is. Is it like a couple's constancy and unwavering faithfulness? That's too demanding for consumers. This isn't asking for grocery shoppers; it's asking for fans of a celebrity. Generally speaking, loyalty essentially reflects consumption frequency and trust relationships. Moreover, the word loyalty is more suitable for products. A typical loyalty competition is when both Pepsi and Coca-Cola are on the shelf, and you have to choose one; or when both McDonald's and KFC are at the same intersection, which one do you choose? The demand in fresh food purchase scenarios is too complex. For example, an elderly person buys groceries at the community fresh food store near their home every day. Today, their grandson insists on eating Wuchang fish, but the store near home doesn't have fish, so she has to go to another store. However, that doesn't mean she no longer trusts the store near home. So, when we talk about loyalty, we are often essentially talking about trust. Back to the problem of Dai Luobo. Looking at Dai Luobo today, it's obvious that Dai Luobo's attitude towards consumers is opposite to that of many merchants. Many front-warehouse models are criticized for not being profitable, with accounts not adding up and relying on subsidies. But regardless, these companies, whether using their own money or investors' money, give benefits to consumers. Although it's just small advantages, who doesn't like small advantages? So consumers will remember and form habitual purchases. But what about Dai Luobo? To this day, it still owes consumers money. In local media reports, almost all headlines and articles mention how consumers who have prepaid can get refunds. This scene is so similar to ofo back then! In this situation, talking about loyalty and trust with consumers is delusional, whether you're in the fresh food business or not. Fresh food retail is actually a bit like the home appliance business that Suning did back then. It's not only an industry with a complex supply chain but also a strong service and experience industry. If you can't provide service experiences that exceed expectations, and instead think about playing financial product tricks first, you indeed deserve to be buried. **-02- Choice of model Although we always say that in the fresh food industry, we can't judge heroes by model. Models are like tanks and armored vehicles. In a duel between a tank and an armed armored vehicle, who wins? Of course, it depends on the driver's ability and experience. However, some models were not thought through from the beginning. During this epidemic, the self-pickup model became popular. Various smart self-pickup cabinets began to appear faster. Has anyone persisted in this track? Shixing Fresh Food is one such example. Although Shixing Fresh Food has always had a low profile in the industry, it has lived at its own pace for 8 years. Although its layout is still concentrated in East China, it has its own way of survival. Does the self-pickup model have defects? Yes, it does. Whether fresh food procurement can be completely classified as planned demand is still controversial in the industry. Or, many problems in the fresh food industry have no standard answers and cannot be generalized. That's why the fresh food track is so diverse, with different models like store-based, home delivery, and self-pickup. In different cities, the mainstream formats also differ. For example, in first- and second-tier cities, why are there so few community fresh food stores, while the front-warehouse model is mainly concentrated in first- and second-tier cities? This is inseparable from the city's population structure, living habits, and consumption habits. Of all the water, take one dipper; the same applies to fresh food retail. What's feared is that entrepreneurs are greedy, trying every model they see, but never establishing their own core competitiveness. What is the essence of the Dai Luobo model? What is the most unique and irreplaceable aspect of this model that consumers need? Now it seems that this model is a bit neither here nor there. It's called self-pickup, but it's not based on residential communities; it has stores, but lacks the richness of stores. The epidemic is actually a test of extreme scenarios. When one type of behavioral demand is suppressed (going out) and another demand is infinitely amplified, we see who can handle it. Because many people's activity range is limited to their residential communities, many stores have seen a sharp decline in foot traffic. However, community fresh food stores and supermarkets can still secure customers after quickly launching mini-programs, because their usual supply chain capabilities have already been accumulated. For companies like front-warehouse models that do home delivery, after the initial chaos, the advantage of delivery capacity can also be demonstrated. In other words, from the business chain perspective, you either stand at the source (upstream supply chain) or at the end closest to consumers (community entrance). This is where competition is fiercest, but when the big wave comes, it's also the safest place. Standing in the middle is the most dangerous. These might be the two inspirations that the story of Dai Luobo can leave behind. Source: Business Teahouse (ID: businesscoffee) Author: Hu An