Economic Observer Network reporter Qian Yujuan On the evening of June 25, Beijing time, Daily Youxian was officially listed on the Nasdaq under the stock code “MF”, becoming the first stock of community retail digitalization.
In this IPO, Youxian issued a total of 21 million American Depositary Shares (ADS) daily (including 24.15 million shares of green shoes) at an issue price of US$13 per ADS, but its US stock opening price was only US$10.65/ The stock price fell by 18%. After that, the largest intraday share price decline expanded to about 30%, the lowest was 8.12 US dollars per share, and the closing price was 9.66 US dollars per share, a decrease of 25.69%. The market value was only 2.274 billion US dollars, compared with its original value. The IPO market value of 3.2 billion US dollars was set, which directly evaporated nearly 1 billion US dollars.
This fresh food e-commerce platform was founded in 2014 and moved to the capital market 7 years later. Xu Zheng, the founder, chairman and CEO of Daily Youxian, emphasized the company’s business model during the listing ceremony. Under the “Instant Retail + Smart Food Market) x Retail Cloud” model, Daily Youxian’s goal is to “become China’s largest community retail digital platform.”
Although the daily fresh food plan is planned, there will be a value market of more than ten trillion in the future community retail layout to be tapped. However, due to the pre-positioning model regarded by the platform as the core, it is like a sword of Damocles hanging over the head. When the company burns money and competes for market share, it becomes the key to profitability.
Fresh business
Huge losses are a topic that cannot be avoided for daily freshness.
The relevant data published in the Daily Youxian prospectus further confirms the judgment of Chen Hudong, a special researcher of the E-commerce Research Center of Net Economics, “Fresh food is an industry that burns money.”
The net loss in 2019 was 2.777 billion yuan, and it will narrow to 1.590 billion yuan in 2020. However, Daily Youxian not only did not take advantage of the momentum to further narrow its losses. The reporter saw that its net loss reached 610.3 million yuan in the first three months since 2021, nearly four times that of the same period last year.
Of course, under Chen Hudong’s words, losses have almost become a problem for most fresh food e-commerce platforms. According to the “e-commerce treasure” large e-commerce database, 88% of the over 4,000 companies that entered the fresh food e-commerce sector in 2016 lost money and 7% were huge losses. Except for 4%, which was flat, only 1% made a profit. .
Relatively speaking, Daily Fresh Food started early, but it is difficult to avoid this constraint that lies before its future development.
In May 2015, Daily Youxian pioneered the pre-warehouse model. By opening a small warehouse in the temperature-differentiated zone to a place covering 3 kilometers around the user, it provides consumers with a service of fast delivery of high-quality fresh and fast-moving goods.
However, when fresh food e-commerce platforms have increased investment in supply chain capabilities, user coverage, warehousing and distribution, etc., after launching track racing, the platform that uses the “front warehouse” model as its lifeline has become a high cost of fulfillment. The incentive to pull its profitability to loss.
Daily Youxian’s performance costs from 2019 to 2020 were 1.833 billion yuan and 1.577 billion yuan, accounting for 30.5% and 25.7% of the year’s revenue, respectively. As of March 31, 2021, Daily Youxian has opened 631 front-end warehouses in 16 first- and second-tier cities.
However, because the average customer unit price is 94.6 yuan, which is higher than any other pre-warehouse companies, the daily premium freshness performance fee rate will drop from 34.9% in 2018 to 25.7% in 2020, and the performance profit rate (gross profit margin minus performance fee) Rate) higher than the average level of other major players in the pre-positioning industry.
For the pre-warehouse model, Bao Yuezhong, a special researcher of the Net Economics E-commerce Research Center, collectively referred to its integration with warehouse stores and community group purchases as the “troika” on the fresh food track. The pre-warehouse model requires expenditures from warehouse rent, The fulfillment cost constituted by factors such as distribution staff salaries.
“It may be difficult to support the healthy development of the future by relying solely on the front warehouse.” Bao Yuezhong said.
Second growth curve
In Bao Yuezhong’s view, fresh food e-commerce companies such as Daily Youxian can match the store-to-home model in addition to the pre-warehouse model to “form a systematic model plan.” He believes that this systematic model path More development possibilities in the future.
It is reported that in order to further promote the full-link digitalization of the community retail industry, Daily Fresh will launch its smart vegetable market business in the second half of 2020, and help the vegetable market to upgrade to a small fresh-food community mall by renovating the venue and hardware and optimizing the combination of merchants.
In the above process of community retail, Daily Youxian also provides merchants with a full-process SaaS service package including electronic payment, online marketing, CRM tools and business planning.
According to data, as of May 31, 2021, Daily Youxian has signed operating agreements with 54 vegetable farms in 14 cities, and started operations in 33 vegetable farms in 10 cities, and the smart vegetable farm business has gradually become a daily Youxian’s second growth curve.
According to iResearch data, from 2020 to 2025, the size of the community retail industry is expected to increase from 11.9 trillion to 15.7 trillion, and the online penetration rate of community retail will increase from 20.9% to 45.5%, which means that In 2025, the scale of China’s digital community retail industry will reach 7.2 trillion.
Daily Youxian will naturally not miss this potential market. However, throughout 2020, community group buying companies, including Xingsheng Optimal, Meituan Optimal, Orange Heart Optimal, and Duoduomai, will accelerate their predatory market share. Chen Hudong saw that community group buying giants have invested heavily in low-cost subsidies, which is undoubtedly a “heavy force to suppress the border” for fresh food e-commerce companies represented by daily fresh food.
Chen Hudong believes that “traditional fresh food e-commerce users are facing a large number of diversions”, which makes fresh food e-commerce companies feel more pressure.
It can be seen that Daily Youxian launched its retail cloud business this year, and plans to target long-tail small and medium-sized supermarkets to provide digital capabilities for online and offline omni-channel retail, customer management, supply chain and contract performance management, thereby helping They quickly start and operate their own businesses digitally, in order to realize their own development path from vertical e-commerce to platformization.
The IPO broke on the first day and the market value has shrunk again, making the outside world pay more attention to how to tell the profit story after Daily Fresh, and whether the second growth curve business of community retail digitalization can help Daily Fresh in the industry market and capital market The two-way confidence boost of China has to be tested by time.Return to Sohu to see more
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