On the evening of June 25, Daily Youxian was officially listed on the Nasdaq under the stock code of “MF”, becoming the first stock of community retail digitalization. Prior to this, the daily scheduled issue price of Youxian was US$13/ADS, which dropped 18% to US$10.65 at the opening. As of the close of the day, the daily share price of Youxian was reported at US$9.66/ADS, a 25.69% drop from the issue price, and the total market value was US$2.274 billion.
It is reported that Dingdong Maicai, who competed with Daily Fresh for the “first share of instant fresh food”, updated its prospectus on the same day as Daily Fresh after submitting the prospectus on the same day on June 8. It is worth noting that only three days after the update of the prospectus, Daily Youxian was oversubscribed, ended bookkeeping early, and was the first to land on Nasdaq.
However, Daily Youxian did not claim to be the “first share of instant fresh food”, but declared that the company has become the “first share of community retail digitalization.” It is reported that in March of this year, Daily Youxian has already proposed the development strategy of (A+B) x N, aiming to build itself into a community retail digital platform.
Xu Zheng, the founder, chairman and CEO of Daily Youxian, also stated at the listing event that under the vision of “becoming China’s largest community retail digital platform”, Daily Youxian is using “(front warehouse real-time retail + smart vegetable market) with the vision of “becoming China’s largest community retail digital platform.” )x retail cloud” model, multi-dimensional deep cultivation of community retail.
It can be seen that the daily fresh food positioning after listing is no longer fresh food e-commerce and fresh food retailers, but community retail enterprises. Its goal is to enter more cities and more business formats in China through multi-business layout. The digital platform empowers supermarkets, vegetable markets, small shops and more in the community retail sector. It is reported that the income of the Daily Youxian Smart Vegetable Farm project mainly comes from three aspects, namely the rent charged to individual merchants, the annual fee for SaaS products, and the commission charged according to the merchant’s e-commerce business GMV.
Chen Hongliang, an investor in the Angel Wheel of Daily Youxian and a partner of Yuanjing Capital, believes that the digitalization of community retail has a long slope and will become one of the markets with the largest increase and the fastest growth rate in the future.
Although community retail digitalization has a bright future for the market. However, the pre-warehouse model of fresh food e-commerce, which is regarded as the core by the platform, is still controversial, and the problem of non-profitability remains to be solved.
Judging from the financial report data, 2020 is the third consecutive year of daily losses for Youxian. From 2018 to 2020, the company’s cumulative net loss was as high as 6.79 billion yuan. After entering 2021, the company’s loss in the first quarter reached 610 million yuan, a further expansion compared to the same period last year.
In addition to continuous losses, Daily Youxian’s cash flow has also been in short supply in recent years. According to data disclosed in the prospectus, from 2018 to 2020, the company’s net cash flow generated from operating activities is negative, which are 1.724 billion yuan, 1.967 billion yuan and 1.612 billion yuan, respectively. After entering 2021, the company’s shortage of funds has even further intensified. The net cash flow generated from operating activities in the first quarter reached -590 million yuan, which has doubled from -227 million yuan in the same period last year.
In addition, according to information on the official website of the well-known online consumer dispute mediation platform “Dian Su Bao”, in 2019 and 2020, Daily Fresh Food ranked first on the fresh food e-commerce complaint list. From the beginning of 2021 to the present (as of 6 March 21) is still in the top three on the list. The company’s complaints mainly included issues such as refunds, product quality, and false promotions. In the rating list, the company was also rated as “not recommended to place orders.”
In recent years, the fresh food track has become increasingly crowded. In addition to Dingdong, who submitted the prospectus, the leading fruit retailers, Baiguoyuan and Hema Xiansheng, also tried to get a piece of the pie. This will undoubtedly be a huge challenge for Daily Fresh, which is still in a loss-making situation, short of funds, broke on the first day of listing, and the market value has shrunk again.
How to tell the profit story of Daily Fresh in the future, and whether the diversified layout can help Daily Fresh’s two-way confidence in the industry and capital markets remains to be tested.
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