Fresh front warehouse asset-heavy model leads to continued tension in the enterprise capital chain

Fresh front warehouse model is mainly "urban sorting center + community front warehouse" of the second level of distributed warehousing system. Each front warehouse, is a small and medium-sized warehousing and distribution center, the headquarters of the central warehouse only need to supply the front warehouse. Consumers order, the goods from the nearby warehouse in the front of the shipment, can be realized within 0.5-1 hours delivery. Online order, offline instant delivery of fresh front warehouse mode, largely improve the distribution efficiency, reduce the fresh goods loss, and improve the consumer experience, to meet the needs of consumers fast and instant purchase of fresh food.

The biggest difference between the fresh front warehouse mode and other fresh food e-commerce modes is that it establishes a front warehouse with an area of about 100 square meters in a residential area of about 1.5km. The front warehouse transit, rent (warehouse), packing (warehouse management), distribution (rider) and other operations and links comprise a high fulfillment cost expenditure, resulting in the fresh food front warehouse mode of fresh food e-commerce platform capital chain continues to be tense. Taking Dingtong Buying Food as an example, Dingtong Buying Food's fulfillment expense rate is 49.92%, 35.68%, and 36.14% in the three years of 2018-2021, respectively. Dingtong Buying Food's fulfillment costs have risen slightly after the listing, but the overall situation is still quite stable. However, this also confirms that the business growth of fresh front warehouses does not bring about a reduction in fulfillment costs.

Representative companies in the industry face persistent losses

The value of goods in the fresh food industry is generally low, and gross profit margins are also low, while the front warehouse fulfillment costs are too high, which ultimately led to Dingtong buy groceries, Daily Youshui is still continuing to lose money. From the financial data, the daily fresh and Dingtong buy vegetables each year's revenue is growing, but the net loss is also growing. The continuous growth of the platform business, did not produce scale effect, did not stop the loss situation, but the bigger the more losses.

Fresh front warehouse still have a chance?

--Close to the target customer Return to normal profitability model

Fresh is non-standardized, while the localization and personalization characteristics are obvious, it is difficult to form a national network effect. Therefore, the fresh market traffic acquisition is relatively slow, and can not quickly form a scale effect and network effect. How to obtain traffic at a lower cost is a problem that every fresh food e-commerce player has to think about. At present, purely relying on the power of capital to smash the market, relying on subsidies to attract consumers, do not bring solid user stickiness. Whether it is the daily fresh layout of intelligent vegetable farms and retail cloud business, or Dingdong buy food evacuation Zhuhai, Chuzhou, Tangshan three cities, in fact, are trying to get closer to the target customers (first and second-tier urban white-collar consumer population), to reduce the long-term losses caused by disorderly expansion, in order to return to the normal business model of profitability.

-- On behalf of the enterprise to turn the helm to raise profits

Industry players such as Daily Fresh, Dingtone grocery shopping, etc. through other ways to enhance profits to reduce the pressure of corporate losses.

-- For more research and analysis of this industry, see the China Fresh Food E-commerce Industry Solutions and Investment Strategy Planning Report