Continuing to pour money into commodities research and development, the ding-dong buy vegetables in win into the supply chain

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On July 28, Daily Youxian announced that it would adjust its business and organization and suspend the "30-minute speed delivery" service.Dingdong Maicai, which was listed on the same day as Daily Youxian and is also in the front-loading model, achieved profitability in Shanghai at the end of last year, and the current loss continues to narrow.

A number of industry research institutes released reports that commodity and supply chain capabilities have become the key points that determine the success or failure of fresh food retail enterprises.The turning point of Dingdong Maicai's leadership is that in August 2021, Dingdong Maicai announced a strategic adjustment: from "scale priority" to "efficiency priority", taking commodity power as the first driving force for development, mainly focusing on upstream supply chains,Make a deep moat.

Compared with Daily Fresh, Dingdong Maicai pays more attention to order volume and efficiency, and strictly controls costs and supply chains.In terms of product richness, Dingdong Maicai SKUs are relatively rich, and there are fewer immediate delivery categories after daily premium fresh products arrive the next day.In terms of hardware investment, the front-end warehouse of Daily Youxian adopts the "self-operated + franchisee" model, while the front-end warehouses of Dingdong Grocery are all self-built and self-operated.

Reflected in the financial report, it means that the R&D cost of Dingdong grocery shopping and the input cost of front-end warehouse are higher.

According to the 2022 Q1 financial report data, the R&D expenditure on Dingdong Maicai products rose sharply by 49.5% to 233.9 million yuan.Dingdong Maicai has continued to make efforts in "doing more and deeper" and has established 10 food R&D and processing plants across the country.The profit of self-operated products is higher. According to the research of Longqiao Dolphin Investment Research, the pre-voucher gross profit rate of Dingdong Shopping’s own brand last year was as high as 33.8%, which was much higher than the 26% pre-voucher gross profit rate of the overall commodity in the same period.

At the same time, Dingdong Maicai also invested more resources in the infrastructure construction of the supply chain.It is understood that Dingdong Maicai already has about 60 city sorting centers and nearly 1,400 front warehouses. In 2022, it will continue to build three large-scale and modern fresh food complexes to achieve lower procurement costs for the company., more market-competitive sales price and larger sales scale.The improvement of supply chain efficiency has led to the continuous reduction of the distribution cost of Dingdong Maicai, and the continuous improvement of profitability.

Dingdong Maicai optimizes its gross profit margin by going deep into the supply chain.In contrast, Daily Youxian pays more attention to business expansion.This also makes the gap between the gross profit margins of the two grow wider and wider. Daily Youxian's gross profit margin for the whole year of 2020 is almost the same as that of Dingdong, but there will be no significant improvement in 2021 until it no longer announces financial reports.

Dingdong Maicai CEO Liang Changlin once said, "With the further development of Dingdong Maicai's product power, the unit price of customers will increase.The fixed costs of the front-end warehouse will continue to be diluted, and the efficiency of order fulfillment will be greatly improved, thereby enabling more net profits.”

The iResearch report shows that China's fresh food retail market is expected to reach 6.8 trillion yuan in 2025.During the epidemic period, consumers have strong demand for online purchase of fresh food, and users' trust in the fresh food e-commerce industry has deepened. Compared with 2021, 65.4% of consumers will increase their consumption frequency and 51.6% of consumers in 2022.increase, it can be seen that consumer demand is strong.

Deepening the supply chain, expanding the proportion of direct purchases from the origin, and promoting the recovery of local consumption have become the current direction of fresh food e-commerce.In 2021, Dingdong Shopping will launch the "Lucid Waters and Lush Mountains" program to help more agricultural products open up the consumer market.As of the third quarter of 2021, the direct mining rate of Dingdong Maicai has reached 79.1%.Peers such as Pupu Supermarket and Meituan Shopping have also taken similar measures.

In July 2021, the Ministry of Commerce and others issued the "Guidelines for the Construction of Urban Convenience Living Circles in Fifteen Hours", proposing that vegetable markets and front warehouses have become basic security formats that need to be prioritized.Under the normalized management of the epidemic, consumers' shopping needs have increased, and they have higher requirements for delivery speed and efficiency. Fresh food e-commerce has become an important part of ensuring residents' daily life, playing an active role in driving the local economy and promoting consumption.