The monthly active users of the APP exceeded 10 million! Daily Youxian user growth tips!

On October 28, Trustdata, a mobile big data monitoring platform, released the "China Mobile Internet Industry Analysis Report from January to September 2019". There is a set of interesting data in this report:

MissFresh leads the fresh food e-commerce market, with monthly active users on its APP exceeding 10 million!

Data source: Trustdata

The report also pointed out that after years of industry evolution and reshuffle, the fresh food e-commerce sector has gradually shown a "631" pattern. In the first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, MissFresh's users account for nearly 60%, followed by HEMA Fresh with 30% , and other players share the remaining 10%.

Data source: Trustdata

Judging from the overall data, the current fresh food market structure has been determined, the Matthew effect is becoming increasingly prominent, and "631" also shows that MissFresh has become the absolute leader in this field.

So, as a company that has been in business for less than 5 years, how did MissFresh survive the fierce competition and grow into an industry "unicorn"? What is the growth logic behind its success?

Next, let’s take a look at it together.

1. Redefine “people, goods, and venue”

In the new consumer era, "people, goods, and venues" are the three growth factors that cannot be avoided:

1. Consumer groups

It used to be said that "those who go online don't buy groceries, and those who buy groceries don't go online." The Internet consumer group born in the 1980s and 1990s have not yet assumed the responsibility of family consumption, while those born in the 1960s and 1970s who are truly responsible for daily family expenses have not yet developed the habit of buying fresh food online.

But times are different now. In the "China Mobile Internet Industry Analysis Report from January to September 2019", Trustdata also pointed out that women account for 70% of MissFresh users, and users aged 18-40 account for more than 80%. The consumption habits of these main users have already been formed. In addition, the number of users over 40 years old has also shown a rapid growth trend, up 5% year-on-year, which is one of the new growth drivers for fresh food e-commerce in the future.

Data source: Trustdata

It can be seen that people born in the 1980s, 1990s and even 2000s are gradually replacing those born in the 1960s and 1970s to become the main consumers of fresh food. On the other hand, people born in the 1960s and 1970s were also connected to the Internet through WeChat. Faced with users of different age groups, MissFresh urgently needs to find a new traffic entrance. How does it do it?

A new growth engine that MissFresh has found is to leverage the power of Tencent, cooperate with Tencent Smart Retail, and acquire customers at low cost through social fission.

On June 13, MissFresh and Tencent Smart Retail held a strategic cooperation press conference in Shanghai, officially launching the "Smart Fresh Billion Plan" which integrates "smart marketing", "smart logistics" and "smart supply chain". It will use Tencent's official accounts, mini-programs, Moments and other channels to directly face user groups and attract users with scenario-based experiences.

Take mini programs as an example. When WeChat proposed the concept of mini programs, MissFresh began to study the possibilities of its business and mini programs. The simplest reason is that there is a huge demographic dividend behind the mini program.

Daily Fresh Mini Program Page

Soon, MissFresh began to replace the H5 mall within the WeChat system with the mini program version, gradually forming a business model in which the mini program and App went hand in hand. Mini Programs have become the main channel for MissFresh to attract new customers, and the number of new customers attracted through Mini Programs has reached nearly 50% of all new users of MissFresh. Behind this is the result of the cooperation between MissFresh and Tencent Smart Retail on mini programs.

According to Tencent, the GMV of the MissFresh mini program increased by nearly 400% month-on-month, the customer acquisition cost decreased by 30%, and the new customer conversion rate increased by 112%.

2. Products

For consumers, there are two reasons for choosing a fresh food e-commerce platform: the quality of the product itself and the richness of the product categories.

Both are the main contents of consumers' offline consumption experience and are also key factors in measuring the service quality of their platforms.

(1) Direct sourcing from the source to ensure product quality and cost

MissFresh strictly requires the quality of its products. 90% of its fruits are sourced directly from the production areas, and the company plans to increase the proportion of direct vegetable purchases to 50% in the future. According to China News Network, MissFresh has contracted the source production areas of top-quality Chilean cherries, bayberries directly delivered by China Eastern Airlines, Yunnan plateau red grapes, the first batch of crayfish from Honghu Lake, and the "traditional crab king" from the best 25 areas of Yangcheng Lake.

This direct sourcing method not only ensures the quality of the product at the source, but also reduces the loss of product transportation. Take cherries as an example. In the previous "cherry war" among major e-commerce platforms, MissFresh gained the upper hand with its "19.9 yuan hot-selling cherries". Data shows that as of the end of January this year, the sales volume of Chilean cherries on MissFresh has reached more than 8 million kilograms. What’s surprising is that despite the low price of 19.9 yuan, it actually makes money.

In addition, MissFresh will regularly conduct random inspections on product quality. For example, we guarantee 100% quality inspection for fruit products. Every order from the user will be accompanied by an inspection report, which also details the sample receipt time, status at the time of receipt, and results of various pesticide residue tests.

(2) Expanding all product categories

Since its inception, MissFresh has always been pursuing the route of selecting SKUs, focusing on the strategy of "what others do not have, I have, and what others have, I have better". In 2015-2016, the number of SKUs of MissFresh was around 500. From 2017 to 2018, MissFresh pushed the SKUs to 1,000-2,000, and gradually completed the layout of selected fresh produce in 12 categories , including fruits, vegetables, dairy products, snacks, beverages, meat and eggs, aquatic products, cooked food, light meals, fast food, grains and oils, and daily necessities.

Daily Fresh APP

The products are rich and diverse. In addition to providing users with ingredients for three meals a day, they also provide users with more choices for daily necessities.

3. Scene

With the advancement of consumption upgrading, consumption habits have gradually changed from "going to the store" to "going home", from planned shopping to instant shopping, and from massive selection to high-quality selection. Targeting this market change, MissFresh innovatively created the “forward warehouse” operating model.

The so-called "forward warehouse" refers to the establishment of an ultra-fast cold chain logistics system of "city sorting center + community forward warehouse" in major cities. Through the forward supply chain, it is opened in the place closest to the consumers, and radiates to the surrounding 1-3 kilometers area "warehouse", to provide guarantee for product quality and 1 hour delivery speed for members.

Daily Fresh Forward Warehouse

For example, Yangcheng Lake hairy crabs strive to retain the most original freshness from the place of production to the user's taste buds. The frozen logistics system covers the entire transportation and storage process to ensure that users can fully enjoy the original flavor of the product.

This model reduces the cost of cold chain logistics and alleviates the problem of high fulfillment costs faced by fresh food e-commerce in the past. By May this year, Wang Jun, partner and CFO of MissFresh, announced relevant data: the company's average loss rate was less than 1%; the inventory turnover days were only 2 days; the post-coupon gross profit margin had been maintained at 20% for a long time, and by the end of 2018, it had achieved positive operating cash flow nationwide.

Today, after four years of deep cultivation of forward warehouses, MissFresh has built 1,500 forward warehouses in 20 cities across the country, meeting the needs of tens of millions of consumers across the country for instant delivery and on-demand consumption of fresh products.

Not only that, MissFresh also uses its own supply chain advantages to diversify its layout and provide users with experiences and products in more scenarios. In May this year, MissFresh began to upgrade its forward warehouse model and launched the forward warehouse 2.0 version.

Compared with the 1.0 version of the warehouse with an average area of ​​100-150 square meters, the 2.0 version of the forward warehouse, which has been replicated on a large scale since 2019, has a significant increase in storage area, reaching 300-500 square meters. The SKUs in the 2.0 version of the forward warehouse have increased from more than 1,500 to 3,000, including categories such as vegetables, meat and eggs, live seafood, meals, and personal care. Its daily order peak can reach 2,000 orders. With the support of intelligent systems, its operational efficiency has been further improved, with an annual sales per square meter of 100,000 to 120,000 yuan, which is 5 to 6 times that of traditional offline stores.

According to MissFresh, by the end of 2019, all forward warehouses will be upgraded to version 2.0, laying a solid hardware foundation for the development towards online comprehensive supermarkets. It is even developing the 3.0 version of the forward warehouse, hoping to explore the reduction of manpower and intelligence in the warehouse, so that the forward warehouse can be more cost-effective and easier to replicate on a large scale.

2. Regional Operation Strategy

MissFresh started out in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen. After its business model was verified, MissFresh quickly implemented a regional expansion strategy. Looking across the country, MissFresh has established more than 1,500 forward warehouses in 20 cities in four regions: North China, East China, South China, and Central China.

The Chinese market is huge, and dietary demands vary greatly. The "one-trick-fits-all" approach is not applicable. Instead, we must take into account the differentiated needs of consumers in different regions. So how did MissFresh do it? In addition to the standardized replication of the forward warehouse model, dataization and intelligence are the key.

Through the data-based and intelligent forward warehouse operation and management system, MissFresh has a high degree of operational flexibility and can formulate regional strategies based on the market characteristics of different regions. In addition, it uses big data to empower site selection, product selection, supply and demand replenishment, delivery route optimization, dynamic marketing and other links to promote the large-scale and systematic replication of the forward warehouse model in multiple cities across the country.

In South China, Daily Youxian's monthly sales of fresh eggs reached 5.98 million pieces, the peak daily sales of Zhuhai sea bass was around 1,000 pieces, and Meizhou white-fleshed honey pomelo achieved daily sales of 20,000 pieces within a week of being put on the shelves. This is all thanks to Daily Youxian's accurate insight into the differentiated needs of users.

In the central China region, when MissFresh entered Wuhan, it fully took into account the local characteristics of abundant crayfish and consumers' expertise in cooking crayfish. It no longer sold semi-finished crayfish as before, but instead put fresh crayfish online. According to MissFresh, its performance increased eightfold nine months after entering Wuhan, with monthly order volume exceeding one million, making it the largest fresh food e-commerce player in the local area.

Regional differences lead to different demands for products among users in different regions, but MissFresh divides the regions into four major areas: North China, East China, South China, and Central China. It adopts the "big platform + regionalization" model and combines the unique eating habits of different regions to carry out in-depth localized operations, truly adapting to local conditions.

It is understood that under the regionalized deep operation model, MissFresh's current market share, revenue growth, user scale and profitability all remain first in the industry.

3. Innovative spirit

Strictly speaking, MissFresh is not the earliest fresh food e-commerce company in China, but it has become the industry leader today, and its innovative spirit has played a big role in this.

Specifically reflected in:

(1) Players with supply chain and procurement advantages will inevitably have inherent advantages on the retail side. So, inspired by this, MissFresh quickly launched unmanned cargo containers (shelves) - MissFresh convenience shopping.

As a subsidiary that operates independently after the split, the entry mini program of MissFresh Convenience Store is independent of the MissFresh App and mini program. And from the perspective of offline distribution and discount strength, it is also different from the main mall of MissFresh.

(2) MissFresh has recently tried its hand at coffee delivery, reusing many forward warehouses to spread the costs of many forward warehouses and improve operational efficiency. By spreading the cost of the forward warehouse, the price of the entire fresh product can be made cheaper, and the money saved will ultimately be returned to the users. So users really like these affordable products and door-to-door delivery services.

(3) In 2018, MissFresh began to enter the field of social e-commerce and incubated the social e-commerce platform Daily Tao. Through the S2S sharing entrepreneurial model of social sharing + membership on the front end and direct purchase + direct supply on the back end, MissFresh's fresh food supply chain was utilized and social fission was adopted. It made strategic deployment and application of social applications and social platforms such as WeChat, and provided fresh food services to users in third- to fifth-tier cities.

After going online last year, its performance grew 80 times in 5 to 6 months.

The above three growth points jointly contributed to MissFresh’s leading position, but the three are not independent of each other. The innovative spirit enabled MissFresh to create the forward warehouse model, and the regionalization strategy is inseparable from the forward warehouse model.

4. A trillion-dollar market with promising future

According to iResearch, the transaction volume of China's fresh food e-commerce market exceeded 200 billion yuan in 2018, and it is expected that the industry will maintain an average annual growth rate of 35% in the next three years. This is close to the prediction given by MissFresh that in the next 5-7 years, fresh food e-commerce may become a track with a penetration rate of 20% and a scale of over one trillion yuan.

Faced with a trillion-yuan dividend, MissFresh has set a goal of achieving a 100 billion-yuan scale within three years. For MissFresh, which has firmly established itself as the leader in the fresh food e-commerce industry, this may just be a matter of time. Let us wait and see.

Author: Box Fungus

Source: Activity Box Operation Society