Dingdong Maicai Product Analysis

On June 9, 2021, Dingdong Maicai was officially listed on the New York Stock Exchange with the stock code "DDL".

According to public reports: Since its establishment in 2017, Dingdong Maicai has received investments from dozens of well-known institutions including Gaorong Capital, Tiger Global Management, Sequoia China, Capital Today, and Softbank China Capital. In the fiercely competitive fresh food e-commerce industry, why has Dingdong Maicai been able to rise rapidly in such a short period of time? What is the current development status of the entire industry?

This article will analyze Dingdong Maicai's perspective to give you an in-depth understanding of the operating logic of this company and the fresh food e-commerce industry.

This article will analyze from the following aspects:

Industry Analysis
Competitive product analysis
User Value Analysis
Business value analysis
Product Iteration Analysis
Product structure analysis
Operational Analysis
Summarize

1. Industry Analysis

Food is the primary need of the people. China is a big agricultural country. It can not only produce large quantities of high-quality food, but its huge population base also lays a solid foundation for the sales of fresh products. E-commerce is a new solution for the sales of agricultural products.

Fresh product e-commerce, referred to as fresh food e-commerce, refers to the direct sale of fresh products such as fresh fruits, vegetables, fresh meat, etc. on the Internet through e-commerce. With the multi-point layout of Internet giants and the continuous influx of start-ups, the scale of the fresh food e-commerce industry continues to expand; the new crown epidemic in early 2020 has further accelerated the development of the fresh food e-commerce industry.

From the birth of China's first fresh food e-commerce platform "Yiguo.com" in 2005, to the establishment of most of today's leading platforms from 2013 to 2017, and to today, fresh food e-commerce has experienced sixteen years of ups and downs in its gestation and development. Why can the fresh food e-commerce industry continue to develop and attract more and more players to participate? Since the fresh food e-commerce industry is deeply affected by macro factors, we will use the PEST model to explore the reasons behind it.

1. Politics

The rapid sale of fresh agricultural products is an issue that the country attaches great importance to. Since 2012, the Central Government’s No. 1 Document has repeatedly proposed “developing agricultural products e-commerce and other trading methods”, “strengthening the construction of agricultural products e-commerce platforms”, “supporting e-commerce, logistics and other companies to participate in the construction of agricultural e-commerce platforms”, etc.

In September 2020, the State Council issued the "Opinions on Leading the Accelerated Development of New Consumption with New Businesses and New Models", which affirmed the important role of the new economy in improving the epidemic situation, and at the same time proposed to further cultivate and expand new consumer businesses and models such as fresh food delivery.

Due to the late development of cold chain logistics and other technologies in my country, many fresh ingredients frequently suffer from problems such as damage, spoilage and mold during transportation.

In order to solve such problems and promote the development of my country's fresh food industry, the National Development and Reform Commission promulgated the "Agricultural Products Cold Chain Logistics Development Plan" in 2010. The "12th Five-Year Plan" and "13th Five-Year Plan" also included cold chain logistics in the list of key support. Subsequently, the Ministry of Finance and the Ministry of Commerce jointly issued the "Notice on Central Financial Support for the Development of Cold Chain Logistics", which also began to focus on supporting the fresh food market.

In December 2020, the State Administration for Market Regulation announced that the "Management Specifications for E-commerce Cold Chain Logistics and Distribution Services" will be implemented on July 1, 2021, which will help further standardize e-commerce cold chain logistics and distribution services, improve service quality, and promote its efficient, healthy and benign development.

2. Economy

After the epidemic, various employment protection measures effectively ensured the recovery of the growth rate of national income. Data from the National Bureau of Statistics showed that the national per capita wage income increased by 4.3% in 2020; the per capita disposable income of urban residents was 43,834 yuan, an increase of 3.5% over the previous year, and residents' spending on people's livelihood also grew steadily.

In 2020, Chinese residents' consumption expenditure on food, tobacco and alcohol accounted for 30.2% of their per capita consumption expenditure. Compared with other categories, fresh food and fast-moving consumer goods are characterized by high consumption frequency and fast consumption speed, and fresh food has the attribute of rigid demand.

In recent years, with the acceleration of my country's urbanization and the continuous improvement of urban construction, more and more young people have flocked to first-tier and new first-tier cities. These cities continue to attract young people with their complete urban construction, high-quality educational resources and abundant employment opportunities. Whether they are applying for university or looking for jobs, they are the first choice for these young people.

Overall, there is a net inflow of population in first- and second-tier cities, while there is a net outflow of population in third-, fourth- and fifth-tier cities. According to experts' predictions, the population concentration in first-tier and new first-tier cities will continue to increase in the future. The growing population in (new) first-tier and second-tier cities provides a broad user base for the fresh food e-commerce industry.

The steady growth of national income, the rigid demand for fresh food and its stable share in residents' expenditure, as well as the increasingly large population in first- and second-tier cities have brought a vast market to the fresh food e-commerce industry.

3. Society and culture

From the perspective of fresh food retail channels, offline retail channels such as supermarkets and vegetable markets are the main fresh food retail channels. Although China's online fresh food penetration rate is still relatively low, the growth rate is rapid.

At present, people born in the 1980s and 1990s have become the backbone of consumption. However, these people are busy with work and have no time to go to offline stores such as vegetable markets and supermarkets to buy fresh products. In addition, more and more young people have higher demands on food quality and safety. Fresh food e-commerce just happens to fit the consumption preferences of young users who pursue quality, convenience and rich product categories.

The emergence of the epidemic has accelerated the online penetration of fresh food. In 2020, the proportion of online fresh food retail in China reached 14.6%. In the post-epidemic era, under the wave of "lazy economy", as consumers gradually develop the habit of online shopping for fresh food and the fresh food retail market pays more and more attention to online fresh food retail, the online penetration rate of fresh food will gradually increase.

4. Technology

The continuous development and progress of technology has brought many improvements and changes to the fresh food e-commerce industry. The application of advanced technologies such as big data, artificial intelligence, and the Internet of Things in the fresh food supply chain has gradually matured. Digital technology connects the fresh food e-commerce industry chain, effectively helping fresh food e-commerce improve efficiency and reduce costs.

The application of smart hardware and digital technology has made the operation of cold chain logistics more and more intelligent. Smart warehousing technology helps standardize each link of cold chain operations and helps enterprises achieve refined management.

The application of artificial intelligence and big data can predict user preferences, help gain insight into consumer needs through in-depth mining and analysis of user data, and help fresh food e-commerce companies better manage inventory, select store locations and products, carry out precision marketing, and make algorithm recommendations, thus providing support for the decision-making and experience of retail companies.

In addition, the development of smart phones and electronic payments has further enhanced users' consumption experience.

All of the above factors have worked together to promote the development of the fresh food e-commerce industry in recent years. So what will be the development trend of this industry in the next few years? Is there enough market space?

Affected by the COVID-19 pandemic, China's fresh food e-commerce market developed rapidly in 2020, with the scale of the fresh food e-commerce industry reaching 458.5 billion yuan, an increase of 64.0% over 2019. According to iResearch Consulting, with the development of fresh food e-commerce and the maturity of its model, users' habit of online shopping for fresh food, the increasingly wide coverage of fresh food e-commerce users and the increasingly mature technology, fresh food e-commerce will continue to maintain rapid growth in the future, and the scale of the fresh food e-commerce industry will exceed one trillion yuan by 2023.

Therefore, we can see that there is still a huge market space in the fresh food e-commerce industry, and it will continue to maintain rapid growth in the next few years.

2. Competitive Product Analysis

With the development of the fresh food e-commerce industry, the number of players entering the fresh food e-commerce market continues to increase. At present, the fresh food e-commerce industry is in a situation where multiple business models coexist. Among them, forward warehouses (such as Dingdong Maicai, MissFresh, Meituan Maicai, etc.) and store-warehouse integration (such as Hema Fresh, RT-Mart Fresh, etc.) are mainly located in first- and second-tier cities, and the consumer groups are mainly white-collar workers in first- and second-tier cities. The community group buying model (such as Xingsheng Youxuan, Duoduo Maicai, etc.) mainly meets the needs of users in the sinking market. E-commerce with different business models meets the consumption needs of consumers at different levels.

According to Jishu statistics, in the ranking of monthly active users of China's fresh food e-commerce platforms in September 2021, Dingdong Maicai and MissFresh are the two top-ranked products under the forward warehouse model. The two are direct competitors and have similar user scale. So next we will take the growth paths and business models of the two companies as the starting point to gain a deeper understanding of the differences between them.

1. Dingdong Shopping

(1) Growth Path

Dingdong Maicai was launched in May 2017. Its predecessor was Dingdong Community, which focused on neighborhood social networking.
In 2018, Dingdong Maicai built 119 forward warehouses, serving most communities in Shanghai. In the same year, it completed four rounds of financing, namely A, A+, B and B+. Investors included Sequoia China, Tiger Global Fund, Gaorong Capital, Red Star Macalline, etc.
In 2019, Dingdong Maicai entered Hangzhou and Shenzhen and completed its B+ round of financing. Investors included Capital Today, CMC Capital, BAI Capital, Longfor Capital, etc.
In 2020, Dingdong Maicai officially entered the southwest. In the same year, it completed its Series C financing, with investors including General Atlantic, Capital Today, Sequoia China, CMC Capital, Tiger Global Management, etc.
In April and May 2021, Dingdong Maicai completed a total of US$300 million in financing in Series D and Series D+ respectively. Investors included SoftBank Aspiration Fund, CMC Capital, Capital Today, Sequoia China, etc.
On June 29, 2021, Dingdong Maicai officially landed on the New York Stock Exchange. In this IPO, a total of 3.7 million American Depositary Shares (ADS) were issued with an issue price of US$23.5 per ADS. Based on the issue price, Dingdong Maicai's market value exceeded US$5.5 billion.

(2) Business model

Dingdong Maicai's business model is direct purchase from the source + distribution in the forward warehouse + delivery to the home in as fast as 29 minutes, aiming to provide users with a fresh food consumption experience with certain quality, certain time and certain category.

Product Source : Products are mainly sourced directly from global origins (more than 85%), with 540 direct sourcing bases, supplemented by brand suppliers.
Product categories : SKU number is 5700+
Product quality control : Emphasis on seven links from planting and harvesting at the place of origin, to receiving and sorting at the warehouse, to inspection and packaging at the forward warehouse, to door-to-door delivery for users to receive the goods, all of which are strictly controlled by our own employees; if the user is not satisfied with the goods after receiving them, they can choose to return or exchange them within seconds, forming the eighth link of "+1"
Number of cities covered : covering more than 30 cities including Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, etc.
Number of forward warehouses : There are more than 1,000 community forward warehouses across the country
Density of forward warehouses : Most forward warehouses are within 1 km of the community.
Delivery threshold : 0 yuan for delivery, free basic delivery fee if the actual payment is more than 15 yuan, and 5 yuan basic delivery fee if the actual payment is less than 15 yuan
Delivery time : fastest delivery to home in 29 minutes
User scale : Serving more than 30 million users
After-sales service : If there is an error in the weight of fresh products, no additional charge will be made if the weight exceeds the indicated weight, and the system will automatically refund the difference if the weight is lower than the indicated weight; if there is a quality problem, fresh products can be returned or exchanged within 24 hours of receipt, and non-fresh products can be returned within 48 hours of receipt.
Business expansion : Dingdong Maicai mainly focuses on building product strength, gradually moving deeper into the production end, building self-operated agricultural bases, strengthening agricultural product quality and food safety assurance from the source, and improving the "standard production" link in the smart agricultural full industry chain system that integrates standard production, agricultural product processing, cold chain distribution, and online sales.

2. Daily Fresh

(1) Growth Path

MissFresh was founded in 2014 and received a US$5 million angel round investment from Guangxin Capital, Yuanjing Capital and Zhanbo Venture Capital in the same year.
In May 2015, MissFresh received US$10 million in Series A funding from Tencent Investment and Guangxin Capital, officially becoming a member company of Tencent Investment.
From November 2015 to September 2018, MissFresh completed five rounds of financing, namely Round B, Round B+, Round C, Round C+ and Round D. Investors included Tencent Capital, Tiger Global Management, Times Capital, Poly Capital, etc.
In July 2020, MissFresh received US$9.5 billion in Series E financing from investors including CICC Capital, ICBC International, Tencent Investment, Tiger Global Management, etc.
In December 2020, the Qingdao Municipal Government and MissFresh Group held a project signing ceremony. Qingdao Guosen, Sunshine Venture Capital, and Qingdao Municipal Government Guidance Fund formed a joint investment entity and made a strategic investment of 2 billion yuan in MissFresh to jointly create a new "Internet + Agriculture" model.
On June 25, 2021, MissFresh was listed on the Nasdaq in the United States, officially becoming the "first stock in community retail digitalization". In this IPO, a total of 21 million (including 24.15 million greenshoe shares) American Depositary Shares (ADS) were issued, with an issue price of US$13 per ADS. Based on this issue price, MissFresh's market value is US$3.2 billion.

(2) Business model

Similar to Dingdong Maicai, MissFresh's business model is direct sourcing from global origins + distribution at forward warehouses + home delivery in as fast as 30 minutes, aiming to provide users with a good and fast fresh food consumption experience.

Source of goods : The goods are mainly purchased directly from the place of origin (the proportion is greater than 80%), supplemented by procurement from suppliers
Product categories : SKU number is 4000+
Product quality control : Strict quality control, 100% batch quality inspection of fresh food; third-party authoritative testing agencies are on-site to test each batch of products, from fresh food, fruits and vegetables to grains and oils, etc., all are checked by professional quality control teams before and after storage to ensure the quality and safety of each ingredient
Number of cities covered : 16 cities including Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, etc.
Number of forward warehouses : There are more than 600 community forward warehouses across the country
Density of forward warehouses : The coverage of forward warehouses is mostly within 1-3 kilometers of the community.
Delivery threshold : 0 yuan for delivery, free basic delivery fee if the actual payment is over 39 yuan, and 5 yuan basic delivery fee if the actual payment is less than 39 yuan
Delivery time : 30 minutes at the fastest
User scale : Serving more than 30 million users
After-sales service: When there is an error in the weight of fresh products, no additional charge will be made if the weight exceeds the marked weight, and the system will automatically refund the difference if the weight is lower than the marked weight; if there are quality problems, fresh products can be returned or exchanged within 24 hours of receipt and non-fresh products can be returned or exchanged within 48 hours of receipt. Products marked with "seven-day unconditional return and exchange" can be returned or exchanged within seven days of receipt.
Business expansion : MissFresh has expanded its MissFresh convenience store business, using a new retail model of unattended, self-service shopping to create mini convenience points in offices for companies. Relying on a professional supply chain system and complete forward warehouses, we provide building-level coverage and provide high-quality beverages, snacks, etc. Users can make purchases conveniently and quickly by scanning the QR code or using their face. In the second half of 2020, MissFresh launched its smart vegetable market business and launched its retail cloud business in 2021, leveraging the core technical capabilities accumulated in the vertical retail field and its independently developed intelligent system - the AI retail network, to further empower community retail industry participants to achieve digital transformation.

3. Conclusion

From the above analysis, it can be seen that MissFresh was established earlier than Dingdong Maicai, and it pioneered the forward warehouse model. The core business of both companies is to represent the new retail of fresh food in the forward warehouse model, providing users with convenient fresh food delivery services, and they are direct competitors.

Although it was established later than MissFresh, Dingdong Maicai has a strong momentum and has completed 11 rounds of financing in succession, especially the two rounds of financing before its IPO in 2021, which exceeded US$1 billion. It was an important financing event for global fresh food e-commerce this year, and also laid a solid foundation for it to form a leading advantage. Nowadays, whether it is the number of cities entered, the number of forward warehouses, the number of SKUs or the average daily order volume, Dingdong Maicai is better than MissFresh.

Although the core business model is the same, the details are different:

In terms of covered cities, number of forward warehouses and forward warehouse density, Dingdong Maicai has a wider coverage and higher density, thus serving more users; in terms of the number of product categories, Dingdong Maicai is also richer than MissFresh, providing users with more choices; in terms of the minimum delivery fee threshold and delivery time, Dingdong Maicai is better than MissFresh, so users do not have to worry about placing orders and waiting. In terms of product quality control and after-sales service, both companies provide relatively high-standard services that meet the needs of young users.

After consolidating their core businesses, both companies began to explore new businesses. Dingdong Maicai is moving towards the production end, building its own agricultural base to ensure product quality from the source; while MissFresh is expanding outward, trying new retail businesses such as unattended and self-service shopping, as well as smart vegetable markets and retail cloud businesses to broaden its channels. However, the specific effects of the two new businesses are still unknown.

3. User Value Analysis

In the fresh food e-commerce market, there are three main participants: suppliers, consumers, and platforms. The business logic diagram of Dingdong Maicai is as follows:

If a platform wants to achieve rapid growth, it must meet the demands of suppliers and the needs of consumers.

Next, let’s explore the needs of these two parties and how Dingdong Maicai can better meet their needs.

1. Supplier

Dingdong Maicai’s products are mainly sourced in two forms: direct purchase from the place of origin and supply from brand suppliers, that is, the suppliers are farmers and brand suppliers respectively. Below we analyze the needs of these two types of suppliers respectively.

(1) Farmers

Simply put, farmers’ demands in the agricultural product trading process are to maximize profits. If you want to obtain the highest profit, the key is to increase the sales volume of agricultural products, increase the selling price of agricultural products and reduce sales costs. At present, farmers sell agricultural products mainly through the following channels:

Farmer direct sales:

Direct sales by farmers refers to a sales method in which farmers sell agricultural products directly to consumers through agricultural product trading markets, stalls, etc. This sales model can save intermediate links and achieve higher economic benefits than the participation of middlemen. However, this sales model requires farmers to invest more time and energy, and the sales costs are relatively high. At the same time, it is difficult for farmers to make accurate judgments on the annual market demand, and sales volume cannot be guaranteed. There is a high probability that agricultural products will be unsold or rot in their hands. The risk is relatively high, and the annual income is not stable enough.

Sales to leading enterprises and agricultural cooperatives:

Farmers sell to leading enterprises or agricultural cooperatives, that is, leading enterprises or agricultural cooperatives match transactions or directly organize agricultural product transactions and sell them to wholesalers in sales areas. This model has a relatively stable channel, which can ensure relatively stable sales and farmers' income will also be relatively stable. In addition, farmers do not need to spend too much energy and can sell agricultural products more conveniently. But at the same time, due to the large number of intermediate links, the selling price of farmers' agricultural products is often lowered, and the farmers' demand for maximum profit is difficult to guarantee; in addition, this model often requires the number of farmers in the same area to form a certain scale, and it is difficult for small rural areas to adopt this model for agricultural product sales.

Selling to wholesalers at the place of origin:

Under this model, wholesalers in the production area actively seek out farmers to purchase agricultural products, or farmers actively sell their own agricultural products to wholesalers in the production area. Under this model, farmers can easily sell their agricultural products without investing too much time and energy. However, due to the long links in this chain, agricultural products need to go through logistics suppliers, sales wholesalers, terminal sales platforms and other links before they can reach consumers. The losses in the middle and the costs of transportation and warehousing are high. In order to ensure their own profit margins, the middlemen will lower the purchase price as much as possible, thereby reducing farmers' income; at the same time, there is uncertainty in the purchasing behavior of wholesalers in the production area. If the output of a certain agricultural product is high in that year, the wholesalers in the production area have already wholesaled a sufficient quantity when they come to the village where the farmers are located. In that case, the farmers are likely to face a situation where no one buys the agricultural products and they cannot sell them, which results in low stability.

Supermarket direct supply:

Direct supply to supermarkets refers to a new distribution method in which farmers and merchants sign a letter of intent, whereby farmers directly supply agricultural products to supermarkets. Under this model, the intermediate links in agricultural product sales are shortened, and the purchase price given to farmers by supermarkets is relatively substantial; at the same time, the agreement signed between supermarkets and farmers can guarantee the farmers' sales destination for a period of time, and the farmers' income is also relatively stable. However, competition to enter large supermarkets is also quite fierce. The entry threshold of supermarkets is also quite high. They often set high entry fees, which increases farmers' sales costs. At the same time, supermarkets often set longer payment terms. Farmers cannot receive payment quickly after selling their products. At the same time, they also have to face the cost of purchasing seeds, fertilizers, machinery, etc. for next year's crops. The capital turnover is relatively tight, which also increases farmers' sales costs from another aspect.

It can be seen that although farmers’ current sales methods can sell agricultural products, each plan cannot simultaneously meet farmers’ needs for stable sales volume, high selling price and low sales cost, and farmers’ profits are not maximized.

(2) Brand suppliers

The ultimate goal of brand suppliers in the fresh product trading process is also to obtain higher profits. Since the sales prices of brand suppliers in different channels are relatively stable, increasing sales and reducing sales costs are the main ways for brand suppliers to obtain higher profits. At present, the main channels for brand suppliers to sell agricultural products are as follows:

Sales to supermarkets:

Brand suppliers can sign agreements with supermarkets to sell their products to supermarkets. This model is similar to farmers' "direct supply from supermarkets". Although it can guarantee relatively stable sales, supermarkets are restricted by geographical space, and their sales volume is limited and sales are not high. At the same time, the supermarket's entry fee increases the sales cost of brand suppliers, making it difficult to obtain higher profits.

Settled in comprehensive e-commerce platforms such as Tmall:

Entering a comprehensive e-commerce platform is also one of the channels for brand suppliers to sell their products. Such platforms have a large number of registered users and potential customer base, providing an opportunity to increase product sales. However, since there are too many categories on comprehensive e-commerce platforms, the traffic is not accurate enough; there are hundreds of brands under the same category and many brand competitors. If you want to improve your brand's competitiveness, you must invest a lot of money in advertising on e-commerce platforms, which also increases the sales costs of brand suppliers and greatly compresses their profit margins.

It can be seen that these sales methods all have problems with high sales costs or low sales volumes, and brand suppliers are unable to maximize profits.

2. Consumers

Dingdong Maicai’s consumers are mainly distributed in first- and second-tier cities, and the main groups are white-collar workers, college students, housewives, etc., and they are generally young. According to iResearch Consulting, the four factors that consumers in first- and second-tier cities pay most attention to when purchasing fresh food are product quality and freshness, product price, delivery speed, and variety of product categories. Because traditional purchasing methods do not involve "delivery services", in the analysis below, we will replace delivery speed with a factor similar to delivery speed in traditional purchasing scenarios - convenience.

Currently, consumers purchase fresh products in the following ways:

(1) Vegetable market

The wet market is the most traditional channel for consumers to purchase fresh products. Because there are many sellers, the variety of fresh products in the vegetable market is relatively comprehensive and the prices are relatively low. However, the environment of vegetable markets is mostly "dirty, messy and poor", and food safety is difficult to guarantee, especially in the post-epidemic period. People are more worried about whether vegetable markets with a mixed crowd and a large number of raw and cooked foods can provide fresh products with guaranteed quality; there are many vendors in vegetable markets, and the freshness of fresh products cannot be ensured; in addition, vegetable markets are not close to all communities, and many consumers need to walk a long distance or even drive to purchase, and then carry heavy dishes upstairs and go home, which is not convenient enough.

(2) Large supermarkets

Large supermarkets are also one of the channels for consumers to purchase fresh products. The shopping environment in large supermarkets is better, the products are fresher, and the quality is guaranteed. However, since large supermarkets need to bear large expenses such as rent and employee salaries, commodity prices are relatively high; in terms of product richness, large supermarkets' fresh food categories are not complete enough, and generally only provide a few major products under each major category of fresh food products. It is impossible to buy everything in one shopping trip, and shopping is not convenient enough; in addition, large supermarkets also have problems such as long distances and carrying heavy objects home, and are not convenient enough.

(3) Fresh food convenience stores

Fresh food convenience stores are generally close to residential areas, making it convenient for consumers to shop. However, due to its convenient geographical location, the store rent is relatively high, and the prices of goods are therefore raised; due to the small size of the store, the fresh food categories are not complete; at the same time, due to the small customer base and commodity volume, it is easy for goods to be sold out or fresh products to be left for too long and not fresh enough.

The above three shopping methods all have certain shortcomings and cannot meet the demands of consumers well.

3. Platform

From the above analysis, we can find that in the matter of fresh product trading, the problems with the existing solutions provided by suppliers are mainly:

Unstable sales
Supply prices are pushed down
Higher sales costs

The main problems with existing consumer solutions are:

Poor product quality, not fresh enough
High commodity prices
Not convenient to purchase
Not enough product categories

So, how does Dingdong Maicai, as a platform, better meet the needs of suppliers and consumers and attract them to this platform?

(1) Enhance sales stability

Signing long-term strategic contracts with suppliers: Since 2019, Dingdong Maicai has begun to try direct sourcing from the source, starting to go deep into the source of fresh products, and cooperating with more than 200 cooperatives, more than 3,000 farmers and breeders at the source. Dingdong Maicai has signed long-term strategic contracts with farmers and brand suppliers to ensure the stability of suppliers’ sales.

(2) Raise supplier prices and lower commodity prices

Self-operated direct purchase, eliminating the middlemen : Dingdong Maicai eliminates the multi-level middlemen in the traditional fresh agricultural product distribution chain through the global direct purchase model, cutting out the layers of price differences. While ensuring its own profits, it ensures profit margins for suppliers, while passing on benefits to consumers, allowing them to purchase high-quality fresh products at lower prices.
Full cold chain transportation reduces losses : In addition to ensuring the quality and freshness of goods, full cold chain transportation can also reduce the loss of fresh products and their sales costs by improving transportation time, reducing the number of handling times and creating a suitable environment during transportation. As Dingdong Maicai’s sales costs decrease, the supplier’s supply price and the seller’s purchase price will naturally increase and decrease respectively.
Data algorithms enable loss reduction : In order management, Dingdong Maicai uses data algorithms to promote order forecasting. After making accurate predictions for orders, Dingdong Maicai can make reasonable adjustments to storage capacity, reducing the fresh food loss rate to a certain extent; in terms of delivery scheduling, data algorithms automatically schedule terminal delivery, helping to improve delivery timeliness, delivery rate and per capita delivery volume, while also reducing the fresh food loss rate, saving costs and improving efficiency, thereby increasing supplier supply prices and reducing commodity prices.

(3) Reduce suppliers’ sales costs

Reduce marketing costs : Dingdong Maicai is a vertical e-commerce platform for fresh food. Its users are all buyers of fresh food products. Compared with comprehensive e-commerce platforms, the platform traffic is more accurate. At the same time, the number of brands on the platform is limited, and the competition between brands is relatively weak, so there is no need to invest more advertising costs to attract users. Each brand supplier-direct product on Dingdong Maicai will also be clearly marked with the brand, which enhances brand exposure and subtly improves brand influence.
Provide financial and technical support to suppliers : Dingdong Maicai provides financial and other support to growers, which not only creates high-quality upstream product production for itself, but also makes great contributions to agricultural development. For example, in 2019, Dingdong Maicai reached a strategic cooperation with a local cooperative in Zunyi City, and completed the purchase of nearly 150 tons of Chishui winter bamboo shoots in just one month; this year, Dingdong Maicai will also help farmers alleviate their difficulties through live broadcasts from production areas and other forms, and continue to increase the purchase and sales of Chishui winter bamboo shoots. It is expected that sales will increase by more than 30% over last year, exceeding 200 tons. In order to solve the funding problem, in the second half of last year, Dingdong Maicai started to explore supply chain finance cooperation with Shanghai Bank. Dingdong Maicai served as a credit endorsement, and the bank provided upstream production areas with loans of several hundred thousand yuan for 2 to 3 months.

(4) Ensure product quality and freshness

Cold chain logistics system : Dingdong Maicai’s fresh products are transported through cold chain throughout the entire process, from its own direct procurement sites to the hands of users. From the direct purchase site to the city sorting center, and then from the city sorting center to the forward warehouse, the main line cold chain and small main line cold chain are used respectively. High-quality insulated boxes are also used during the last mile of door-to-door delivery. Both urban sorting centers and forward warehouses are covered by cold storage. Dingdong Maicai also provides corresponding packaging for special categories of products. For example, aquatic products such as fish and shrimp will be packaged in inflatable bags injected with fresh water. When delivered to customers, these aquatic products can still be alive and kicking.

"7+1" quality control process : In order to ensure that the products received by Dingdong Maicai users are in the best condition, Dingdong Maicai has formulated a "7+1" quality control process, namely the seven major quality controls of supply, large warehouses, processing, forward warehouses, inspections, sorting, and customers, plus after-sales service, to ensure that from the source to the end, each link has standardized quality control actions to ensure the quality of the goods to the greatest extent.

(5) Improve purchasing convenience

Forward warehouse model, delivery to home in 29 minutes : Dingdong Maicai adopts the forward warehouse model, setting up a forward warehouse within 1 km of the community, and using self-built logistics distribution after receiving user orders. Through intelligent scheduling and cycling route optimization, delivery to home in 29 minutes. Consumers do not need to run around or carry heavy objects. They can receive the goods they need without leaving home with simple operations on their mobile phones.

(6) Improving the richness of product categories

5700+SKUs, rich categories: Dingdong Maicai currently has more than 5700 SKUs, and the richness of its products is unmatched by wet markets, large supermarkets and fresh food convenience stores. The rich product categories provide consumers with a one-stop shopping experience for the products they need to cook. Consumers do not need to go back and forth between multiple stalls and can purchase everything at one time.

Through the above analysis, we can find that compared with other fresh product trading methods, Dingdong Maicai better meets the needs of the platform’s two major users - suppliers and consumers, which also explains why Dingdong Maicai is so popular.

4. Commercial Value Analysis

Dingdong Maicai’s current core business is the “fresh food delivery” business. An important indicator for judging whether a business can develop healthily is revenue. Here we use GMV, the most commonly used data indicator in e-commerce, to analyze whether Dingdong Maicai’s core business is healthy.

GMV=number of users*conversion rate*average order value. Any improvement in any of the indicators, such as the number of users, conversion rate, and average order value, will have a positive impact on the growth of overall revenue, so next we will focus on analyzing the means Dingdong Maicai uses to improve these three key indicators.

1. Increase the number of platform users

In order to achieve sustained growth in revenue, a steady stream of new registered users is the most basic guarantee. So how does Dingdong Maicai attract new users?

There are mainly two ways: paid channels and free channels. Paid channels include advertising, door-to-door promotion and invitation-based promotion, while free channels are mainly word-of-mouth.

(1) Large-scale advertising (paid channels)

Advertising is divided into online advertising and offline advertising.

Online advertising : Dingdong Maicai has placed a large number of advertisements online, such as WeChat Moments information flow advertising promotion, short video advertising on Douyin, Weibo, etc. These products are Dingdong Maicai's target customer group - apps frequently used by young white-collar workers in first- and second-tier cities, and can achieve good promotion effects.

Offline advertising : Dingdong Maicai has also placed advertisements in many offline scenarios, such as subway platform light box advertisements, bus stop advertisements, elevator advertisements, etc., so that target users can see them during their daily travels; the conspicuous green image of Dingdong Maicai deliverymen and delivery boxes is also a kind of advertisement. By shuttling on city roads, quite a lot of people can see and understand Dingdong Maicai.

(2) Local promotion and new customer acquisition (paid channels)

Local promotion and attracting new customers is one of Dingdong Maicai’s important offline promotion channels. Since its predecessor was the community service APP Dingdong Community, Dingdong Maicai is very familiar with offline promotion and attracting new customers. Dingdong Maicai targets white-collar gathering areas in target cities - near high-end office buildings, near business districts, and residential areas near office buildings, and conducts ground promotion in these places. As long as you download the APP and complete the registration on the spot, you can receive small gifts such as eggs and fruits. In this way, Dingdong Maicai has accumulated a large number of new users.

(3) Invite new customers (paid channels)

Dingdong Maicai has set up a mechanism for inviting and attracting new users. Users can send their invitation codes to their family and friends. After an unregistered user successfully registers using the invitation code, both of them can receive coupons and other rewards. The invitation and attracting new users mechanism is also divided into installments. In each activity, the rewards for attracting new users increase in a step-by-step manner, that is, the number of new users can be accumulated, and the more new users you attract, the greater the reward you can get.

Taking Dingdong Maicai's current event as an example, if you invite a new user and the new user completes the first order (within 7 days and actual payment ≥ 25 yuan), you can get a coupon for 30 yuan off for orders over 59 yuan; if the new user completes the second order (within 7 days after the first order and actual payment ≥ 28 yuan), he or she can get a coupon for 10 yuan off for orders over 59 yuan. The cycle of the ladder activity is one week. Within one week, in addition to getting the above-mentioned 40 yuan coupon, inviting new users can get Shaanxi Luochuan Red Fuji worth 9.5 yuan, inviting 2 people can get fresh eggs worth 17.9 yuan, and inviting 5 people can get domestic South China Sea prawns worth 31.5 yuan. By setting up step-by-step activities, the enthusiasm of users to attract new users is further enhanced.

(4) Word-of-mouth communication (free channel)

Word-of-mouth is also an important way for Dingdong Maicai to accumulate new users. The key to establishing a good reputation is excellent product quality, thoughtful service details, and whether it brings "little surprises" to users. When users receive satisfactory or even unexpected services, they will spontaneously promote Dingdong Maicai on social media and in front of their friends and family, thus spreading word of mouth.

2. Improve conversion rate

After guiding users to download the APP and successfully register through various means, it is only when users make purchasing decisions, that is, when they are converted from new users into paying users of the platform, that they are valuable to the platform. So how does Dingdong Maicai improve its conversion rate? We will study how to improve conversion rates by sorting out Dingdong Maicai’s shopping process.

The shopping process of Dingdong Maicai mainly consists of the following steps: home page – product category page – product details page – shopping cart page – checkout page.

(1) Home page

Create a sense of urgency : After entering the app, more than 2/3 of the homepage for users who have not placed an order will display details of the "New Customer Trial Price" products and the "108 yuan coupon package". The text of "limited supply, stopping after grabbing" creates a sense of urgency for shopping, while "exclusive to newcomers, free shipping for the first order" gives new users a sense of dignity. The flashing of the “Use Now” button attracts the user's attention. Under such a page, new users will think that the first order is very cost-effective. If you don’t place an order quickly, there will be no such great discount after the taste products and coupons expire, so the possibility of users placing an order is very high, and the conversion rate of Dingdong Maicai has been improved.

Provide an entrance for users with clear purchase goals : The upper part of the homepage is the search bar (①), and the search bar provides a convenient entrance for users with clear purchase goals. For such users, they have clearly known their needs and do not need to look through other content, just search directly.

Provide an entrance for users whose purchase goals are not particularly clear : the newcomer area is the classification section, and the classification section provides an entrance for users whose purchase goals are not particularly clear (knowing the major categories you want to buy, but still want to choose them). The classification section is in the form of a circular picture button + text description, which is very intuitive, and users can easily enter the category they want to purchase. It should be added that in addition to the conventional meat, poultry, eggs, aquatic seafood, etc., Dingdong Maicai's classification logic also provides some "set menu" classification methods, such as hot pot to home and five meals a day. The products in these categories do not strictly belong to the same category, but because they are users' high-frequency matching methods, Dingdong Maicai integrates the main products involved together to facilitate users to choose and purchase.

Strengthen trust : Below the classification section is a summary of Dingdong Maicai's business model - delivery at the fastest 29 minutes, free delivery fee for over 15 yuan, and customer service phone number (department ③). The emergence of this line of text has deepened new users' understanding of Dingdong Maicai and further deepened users' sense of trust.

Provide an entrance for users with unclear purchase goals : further downward, it is a limited-time rush to buy, Dingdong new products, evaluation markets, and other sectors (④). This part of the content provides users with unclear purchase goals, but they have not decided what to buy due to the full discount or not knowing what to eat. The settings of this section provide users with a reason to purchase - special offers, new products, or what you like, to help users make decisions. In addition, sectors such as Dingdong Maicai's green card membership and Dingdong Fish Pond that enhance user stickiness also appear here, playing a publicity role.

(2) Product Category Page

Save operation steps : The search bar is still at the top of the product classification page (①). The settings of the search bar here can make it easier for users to suddenly think of a certain product that they need to purchase during the selection process. At this time, the user does not need to search in the list by category, nor does he have to return to the homepage, but can still easily search for the required products in the search bar of the category page.
Easy to scan principle : Below the search bar is the first-level classification (②), and then the left vertical column below is the second-level classification (③). This setting follows the easy to scan principle among the ten principles of Nelson and is in line with the user's operating habits. Users can first drag the first-level classification bar above to select the major categories you need to purchase, then search for specific subcategories on the vertical bar on the left, and then slide up and down the product list (④) on the right to select. For subcategories with a large number of products, Dingdong Maicai also provides the specific category name (position ⑤) above the product. After clicking, the page will directly scroll to the selected category.
Reflect product popularity : In the vertical column on the left, there are red "explosion" and "provincial" small signs (⑥) in front of the "Hot Sales Recommendations" and "Special Offer Zones", respectively, to grasp the consumers' herd mentality and the mentality of taking advantage of the situation, and users have a greater possibility to enter these two categories. The product list displays the basic information of the product (subject ⑦). In addition to the name, specifications, and price, Dingdong Maicai also adds some evaluative words, such as "large size", "clean and free of miscellaneous", which allows users to have a rough prediction of the product, which facilitates their judgment on whether it is the product they want; Dingdong Maicai also wrote information such as sales ranking, XX million people have placed orders, special offers, etc., which enhances users' desire to buy.

(3) Product Details Page

The product details page is divided into four sections - product, evaluation, details, and recommendations.

Products - Show product quality and considerate service : In the product section, the upper half is the product carousel (①), and the circular scrolling of 6 high-definition large pictures allows users to clearly see the details of the product and recognize the quality of the product. The upper left corner is the pop-up window information (②) that pops up from time to time - xxx purchased the product. This small detail allows users to feel that not only themselves, but many people have also purchased this product, reflecting the popularity of the product, and users will be determined by their choices. Below the carousel picture is the detailed information of the product (④), including basic information such as name, specifications, price, origin, etc., as well as storage conditions, recommendation reasons, etc., which can help users better judge whether to purchase; while the delivery time tells the user that "our delivery is very fast", helping users to dispel their concerns, and the coupon information shows the coupons that the user has received, telling the user that "the purchase is very cost-effective now", and the weighing and price refund service tells the user that "don't worry about being short of weight". When the user does not understand the meaning of the service, you can also click to view the details. These information are all conveying information to users - we have thought about what you are worried about for you, don’t worry, just place an order now.

Evaluation - Verify product quality : The evaluation page shows the real reviews of past purchasers below the above product information. The number of reviews and the positive review rate give users confidence in placing an order; if users want to see the specific reviews of other users, they can also click to enter. All the star ratings, texts and pictures of the evaluation are clearly listed. The user shows the overall user satisfaction and indirectly confirms the excellent product quality.

Details - Show product quality : The details page first displays the information of the product's net content, storage conditions, origin, etc. (Section ①), and also provides a quality inspection report. You can click to view the details (Section ②), and below is a high-definition large picture of the product (Section ③) to allow users to understand the product more and enhance their desire to buy.

Similar Products & Guess You Like - Help users make the most accurate purchasing decisions : above and below the product details are "Similar Products" and "Guess You Like". These two modules are relatively similar, and both recommend products similar to the products being browsed to users. For example, the user did not think about what to eat, so he was preparing to make do with a stir-fried rapeseed. When he was browsing rapeseed, these two pages would recommend vegetables such as Shanghai green, cabbage, and lettuce to help users provide more options. When users see lettuce, they will feel that "Oh, lettuce in oyster sauce seems to be more delicious". At this time, users will change from "buying rapeseed without firmness" to "buying lettuce with firmness". These two modules can provide users with better choices and also increase users' probability of placing orders.

(4) Shopping cart page

The top of the shopping cart page is still the coupon information (①), which shows the coupons that users can receive or will be able to receive soon. While implying that the user's purchase is very favorable, it also captures the user's desire to take advantage of the situation and induces the user to increase the shopping amount to receive larger coupons. Below the coupon information is the exchange information (②). If the whole shopping is over a certain amount, you can exchange goods at a lower price. It also captures the user's desire to take advantage of the situation, which increases the chance of placing an order and also increases the average customer price. Below the purchase information is the product list (place ③) in the shopping cart. The red font and small labels highlight the discount information, and once again emphasize to users that this is a very cost-effective shopping. Going downwards is a very favorable design for Dingdong Maicai - free collection of shallots or garlic (④ places). Users can choose to purchase for free before settlement. Once again, the user feels that he has "get the wool", which further increases the probability of placing an order.

(5) Settlement Page

Show cost-effectiveness : Dingdong Maicai also sets many small details to improve conversion rates in the settlement page. Green card membership purchase card (part ①) is the price information of this shopping (part ②), including the product amount, delivery fee and coupons. Dingdong Maicai adopts the form of graying out the original price and shifting off and the current price is bold, focusing on showing users the discount level of this shopping. Next is the choice of payment method (③). Dingdong Maicai provides various payment methods such as Alipay, WeChat, UnionPay payment, etc., which meets the diverse needs of users with different payment habits. At the same time, it also displays the discount information of third-party payment platforms one by one, helping users choose the most favorable payment method, making users feel that this shopping is really great, thus ensuring the conversion rate. The bottom of the page is the amount to be paid and the payment button (⑥), where the amount to be paid is in bold red, and the small red font below indicates the discount amount, which once again implies the user before the user pays: This shopping really saved you a lot of money.
Dispel user concerns : The payment method is below the notes and invoices (④). These two contents can make users feel the considerate of Dingdong Maicai service and the formality of the platform. At the end of the page are the three major security guarantees (⑤) of Dingdong Maicai - time-out compensation, refund of missing or heavy refunds, and return and exchange of peace of mind. Once again, emphasize the considerateness of platform services to users, dispel users' last concerns and allow users to place orders with confidence.

The above is the core functions of Dingdong Maicai in the entire conversion process from registration to ordering.

3. Increase average order value

The average customer price refers to the average payment amount of all paying users over a period of time. The average customer price is affected by two factors: the amount of a single purchase and the frequency of purchases. Therefore, we will analyze how Dingdong Maicai increased its average customer price from these two aspects.

(1) Increase the single purchase amount

Full discount coupon issuance : Dingdong Maicai will issue full discount coupons to users from time to time, and the discount coupons will also increase with the increase of the threshold for full discount. Users will increase the number of purchases in order to enjoy greater discounts, thereby increasing the amount of single purchases.

Promotional activities such as N-discount, XX yuan optional N-discount , Dingdong Maicai will launch promotional activities such as N-discount, XX yuan optional N-discount, XX yuan optional N-discount, and N-discount for some products. The average unit price of N-discount is cheaper than buying one. In this way, users who originally planned to buy only one item will increase the number of purchases in order to obtain greater discounts, thereby increasing the amount of single purchases.

Value-for-value exchange activity : There is a value-for-value exchange option above the shopping cart page of Dingdong Maicai. As long as the consumption reaches a certain threshold, you can buy certain products at a relatively preferential price. Since most fresh food products are in a basic need, users will feel that they will have to buy them sooner or later. Since there is such a discount, it is better to buy them by the way. If the user does not meet the replacement threshold, the page will still display a value-for-sale option, but the text has changed from "0/2 pieces selected" to "It's still XX yuan". When the user's consumption amount is almost the same as the replacement threshold, the user will feel the mentality of losing if he doesn't buy, so as to make up the amount to the replacement threshold and exchange the product. Therefore, the value-for-money option also increases the amount of a single purchase.

You may like the shopping cart page : In the shopping cart page, set the "Guess You may like" section below the shopping cart product list. Dingdong Maicai intelligently recommends products based on the products that users have added to the shopping cart, and provides products that can be matched together. For example, there are chicken wings in the shopping cart. Dingdong Maicai intelligently recommends Coke and Orleans flavor marinades. When users see these two products, they will feel "reminded" - making a Coke chicken wing, or New Orleans chicken wings seems to be good? Therefore, you may also like the section of the shopping cart page and increase the single purchase amount.

(2) Increase purchase frequency

Green card membership system : Dingdong Maicai sets up a "Green Card Membership" system. After opening a green card membership, users can enjoy seven major benefits, including free daily meals, exclusive coupons of 88 yuan per month, exclusive green card price, life privileges, exclusive 88% off on Friday Green Card Day, free delivery fees for 6 times a month, and exclusive customer service. For example, the right to receive free dishes every day is to get a fresh product worth a few yuan for free if you spend 39 yuan or more; the monthly exclusive coupon is 4 full discount coupons with varying denominations to users every week. The exclusive discounts of these members can enhance user stickiness, and users can receive additional gifts or discounted prices for each purchase, which will make users a habit of placing orders on Dingdong Maicai and increase purchase frequency. The annual fee for Green Card Membership is 88 yuan, and it has launched a joint membership with Vipshop and Himalaya to exchange traffic, reducing the cost of users to open members and expanding the membership scale.

Fish pond and orchard game : Dingdong Maicai has launched a fish pond and orchard game. Users can receive feed, water droplets and fertilizer as long as they complete the corresponding operations. The purchase behavior can obtain feed and fertilizer that is larger than the regular operations such as sign-in and browsing. When the small fish in the game grows up and the fruits are ripe, users can obtain real fish and fruits. These two mini games have cultivated users' usage habits by encouraging users to place orders and browse, and also increased users' purchase frequency.

Sign-in and points system : Dingdong Maicai has set up a sign-in and points system. The specific rules for signing in are to sign in for 30 consecutive days, and you can get a total of 60 yuan in grocery shopping; the specific rules for points are to get 1 point for every 1 yuan spent (double points for green card members). 100 points are equivalent to 1 yuan, and you can redeemed for red envelopes without thresholds. The sign-in system allows users to develop the habit of opening APPs every day, while the points system allows users to redeem a 3-yuan coupon after placing orders 5-6 times (estimated at the average customer price of 50-60 yuan), which can bring surprises to users. Both systems can promote the increase in order frequency.

Purchase again and buy frequently : On the user's completed order page, there are "Purchase again" and "Buy frequently buy frequently" functions. Since users have relatively fixed preferences for fresh products, these two functions facilitate users to place orders directly, saving time and operation steps, and increasing users' purchase frequency.

From the above analysis, we can find that in order to optimize its revenue model, Dingdong Maicai has done a lot of work, constantly attracting new users and increasing conversion rate and customer unit price. The effect is very good at present, so it can continue to attract investors to increase investment, because Dingdong Maicai's commercial value is still quite great.

5. Product Iteration Analysis

In order to deeply analyze the iteration rhythm of Dingdong Maicai's version and explore the logic of product iteration, the author will analyze all the iterations of Dingdong Maicai's core versions. Since Dingdong Maicai's predecessor, Dingdong Community, is a life service product, not a fresh food e-commerce, we no longer analyze the previous version, but instead analyze all the core versions of V7.0.0 revision to V9.40.0, and sort it out as follows:

The following picture shows the cumulative download volume curve of Dingdong Maicai from Coolchuan.com since February 16, 2017.

Because the statistical data is affected by market rules fluctuations, we eliminated some abnormal data and re-drawed it to get the following figure. It can be seen that the curvature of user growth continues to increase since V8.24.0 (that is, January 12, 2019), while starting from V9.25.0 (that is, April 3, 2021), the curvature of user growth slows down, so Dingdong Maicai's growth model belongs to the "S-shaped" curve, so we divide Dingdong Maicai into three stages for analysis.

1. Start-up stage: Improve the basic functions of the product and polish the user experience

Before January 2019, the V7.0.0-V8.23.3 version was the launch stage of Dingdong Maicai. The main goal of this stage is to improve the basic functions of the product and polish the user experience.

At this stage, Dingdong Maicai first improved the basic functional modules of fresh food e-commerce, such as adding new category tabs, shopping carts, order tabs, and enhancing search functions, ensuring the basic operation experience of users.

Later, in order to improve user stickiness, Dingdong Maicai entered two aspects - enriching the operational activities and product functional modules on the platform, and improving and optimizing product functions. First of all, Dingdong Maicai has launched a wealth of marketing activities and product functional modules, such as fresh food group buying, full-time activities, points-free cash payment and other activities or functions, which has increased the frequency of users' orders;

With the enrichment of products and the increase in user volume, in order to achieve efficient matching between products and people, Dingdong Maicai has added modules such as high-quality recommendations and guess you like, and accurately recommends products to users through algorithms to stimulate users to place orders; the "Green Card Member" launched on V8.14.0 version on May 18, 2018 has greatly enhanced user stickiness and attracted users to place orders with rich member activities.

In addition to using rich activity gameplay to attract users, Dingdong Maicai also spent a lot of effort to polish the products at this stage, optimizing the user experience in multiple details of pre-sales, during-sales and after-sales scenarios.

For example, before the sale , the problem of repeatedly entering to confirm whether the goods that users want to buy are not in stock when they have no inventory. Dingdong Maicai has added a "arrival reminder" function; and in response to the user's missed discount due to the lack of time-limited purchase activities, Dingdong Maicai launched the "reminder" function of the limited-time-limited purchase activities; it also added the function of sharing recipes to WeChat and product details to display product evaluations to better assist users in making purchase decisions;

During the sale , due to the imperfect delivery system, users cannot understand the specific progress of order delivery, nor can they modify the delivery time, which leads to users' sense of insecurity. In response to this problem, Dingdong Maicai has added the functions of "the position of the order in delivery can be seen" and "modify delivery time" to facilitate users to understand the delivery progress, and provide users with opportunities to remedy if they are unable to receive the goods on time or accidentally choose the wrong delivery time;

After -sales service , Dingdong Maicai has added the functions of overtime payment and refund application. When customers are dissatisfied with issues such as delivery services or product quality, the problem can be solved in a timely manner. In addition, Dingdong Maicai has improved the customer service system, and can view common questions in contact with customer service, and has launched the online customer service function to deal with problems that cannot be covered by common questions.

While improving user stickiness, Dingdong Maicai has also tried to increase the scale of platform users in its growth period, but increasing the scale of platform users is not the focus of this stage. Therefore, Dingdong Maicai has only launched activities with low cost such as sharing red envelopes and invitation gifts, and has also launched a special section for new people to encourage old users to recommend new users and attract new users to register spontaneously.

2. Growth stage: expand the number of users and retain old users

From January 2019 to April 2021, the version from V8.24.0 to V9.24.4 is the rapid growth period of Dingdong Maicai. It can be seen that the user growth rate continues to rise in this stage. Expanding the number of users and retaining old users has become the focus of product iteration.

In terms of expanding the number of users , Dingdong Maicai launched the "contactless receipt" function during the epidemic in early 2020, and attracted many new users through this function; Dingdong Maicai also optimized the new user area, gave new users rich benefits, and added the "Share products and have the opportunity to get coupons" function to encourage old users to share more and attract new users; in addition, Dingdong Maicai also simplified the registration and login process to minimize user operation costs and expand the number of users. Make full efforts in product functions, operation activities, etc. to gain a large number of new users.

In terms of retaining old users , Dingdong Maicai still adopts the "soft and hard" method to retain users by enriching the gameplay of fresh shopping operation activities and optimizing and improving product functions details. In terms of enriching the gameplay of operation activities, Dingdong Maicai has added activities such as limited-edition grabs, hot-selling lists, live lottery, and combination free-to-play activities, and continuously attracting old users to place orders through rich activities; Dingdong Maicai always has quite high standards for user experience. In terms of optimizing and improving product function details, Dingdong Maicai has optimized and revised the eating module, classification page, search function, online customer service function and other functions; Dingdong Maicai has also added shopping cart price reduction reminders and order-making functions, which better improves the user experience.

From the data, at this stage, the number of users of Dingdong Maicai showed an explosive growth, indicating that Dingdong Maicai's series of actions at the product level and operation level have achieved good results.

3. Maturity stage: Continuously optimize product experience and expand business direction

From April 2021 to the present, the version has gone from V9.25.0 to V9.40.0, which is the maturity period of Dingdong Maicai. At this stage, the curvature of user growth slows down, and continuous optimization of product experience and expanding business direction is called the development focus of this stage.

During the mature stage of the product, Dingdong Maicai still makes good products steadily, continues to enrich operational gameplay , and improves the functional details of the product . For example, Dingdong Maicai began to support batch sales. Taking fresh milk with a shelf life of 4 days as an example, the price of production on that day was 2.5 yuan, while the price of production yesterday was 1.99 yuan. This measure also met the needs of users with different quality and price focus, and increased sales volume.

Dingdong Maicai has also added or optimized the automatic coupon issuance function, evaluation and points function, and product introduction to add live broadcast playback to attract users; at the same time, Dingdong Maicai has also made many detailed improvements, such as adapting the homepage, classification page and search bar to aging, paying attention to the user experience of middle-aged and elderly users, ensuring the retention of such users.

As for the expansion of business direction, we have mentioned it in the business model analysis in competitive product analysis. Dingdong Maicai began to build a self-operated agricultural base in the first half of 2021, strengthening agricultural product quality and food safety guarantees from the source, and improving the "standard production" link in the full industrial chain system of smart agriculture that integrates standard production, agricultural product processing, cold chain distribution, and online sales. This time node is also matched with the stage of its entire business development. After the product enters a mature stage, it begins to expand its business direction and make more attempts.

4. Conclusion

Overall, Dingdong Maicai has a good sense of rhythm. Dingdong Maicai focused on polishing its products in the early stage. After improving its basic functions, it optimized and improved the details of a number of products, and used a low-cost new recruitment method to try to expand the number of users. When the user experience stabilized, Dingdong Maicai began to enrich the way to play fresh shopping and successfully seized the pain points of users during the epidemic to launch solutions, thereby attracting the use of a large number of new users.

Since then, Dingdong Maicai continued to maintain sincere new rewards to ensure a stable increase in the number of users, and constantly updated fresh and interesting shopping methods, while constantly improving and optimizing product details, so as to retain old users while expanding the number of users. When user growth slows down and products enter a mature stage, while Dingdong Maicai continues to optimize the product experience, it began to build a self-operated agricultural base, gradually moving towards the production side, and trying to expand its business direction. This is the overall iteration step of Dingdong Maicai.

6. Product structure analysis

In the iterative analysis, we analyzed the iterative steps of Dingdong Maicai's product functions. Next, let's take a look at what users' needs meet and how they are distributed throughout the APP. We mainly analyze the product structure. The following figure is the product structure brain diagram of Dingdong Maicai V9.40.0:

For the sake of analysis, the author re-examined the product structure of Dingdong Maicai according to users, scenarios, needs and functions, and obtained the following table:

1. Overall analysis

When consumers use Dingdong Maicai, the following five scenarios will exist:

Before purchasing , you need to confirm whether you can deliver and find the products you need to buy;
When purchasing , you need to know the specific information about the product;
During settlement , you need to understand discount information, delivery information and payment information
After placing an order and before receiving the goods , you need to know the delivery information. If there is an emergency, you may need to cancel the order;
After receiving the goods , if you are not satisfied with the goods, you need to apply for after-sales service. In addition, there is also the need to evaluate the goods, repurchase and issue invoices.

2. Specific analysis

Scenario 1: What needs do consumers have before purchasing, and what functions does Dingdong Maicai meet this needs?

Before purchasing, the consumer may not be at the address where the delivery is required (for example, before the unit gets off work, the delivery address of the consumer this time is different from before. Therefore, consumers need to first click on the positioning module on the homepage and switch to the delivery address.

Taking the standard of whether the purchase needs are clear, consumers can be divided into three categories: clear purchase needs, not particularly clear and unclear.

For consumers with clear purchase needs, they can directly click on the search bar above the homepage and enter the product name to search directly;

For consumers who do not have particularly clear purchasing needs, that is, users who only know the category they want to buy but have not thought about which product they buy in the category, they can click on the specific product category on the homepage, or enter the classification module through the bottom navigation to select specific categories to choose;

For users with unclear purchase needs, if you want to get inspiration through shopping on the platform, you can enter the homepage's guesswork module, enter the user preference section predicted by algorithms, or enter the "What to eat" module through the bottom navigation, browse the recipes of many different cuisines, and determine the products you want to buy; if you use the purchase needs are unclear, consumers sometimes just want to see what discounts the platform has, stock up on the low price, or want to see what new things have been put on the shelves recently. At this time, users can enter the homepage's limited-time rush purchase, Dingdong new products, and special promotion modules, and take a look and browse.

All the functions mentioned above can be found in the home page or at the bottom navigation bar, and all the steps can be completed in just 1-2 clicks. For new users, all the content needed can be found quickly, and the operation cost is very low; for old users, the path of these operations is very short and the user experience is good.

Scenario 2: What needs do consumers have during purchases, and what functions does Dingdong Maicai meet this needs?

During the purchase process, the core needs of consumers are to understand the specific information of the product. Therefore, in this process, consumers' needs are mainly realized on the product details page.

First of all, consumers want to understand the price, specifications and other information of the product to judge whether the product is cost-effective. This information is displayed on the first screen of the product details page. Without sliding, consumers can see this information and see it at a glance;

In addition, consumers also want to understand the quality of the product, and can slide down to the long product details picture; before making a decision on whether to buy or not, if consumers want to see other users’ evaluations of the product, they can go to the evaluation area of the product details page, which displays the number of evaluations and the positive review rate. If you want to know more, you can click to enter and see the text content and pictures of each specific evaluation;

Since most of the platform users are young and their cooking skills are generally not high, some consumers do not know how to make this dish when purchasing. At this time, you can enter the recommended recipes on the product details page to view the recipes related to this product to better assist users in making purchasing decisions.

All the above functions are implemented on the product details page, that is, the product details page brings together solutions for all users' needs during the purchase process. This design can make the user experience smoother and more convenient to operate.

Scenario 3: What needs do consumers have during settlement and how does the platform meet it?

After the purchase is completed, consumers will first pay attention to the discount information during settlement, such as whether there are available coupons. The coupon collection column at the top of the shopping cart page displays this information to the user. After that, the consumer clicks the Go to Checkout button to enter the checkout page.

At this time, consumers will care about the delivery time, delivery address and other information of the product. For example, consumers do not need to deliver it immediately, but hope that when the appointment is delivered at a certain time in the future, they need to click the delivery time column of the settlement page to modify it;

When choosing a payment method, consumers want to know which third-party payment platform's discount activities meet the conditions and are the most cost-effective. At this time, consumers can click on the corresponding red labels after each payment method on the settlement page, which contains a detailed explanation of the discount activities to help users decide which payment method to use. In addition, if consumers have special requirements, such as having a sleeping baby at home and do not want the deliveryman to knock on the door, they can fill in the notes information in the notes column, which also reflects the humanity of Dingdong Maicai.

Scenario 4: What needs do consumers have after placing an order and before receiving the goods, and how does the platform meet it?

After placing an order, consumers may be unable to receive the order due to emergencies, or find that they buy the wrong product, choose the wrong address, etc., and need to cancel the order. At this time, consumers can click "My" in the navigation at the bottom to enter my order, and click Cancel the order in the card of this order to cancel it;

While waiting for the delivery, consumers want to understand the delivery staff's location and estimate the arrival time so as to arrange their own affairs. At this time, users can click to enter this order in the list of delivery to receive in my order to view the delivery staff's location in the map information on the page to better grasp the real-time progress of the order.

Scenario 5: What needs do consumers have after receiving the goods and how does the platform meet them?

After receiving the goods, if the consumer finds that there is a problem with the quality of the product, he will want to apply for after-sales. At this time, the consumer enters my page through "My" in the bottom navigation bar, click on the after-sales/refund in my order and select this order, and can apply for after-sales service online quickly;

If consumers want to evaluate and publish their satisfaction with products, delivery services, etc. and give reference to other users on the platform, they can click on my order to be evaluated and evaluate this order;

If consumers have a fixed shopping habit and want to buy these products again after a period of time, they can find this order in my order-all orders, click to get another order to make a quick repurchase;

In addition, if users have the need to issue invoices, they can click on customer service and help on my page, select the invoice I want to issue, select the order to issue invoices, fill in the invoice information, and easily issue invoices.

The above functions are all set on the "My" page, which is very concentrated, and you can enjoy a very smooth experience after the user receives the goods.

From the above analysis, we can find that Dingdong Maicai’s functional design can well meet the needs of users in five scenarios: before purchase, during purchase, during settlement, to after ordering, before receipt, and after receipt. At the same time, the high-frequency functions required by different users have a prominent focus and reasonable distribution in product structure, which can be regarded as a product with relatively excellent design.

7. Operational Path Analysis

The saying "Products are responsible for giving birth, and operations are responsible for raising them" also indirectly reflects the close relationship between products and operations. So how did Dingdong Maicai operate this product so that it can grow rapidly in a short period of time? According to the AARRR model, the author sorted out the main operating activities of Dingdong Maicai since its establishment as follows:

1. User acquisition (A)

Dingdong Maicai did not use the method of attracting new products such as inviting spokespersons and naming variety shows to attract new products. On the contrary, Dingdong Maicai's new products are more down-to-earth. It has been described in detail in the "Improving the Number of Platform Users" section of "Business Value Analysis". Here are only a brief list as follows:

Large-scale advertising (online, offline)
Pull new ground
Invite new recruits
Word of mouth communication

2. User activation (A)

When a user downloads and registers an APP, he needs to activate the user to open the APP, thereby improving the daily and monthly active users of the APP. In order to improve user activity, Dingdong Maicai mainly pushes special event information, daily points, check-in reminder information, etc. to the user in the form of push messages, prompting the user to open the APP. For example:

Eat hot pot at home on weekends → xxx shrimp slips 9 yuan/bag, xxx beef balls 21.9 yuan/bag, click to buy
You have 2 great coupons worth 25 yuan in total to expire soon
【Dingdong Fish Pond】Feed rewards to be received
Haven't signed in today

3. User Retention (R)

After promoting user activity, it is also necessary to improve user retention rate in order to continuously create value for the platform. In order to improve user retention rate, Dingdong Maicai mainly does the following:

Create a green card membership system: provide free dishes, coupons, exclusive prices and other discounts every day and every week to improve user stickiness
Fish pond and orchard game: Complete simple tasks every day to get feed and water droplets, and receive real fish/fruit after the progress is completed
Sign-in and points system: Continuous sign-in to receive grocery purchase bonus, return points for orders, points redemption without threshold coupons

4. Increase income (R)

We have introduced in detail the methods to increase revenue in the business value analysis section, so we will not repeat them here.

5. Recommended Communication (R)

In order to guide users to spread spontaneously, Dingdong Maicai mainly does the following:

Actively assume social responsibilities, such as launching the "Green Water and Green Mountains" plan to help rural revitalization; assisting 99 Charity Day to provide care for visually impaired people; during the epidemic, it also provides public welfare vegetable packs for residents in many places, etc., establishing a good enterprise
Invite gifts, old users invite new users, and both parties can get corresponding gift packages to stimulate users to share with their friends

Above, the author systematically analyzed the reasons behind the rise of Dingdong Maicai from seven parts: industry, competitors, user value, commercial value, product iteration, product structure, and operation. It can be seen that the success of any product is a comprehensive role of internal and external reasons such as "the right time, place, and people".

8. Future Prospects/Optimization Suggestions

Through the above analysis, we have understood the reasons for the rapid rise of Dingdong Maicai. So where will this "head" unicorn go in the future? Next, the author will use the SWOT model to conduct a system analysis, hoping to draw effective conclusions from it.

Through the above analysis, we can see that if Dingdong Maicai wants to continue to develop and continuously obtain new financing, it must seize opportunities, maintain its advantages, and at the same time eliminate threats and reverse its disadvantages, and achieve the following:

首先，必須努力調整單一的盈利模式，因地制宜地發展新業務。

前置倉的模式無疑是符合一二線年輕白領的需求的，因為它能滿足這些用戶對便捷程度和商品品質的要求。但對于三四線城市的用戶來說，他們的工作相對輕松，空閑時間較多，收入水平也比一二線城市的用戶低很多，價格敏感度高、便捷程度敏感度低才是這類用戶的特點。

因此，叮咚買菜若想拓展更廣闊的的下沉市場，需要在這些城市改變業務模式。

比如，可以借鑒美團優選、多多買菜等社區團購的模式，用相對更低的價格吸引三四線城市的用戶；

也可以嘗試在三四線城市開展B端業務，向線下蔬菜商店供貨，這樣可以節省建設前置倉的成本，更符合三四線城市的實際情況；

In addition, the habit of users in third- and fourth-tier cities to go to the vegetable market to buy vegetables is more difficult to change than that of users in first- and second-tier cities. Dingdong Maicai can also get involved in the smart vegetable market business and create a new type of vegetable market with a good environment and smart experience.

其次，在生鮮垂直領域通過優質的服務和商品質量取得了越來越多用戶的認可后，叮咚買菜也可以嘗試拓寬相鄰航道及探索行業上下游業務。

目前，我們可以看到叮咚買菜已經開始探索生鮮行業上游，建設自營農業基地。

未來，叮咚買菜也可以嘗試拓寬相鄰航道，在已有用戶的基礎上，切入更多用戶場景，比如，提供自營速食包的售賣服務，依托新鮮且低價的直采農產品和強大的配送體系，為用戶提供健康、快速、低價的餐品；

也可以嘗試建設線下無人超市，依托專業的供應鏈體系和完備的前置倉，開展線下零售業務。這些探索不僅可以提高叮咚買菜在生鮮賽道的影響力，還可以改善單一的業務結構，建造自己的護城河，形成與其他生鮮電商的競爭優勢。

第三，要持續做好生鮮產品質量的把控和用戶體驗的不斷提升。

產品才是硬道理，這個產品既指叮咚買菜售賣的生鮮產品，也指叮咚買菜這款APP，只有這兩者都保持高質量，用戶才會持續買單。

最后，叮咚買菜要想獲得更持久的發展，一定要嚴格遵守國家的法律法規，積極響應國家政策要求。

目前，生鮮電商的出現給廣大農民的收入帶來了切實的增長，農民的生活也更加有保障，因此我國對農產品電子商務持支持態度。但與此同時，隨著生鮮電商行業競爭的加劇，各家企業都必須做好相應的應對措施，此時，叮咚買菜務必守好底線，在國家期許的范圍內發展，才能有更長遠的發展。

作者：Mandy

來源：Mandy

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