Daily Fresh Product Analysis Report

On June 25, 2021, MissFresh was officially listed on the Nasdaq with the stock code "MF", becoming the first stock in community retail digitalization.

According to relevant reports: Since the establishment of MissFresh in 2014, it has completed 11 rounds of financing, including a round of financing in December 2020 of up to 2 billion yuan. So, what made this fresh food delivery platform grow so rapidly? What is the current situation of the entire industry?

This article will analyze from the following aspects:

1. Industry Analysis
2. Competitive product analysis
3. User Value Analysis
4. Business value analysis
5. Product Iteration Analysis
6. Product structure analysis
7. Operational Analysis
8. Summarize

1. Industry Analysis

With the comprehensive coverage and continuous development of mobile Internet, fresh food e-commerce has emerged.

Since the rise of the Internet, more and more people have developed the habit of shopping at home, especially white-collar workers living in first- and second-tier cities who usually do not have time to go to the supermarket to purchase fresh food. The emergence of fresh food e-commerce can greatly reduce everyone's time cost for purchasing. Especially in the past two years, fresh food e-commerce has become very popular.

So, what has driven the development of fresh food e-commerce in such a short period of time? Below we will use the PEST model to discuss.

1. Politics

• In March 2006, the "National Informatization Development Strategy 2006-2020" emphasized the expansion of the cyber economy space and the formulation of an implementation outline for building a cyber power.
• On July 1, 2015, the State Council issued the Guiding Opinions on Actively Promoting the "Internet Plus" Action, and on September 29 of the same year, the General Office of the State Council issued the Opinions on Promoting Online and Offline Interaction to Accelerate the Innovation, Development, Transformation and Upgrading of Commercial Circulation.
• In January 2018, the State Intellectual Property Office issued the "Catalogue of Key Intellectual Property Support Industries (2018 Edition)", which listed the industrial Internet as a key industry for national development.
• November 2019 "5G+Industrial Internet" 512 Project Promotion Plan
• In April 2020, the National Development and Reform Commission and the Cyberspace Administration of China issued the Notice on Recommending the Implementation Plan for the "Cloud Computing, Data Use and Intelligence" Action to Cultivate New Economic Development, which emphasized the establishment of platforms and the construction of a multi-layered industrial Internet platform to empower the digital transformation of small and medium-sized enterprises.
• In January 2021, the Ministry of Industry and Information Technology issued the "Industrial Internet Development Action Plan (2021-2023)", which established the three-year development goals of my country's industrial Internet in light of current industrial development.

2. Economy

As the world's most populous country, China certainly has a huge consumer group. With the rapid economic development and popularization of the Internet this year, national consumption has also increased significantly. In particular, the growth of disposable income of urban residents will greatly enhance the activity of online consumption on the mobile Internet, especially white-collar workers in first- and second-tier cities.

As the saying goes, food is the most important thing for people. According to the analysis of the National Bureau of Statistics, the proportion of per capita food research consumption expenditure of the national residents has always remained high.

Moreover, compared with other categories, food has the characteristics of high consumption frequency and fast consumption speed, and the demand for fresh food, which is a rigid demand, continues to grow.

Fresh food is one of the basic consumer goods in my country. With the increase of per capita disposable income and consumer expenditure, iResearch predicts that the fresh food retail market will continue to grow in the future. By 2025, the scale of China's fresh food retail market will reach 680 million yuan.

3. Social and cultural aspects

Urban residents, especially young people in first- and second-tier cities, account for a very large proportion of consumption. This generation’s educational background and growth environment have also greatly promoted Internet consumption behavior. Before the development of Internet fresh food platforms, young people living in first- and second-tier cities generally faced problems such as not having time to go to physical supermarkets to shop and the high prices of fresh food in supermarkets.

The rise of fresh food e-commerce not only solves the problem of difficulty and high cost of buying vegetables, but also saves more white-collar workers a lot of time costs and physical labor due to the fresh food delivery service.

However, food safety issues will also have a great impact on the development of online fresh food. How can we buy safe and reliable food? More people are looking for a fresh food platform that can provide safety guarantees to purchase ingredients, which will further catalyze the development of fresh food platforms.

During the epidemic prevention and control period in 2020, more people were forced to enjoy online shopping. During this period, some groups who were accustomed to offline consumption gradually turned their attention to online shopping.

After the epidemic, the number of users of fresh food platforms has remained at a high level, and people's online consumption habits have gradually strengthened.

4. Technology

The development of 5G, mobile payment, big data and cold chain has provided new opportunities for fresh food platforms. According to iResearch, the number of 5G mobile device users in China was 13 million in 2019, and it grew rapidly to 128 million in 2020, entering a stage of large-scale growth. By 2025, the number of 5G mobile device users in China will exceed 800 million, reaching 862 million.

The popularization of 4G has promoted the rapid development of mobile Internet. The promotion of 5G can drive mobile Internet consumption to a great extent, and 5G will fully usher China into the era of the Internet of Everything. This shows that there is still a huge market for mobile Internet. As a rigid demand industry for people's livelihood consumption, the scale of fresh food retail is as high as trillions of market volume.

5. Conclusion

With the increase in my country's per capita disposable income and the rapid development of the Internet industry, fresh food e-commerce has gradually entered more households, especially white-collar workers living in first- and second-tier cities, who are the main consumers of fresh food e-commerce platforms.

According to Maslow's hierarchy of needs, residents whose basic needs have been met have gradually shifted their attention to the issue of food safety, which will also catalyze the development of fresh food e-commerce to a large extent.

The popularization of 5G networks and the increase in the number of white-collar workers in first- and second-tier cities will promote the further development of fresh food e-commerce platforms.

2. Analysis of Common Business Models of Fresh Food E-commerce

1. Pattern Analysis

2. Summary

Depending on the target user groups, each model has its own advantages and disadvantages. Generally speaking, white-collar workers living in first- and second-tier cities prefer online fresh food platforms.

From the perspective of maintaining the freshness of fresh food, the three models of forward warehouses, in-store and supermarket + catering will relatively better meet the needs of this user group.

3. Competitive Product Analysis

Fresh food e-commerce platforms generally refer to the direct sales of fresh products on the Internet, such as fresh fruits, vegetables, fresh meat, etc. Fresh food e-commerce has developed along with the general trend of e-commerce.

In this rapidly developing trend, it is inevitable that a large number of participants emerge in a short period of time. There are those that deliver directly from offline supermarkets (Yonghui Supermarket, RT-Mart, etc.), and those that deliver from forward warehouses (Dingdong Maicai, MissFresh, etc.), and the quality varies. Today we will discuss MissFresh and Dingdong Maicai.

1. Daily Fresh

• MissFresh was founded in October 2014 and completed a US$5 million angel round of investment in December of the same year.
• In May 2015, it completed a US$10 million Series A financing. In November this year, Tencent led the investment again and MissFresh received RMB 200 million in Series B financing.
• In April 2016, the company received an investment of RMB 230 million, marking the next stage for the fresh food e-commerce business.
• In January 2017, MissFresh completed a US$100 million Series C financing, and will increase its investment in supply chain and cold chain. In September of this year, it confirmed the completion of a US$330 million Series C financing.
• In September 2018, MissFresh completed a new round of financing of US$450 million, led by Goldman Sachs and Tencent.
• A new round of financing was completed in May 2020, with a pre-investment valuation of over US$3 billion
• In December 2020, MissFresh received a strategic investment of RMB 2 billion and will register its headquarters in Qingdao
• IPO on June 25, 2021 with financing of US$2.27 billion

MissFresh completed 12 rounds of financing in just seven years.

Analysis of Daily Fresh’s business model:

(1) Mode : Forward warehouse mode

(2) Product source : Direct sourcing from the source. In 2020, with the industry average direct sourcing rate at 55%, more than 80% of the products and more than 93% of fresh agricultural products were purchased directly from producers. We are committed to reconstructing the fresh product supply chain and connecting high-quality fresh producers and consumers.

(3) Product types and quantities : More than 4,300 SKUs, covering all categories including fruits and vegetables, seafood, meat and poultry, milk and snacks, etc.

(4) Transportation : The ultra-fast cold chain logistics system of “city sorting center + community distribution center”.

(5) Storage : 631 forward warehouses cover 16 first- and second-tier cities in China, and have established strict disposal standards based on the specific expiration date, storage space availability, storage environment requirements and demand forecasts of each SKU.

(6) Delivery : The delivery range is 1-3 kilometers and the delivery time is about 1 hour

(7) Users : White-collar workers in first- and second-tier cities

2. Dingdong Shopping

• Founded in May 2017 and received angel round financing
• In 2018, it received financing from Dachen Venture Capital and Red Star Macalline and entered the A round
• In November 2018, Sequoia Capital invested in Dingdong Maicai and it entered the B+ round.
• In March 2019, Dingdong Maicai entered the B++ round with the lead investment from Capital Today. In July of the same year, it received financing again and entered the B+++ round.
• In April 2021, the company completed its Series D financing with a financing amount of US$700 million. In May of the same year, SoftBank Group invested US$330 million and Dingdong Maicai entered the D+ round.
• On June 29, 2021, the company raised US$410 million through an IPO.

Dingdong Maicai completed 8 rounds of financing in 7 years.

Analysis of Dingdong Maicai’s business model:

(1) Mode : Forward warehouse mode

(2) Product sources : With the assistance of technologies such as big data and artificial intelligence, on-demand e-commerce platforms can establish an efficient feedback mechanism within the supply chain. Based on insights from downstream consumer data, they can guide upstream production in a timely and accurate manner, effectively reduce the loss rate, and maximize the productivity of upstream suppliers.

(3) Product types and quantities : Mainly provide fresh products such as vegetables, bean products, fruits, meat, poultry, eggs, seafood, rice, flour, grains, oil, snacks, etc.

(4) Transportation : We adopt the method of “city wholesale procurement + community forward warehouse + 29-minute delivery” to avoid the “source, cold chain, cold storage” approach to reduce supply chain cost issues.

(5) Storage : As of the first quarter of this year, Dingdong Maicai has covered 29 cities across the country, with 40 regional processing centers and more than 950 self-operated forward warehouses.

(6) Delivery : The delivery range is 1-3 kilometers and the delivery time is about 1 hour

(7) Users : White-collar workers in first- and second-tier cities

3. Conclusion

From the above analysis, it can be seen that MissFresh and Dingdong Maicai were established at a similar time, and their core business model is the forward warehouse model, making them direct competitors. However, MissFresh's financing was smoother, with characteristics such as fast financing speed and high financing amount, which gave it a leading advantage and continuously widened the gap with its competitors, preparing sufficient ammunition for this protracted war.

At the same time, MissFresh and Dingdong Maicai have differences in supply chain management. MissFresh focuses on source procurement and is committed to making it easier for every family to shop and eat with peace of mind. Dingdong Maicai is committed to using big data to improve the productivity of suppliers. Relatively speaking, MissFresh is more popular among the people in terms of product selection.

Fresh food e-commerce has high operating costs and requires the use of cold chain throughout the entire process. On the other hand, some fresh food categories in China are not industrially produced, and it is difficult to satisfy consumers.

The emergence of the epidemic has pushed fresh food e-commerce to the forefront again, but the epidemic will eventually pass, and the growth it brings may only be temporary. So where can fresh food e-commerce companies go?

4. User Value Analysis

In the fresh food e-commerce market, there are three main participants: consumers, platforms and suppliers. The platform consumers are mainly concentrated in first- and second-tier cities. Data from industry analysis shows that white-collar workers in the target cities are the main consumer group. Based on this, the business logic of Daily Fresh is as follows

If the platform wants to achieve rapid growth, it must meet the demands of user groups and purchasing sources. Below we will discuss the needs of these two aspects and how MissFresh can better meet their needs.

1. Target consumers

From industry analysis, it can be seen that fresh food e-commerce is mainly concentrated in first- and second-tier cities, and most of the active users of fresh food e-commerce are female users. People born in the 1980s and 1990s have become the main consumers of fresh food e-commerce products.

Data shows that users of fresh food e-commerce platforms are mainly concentrated in the age group of 25-35 years old. 75.3% of Daily Youxian’s users are under the age of 30. The users tend to be younger and they are more willing to purchase fresh products online.

People born in the 1980s and 1990s are mainly white-collar workers in the workplace. For so many white-collar workers, "what to eat" has become a common problem besides work. If you often choose takeout, it will be unhealthy, and the food in the company cafeteria is not delicious. More and more people choose to cook their own meals. So how do you meet your needs for purchasing fresh food and what do you value most when purchasing?

iResearch survey data shows that online food consumers value food safety the most, but pay more attention to price when purchasing.

As shown in the figure, among the factors that online fresh food shoppers value most when purchasing goods, food safety ranks first with a proportion of 57.0%, and price is the second most important factor;

Among the factors influencing decision-making, price is the primary concern, accounting for 42.6%, and food safety is the second concern, accounting for 36.4%.

Users value food safety the most, but are more influenced by price and other factors when making decisions. iResearch believes that due to the large number of fresh food categories, and the large differences between products in the same category due to differences in brand, origin, etc., users cannot effectively distinguish the differences between different products during the purchasing process, so they will choose to refer to more straightforward price factors when making purchasing decisions.

Then, let’s start with the discussion of the factors that users consider most when shopping for fresh food online.

(1) Offline supermarkets

In the early days, people bought fresh food through offline channels, such as supermarkets and vegetable markets.

Price level: Supermarkets need to choose good geographical conditions and purchasing costs. Correspondingly, the prices of fresh products sold there are also relatively high.

Timeliness issue: Offline venues are fixed, and every time people buy fresh food, they need to go to a supermarket a certain distance away to meet their needs. Secondly, every offline purchase requires queuing up for weighing, queuing up for payment, etc., which will greatly increase everyone’s time cost. After buying the vegetables, you need to carry them back yourself, and this process slowly consumes time and energy.

Safety issues: quality needs to be verified

Category: All categories

In summary: purchasing fresh food from supermarkets has the advantage that the goods are fresh enough, but it also has disadvantages such as consuming time and energy and being more expensive. In today's society, time is money, and office workers have limited free time every day, so they will not waste enough time on purchasing fresh food.

(2) Vegetable market

Price level: The price is relatively lower than that of supermarkets

Timeliness issue: Need to purchase by yourself

Safety issues: quality needs to be verified

Category: Few categories

Summary: Office workers can only go to the vegetable market to buy vegetables after get off work. Usually, after get off work, the food selection is limited, and there are very few vegetables, fresh seafood and meat. Moreover, the vegetables in the vegetable market are abundant and freshest before 10:00 in the morning, which is more suitable for families with elderly people to help buy groceries and cook.

(3) Procurement on traditional e-commerce platforms

The advent of the new era has brought convenience to many services. With the development of the Internet, various fresh food purchasing models have emerged on e-commerce platforms, providing convenience for everyone to buy vegetables, meat, etc. More and more people prefer online shopping.

Price level: Online shopping does not require high rents, and generally speaking, product prices are lower.

Timeliness issue: Traditional e-commerce platforms do not require consumers to go to stores to purchase, they only need to place orders online, and there is no distance cost. The time cost for user procurement is almost zero. No need to shop in person though. However, you need to sign for it in person at the post station and move it home.

Product quality: Due to the long transportation time, the vegetables lose moisture and are relatively less fresh.

In addition to the above, many consumers are concerned about whether there will be issues with short weight and after-sales guarantee when fresh food is delivered via the platform.

Category: All categories

Summary: Purchasing fresh food on traditional e-commerce platforms not only has the advantage of saving time but also can save consumption costs. In the beginning, it was very popular among white-collar workers in first- and second-tier cities. However, it also has the disadvantage of insufficient freshness, a defect that is enough to lose a large number of users.

(4) Fresh food convenience cabinet

Price level: relatively high

Timeliness issue: Fresh food cabinets are usually placed in residential areas, so you can pick up what you need directly.

Safety issues: quality needs to be verified

Category: Limited categories

Summary: Fresh food convenience stores are usually located in residential areas, making it relatively convenient to buy fresh food. However, the prices of fresh food products in their counters are usually 10% to 30% more expensive than those in supermarkets or local vegetable markets. In addition, the area of ​​fresh food convenience stores is relatively small, and the variety of products deployed is relatively small.

Therefore, buying fresh products in fresh food convenience stores is expensive and the variety is limited.

2. Origin supplier

The latest food consumption standards of the State Council show that my country's total demand for fresh food is estimated to be 420 million tons. Compared with the annual fresh food output of more than 1.11 billion tons in 2018, it can be seen that the entire fresh food market presents a situation of structural oversupply. At the same time, these suppliers are also looking for new sales channels due to the outdated traditional supermarket model, forced promotions, overdue accounts and other reasons.

This article first analyzes the traditional sales methods of fresh food to see if we can get some inspiration:

(1) Direct supply from large supermarkets

Some businesses on the market rely on the advantages of their own channels to charge unfair fees to their suppliers in order to lower costs.

In addition, fresh produce is "time-sensitive, perishable and fresh". During the transportation process, it is easy for a large amount of loss to occur, which will increase the chance of supermarket returns and increase the cost of suppliers.

Overdue accounts seem to be a typical phenomenon in the retail industry, with large supermarkets settling payments after goods are sold, or on a monthly or quarterly basis, which can easily lead to difficulties in capital turnover.

Brand owners/wholesalers are usually in local agricultural wholesale markets. Due to geographical restrictions, it is difficult to reach cross-regional customers to come and purchase.

(2) Traditional wholesale markets

Traditional wholesale markets generally purchase goods locally. Due to oversupply, coupled with the high output of suppliers and the high perishability of fresh produce, it is easy for suppliers to suffer losses.

Generally, the goods are purchased from local brands/wholesalers, and some small vendors also play the role of middlemen. Since the quantity and types they purchase are limited, and they also sell on credit, they have difficulty in capital turnover.

(3) Self-production and self-sales

In the Internet age, many farmers will also adopt the model of self-production and self-sales. They open their own stores and sell products through major platforms. However, due to transportation problems that cause damage to fresh products at different stages, many users will choose to return the products for a refund, which will also cause great economic losses.

3. Platform

From the above analysis, we can find that consumers have two main ways to purchase fresh food. The main problems of these two ways are:

1. High time cost
2. The price of a single product is relatively expensive
3. Food quality issues
4. Need to pick up at the post station

(1) Time control issues

MissFresh adopts the service of online ordering and home delivery by delivery personnel, which can greatly save the timeliness of purchasing fresh food and other supplies for users.

Secondly, in terms of product variety and quantity, there are more than 4,300 SKUs, covering all categories including fruits and vegetables, seafood, meat and poultry, milk and snacks. It can greatly meet consumers' online shopping needs.

Finally, MissFresh adopts the policy of reducing shipping fees when the purchase reaches a certain amount, so that consumers can enjoy their shopping.

(2) Issues in controlling fresh produce quality and prices

The issue of fresh food quality control is also a concern of consumers. MissFresh adopts the strategy of direct sourcing from the source. In 2020, with the industry average direct sourcing rate of 55%, more than 80% of commodities and more than 93% of fresh agricultural products are purchased directly from manufacturers. It is committed to reconstructing the fresh food supply chain and connecting high-quality fresh food producers and consumers.

Since the products are sourced directly from the source and there are no middlemen to make a profit from the price difference, the prices of products at MissFresh are relatively more favorable than those in traditional fresh food supermarkets. It also meets consumers' demand for fair prices.

(3) After-sales guarantee

According to the MissFresh App, if the goods you received are not fresh, you can get a refund and enjoy a quick return service. This provides sufficient protection for consumers after sales.

According to information provided by MissFresh customer service: After-sales feedback for fresh seafood is within half an hour after receiving the goods. After-sales feedback for vegetables, fruits, meat products, etc. will be approved as long as it is applied for within two days. The after-sales period for eggs, dairy products and other snacks is 7 days.

It can be seen that MissFresh has done a good job in after-sales service, which not only enhances the trust of consumers, but also establishes the platform's reputation for good service, attentive service and timely service.

(4) Supplier level

a. Three 0 Plan:

According to the official website of MissFresh, in order to attract high-quality suppliers. MissFresh has achieved three "0s", namely: 1. 0 fees - no entry fees or promotion fees of any form; 2. 0 returns - qualified goods; 3. 0 account period - supply chain financial services. This strategy has eliminated the worries of suppliers and attracted a large number of high-quality suppliers to settle in.

b. “10 Billion Club” Plan

In 2020, MissFresh held the first supply chain ecology conference in the fresh food retail industry and officially launched the "10 Billion Club" plan, announcing that it will support 100 billion-level cooperative suppliers in the future, and provide multi-dimensional empowerment such as R&D, brand, channel, data, and capital, and grow together with upstream and downstream partners.

4. Conclusion

Through the above analysis, we can find that MissFresh can not only meet the consumption needs of consumers, but also meet the multi-channel, branding and R&D needs of suppliers. Compared with other fresh food procurement channels, these data explain why MissFresh is so popular.

5. Commercial Value Analysis

MissFresh’s current core business is revenue. Here we use GMV, the most commonly used data indicator in e-commerce, to analyze whether MissFresh’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 used by MissFresh 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 MissFresh attract new users?

There are mainly two ways: paid channels and free channels.

(1) Large-scale advertising investment (paid channels)

For example, advertising on Tencent Video

The advertisement "You're Delicious Too" was launched on Tencent Video. The short film expresses the wonderful feeling of food vividly through nonsensical storylines, especially the ending of each story, which is the finishing touch. I believe that after reading this, users will not only be deeply impressed, but will also remember the magical slogan "Daily Fresh".

(2) Weibo topic marketing and Weibo poster marketing

When the billboards were launched one after another, MissFresh released the topic #Invite another 200 million people# through its official account, which quickly spread on Weibo. MissFresh crossed over for the first time and found 11 blue Vs including Koala FM, Jiayuan.com, Golden Dragon Fish, Liangpin Shop, Xiaobai Camera, and Haier Air Conditioner to jointly interact and release brand joint posters.

(3) Collaborating with jokesters to bombard friends’ circle (VX marketing)

In addition to the cooperation of Blue Vs, MissFresh also posed difficult questions to many joke makers, asking them to use their own creative ways to invite friends to follow and use MissFresh, warm up the second round, and successfully bombard the circle of friends.

Many Weibo joke makers such as My Friend is a Weirdo, My Ex is a Psycho, The Flip-Flop Devil, British Newspaper Sister, My Friend is a Idiot, etc. have responded and posted creative "invitations" in their personal circles of friends, making their advertisements everywhere.

(4) Launching a campaign to give away stored-value cards by finding billboards to trigger hot topics (event marketing, topic marketing)

The most important thing in communication is to be truthful. This time, MissFresh was very conscientious. After the advertisement went online, it launched a billboard search activity through its official Weibo account. As long as you see any billboard of MissFresh, take a photo and post it on Weibo saying where the billboard is, you can get a 200 yuan stored value card from MissFresh.

For a time, the search for billboards by the whole nation became a hot topic, and many fans participated in the event, generating a large number of high-quality UGC photos. MissFresh’s creative billboards also quickly spread through Weibo and WeChat Moments.

(5) Launching H5 to trigger a large amount of UGC dissemination (creative H5 marketing)

It is understood that MissFresh had no plans to make H5 before, but seeing how popular it was online, it launched an H5 called "Give You a Billboard" in a short period of time. Users can use the billboard templates provided in the H5 to freely edit and create their own creative billboards.

MissFresh has used offline billboards, WeChat Moments, Weibo, short videos, H5 and other forms to capture consumers' attention in all aspects. A qualified integrated communication should have a proper promotion rhythm, make continuous moves in a short period of time, integrate media and resources.

(6) Ways to cooperate with other platforms

• On June 13, 2019, MissFresh and Tencent held a strategic cooperation press conference in Shanghai with the theme of "Fresh to 100 Billion, Smart to Win". Relying on the support of Tencent Smart Retail's "all-touchpoint retail", the 100 billion smart fresh plan integrating "smart marketing, smart logistics and smart supply chain" was officially launched.
• In October 2019, MissFresh signed a strategic agreement with Hengdu to collaborate on procurement and explore a new model of retail-supply cooperation. In this strategic cooperation, the two parties adopted an advanced cooperation model, relying on the big data advantages of both parties to conduct early sales forecasts and production capacity planning, and jointly carry out large-scale direct purchases from production areas, further controlling procurement costs while ensuring product quality. Even in the current situation of generally rising beef and mutton market prices, the cooperative products can still maintain stable prices.
• In February 2020, we collaborated with Lenovo Xiaoxin to launch the "Love Gift Package" to share loving stories during the epidemic.
• On April 21, 2020, Fengxiang Co., Ltd. signed a strategic cooperation agreement with MissFresh, joining MissFresh's "10 Billion Club" plan, and will work together to promote the innovation and upgrading of healthy chicken products, and will also cooperate in-depth in precision marketing and the integration of online and offline channels.
• On May 19, 2020, Vinda and MissFresh platform held a strategic cooperation signing ceremony in Beijing. At the ceremony, the two sides reached a deep consensus on issues such as jointly promoting the development of social e-commerce platforms.
• In September 2020, we reached a strategic cooperation with Tencent Maps, Knight Card, etc.

For example, by cooperating with other platforms such as Ele.me, Koubei, and Beike, taking advantage of the Ele.me New Year Festival to promote its own brand, and promoting the Blue Ocean Action with Beike.

2. Word of mouth conveys the “fresh” taste

MissFresh CEO Xu Zheng: Especially in times like this, the more we need to learn to use the power of word of mouth.

Excellent product reputation is very important for fresh food platforms. Word of mouth plays a crucial role in attracting new customers. Only when the product quality is good enough, the variety is wide, and the delivery speed is fast can it attract new and old users.

(1) Invitation registration benefits

Reward users with red envelopes or vouchers by having old users invite new users to register and click on their likes.

(2) Help get free red envelopes

New and old users can receive free products or coupons by inviting other users to help as long as a certain amount of help is reached.

Therefore, we often see users who purchase Daily Youxian sharing links and inviting friends to help. This simple and effortless way of click-and-support can be said to be a good way of promotion. Therefore, when a product has a good reputation, word-of-mouth communication will also be formed.

(3) Approaching consumers - Ground promotion

MissFresh conducts offline promotions, offering registered users free eggs or fruits to attract new users to register.

3. Improve conversion rate

After guiding users to download the APP through various means, it is only when users complete the registration step by step and generate purchasing behavior, that is, when they are converted from a new user into a paying user of the platform, that the APP is valuable to the platform. So how does MissFresh improve its conversion rate?

There are generally two ways for users to purchase:

(1) Browse the App homepage - enter the details page - browse products - add to cart - ... - pay

(2) Search for the product directly - go to the details page - add to cart - pay

Next, we will analyze the user purchase process touchpoints: product list page, product details page, shopping cart page, checkout page, etc., and how the platform guides users to generate purchasing desire.

(1) Daily Fresh Home Page

New users can enjoy special discounts within seven days. Most users have the mentality of taking advantage of the situation. In addition to free shipping for the first order when registering as a new user, Daily Youxian also offers a 128 yuan red envelope discount exclusively for new users. The discount is limited to a certain period of time and will be invalid after the expiration date.

Secondly, according to Hick's Law, the more choices you give to users, the longer it takes them to make a decision. If users stay at each link for too long, they will lose some users. In order to reduce the user's decision-making time, the homepage of Daily Youxian displays the products in the form of major categories for users to choose quickly.

The overall interface of Daily Youxian highlights product images and prices, so that users can quickly check whether it is the product they want, and click the add to cart icon in the lower right corner to add it directly to the shopping cart, reducing the decision time of clicking into the detail page to add to the cart.

(2) Product details page

When you enter the product details page, you can clearly see the words "refund if not tasty" and the inspection report in the lower left corner of the product image. Clicking on it, you can clearly see information such as the inspector and inspection time, which can greatly deepen the user's impression of the platform's quality assurance.

Secondly, there is a countdown reminder for flash sale products. MissFresh tells users through inventory quantity and number of goods in stock that the product is very popular and if they don’t buy it quickly, it will be out of stock later. The countdown to a flash sale gives people a sense of urgency.

(3) Shopping cart page

When users add products to the shopping cart, they will see the information prompt again that the product can be delivered in as fast as 30 minutes, followed by a prompt to exchange it for another product. At the bottom of the page, it is also informed that free delivery is available, increasing the user's impulse to place an order.

The eye-catching checkout button enhances the user's willingness to check out. After clicking the checkout page, a super value exchange interface will pop up, giving the customer a sense of profit from the platform when checking out is approaching.

(4) Checkout page

The checkout page is the interface where users are about to make payments. The most eye-catching thing on the page is the user’s delivery address information. The error-proofing principle is used to prevent users from submitting incorrect address information, which may lead to longer platform delivery time and user dissatisfaction.

Secondly, users can freely choose the door-to-door delivery time, whether basic shipping costs are included, and finally, when faced with temporary out-of-stock situations, users are given multiple options to avoid time delays that affect users.

Finally, all available payment methods are listed. The platform supports mainstream mobile payment methods in the market, such as VX, Alipay, Huabei and UnionPay. After selecting the payment method commonly used by the user, click on the eye-catching "Go to Pay" button, which will automatically jump to the payment interface, thus avoiding payment obstacles encountered during settlement to the greatest extent.

(5) Payment page

If the user cancels the payment process during the payment operation, the interface will automatically jump to the payment waiting interface. The eye-catching "remaining payment time" will give the user a sense of urgency.

Secondly, the payment button is placed on the right. According to Fitts's law, the closer the distance to the target area block, the shorter the time taken. The delivery time and delivery address are clearly displayed again to avoid user errors.

Finally, it is clearly reminded again that all products on the platform have passed video security monitoring and can be purchased with confidence, breaking through the users' psychological defenses.

The design of the Meituan Youxian interface can satisfy users’ desire for bargains (discounts, promotions), the principle of shortage (limited discounts for a limited time, loss if not bought), the principle of authority (platform security service guarantee), and environmental influence (popularity, comments), etc., eliminating users’ concerns, reducing users’ decision-making time and thus increasing their willingness to buy. In addition to improving user conversion rate, you can also consider increasing the average order value to increase GMV.

4. Increase average order value

The average order value is affected by two factors: the single purchase amount and the purchase frequency.

(1) Increase the single purchase amount

The Daily Youxian platform has a policy of reducing shipping costs when the user places an order of 39 or more. The basic shipping fee can be waived, which helps increase the user's single purchase amount.

Through the super value exchange, half-price for the second item in the shopping cart checkout page, and related product recommendations on the product details page, the number of products purchased by users can be increased, indirectly increasing the average order value of the products.

(2) Increase user purchase frequency

Membership system: MissFresh adopts a membership strategy, that is, users buy platform membership and launch 7 exclusive member benefits: free dishes for members, member-exclusive coupons, member free shipping coupons, member-exclusive prices, member family cards, membership day every Wednesday, and double member points return, etc.

Setting up membership packages and giving away VIP cards of cooperative platforms when choosing membership will make users feel that it is a great value and thus stimulate them to apply for cards. There are four membership packages, namely, continuous monthly card (9.9 yuan/month), continuous quarterly card (20 yuan/month), super value annual card (88 yuan/month) and co-branded annual card (88 yuan/month plus Tencent Video VIP)

The continuous monthly subscription card is selected by default to reduce the user's decision-making time.

(3) The system prompts product price reduction information

For old users, if the price of products that the user has browsed on the App or has placed in the shopping cart but has not yet purchased drops within a period of time, the Daily Youxian system will push notifications such as price reduction reminders.

To sum up, MissFresh has taken various measures to increase the number of user registrations, conversion rate, and average order value. And the results are very good at present, so investors continue to increase their investment, because the commercial value of MissFresh is still very broad.

6. Product Iteration Analysis

In order to deeply analyze the version iteration rhythm of Daily Youxian and explore the product iteration logic, the author sorted out all the core version iterations of Daily Youxian from V1.0.1 to V9.9.50 as follows (the data comes from Kuchuan Data-Daily Youxian iOS version):

Based on the curve distribution of the cumulative downloads of MissFresh on KuChuan, it can be seen that MissFresh belongs to an "S"-shaped curve. Daily Youxian can be divided into three stages for analysis.

Phase 1: Startup phase, 2015 V1.0-V2.0.1, the main goal of this phase is to verify user needs.

The second stage: the growth stage, V3.0-V9.3.0 in 2016, the MissFresh APP was officially launched. During this stage, the product mainly expanded its user base through various promotional activities and social means to achieve rapid growth.

The third stage: mature stage, from 2019 V9.4.0 to the present, the products (maintaining old users and continuously attracting new users) have begun to optimize various functions and continuously polish the user experience.

1. Start-up phase: Improve basic functions

In 2015, V1.0-V2.0.1 was launched with a minimum feasible product to verify user needs. The first version of MissFresh is launched in the form of VX Mall, which is the cold start stage of MissFresh.

According to Cool Drive data statistics, the average daily download volume of users in this stage is less than 1,000, and the number of users can meet the test and iteration of basic functions by Daily Youxian. At this stage, there are relatively few new activities, and the number of users is very limited.

This stage mainly verifies user needs and improves basic functions. On this basis, it has expanded the types of coupons, discount code redemption, shopping cart discount tips, accurate delivery address and complete recharge functions. At the beginning of its launch, the V2.0 version added group buying activities, laying the foundation for the next step of attracting new products.

2. Growth stage: new recruitment and retention of seed users

From March 2016 to October 2019, the version from V3.0-V9.3.0 is the growth stage of MissFresh. The main goal of this stage is to grow users on a large scale.

(1) Reward mechanism

Since the focus of this stage on increasing the rewards of new users and the retention of old users, the platform kicked off by discounts such as discounts of 50 yuan for new users over 99 yuan, inviting friends to each other, and newcomers to enjoy 100 yuan coupons.

Old users invite new users to place orders and each has its own rewards, as well as the subsequent new product function. The platform hopes to reduce operating costs, improve user stickiness, and achieve user growth through the way users actively attract new users and offer discounts.

Add the membership system, and new users place two orders and are promoted to members; recharge 99 and get a member; download the App and bet and upgrade to members; redeeming member points for commodity coupons and order cashback are used to increase user stickiness. Secondly, the membership system can also make full preparations for user retention.

Welfare club earns points to activate users. By allowing users to sign in every day, do tasks and earn points to exchange for commodity coupons, they can also be shared with other friends.

Upgrading member rights can not only provide discounts but also open a store to make money (active users, attract new users).

(2) Safe to buy

To achieve continuous growth of users, in addition to attracting new users, it is also crucial to let users know that the products they buy have quality assurance.

According to Maslow's hierarchy of needs theory, people will tend to have deeper needs after meeting the basic food and clothing. At this time, as a fresh food e-commerce platform, if you launch a product quality inspection report and business certificate on the product details page, it will greatly reduce the user's defense and your sense of trust in the platform will increase.

On this basis, Daily Youxian has added a new product security testing label, so that every consumer can eat with peace of mind.

(3) Use it with worry-free

The original forward warehouse model of MissFresh achieves 2-hour fast service, which not only improves the user experience, but also enhances the market competitiveness of the product, thereby promoting the use of new users. In addition, in the continuous iteration, the real-time positioning function of delivery staff is optimized to help consumers view the delivery staff's location from the delivery point, which helps to update information in real time.

Add an address prompt function to prevent users from negligence in a temporary manner and indirectly improve user experience problems.

Activity preheating: The product pre-sale function is online and can be delivered regularly. In addition, the function of selling out products can also be delivered next day to meet the needs of users.

If the user is not satisfied during the transaction period, customer service needs to deal with the problem in a timely manner. This time, Meiji Youxian optimized the online customer service problem so that users can enjoy excellent after-sales service after consumption, which is conducive to the spread of word-of-mouth.

The version iteration of this stage also includes functions such as inventory residual prompts, flash sale countdown, product price reduction reminder, only recommended products, shopping cart coupons, etc., which have contributed to increasing customer unit price. The special feature is the site's PUSH message prompt optimization function, which can promptly push each platform event to every user, improving the platform DAU.

According to iResearch data, MissFresh received an investment of RMB 230 million in April 2016. After sufficient ammunition, it accelerated the pace of attracting new products and operating operations. The rewards for new users have also become very generous, resulting in many interested new users getting very large discounts when placing orders.

According to Cool Traditional Measurement data, the daily growth of Youxian users at this stage showed a "J-shaped" curve. This shows that the user growth rate is very fast at this stage.

3. Maintain old users and continue to attract new users in the mature stage

From August 2019 to the present, from the version V9.4.0 to the current V9.9.50, the product functions have been continuously optimized and steadily developed.

From March 2020 to the present, this stage is the maturity period of Daily Youxian. Continuous optimization functions at the product level, including homepage components, what to eat, and inviting food bloggers to publish food logs, which not only increases user activity, but also configures to directly purchase ingredients used by food bloggers with one click to increase customer unit price.

New Huabei payment is added so that users can enjoy first and then pay. Later, UnionPay Cloud Flash Payment and other market share were increased. During the epidemic, we launched a lunch for resumption of work and a lunch for resumption of work, and invited food experts to share fresh goods and cooking skills online, and teach you how to buy and cook vegetables step by step.

Due to the impact of the epidemic, the number of daily Youxian users has surged, so iterations have been frequently performed at this stage and the "contactless delivery" service has been launched, which greatly ensures security, eliminates the fear of users in special periods, and enhances the trust of users on the platform.

In addition, the launch of a series of promotional activities is also to enhance the retention of users that soared during the epidemic. According to Cool Drive data statistics, the average daily download volume of users in this stage has increased sharply, with the highest exceeding one million.

In September 2020, we reached strategic cooperation with Tencent Map, Knight Card, etc., and withdrew from the one-billion-subsidy event of Youxian Vegetable Market, once again increasing the exposure of Youxian Daily.

In order to consolidate the status of the platform, subsidy activities and free dishes are carried out intermittently to achieve the purpose of promoting vitality.

4. Conclusion

Overall: MissFresh is a platform for steady development and continuous progress. The product iteration rhythm of MissFresh is a typical growth path for business-oriented products.

The startup stage focuses on verifying user needs, polishing user experience, and improving product functions. After the product has stable functions, it enters the growth stage. During this period, large-scale operation activities are carried out to acquire a large number of users, so that the platform can raise more funds. When the number of users reaches a certain scale and enters the mature stage, the product is still constantly optimizing and seizing the market, making the platform have strong competitiveness in the e-commerce industry.

In order to increase user stickiness and increase customer unit price, daily Youxian operation activities have also continued.

7. Product structure analysis

In the iterative analysis, we analyzed the iterative steps of MissFresh’s product functions. Next, let’s take a look at what user needs these functions meet and how they are distributed throughout the app. This is mainly analyzed through product structure. The following figure is the product structure brain diagram of MissFresh V9.9.50:

For the sake of analysis, the author will find the following table by re-examining the product structure of MissFresh according to users, scenarios, needs and functions:

MissFresh is a typical business-oriented product, and the target users are consumers, so it focuses on meeting consumer needs. When consumers use MissFresh, there are four scenarios: before placing an order, before placing an order, before receiving the goods, and after receiving the goods.

1. Before placing an order

What do consumers need before placing an order? How does Daily Youxian satisfy?

Fresh food e-commerce is emerging one after another, why should consumers choose to believe in MissFresh? Is your platform reliable? Are the products on your platform safe? It has been mentioned in the User Value Analysis chapter that product safety is a concern for users. So how did the platform solve it?

First of all, the platform publishes photos of business certificates, which not only has platform qualification certification (including business licenses and food business licenses) and business qualification certification, but also dispels users' doubts about platform operation.

Secondly, consumers will habitually want to pay attention to user reviews before placing an order, and decide whether they choose to buy it through everyone's evaluation of this product. To this end, the platform has optimized the user evaluation function of the product details page, and the product inspection report and product quality inspection qualification label are attached to the details page of each fresh product, and each batch will be updated to allow users to buy and eat with confidence.

For fresh food consumers, they will pay more attention to the delivery time of the product. The platform creates its own forward warehouse model, provides cold chain delivery throughout the process, and launches services that are as fast as 30 minutes.

Finally, there will be users with clear needs and users with unclear needs on each platform. How does MissFresh divide products according to different user groups?

For users with clear needs: add a search box on the homepage to facilitate consumers to quickly purchase the products they need.

For users with unclear needs: the platform homepage launches functions such as banner event carousel, daily flash sale products, discount sale and special discounts, and the bottom navigation page launches "What to eat", and invites food bloggers to share food live broadcasts, send notes to teach you how to cook, and considerately release ingredients for consumers to purchase.

2. During the ordering process

After the first step, the platform gained the trust of consumers, so what are consumers thinking during the ordering process? What are the needs? Does the platform meet these needs of users?

First of all, for new users, product discount activities can promote users' desire to purchase. For this reason, the platform places the mall's discount activities and discount strength on the most eye-catching banner picture on the homepage, and prompts the discount countdown on the product details page to increase the user's sense of tension.

Secondly, what should users do if they find that the products they purchased have expired due to some reasons during the purchase process? MissFresh optimizes the function of finding similarities, click to find similarities, and the platform will automatically match products similar to this product to meet user needs.

Finally, after submitting the order, the user suddenly thought that he forgot to buy "watermelon". If he submits this order and then buys watermelon, the watermelon will not be shipped free of charge. If the order is cancelled directly, it will be too troublesome to purchase these products again.

In order to meet this demand of users, the shopping cart will automatically purchase the items that cancel the order after the user submits the order with one click. The user does not need to purchase them manually, which can greatly improve the user experience.

3. Before receiving the goods

After the order is submitted, the user's purchasing process has been completed. So what kind of needs will users have in this step? Will MissFresh meet these needs?

The important stage before receiving goods is the distribution of staff and the delivery staff. What if the user suddenly goes out during this period or has other reasons to cancel the order? If the order delivery timeouts, who should consumers ask for consultation and negotiation?

At this stage before the user receives the goods, Daily Youxian optimizes the logistics query function, mainly the real-time positioning of the delivery staff and the function of contacting the delivery staff, so that users can predict the delivery time of the purchase of goods and make users more at ease.

4. After receiving the goods

Some users find that the product is of good quality and want to order another order, but they need to click to open an order one by one? What should I do if another user finds that the product is of poor quality after receiving the goods? Can I return the product?

In order to meet these needs of users, the Daily Youxian platform has added another order function to help users realize the need for one-click purchases. And add a refund service on the order page, which does not require a return, and a refund is made. If you need a shopping voucher, you can apply for an invoice. Platform-My order has the "to be evaluated" function and the evaluation rewards 100 points.

5. Conclusion

From the above analysis, we can find that the functional design of MissFresh can well meet the needs of users before placing an order, before receiving the order, before receiving the goods, and after receiving the goods. At the same time, the different needs of different users are highlighted and distributed reasonably in terms of product structure. At the functional level, it can meet the needs of most users. Therefore, MissFresh's product structure design can be said to be relatively excellent.

8. 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 MissFresh operate this product and achieve rapid growth in a short period of time? According to the AARRR model, the author has sorted out the main operational activities of MissFresh since its establishment as follows.

1. Attract new customers (A)

(1) Method 1: Celebrity endorsement

Daily Youxian joins forces with 10 actresses including Zhang Jingchu, Qin Lan, Tan Zhuo and others to call you "eat at home"

(2) Method 2: Strategic cooperation

In September 2016, MissFresh signed a strategic cooperation agreement with Beijing Yueshengzhai, and MissFresh will become an important online sales channel for Yueshengzhai.

In July 2017, ofo reached a cooperation with MissFresh to explore the Internet + sharing economy.

In October 2017, MissFresh and Didi cooperated across the border to deliver "Yuanqi Breakfast" to office workers.

In January 2018, MissFresh and Junlebao Dairy Group reached a strategic cooperation to fully expand the first-tier market for low-temperature yogurt and stabilize the second- and third-tier markets.

In June 2019, MissFresh and Tencent reached a strategic cooperation and launched the "SmartFresh 100 billion plan", including "smart marketing", "smart logistics" and "smart supply chain".

In February 2020, MissFresh actively cooperated with Xibei and Meizhou Dongpo to solve the production capacity and distribution problems of vegetable processing in Daguan, and through intelligent scheduling, we ensure the best overall delivery quality.

In February 2020, VX opened the "Smart Retail" entrance, Daily Youxian opened Tencent Super Traffic Box

In April 2020, the well-known rice brand October Rice Field and MissFresh reached a strategic cooperation. We jointly launched the "Super Youxian Brand Day" event.

In June 2020, MissFresh established the Summer Ice and Snow Alliance, and the first batch of Heluxue, Baxi and Mengniu moved in to launch the ice cream category day.

In July 2020, Coca-Cola and MissFresh reached a strategic cooperation to explore innovation in home scene retail model

(3) Method 3: Helping public welfare

On November 10, 2017, on the Adoption Day of Daily Youxian, more than 300 charity stars, caring entrepreneurs and caring people from all walks of life gathered together to bring a warm winter to millions of stray animals!

On November 8, 2018, the 5th World Internet Conference "Internet Charity and Poverty Alleviation: Daily Youxian signed pairing assistance cooperation agreements with Yanyuan County, Sichuan and Ziyun County, Guizhou, respectively. This is also the continuous implementation of the "four one" industrial poverty alleviation model of Daily Youxian.

In February 2020, Youxian produced a rap "give me 5" charity video to encourage citizens to buy groceries at home during the epidemic;

In February 2020, Youxian launched a community assistance project, and set up "contactless delivery and storage shelves" in many cities to apply for free and install them in place, meeting people's needs at special times;

In March 2020, Daily Youxian launched an epidemic prevention work meal in Beijing to support and encourage those struggling to work.

(4) Method 4: Content operation

a. New media operation: Weibo mainly focuses on event previews, cooperative publicity, forwarding comments, and launching savings card delivery activities in conjunction with offline billboards. Currently, the number of fans has reached 404,000; VXgongzhonghao content mainly focuses on product event discounts and product new products, and is equipped with app and mini-program purchase links.

b. Short video operation: such as: Douyin and Xiaohongshu, the focus of operation is on brand promotion; the content is mainly about exploring stores, tastings, and popularizing cold knowledge. At present, the number of fans of Youxian Douyin account has reached 490,000.

2. Stimulate activity (A)

After the user downloads and registers the app, he needs to activate the user to open the app, thereby improving the daily and monthly active users. In order to improve the user's activity, the method of Daily Youxian is mainly through push messages:

• Various promotions
• Product price reduction notification
• Seasonal new notice

3. Improve 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, MissFresh mainly did the following things:

• Membership
• Rewards through continuous sign-in by users, etc.
• Recharge rewards
• Sign in every day, earn points to exchange for commodity coupons
• "What to eat" Post food notes and remember cash

4. Share and spread (R)

In order to guide users to spread the word spontaneously, MissFresh has mainly done the following things:

• Invite new users to register and click on sponsorship to reward users with red envelopes or product coupons.
• Help get red envelopes for free
• Share food notes through "What to eat"

5. 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.

Above, the author analyzed the reasons why MissFresh has grown rapidly from seven parts of the industry, competitors, user value, commercial value, product iteration, product structure, and operation. It can be seen that no product can be successful casually, which must be the comprehensive effect of internal and external reasons such as "time, place, and people".

IX. Future Outlook/Optimization Suggestions

Through the above analysis, we understand the reasons for the rapid rise of MissFresh. So where will this 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.

Optimization suggestions:

In terms of opportunity, the author personally believes that if the MissFresh platform launches the semi-finished dish series or develops sinking markets such as third- and fourth-tier cities, it should be more popular.

1. Semi-finished dish/finished dish

Users choose dishes - placing an order and choosing cooking methods - Daily fresh processing - home delivery;

2. Third- and fourth-tier cities

The meaning of life lies in uncertainty, and there is no way to know the future. I hope that MissFresh can get better and better.

Author: Miaoer

Source: Miaoer