Daily Fresh Product Analysis

There is a saying in the e-commerce field: "Whoever controls the fresh food controls the world." The fresh food industry looks great, but it is not easy to do business in it - there are more than 4,000 players in the fresh food e-commerce industry, but only 1% of them ultimately achieve profitability.

• In November 2014, MissFresh was established;
• On June 13, 2019, MissFresh founder and CEO Xu Zheng stated at the MissFresh and Tencent Smart Retail Strategic Cooperation Conference that MissFresh's sales will reach 100 billion in 2021, a tenfold increase in three years!

What makes it stand out from more than 4,000 fresh food e-commerce companies across the country and achieve such high sales? What is the development status of the entire industry?

As loyal users of MissFresh, let us analyze MissFresh from the perspective of MissFresh to gain a deeper understanding of the development of this company and the fresh food 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

The fresh food e-commerce industry is a livelihood industry that targets young people born in the 1980s and 1990s. It has a market size of trillions of dollars. So why has it only begun to develop rapidly in recent years? Next, we use the PEST model to explore the reasons behind this.

1. Politics

In 2015, the State Council issued the "Guiding Opinions on Actively Promoting the 'Internet Plus' Action" to promote the development of the e-commerce industry.

In 2016, the General Office of the State Council issued the "Opinions on Deeply Implementing the 'Internet + Circulation' Action Plan" to promote the construction of cold chain logistics and promote the coordinated development of e-commerce and the logistics industry.

In June 2019, the National Development and Reform Commission compiled the "Implementation Plan for Creating a Favorable Market Environment to Promote the Integrated Development of Transportation and Logistics", proposing to form a number of complete cold chain transportation service standards by 2020 to achieve an uninterrupted chain throughout the entire process.

It can be seen from the trends of national policies in recent years that my country's attention to fresh food e-commerce is also increasing year by year.

2. Economy

According to the seventh national census in 2020, the total population size of the mainland reached 1.41 billion, and the urbanization rate of the permanent population reached 63.9%. Relevant data from the fourth national economic census showed that my country's GDP in the first quarter was 24,931.0 billion yuan, an increase of 18.3% year-on-year at comparable prices. The per capita national income has increased significantly, and residents' consumption needs have begun to upgrade from basic consumption of food, clothing, housing and transportation. The increase in consumption willingness will create new market space and new industry opportunities.

Nearly 70% of fresh food e-commerce users come from first-tier and new first-tier cities, and the proportion of users in second-tier cities is also increasing.

3. Society and culture

As the world's most populous country, China has an extremely large consumer group. As people's consumption concepts and consumption levels improve year by year, people's demand for fresh products continues to grow.

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. The emergence of the COVID-19 pandemic in 2020 has further accelerated the online penetration of fresh food.

In 2020, the proportion of online fresh food retail in China reached 14.6%. As consumers gradually develop the habit of shopping for fresh food online 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

With the development and progress of science and technology, the speed at which humans transmit information and transport goods has greatly increased. This not only improves the efficiency of social operations, but also profoundly affects and changes people's production and lifestyle.

The entry of giants such as Alibaba and JD.com into the market, the integration of online and offline, and the continuous increase in investment in infrastructure construction such as supply chain and logistics under the O2O model have brought about a series of innovative models and revitalized the fresh food e-commerce market. Cold chain logistics and distribution use "high-standard foam boxes + low-temperature ice bags" for multiple insulation, allowing fresh food e-commerce to meet the requirements for the freshness of fresh foods such as fruits and vegetables, further promoting the development of the fresh food e-commerce industry.

The above reasons have driven the rapid development of fresh food e-commerce. What will be the development trend of this industry in the next few years? Is there enough market space? iResearch predicts that the fresh food retail market will continue to grow in the future, and the scale of China's fresh food retail market will reach 6.8 trillion yuan by 2025.

2. Analysis of various typical models of fresh food e-commerce

Since the development of fresh food e-commerce, various models have been formed. What is each model like? What are the advantages and disadvantages of MissFresh compared to other models? The following is an analysis of various models of fresh food e-commerce.

1. Traditional fresh food e-commerce

It refers to using the Internet to deliver fresh products to consumers through traditional express delivery methods such as e-commerce warehouses and branch warehouses. Generally, it will be delivered within 1 to 2 days after the user places an order, such as Tmall Fresh and JD Fresh.

2. Fresh food e-commerce with “home delivery” model

Fresh food e-commerce covers consumers within 1-3 kilometers around the community by setting up forward warehouses around the community or cooperating with offline supermarkets, retail stores and convenience stores. After placing an order on a consumer app, fresh products can be delivered to consumers quickly within 1 hour through logistics distribution, such as MissFresh, JD.com, Dingdong Maicai, etc.

3. Fresh food e-commerce in the “in-store + home delivery” model

Fresh food e-commerce companies open stores around communities, using the stores as the center to serve users within 1-3 kilometers. Users can shop in the stores or place an order on the APP, and the platform will provide home delivery service within 1 hour. The stores opened by the platform are not only open for business, but also undertake online warehousing and distribution functions, such as Hema Fresh, 7 Fresh, etc.

4. Fresh food e-commerce with group purchase model

With the community as the core, consumers place orders through recommendations from group leaders (usually a community mom-and-pop store) or on the e-commerce app/mini program themselves, and pick up the goods at the group leader the next day. Such as Xingsheng Youxuan, Shihuituan, Meituan Youxuan, Duoduo Maicai, Chengxin Youxuan, etc.

5. Fresh food e-commerce in the “delivery to counter” model

Fresh food e-commerce companies set up fresh food pick-up cabinets in public restricted areas such as communities and business buildings. Generally, the platform collects user needs in advance, then places orders directly with the place of production to purchase fresh food, which is then delivered to the community. Users pick up fresh food products at pick-up cabinets in communities, business buildings, etc., such as Shixing Fresh Food.

Summary: People’s pace of life is getting faster and faster. The delivery time of traditional fresh food e-commerce is a fatal flaw. If they fail to keep up with the pace of the fast times, they may be eliminated by the times.

Compared with other models, MissFresh's model of delivering food to homes through forward warehouses has a strong timeliness factor and fits the pace of life of people in first- and second-tier cities. When users need to buy groceries or cook, they can place an order on their mobile phones and the food can be delivered to their doorsteps quickly, which brings great convenience to users.

However, compared with the "in-store + home delivery" model, it lacks selectivity, and users cannot experience the joy of selecting fresh food when they are free.

3. Competitive Product Analysis

As an industry with strong demand for people's livelihood consumption, the fresh food retail industry has a market size of trillions of yuan and is also favored by capital.

Since MissFresh and Dingdong Maicai are direct competitors and have similar user scales, we will use the two companies’ growth paths and business models as a starting point to gain a deeper understanding of the differences between them.

1. Daily Fresh

• MissFresh was founded on October 30, 2014, and received US$5 million in angel round financing from Yuanjing Capital and Guangxin Capital in the same year. It officially started operations in December 2014.
• In May 2015, it completed a US$10 million Series A financing, and in November of the same year, it completed a RMB 200 million Series B financing.
• In April 2016, it received RMB 230 million in B+ round of financing.
• In the first half of 2018, MissFresh’s user base in the fresh food e-commerce industry exceeded 50%, leading the industry for four consecutive quarters.
• In 2018, we have completed the layout of all categories of selected fresh produce, and established an ultra-fast cold chain logistics system of "city sorting center + community forward warehouse" in 20 major cities across the country, providing users with self-operated all categories of selected fresh produce within 1 hour.
• In the early morning of June 9, 2021 (Beijing time), MissFresh submitted a prospectus in the United States, planning to be listed on the Nasdaq with the code "MF" and intends to raise US$100 million.

1) Product source

“Only products that can withstand layers of selection can be called selected” - MissFresh has a purchasing team that insists on “customer first” and has in-depth cooperation with high-quality production areas across the country and even the world. In order to seek high-quality ingredients, the buyer team went to the United States, Chile, South Africa, Peru, Australia and other countries for in-depth exploration of high-quality origins. Based on the principle of "adapting to the times and local conditions", they selected high-quality ingredients with suitable climatic conditions and geographical environment.

2) Category

More than 4,000 selected products cover 12 major categories, including fruits, vegetables, meat and eggs, aquatic products, snacks, dairy products, light meals, grains and oils, beverages, fast food, light meals, daily necessities, etc., providing a one-stop shopping experience for all categories of fresh food.

3) Product quality

Strict quality control, 100% batch quality inspection of fresh produce. We have an authoritative third-party testing organization that conducts on-site testing of every batch of products. From fresh produce, fruits and vegetables to grains and oils, all of them are checked by a professional quality control team before and after they enter storage to ensure the quality and safety of each ingredient.

4) Density of forward warehouses

MissFresh adopts a two-level distributed warehousing system of "city sorting center + community micro-warehouse". Establish urban sorting centers in North China, East China, and South China, and set up forward micro-warehouses in business districts and communities based on order density, adopting the "self-operated + franchise" model for opening warehouses. According to the prospectus, 16 cities have been launched, with 631 forward warehouses covering a radius of three kilometers. In cities that are not covered by forward warehouses, MissFresh also provides traditional e-commerce services.

5) Delivery

Adopt the distribution method of cold source + time cold chain to ensure the quality and timeliness of goods. Delivery within 30 minutes, free delivery for orders over 39 yuan.

6) Seafood

Daily Youxian does not have live seafood, all are frozen products.

7) User Acquisition

Social membership is MissFresh’s main way to attract new users, by developing new users through old users and directing them to the platform. Members can attract new users by inviting friends to place orders to receive red envelopes, share fresh coins, invite group purchases, and share membership experience cards to ensure the activity of new users.

Overall, MissFresh relies heavily on the 1.1 billion traffic pool from Tencent WeChat, generating new customers from old customers. Its official revealed that MissFresh's customer acquisition cost is as low as 40 yuan per person.

2. Dingdong Shopping

• Dingdong Maicai was founded in April 2014 and received angel round financing in the same year.
• Dingdong Maicai was launched in May 2017 and first expanded into Shanghai.
• By the end of 2019, nine cities including Shanghai, Shenzhen, Hangzhou and Suzhou had been opened.
• Dingdong Maicai entered Beijing in April 2020 and is acquiring new users through subsidies and discounts.
• On April 6, 2021, it completed a US$700 million Series D financing.
• In June 2021, it completed a US$330 million D+ round of financing, and on June 9, it submitted an IPO application to the U.S. Securities and Exchange Commission.

1) Business model

Similar to MissFresh, Dingdong Maicai also adopts a forward warehouse delivery model. The difference is that Dingdong Maicai builds forward warehouses around communities, and all forward warehouses are self-operated.

2) Product source

"Meat products are directly supplied by brand owners on demand, and fresh products such as vegetables and aquatic products that are difficult to transport over long distances are mainly purchased in bulk. More than 80% of the goods are directly purchased from the place of production. There are 350 direct production places for fresh produce, and more than 500 direct supply suppliers from the place of production.

3) Category

2000+SKUs of fresh food, covering everything you need in the kitchen.

4) Product quality

The “7+1” quality control process conducts quality control management on fresh products throughout the entire chain, which can effectively ensure product quality. Each fresh product is given an optimal shelf life and comes with a QR code that can be scanned for traceability.

5) Forward warehouse density

Dingdong Maicai launched the forward warehouse model in May 2017. As of March 31, 2021, Dingdong Maicai has entered 29 cities and currently has a total of 950 forward warehouses.

6) Delivery

Delivery within 29 minutes, starting from 0 yuan, no delivery fee. The time from 7:00 to 23:00 is divided into 32 time periods with half an hour intervals. If a time period is fully booked, it cannot be selected. You can make an appointment for home delivery up to one day in advance.

7) Seafood

You can buy live seafood, which will be delivered in an oxygen box or with water, or you can choose to have it slaughtered, so you can eat the freshest ingredients.

8) User Acquisition

① Mom Helper

Liang Changlin, the founder of Dingdong Maicai, previously founded "Mamabang". Advertising on Mamabang can accurately target young mothers, who are one of the main groups of Dingdong Maicai. The cost of advertising is low but the effect is better.

② Group buying + sharing

Utilize social software such as WeChat groups to acquire new users through group buying and sharing red envelopes among neighbors. Social sharing based on acquaintances makes it easier to gain the trust of new consumers.

③ Ground promotion

Because Dingdong's predecessor was originally used for community services, the service area is small and densely laid out. By setting up promotion booths at the entrance of the community, it guides community residents to download and use the Dingdong Grocery APP. After downloading the APP, they can place an order and receive products such as oil, salt, sauce and vinegar, thereby attracting users to register and try it out at a low cost.

④ Tik Tok advertising

Summary: From the above, we can see that Dingdong Maicai and MissFresh were established at similar times, but MissFresh was launched earlier and has priority in acquiring more users. However, in terms of delivery and seafood products, Dingdong Maicai is better.

Both companies offer a wide variety of products, but MissFresh targets the higher-end market. Dingdong is more in line with ordinary people's concept of fresh food consumption.

(The picture below is the pork purchase interface, with Daily Youxian on the left and Dingdong Maicai on the right. Daily Youxian’s pork is safe and the price is more expensive, while Dingdong Maicai’s pork is Dahongmen or Youxuan, and the price is relatively cheap)

The scale of Dingdong Maicai's forward warehouse is much larger than that of MissFresh, but MissFresh covers the whole country. In cities without forward warehouses, the minimum delivery amount is one piece and there is no delivery fee. In areas with forward warehouses, delivery can be made to the door at the scheduled time on the same day.

Dingdong Maicai only serves areas with forward warehouses. Orders can be booked for tomorrow at most, and the delivery time can be changed or the order can be canceled at any time before sorting. MissFresh’s service scope is larger than Dingdong Maicai’s, but its reservation capability is weaker than Dingdong Maicai’s.
In a nutshell, MissFresh casts a wide net but the mesh is also large, while Dingdong casts a small net but the mesh is also small.

4. User Value Analysis

As a fresh food e-commerce company, MissFresh’s main participants are consumers, suppliers, and platforms. The following is an analysis of these three parties respectively.

1. Consumers

In recent years, food safety issues have occurred frequently, consumers have become increasingly aware of food safety, and pay more attention to product quality when purchasing fresh food.

Survey data from April 2019 showed that 55.7% of users said that food safety is the most important factor when choosing a fresh food e-commerce platform, and quality is the second consideration, accounting for about 49.3%.

In the past, consumers had three channels to purchase fresh food.

1) Wet Market

• It is well known that the sanitation environment in wet markets is poor and food safety cannot be guaranteed;
• Prices vary. Some merchants raise prices for their own benefit. Young people nowadays don’t like to bargain, so they may be shortchanged.
• Freshness cannot be guaranteed, and consumers need to develop a discerning eye to tell whether the dishes are fresh;
• It is suitable for the elderly to go shopping leisurely, but office workers do not have time to carefully select.

2) Large supermarkets

• Large supermarkets are usually located in crowded places, so residents who live a little further away need to travel a long way, wasting time.
• Large supermarkets have a complete range of products and guaranteed quality, making them the preferred place for the elderly. For office workers, it is not only time-consuming but also energy-consuming to select, weigh, and queue up to check out after get off work, and also to bear the weight of the goods from the supermarket to their homes.

3) Fresh food convenience stores

• Prices are generally high, compared to supermarkets, the location is small and the variety is limited;
• They are usually opened next to residential areas, so it is relatively convenient to buy fresh food, which is suitable for residents of the community to save time and effort.

From the above, it can be seen that traditional purchasing methods have their defects and cannot meet the needs of consumers well.

2. Suppliers

1) Agricultural product growers in the production area

The biggest demand of product growers is to sell more and earn more, but due to funding, technical and other reasons, the scale of planting is small and the product quality is low and uneven, which makes it impossible to sell in large quantities and earn large profits.

The solutions they currently use more often are:

① Sell to middlemen

When the agricultural product harvest season arrives, a large number of middlemen will come to the planting bases to discuss purchasing. Due to the short shelf life of agricultural products and the limited sales capacity of agricultural product growers, they are very happy to give them to the middlemen during the harvest season.

However, because the quality of agricultural products is greatly affected by factors such as climate, temperature and humidity, soil, and natural disasters, general middlemen dare not sign long-term and stable purchasing relationships with agricultural product growers in the production area. Therefore, the middlemen will take whatever they want wherever they go. They will buy the good ones in large quantities and the bad ones at a lower price or even not want them at all.

The middleman is usually not the one who sells the final product to the end user. He will calculate the costs of sorting, transportation, warehousing and loss into the agricultural products, so the price-cutting phenomenon of products is quite serious.

② Set up stalls to sell to tourists

In order to get a good price, agricultural product growers usually set up stalls to sell their products to tourists, but the sales cycle is usually long and the sales scale is small because the number of tourists is limited and the quantity purchased each time is also limited.

③ Take the products to sell on the streets or in the market

For users with small planting volumes, they may carry their products around the streets to sell them, or take them to the market to sell them. It is hard and time-consuming, and the quantity sold is limited.

It can be seen that none of the above methods can effectively solve the pain points of agricultural product growers in the production areas.

2) Brand Supplier

Brand suppliers build their brand capabilities mainly through the following ways:

• Through advertising, we can increase brand awareness, let more users know about the brand, and accelerate the process of consumers purchasing brand products. However, advertising is expensive and may not achieve the desired results, so the company may incur high expenses.
• Looking for large supermarkets to cooperate with. Through promotional activities, customers can become familiar with the products and then become users of the products. However, supermarkets have a wide range of product categories and prices are very similar, so it is difficult to surpass other brands after returning to normal prices, and the effect is not good.

It can be seen that none of the above methods can meet the expectations of brand suppliers well.

3. Platform

The above analysis shows that different parties have different requirements and problems in the fresh food sector.

Consumers’ demands and questions include:

• Whether the product is safe, of guaranteed quality, and fresh;
• Whether there are any restrictions on where and when the product can be purchased;
• Whether the product purchase saves time and effort;
• Is the product price affordable?
• Are there many product categories to choose from?

The problems faced by growers in the production areas are:

Lack of long-term stable acquisition relationships, sales are unstable and infrequent.

The problems existing in the urban wholesale market are:

• There are many customers and the purchase quantity is small, so the management cost is high;
• Without a systematic data system, it is impossible to grasp the supply and demand data well to prepare goods.

The problems faced by brand suppliers are:

• Brand building is expensive;
• The branding effect is not good enough.

So how does MissFresh solve the pain points of all parties so well that suppliers are willing to supply goods as required and consumers are willing to buy?

1) Meeting consumer needs

① Ensure safety

Selected ingredients and strict quality control. 100% batch quality inspection for fresh food, third-party authoritative testing agency, on-site testing of each batch of products to ensure that every bite is safe. MissFresh adheres to the mission of "making every family shop with ease and eat with confidence" and has comprehensively upgraded its product quality control system. All products, from fresh produce, fruits and vegetables to grains and oils, are subject to level-by-level checks by a professional quality control team before and after storage to ensure the quality and safety of each ingredient.

The following figure shows the quality inspection process of Daily Fresh:

② Complete product categories

The purchasing team adheres to the "user first" principle and cooperates deeply with high-quality production areas across the country and even around the world. Over 4,000 selected SKUs cover 12 major categories, providing a one-stop shopping experience for all categories of fresh produce.

③ Affordable price

Direct sourcing from the source reduces the number of middlemen making profits from price differences, which can not only ensure the freshness of fresh products but also pass on profits to consumers.

④ Convenience of purchase

The dishes online are clearly listed, prices and weights are clear, and searching is easy. In first- and second-tier cities, MissFresh pioneered the "forward warehouse" model, providing delivery service as fast as 30 minutes. For office workers, they can buy groceries on the way home from work and cook when they get home, saving time and effort.

2) Meeting the needs of suppliers

As early as 2017, when it announced that it had received its Series C financing, MissFresh announced its “Three Zero Plan” to support upstream high-quality suppliers, namely “0 fees, 0 returns, and 0 account periods.”

At the same time, MissFresh has invested more funds to increase its support for upstream high-quality fresh produce producers, hoping to fundamentally rebuild new standards for agricultural and commercial cooperation through the one-stop service policy of the "Three 0 Plan" and completely change the traditional retailers' long-standing problems with suppliers in terms of "high fees, random returns, and long payment terms."

On September 17, 2020, MissFresh officially launched the "10 Billion Club" plan, which is to invest 10 billion in the next five years to support 10 billion-level cooperative suppliers and empower them in six major areas.

The six empowerments include: R&D empowerment driven by big data for precise development of segmented categories, channel empowerment that covers all scenarios of consumers with "ultra-fast delivery + next-day delivery + on-site delivery"; through C2M order agriculture, using data to guide the entire production process and promote data empowerment for the upgrading of the large agricultural industry chain; adopting a weekly settlement policy with leading suppliers and providing inclusive financial funding empowerment to partners across the entire chain. [Meeting the needs of suppliers is to find information, I don’t understand/covering my face]

From the above, it can be seen that MissFresh has effectively solved the pain points of consumers and suppliers, built a bridge between suppliers and consumers, provided suppliers with a good cooperation experience, and provided consumers with a good shopping experience. This is why it is so popular.

5. Commercial Value Analysis

MissFresh’s current core business is “forward warehouse + home delivery”.

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 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 overall revenue growth, 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 fresh blood is needed - new users are the most fundamental guarantee. How does MissFresh attract new users?

There are four main ways: advertising, social sharing, local promotion and word of mouth.

1) Different forms of advertising

• Transportation advertising: subway platform advertising, subway tunnel advertising, bus station advertising;
• Delivery advertising: mainly fresh food logistics, such as deliveryman’s work clothes, battery vehicles, cargo boxes, and product packaging bags;
• Send SMS with coupons to recall old users.

2) Social Sharing

3) Pushing new customers

Sales guys invite new users to register or recall old users by distributing gifts or coupons at the entrance of residential communities and key points on streets.

4) Word of mouth

As we all know, for any product, word of mouth plays a vital role in attracting new customers. Fresh products are necessities in people's lives, but there are many purchasing channels and consumers are prone to shifting away, so a good reputation is very important, not only to retain old customers, but also to attract new customers.

Daily Youxian has a wide range of products, delivers on time, and it is easy to apply for after-sales service, so it has formed a relatively good reputation.

2. Improve conversion rate

After guiding users to the platform through various means, users are valuable to the platform only after they generate purchasing behavior, that is, convert into paying users of the platform. So how does MissFresh improve its conversion rate?

Let’s look at how MissFresh improves conversion rates from the user’s purchasing process: log in → home page → what to eat → product list page → product details page → add to cart → checkout.

1) Log in

① New member bonus

After new users register, they can receive large red envelope coupons, and the red envelopes have a validity period, which can stimulate users to place orders for consumption.

② Exclusive price for new customers

After new users log in, they can see items “exclusively for new users”, that is: choose one item to take home for 0.99 yuan. At the same time, the price of 0.99 is crossed out to show the original price, giving users the feeling that they are getting a good deal.

2) Home page

• The carousel displays hot-selling products or activities, such as: 618 Thanksgiving Return, Silent "Father" Out, Cheers to Love (Father's Day), creating a purchasing scenario and a reason for users to buy.
• The middle area has "Receive 99-50 red envelopes" to stimulate consumption and increase conversion rates.
• The marks of "Youxian self-operated", "fastest delivery in 30 minutes" and "worry-free after-sales service" make users feel that the quality is guaranteed.
• Today's flash sale: featured recommendations, limited-time discounts, and countdown to the flash sale. Flash sale products use price discounts to induce users to consume, and countdowns create a sense of urgency.

3) What to eat

This module is equivalent to a social platform. It will recommend recipes to consumers with pictures that are colorful, fragrant and delicious. Click on the recipe details to see a list of related ingredients. It not only provides a solution for people who don’t know what to eat, but also provides a quick way to purchase ingredients.

4) Product list page

Some products are marked as having only X pieces left to increase conversion rate, while some products are marked as having m discount for every n pieces to increase average order value.

5) Product details page

• There is an entrance for test reports to improve product quality assurance;
• Display the coupons to let users see the discounts directly;
• The "Everyone is Making" module displays the methods of the dishes currently being viewed;
• Set up a list - being selected into the word-of-mouth recommendation list means that the current product quality is very good.

6) Shopping cart

• Display available coupons and use the user's desire to get a bargain to encourage orders.
• When the selected product does not meet the coupon threshold, it will show that there is still a shortfall of X yuan, so users can make the order. This helps users use the discount and promotes ordering.

7) Checkout page

① If there are three options when the product is out of stock, the default option is "continue to deliver other products" instead of letting the user choose by themselves, such as canceling the order, communicating by phone, etc., so as to improve the conversion rate.

② After canceling the order——Payment page

• Show the time remaining to pay to create a sense of urgency.
• The “Go to Pay” button is highlighted to create a visual impact.
• Providing quality control inspection reports for fresh products can provide consumers with quality assurance and a sense of security.

③ After the payment is successful, a link to receive the red envelope will be displayed, paving the way for the next purchase.

3. Increase average order value

The average order value is affected by two factors: the single purchase amount and the purchase frequency. So how does MissFresh increase its average order value?

1) Increase the single consumption amount of a single user

① Operational means such as full discount, full reduction, and red envelopes

Through red envelopes, discounts, and rebates, users are guided to purchase more products, which increases their willingness to make additional purchases and makes them feel that it is a good deal after the purchase.

② Related recommendations

Analyze the products currently viewed by the user and recommend related products.

③ Coupons

Display coupon information, and after receiving it, increase the order amount to meet the discount conditions.

When the amount is less than the discount threshold, the price difference will be displayed and you can directly click "Go to order".

④ Free shipping if you place a group order

Buy more items, or place a combined order, and reach the free shipping threshold to enjoy this offer.

⑤ Promotional activities

Display the current selling price of the product and the strike-through price, so that users can see the difference and notice that the current product is on sale and very cheap.

2) Increase the consumption frequency of a single user within a period of time

• "Today's Flash Sale" is a limited-time special offer event that starts at 8 a.m. every day. The price of goods will be much cheaper, increasing the frequency of purchases.
• Send coupons to users irregularly (or regularly, no idea what the rules are) and send text message notifications to encourage users to buy on the platform.
• "Help to get it for free" is a form of social marketing that allows friends to bargain with you in order to remind them to buy.
• "Receive a 5 yuan red envelope" and a customer service QR code will be given. It is a form of community marketing, and preferential benefits are distributed in the community every day.
• The "What to Eat" module provides users with a menu in the form of content marketing, so that users can look through it when they don't know what to eat. Continuous production of high-quality content improves user stickiness.
• "Premium Member".

In order to retain its existing user base, MissFresh launched a paid membership. Since users have prepaid fees, they must continue to consume on the platform to maximize their membership benefits. Therefore, paid members also have the characteristics of high loyalty and high repurchase.

4. Conclusion

From the above analysis, we can find that the platform has set up various marketing points in every process and every link, constantly attracting new customers, promoting activation, improving conversion rates, and increasing average order value to maximize commercial value, thereby attracting more investment.

6. Product Iteration Analysis

In order to deeply analyze the version iteration rhythm of MissFresh and explore the product iteration logic, all the core version iterations of MissFresh from V1.0 to V9.9.36 are summarized as follows:

According to the above functional iterations and the download curve (S-shaped), Daily Youxian can be divided into three stages for analysis:

1. Phase 1: Startup phase, 2015.4 v1.0-v2.0, the first major version was launched. The goal of this phase was mainly to fix bugs, verify user needs, and improve basic functions.
2. The second stage: the growth stage, 2016.3 v3.0-2020.3 v9.8.30. During this stage, the product mainly expands the user scale through various preferential activities, social means and membership system, enabling it to grow rapidly.
3. The third stage: mature stage, 2020.4 v9.8.37-2021.6 v9.9.36. During this stage, the product continues to optimize various functions, constantly polish the user experience, and develop steadily.

1. Start-up phase

2015.4 v1.0-2015.12 v2.0 is the startup phase, the product is from 0 to 1, improving basic functions and enhancing user experience.

From 2015.4 v1.0 to 2015.12 v2.0 was the startup phase of MissFresh.

This stage mainly focuses on improving basic functions, fixing bugs, and improving user experience. For example, bugs such as the inability to select coupons and the inability to display orders are fixed, and a new delivery address label is added to make the product more convenient for users to use.

A sign-in function has been added, allowing users to sign in to the APP every day to enhance user stickiness and retain existing users.

Adding the recharge function can enhance user stickiness on the one hand, and also recover funds on the other.

After completing the improvement of basic functions, we began to promote it vigorously and entered the growth stage.

2. Growth Phase

From March 2016 to March 2020, the versions increased from v3.0app to v9.8.30, which was a period of rapid growth for MissFresh. Expanding the user base became the focus of product iteration.

During this stage, the focus is on acquiring a large number of customers and expanding the user base through various promotional activities, social means and membership systems.

1) Promotions

Set up discount coupons of 99-50 yuan for the first order, carry out new user acquisition activities, let new users use the App, and place orders to increase conversion rate.

2) Social activities

Invite friends and get 50 yuan each. Use the method of old users bringing in new ones to achieve fission, allowing the App to grow infinitely in the user circle, so as to achieve the effect of expanding the user scale.

3) Membership system

Place two orders to upgrade to membership → Deposit to upgrade to membership → Register to become a member. During the growth stage of the platform, the main purpose is to expand the user base. From the development of the version, it can be seen that the way to become a member is simpler. When a user becomes a member, he will enjoy member benefits, thereby enhancing user stickiness and retaining old users while acquiring new users.

4) New features

① Add overtime compensation and online refund functions.

Many users buy fresh food through the App when they want to eat or cook. When they see the overtime compensation function, they will think that the platform delivers on time. When they see that refunds are supported, they think that their funds are guaranteed, which provides a boost for users to place orders and increases conversion rates.

② Add the “National Delivery” function to expand the user base so that users in areas without forward warehouses can also buy goods from the platform; users can also buy goods that are not available in forward warehouses, providing users with greater possibilities and enhancing user stickiness.

③ Reminder of remaining inventory increases users’ sense of urgency in seeing the remaining inventory; countdown display for flash sales makes users feel that the current price is the cheapest, allowing users to purchase products faster and increase conversion rates.

④ Contactless delivery during the epidemic caters to the current reality. During the period of national anti-epidemic efforts, contactless delivery makes users feel more at ease. Many users in quarantine or users who are unable to go out due to the epidemic can also eat fresh dishes. In this special period, it can also keep users on the platform.

⑤ Add “Convenient Shopping” function. When online user traffic reached a certain level, MissFresh began to expand new businesses that integrated offline and online, such as convenience shopping, bringing offline user traffic to the online.

⑥ "Youxian Supermarket" is launched. Considering the profit model, Daily Youxian will develop its business into a supermarket model. Youxian Supermarket will expand its product categories from fresh food categories such as vegetables, fruits, and aquatic products to hundred-day categories including beauty, personal care, cleaning, and health care, realizing the extension of fresh food e-commerce to online comprehensive supermarkets.

3. Mature stage

From April 2020 to present v9.9.36, product functions have been continuously optimized and developed steadily.

From March 2020 to the present, MissFresh has entered its maturity period. We continue to optimize functions at the product level, including order settlement page, what to eat, and increasing comment rewards.

In order to consolidate its leading position, MissFresh's operational activities continued during this period, such as: MissFresh New Year Festival, red envelopes for deposits before the Lantern Festival, 618 promotion, etc.

4. Conclusion

Overall: MissFresh is a platform that is developing steadily and constantly improving.

During the startup phase, we focus on user needs, polish the user experience, and improve product features.

After having a stable functional foundation, it entered the growth stage, during which time it continuously attracted new users and promoted activation through various promotional activities and social events, expanded the user base, entered the first echelon of the fresh food e-commerce industry, and continuously optimized the product level.

When the number of users reaches a certain scale, it enters the mature stage. In this stage, in order to continuously increase the number of users, the product level continues to be polished, and operational activities continue. This is the overall iteration step of MissFresh.

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 in the entire APP.

This is mainly analyzed through product structure. The following figure is a brain map of MissFresh’s product structure:

For the convenience of analysis, the author re-sorted the product structure of MissFresh according to users, scenarios, needs and functions and obtained the following table:

Overall analysis: MissFresh’s users are consumers, so the focus is on analyzing consumers’ potential needs. According to the consumer's shopping process, it can be divided into four usage scenarios: before placing an order, placing an order, before receiving the goods, and after receiving the goods.

1. What do consumers need before placing an order? What functions does MissFresh use to meet this demand?

First of all, when users want to consume on a platform, their priority is whether the platform is safe, reliable, and trustworthy? Based on this demand, the platform has set up a qualifications and rules button on the homepage. After seeing the qualifications, users will have more trust in the platform and can buy products with confidence.

Secondly, food safety is the focus of consumers’ attention. Based on this demand, the platform provides an entry for “test report” on each fresh product detail page, so that users can buy with confidence.

When a user wants to place an order, does he want to know whether the platform can deliver to his address? Therefore, the user's location is obtained first when entering the system, and when the user wants to switch the address, he can select the address through the homepage.

Finally: Consumers can be roughly divided into users with clear target needs and users with unclear target needs.

For users with clear target needs, they can enter the product name in the search box on the homepage, such as "cabbage", to search for all the cabbages sold on the platform. At this time, users can quickly filter out the required products by comprehensive analysis, sales volume, and price to improve efficiency.

For users whose target needs are unclear, the platform has set up some promotional information, product banner carousels, today's flash sales, selected ingredients, seasonal new products, etc. on the homepage, which can provide reference for consumers with unclear targets.

At the same time, the platform also has a "what to eat" content module, which provides guidance for users who don't know what to eat or how to cook ingredients. When users see delicious food pictures, their appetite will be aroused, thereby increasing the conversion rate.

At the same time, the platform also carefully considers the "special needs" of individual users - cooking methods.

2. What are the consumer’s needs when placing an order? How does MissFresh satisfy your needs?

When a user places an order, he wants to know whether all the items he needs have been added to the shopping cart. At this time, he can enter the shopping cart page, where the quantity, price, etc. of the items are clearly visible.

During checkout, users want to know whether red envelopes can be used for the products they have selected? There is an available coupon button in the upper right corner of the shopping cart page. You can check how many coupons you have and what type of coupon each is. You can also place orders together to achieve a certain discount.

The platform offers free delivery for orders over 39 yuan. If users want to know whether the products they have selected have reached the free delivery threshold, they can select the products they want to buy on the shopping cart page to calculate the total amount, which will show that there is still X yuan left to waive the basic delivery fee. Users can click to place the order to reach the threshold.

On the checkout page, MissFresh supports five payment methods: WeChat, Alipay, Huabei, UnionPay QuickPass, and stored value balance, to prevent users from giving up payment due to different payment habits.

3. What needs does the consumer have before receiving the goods? How does MissFresh satisfy your needs?

After placing an order, users usually want to check their order information and delivery information. The platform displays order information at each stage in My → My Orders.

When a user changes his or her needs temporarily and wants to cancel an order, he or she can view his or her order and cancel it on the My → My Orders → Pending Delivery page.

4. What needs do consumers have after receiving the goods, and how does the platform meet them?

After the user receives the product, if there is any need for after-sales processing, he or she can apply for a refund or claim.

When users want to post their satisfaction with the products they received, delivery, etc. on the platform, they can click the "Waiting for Evaluation" → "Evaluate and Earn Points" button to make an evaluation.

Based on users' purchasing habits, the platform sets up a "Next Order" button, which allows users to add all the items in the previous order with one click, which is simple and quick.

For users who want to issue invoices, the platform has set up an invoicing entrance on the My Order page.

5. Conclusion

From the above analysis, we can find that MissFresh’s functional design can well meet the needs of users before placing an order, before placing an order, and after receiving the goods. At the same time, the high-frequency functions required by different users are highlighted and reasonably distributed in the product structure. It can be regarded as a product with relatively excellent design.

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 does MissFresh operate this product to achieve rapid growth?

According to the AARRR model, the author has sorted out the main operating activities of MissFresh since its establishment as follows:

1. Content Operation

1) MissFresh focuses on content operation and has launched the "What to Eat" module. Through UGC, users who love cooking can post recipes + pictures on the platform. When posting, they can choose relevant ingredients and note "Add ingredients for a chance to win cash rewards" to encourage users to produce content.

Excellent content operations can attract user attention, increase the activity of platform users, and promote consumption conversion. When users don’t know what to eat, they can open the platform’s “what to eat” module and see delicious pictures of delicious food to arouse their appetite. There are purchase links for related ingredients below the content, which is convenient and fast, and promotes user conversion rate. At the same time, content operation can also increase user stickiness to a certain extent.

2) Opened a Douyin account, which currently has 443,000 followers. Short videos are posted on Douyin about food stories, cooking techniques, etc., and are divided into two topics: a fresh dish a day and daily home cooking. Users can learn to cook through cooking videos, so that the brand image of MissFresh can penetrate into users' lives and enhance user stickiness.

3) MissFresh opened a Kuaishou account and updated promotional activities daily to boost conversion rates.

4) MissFresh opened an official Weibo account, which mainly focuses on event announcements, cooperation promotions, and forwarding comments. It currently has 424,000 followers, and increases user activity by launching lucky draw activities.

5) MissFresh opened an account on Xiaohongshu to carry out brand promotion and increase the impression of the platform in users’ minds.

2. User Operation

User operation is the top priority of MissFresh’s operations, which requires constantly attracting new customers, promoting conversion rates, and improving retention rates. Frequent promotional activities have a positive impact on user retention and activity on the platform.

1) Attract new customers (A)

In addition to offline marketing, the platform’s main way of attracting new users also relies mainly on social mechanisms, that is, users invite new users by sharing with WeChat friends or Moments.

Before purchasing, share the link with WeChat friends through the "invite and get gifts" method. After your friends click the link and register, they will receive a new user red envelope/product voucher. After the user places an order, they will receive a large discount coupon. This method can not only improve the conversion rate of old users, but also achieve the purpose of inviting new users.

Get red envelopes or merchandise coupons through banner carousels, "Mid-Year Sale" events, helping to get free items, and getting coupons by playing games (such as: synthesizing big watermelons, saving money and playing Candy Crush).

Whether it is a red envelope or a gift voucher, users need to register and place an order before they can use it. In this way, the platform continues to acquire new users.

2) Promote activation (A)

Daily Youxian increases user activity by continuously carrying out promotional activities, such as:

• 2021-6-22 Mid-year promotion, warehouse opening and grain storage activities;
• 2021-06-11 618 promotion;
• 2021-05-12 The much-anticipated Food Festival is online;
• 2021-04-12 Youxian’s 6th anniversary celebration is in progress, with good products and discounts every day;
• 2021-02-01 Before the Lantern Festival, top up your Youxian balance and receive a red envelope;
• 2020-12-21 Winter Solstice is like a New Year, 10% off for 2 pieces of dumplings and 20% off for 3 pieces;
• 2020-11-30 Every Wednesday, Member Day, 50% off on popular items, saving 866 yuan per year;
• …

Youxian membership privileges can also promote user activity: free dishes for members, member-exclusive coupons, member free shipping coupons, member-exclusive prices, member family cards, membership day every Wednesday, and double points return.

3) Improve retention (R)

• A large number of discount red envelopes and preferential activities, such as mid-year promotion, discount specials, discount red envelopes, etc.
• Membership system: free vegetables, member-only coupons, member-only shipping coupons, member-only prices, etc.;
• Retain users who love gourmet food through content operation of the "What to Eat" module;
• Regularly push activity information to users, send discount text messages, etc.

4) Share and spread (R)

• Invite with gifts: When old users invite new users, both parties can get corresponding gift packages, which encourages users to share with their friends;
• Help to get free stuff: Users can invite friends to bargain through the help to get free stuff and get coupons or food vouchers.

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.

In the above, the author systematically analyzed the reasons behind the rise of MissFresh from 8 aspects, including industry, typical model of fresh food e-commerce, competing products, user value, commercial value, product iteration, product structure, and operation. It can be seen that no product can succeed casually. It must be the combined effect of internal and external factors such as "time, place and people".

IX. Future Outlook/Optimization Suggestions

Through the above analysis, we understand the reasons for the 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.

Through the above analysis, we can see that if MissFresh wants to continue to develop and gain more users, it can refer to the following aspects:

1. First of all, on the basis of ensuring the quality of the dishes, we rationally allocate delivery staff, such as hiring some part-time staff during periods of high order density to ensure delivery quality and improve user experience.
2. Increase sales of semi-finished dishes to meet the needs of busy office workers in first- and second-tier cities.
3. Increase the distribution of fresh seafood and ensure the quality to retain users who have high requirements for seafood.

Author: Ning Ge~

Source: Ningge~