Dingdong Maicai Product Analysis

The fresh food e-commerce industry is also an industry that is currently receiving much attention. Combined with Internet data, merchants can quickly deliver fresh food to users, improving their consumption experience.

On June 9, 2021, Dingdong Maicai submitted an application to the U.S. Securities and Exchange Commission, intending to be listed on the New York Stock Exchange with the stock code "DDL". The maximum amount of funds raised is tentatively set at US$100 million in the prospectus. In the five years since its establishment, this company, which has raised 10 rounds of financing, has expanded its service scope to more than 30 cities across the country, established more than 850 community forward warehouses, and served more than 30 million users. Its monthly revenue in February 2020 alone exceeded 1.2 billion yuan.

However, what is somewhat strange is that during the development of Dingdong Maicai, not only is there no Internet giant behind it, but it is not even profitable at the moment. So how did it rise so quickly in such a short period of time? What is the current situation of the entire industry?

This article attempts to analyze the process of the Dingdong Maicai product to give you a glimpse into the operating logic of the entire fresh food industry.

1. Analysis and explanation

Product name: Dingdong Maicai.

Product positioning: Make delicious food as accessible as tap water and benefit everyone.

Product version: V9.26.3.

Experience environment: iPhone 12 mini (iOS 14.6).

2. Industry Analysis

The fresh food e-commerce industry is an e-commerce sub-industry that has created a completely new fresh food industry chain using modern Internet technology.

Different from the traditional fresh food industry, fresh food e-commerce integrates upstream and downstream resources through Internet big data, artificial intelligence and other means, optimizes the supply chain, and creates new models such as O2O platforms, forward warehouses, store-warehouse integration, and community group purchasing. After users place an order online, fresh food products can be delivered to users quickly and efficiently.

So how did the fresh food e-commerce industry usher in this disruptive change? Below we use the PEST model to explore and analyze the reasons behind it.

1. Politics

The 2021 "Opinions of the CPC Central Committee and the State Council on Comprehensively Promoting Rural Revitalization and Accelerating Agricultural and Rural Modernization" pointed out:

“(XI) Build a modern rural industrial system. Accelerate the improvement of the modern agricultural full industrial chain standard system… (XVIII) Accelerate the implementation of agricultural product storage, preservation and cold chain logistics facility construction projects, promote the construction of small-scale storage, preservation and cold chain facilities at the farm, low-temperature direct sales distribution centers at the production site, and national backbone cold chain logistics bases…”

In fact, from 2012 to the present, my country's annual "Central Document No. 1" has clearly proposed "developing agricultural products e-commerce and other trading methods", "strengthening the construction of agricultural products e-commerce platforms", and "supporting e-commerce, logistics and other companies to participate in the construction of agricultural e-commerce platforms". The country’s policy support has brought more opportunities for the development of the fresh food e-commerce industry.

2. Economy

China's GDP, which has been steadily increasing year by year, finally exceeded 100 trillion in 2020, making it the only country in the world to achieve positive growth last year. At the same time, as the world's most populous country, China also has a consumer market of 1.443 billion people.

As the saying goes, "food is the most important thing for people." Food, tobacco and alcohol have always accounted for the highest proportion in China's per capita consumer expenditure, reaching 30.2% in 2020. As a basic necessity industry in people's livelihood consumption, the fresh food retail industry also has a market size of trillions of yuan.

3. Society

The development of the Internet in China over the years has enabled more and more consumers to develop the habit of online consumption. According to data from CNNIC and the National Bureau of Statistics, by the end of 2020, the number of Internet users in China reached 990 million, the Internet penetration rate was 70.4%, online retail sales were 11.8 trillion yuan, and the online penetration rate reached 27.9%.

With the changes of the times, people born in the 1980s and 1990s have become the backbone of consumption in my country. This group of people is very accustomed to using the Internet, is relatively less sensitive to the prices of fresh food, and pays more attention to convenience when shopping, which also provides a foundation for the development of fresh food e-commerce.

In addition, the sudden outbreak of the epidemic in early 2020 greatly promoted the online penetration of fresh food, and the number of times consumers used fresh food e-commerce apps increased significantly. Even though the domestic epidemic is currently stable and the number of times consumers used fresh food e-commerce apps has slightly declined, it is still much higher than before the epidemic.

In summary, a large number of consumers have developed the habit of consuming fresh food online.

4. Technology

The continuous development and progress of technology has brought many improvements and changes to the fresh food e-commerce industry.

• With the technological advancement of the e-commerce and logistics industries, the efficiency of online shopping has been greatly improved, while the delivery costs have been reduced.
• With the transplantation of Internet technologies such as big data and artificial intelligence into the fresh food e-commerce industry, fresh food e-commerce has reduced the fresh food loss rate from 30% in traditional vegetable markets to 1% by accurately predicting its sales. Low loss and high turnover also improve the freshness of goods.
• With the steady development of the cold chain logistics industry, the cold chain logistics costs of fresh food e-commerce will further decline, providing users with lower-priced and fresher fresh food products.

5. Conclusion

Overall, the above factors have jointly driven the booming fresh food e-commerce market in recent years. So what will be the development trend of this industry in the next few years? Is there enough market space?

In recent years, China's fresh food retail market has maintained steady growth, with the market size exceeding 5 trillion yuan in 2020. With the increase in per capita disposable income and consumer expenditure, iResearch Consulting 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.

Therefore, we can see that there is still a lot of room for this market, and it will continue to grow rapidly in the next few years.

3. Typical Model Analysis

Faced with the fast-growing track and trend of fresh food e-commerce, many capital giants have deployed in multiple locations and start-ups have rushed in. However, to date, the various existing models in this market still have their own advantages and compete with each other, and no model with absolute advantages has yet been developed.

Fresh food e-commerce as a whole can be divided into traditional fresh food e-commerce and new fresh food e-commerce , and the new fresh food e-commerce can be further divided into home delivery model (including platform model and forward warehouse model ), home delivery + store model , counter pick-up model and community group buying model .

The relevant reference pictures are as follows:

1. Traditional fresh food e-commerce

Traditional fresh food e-commerce companies purchase directly from high-quality fresh food producers/suppliers at home and abroad, and provide cold chain distribution and home delivery services . Its essential feature is to serve as a bridge between the origin/supplier and the user, but goods will only be shipped from the origin once the user confirms the order.

Compared with other models, it does not require a lot of site resources in each city, but correspondingly, its delivery time is longer, ranging from 1 to 3 days, depending on the distance between the place of origin and the user.

Representatives of traditional fresh food e-commerce include Tmall, JD Fresh, Benlai Life, SF Express, and Fruitday.

2. New Fresh Food E-commerce

1) Home mode

① O2O platform model

Fresh food e-commerce in the O2O platform model cooperates with offline supermarkets, retail stores, and convenience stores. It does not need to purchase/stock any fresh food itself (or have an affiliated relationship), and provides home delivery services after users place an order.

Its essential feature is to serve as a bridge between offline supermarkets, retail stores and convenience stores near users. It only provides urban logistics services, and its delivery time is between 1-2 hours.

Representatives of the O2O platform model include JD.com, Meituan Flash Purchase, Ele.me (the above partnerships), Duodian MALL (affiliated with Wumart Supermarket), etc.

② Forward warehouse model

Fresh food e-commerce using the forward warehouse model purchases high-quality fresh food production areas/suppliers at home and abroad, transports them to their urban storage centers, and then deploys storage points that integrate warehousing, sorting, and distribution near users, shortening the final distribution chain and providing fast door-to-door delivery services after users place an order.

Its essential feature is to prepare fresh goods near users in advance, so that once users have needs, the goods can be delivered as quickly as possible.

This model is asset-intensive and requires the deployment of a large number of forward warehouses in cities within its operating scope, so the service scope is limited to first- and second-tier cities, and the delivery time varies from 30 minutes to 60 minutes.

Representatives of the forward warehouse model include MissFresh, Dingdong Maicai, Meituan Maicai, etc.

2) In-store + home delivery model (store-warehouse integration)

The in-store + home delivery model combines in-store consumption, online shopping, and instant delivery to provide an integrated online and offline consumption experience.

This model is actually very similar to the forward warehouse model. The only difference is that the core forward warehouse of the former is only a storage point and does not receive users; while the latter's "forward warehouse" is actually an integration of storage points and stores, and can receive users for offline shopping.

Correspondingly, the operation and maintenance costs of each store in this model are very high (which also brings in revenue), so the number of stores, expansion speed and scope are more limited than those of forward warehouses. Currently, they are only deployed in first- and second-tier cities, and the delivery time ranges from 30 minutes to 60 minutes.

Representatives of the in-store + home delivery model include Hema Fresh, 7FRESH, etc.

3) Pick up at the counter

The pick-up at the cabinet mode means that users place orders in advance, and then the platform delivers the fresh goods from the cold chain of the place of origin to the refrigerator near the community, and the users go to pick up the goods by themselves.

This model has very low costs because the platform has basically zero inventory and refrigerators do not have high costs like forward warehouses/stores; at the same time, the prices of goods are relatively cheap for users.

But relatively speaking, the number of refrigerators it needs to install near the community will be much denser than that of the forward warehouse. The delivery time is 1-2 days. This low timeliness and lack of “convenience” also determine that its target market is mostly in third-tier and fourth-tier cities and below.

Representatives of the pick-up at the counter model include Shixing Fresh, Dailuobo, etc.

4) Community group purchasing model

The community group buying model is that the platform supports the group leader to be responsible for community operation and gather users to place orders. After the order is placed, the platform transports the products from the place of origin to various communities, and finally the users pick up the goods at the designated location (within the community).

For the platform, this model has an extremely low customer acquisition price and a high conversion rate, and the pre-sale model does not require the platform to provide high storage fees to stock up on goods; for users, product prices are also more favorable.

However, group buying is generally more popular among middle-aged users, and the target market is more concentrated in third- and fourth-tier cities and below, with a delivery time of 1-2 days.

Representatives of the community group purchasing model include Chengxin Youxuan, Duoduo Maicai, Xingsheng Youxuan, etc.

4. Competitive Product Analysis

The research object of this article, Dingdong Maicai, is a product of the forward warehouse model. In the forward warehouse model, Dingdong Maicai and MissFresh are direct competitors, and their user scale is relatively similar. Therefore, we will take the growth paths and business models of the two companies as the entry point to gain a deeper understanding of the differences between the two.

1. Daily Fresh

1) Growth Path

• MissFresh was founded in November 2014, and received US$5 million in angel round investment from Yuanjing Capital and Guangxin Capital that year.
• In April 2015, MissFresh’s WeChat mall was launched, and in November, it pioneered the forward warehouse model. In the same year, it received A round (US$10 million) and B round (RMB 200 million) financing led by Tencent.
• In March 2016, the MissFresh APP was officially launched; in April of the same year, it received RMB 230 million in B+ round financing.
• In January, March and December 2017, MissFresh completed three rounds of financing totaling US$830 million, entering the ranks of unicorns.
• In September 2018, it received US$450 million in financing, led by Goldman Sachs, Tencent, and Times Capital.
• In July 2020, it received US$495 million in financing, led by CICC Capital; in December, it received a strategic investment of 2 billion yuan from the Qingdao government, and the National Ecological Chain Headquarters Industrial Park settled in Qingdao.

2) Business model

• Target users : Young people born in the 1980s and 1990s in first- and second-tier cities.
• Ways to attract new customers : Mainly through social media such as WeChat mini-programs, supplemented by offline marketing.
• Product Source : Mainly direct purchase from global origin (accounting for more than 80%), supplemented by supply from brand manufacturers.
• Product categories : including 4000+SKUs.
• Product quality control : 100% batch quality inspection on the platform + inspection by third-party agencies.
• After-sales service : If there are any quality issues, please apply for a refund within 48 hours, and customer service will review and process it within 1-4 hours during working hours.
• Delivery range : Ultra-fast cold chain logistics in the 16 core cities nationwide/ fastest delivery within 30 minutes within 3 kilometers of the community/next-day delivery in non-core areas.
• Warehousing density : 1,500+ forward warehouses nationwide/about 20,000 people share one warehouse.
• Business expansion : 1. Propose "smart vegetable markets" for the sinking market and digitally transform traditional vegetable markets; 2. Use the technical capabilities accumulated in the vertical retail field to develop a "retail cloud" intelligent system to assist traditional retailers in their digital transformation.

2. Dingdong Shopping

1) Growth Path

• In December 2013, Dingdong Maicai’s predecessor, Dingdong Community (focusing on community convenience services), was launched.
• In May 2014, Dingdong Community received angel round investment from New Oriental Education & Technology Group and Yonghua Investment.
• In May 2017, Dingdong Community was renamed Dingdong Maicai, and the Dingdong Maicai APP was officially launched.
• Since May 2018, Dingdong Maicai has received five rounds of financing, with investors including Gaorong Capital, Red Star Macalline, Morningside Venture Capital, Tiger Global Management, Amber Capital and Sequoia Capital; in October of the same year, 119 forward warehouses were built in Shanghai.
• It received two rounds of financing in March and July 2019, led by Today Capital and Star Capital; in the same year, its revenue exceeded 5 billion, and nearly 600 forward warehouses were built.
• In April 2021, it completed a US$700 million Series D financing round, led by DST Global and Coatue; in May, it received US$330 million in Series D+ financing from SoftBank Group.

2) Business model

• Target users : Young people born in the 1980s and 1990s in first- and second-tier cities.
• Ways to attract new customers : Mainly through field promotion, combined with social media.
• Product Source : Mainly direct purchase from global origin (accounting for more than 85%), supplemented by supply from brand manufacturers.
• Product categories : including 2000+SKUs.
• Product quality control : original “7+1 quality control process” (see “5.3.3 “7+1” quality control, please feel free to place your order” for details).
• After-sales service of goods : If there is a difference in weight, the difference will be charged immediately. If there is any quality problem, fresh goods can be returned or exchanged within 24 hours of harvest, and non-fresh goods can be returned or exchanged within 48 hours.
• Delivery range : Covering the core 30 cities/communities across the country, delivery within 3 kilometers can be achieved in as fast as 29 minutes.
• Warehouse density : 850+ forward warehouses nationwide/20,000-30,000 people share one warehouse.
• Business expansion : We will move upstream in the supply chain and establish Dingdong’s own farm, committed to the branding and digitization of agricultural products, so that consumers can trace and monitor the entire process of crop growth.

3. Conclusion

From the above analysis, it can be seen that although Dingdong Maicai Company was established earlier, its business focus at that time was on community convenience services. It was not until May 2017 that it adjusted its direction to fresh food e-commerce and changed its name to Dingdong Community. From this point of view, MissFresh started earlier and received the favor of capital as soon as it was born. It developed more smoothly in the early stage and accumulated certain first-mover advantages.

In terms of business model, although both target young people born in the 1980s and 1990s in first- and second-tier cities, and mainly adopt the forward warehouse model, directly purchasing goods from global origins, and promising to deliver goods within half an hour after users place an order ; but today, they have developed slightly different details.

In terms of new customer acquisition methods , MissFresh is backed by Tencent and mainly relies on social methods such as WeChat mini-programs to attract new customers, supplemented by offline marketing. Dingdong Maicai started out as a community convenience service, and offline marketing is its expertise. In the middle and late stages, attracting new customers through various social channels will also become a major focus.

In terms of product variety , MissFresh is obviously far larger than Dingdong Maicai, striving to provide users with more comprehensive choices, while Dingdong Maicai deliberately controls the number of product types to better utilize limited forward warehouse resources and improve turnover rate, thereby balancing the contradiction between turnover and gross profit.

In terms of product quality control , MissFresh not only conducts 100% batch quality inspection on its products, but also introduces third-party agencies to conduct joint inspections. Dingdong Maicai adopts a "7+1 quality control process", strictly controlling the seven links from production to home delivery. If the user is still not satisfied, they can return or exchange the product within seconds, which serves as the "+1" link.

Regarding the delivery range and warehousing density , MissFresh provides half-hour express delivery service in the 16 core cities across the country, with a forward warehouse density of about 20,000 people sharing one warehouse. The rest of the regions provide next-day delivery service, and they have to lay out their priorities carefully. Dingdong Maicai has covered the 30 core cities across the country, with a slightly lower forward warehouse density, with 20,000 to 30,000 people sharing one warehouse. However, once the layout is in place, the standard is unified as the fastest delivery within 29 minutes within 3 kilometers of the community.

Finally, after consolidating their core businesses, both companies began to expand their businesses in different directions last year.

MissFresh targets the sinking markets in third-tier cities, transforming traditional vegetable markets into digital and intelligent markets, and developing "smart vegetable markets". At the same time, it uses the technical capabilities accumulated in the vertical retail field to develop a "retail cloud" intelligent system to help traditional retailers transform into digital ones.

Dingdong Maicai traces the source upstream, cooperates with suppliers or directly establishes Dingdong’s own farms, and is committed to the branding and digitalization of agricultural products, allowing consumers to trace and monitor the entire process of crop growth, so that they can eat greener and safer.

5. User Value Analysis

In the fresh food e-commerce market, there are three main participants: suppliers , users and platforms . Dingdong e-commerce’s business logic is as follows:

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

Next, we will explore the needs of these two parties and how Dingdong Maicai can better meet their needs.

1. User

According to the survey results of iResearch Consulting, the proportion of users of fresh food e-commerce in my country who are 35 years old or below has reached 55.7%, which shows that users born in the 1980s and 1990s have become the main force of fresh food e-commerce consumption.

iResearch conducted a survey to explore the reasons why fresh food e-commerce meets their needs:

According to the survey results in the above figure, the main demands of post-80s and post-90s users for fresh food consumption are concentrated in:

• The shopping time cost is low;
• The product categories are rich enough;
• The product prices are favorable enough;
• The shopping experience is good.

In addition, the author believes that there is another basic requirement/prerequisite that everyone takes for granted: the quality of the product is good enough. These five points will be analyzed below.

For high-frequency and urgent fresh food consumption, there are currently three main purchasing methods for users.

1) Large supermarkets

Supermarkets are widely distributed in cities and are relatively numerous. They are also shopping places that the general public is very familiar with and where they frequently shop.

Supermarkets usually have a fresh food area, and the quality of the goods is guaranteed to a certain extent. You can choose the fresh food you need from it. Although a considerable number of people are accustomed to purchasing fresh food through supermarkets, this method still has the following problems:

• The time cost of shopping is high;
• Commodity prices are relatively high;
• The product categories are limited;
• The shopping experience is not convenient enough.

2) Traditional food market

There are relatively few traditional vegetable markets in cities, but they have the richest variety of goods, are relatively cheap, and are of relatively fresh quality, enough to meet all the fresh food needs of ordinary people. They are mainly composed of different individual merchants.

With the development of the Internet, the problems of traditional vegetable markets are also obvious:

• The time cost of shopping is high;
• The shopping experience is not good (the environment is dirty and messy, and the selection cost is high).

3) Community fresh food convenience stores

There are usually some small fresh food convenience stores around the community. Since they are located near the community, the shopping time cost is very low. Busy people born in the 1980s and 1990s can buy dinner ingredients on their way home from get off work. But it also has the following problems:

• The product categories are not rich;
• The prices of goods are relatively expensive;
• The shopping experience is not good;
• Product quality is not guaranteed.

To sum up, the above three methods have their own advantages and disadvantages, and none of them can meet the current needs of users well.

2. Suppliers

Suppliers of fresh food e-commerce generally have two roles: farmers who purchase directly from production areas and brand suppliers . Direct sourcing from the source is Dingdong Maicai’s main means of purchasing, accounting for more than 85%; generally, the platform will purchase specific categories of goods (such as meat, snacks, alcoholic beverages, etc.) from brand suppliers. Since brand suppliers account for a small proportion of the supply and have stable sales channels, farmers who directly purchase from the production areas (hereinafter referred to as "farmers") are taken as the analysis objects.

The agricultural products produced by farmers in various regions are seasonal and time-sensitive. It is possible to accumulate a large amount of agricultural products in a short period of time. In addition, due to local conditions, most people also face the dilemma of a small circulation radius of agricultural products during their harvest season, which is prone to unsalable products. Secondly, as the upstream of the traditional fresh food supply chain, the prices of agricultural products are usually suppressed at a relatively low level. Therefore, the primary needs of farmers are:

• Sell ​​agricultural products in a long-term and stable manner;
• Increase your own income;
• Conveniently sell agricultural products.

The following are the two main sales methods currently used by farmers.

1) Origin market/wholesaler

If the output of agricultural products is large during the harvest season, farmers will generally choose to send them to local markets/wholesalers for bulk sales, which is more convenient for them. In this way, agricultural products flow into the next level of wholesale markets/wholesalers.

However, the disadvantages of this method are very obvious, because there are many circulation links, the chain is long, and the product loss is large. Farmers are at the upstream and have information bias. Therefore, through this method, they:

• Low income (passive position, weak bargaining power);
• Agricultural products may be unsalable (subject to large market fluctuations).

2) Setting up stalls near the production area

The method of setting up stalls nearby to sell is very flexible for farmers, and their bargaining power is relatively stronger; on the other hand, farmers' conditions for preserving agricultural products are very limited. So its fatal flaws are:

• Unstable trading patterns;
• The transaction model is inconvenient (high time cost, small transaction scale, not suitable for long-term sales);
• The overall income is still not high.

In summary, the above two methods have their own advantages and disadvantages, and neither can meet the current needs of farmers directly purchasing from the production areas.

3. Platform

From the above analysis, we can find that when it comes to fresh food consumption, the problems with users' existing solutions include: daily work pressure is high, free time is limited, and the time for purchasing fresh products is restricted; supermarkets and community fresh food convenience stores have limited product categories and are relatively expensive; the environment of traditional vegetable markets is poor and the selection cost is high.

Similarly, farmers who purchase directly from production areas and are the main suppliers also have problems with unstable sales channels for agricultural products, easy unsale, and relatively low incomes.

So how does Dingdong Maicai, as a platform, better meet their needs and attract them to this platform?

1) Forward warehouse model, door-to-door delivery within half an hour (low time cost, good experience)

In order to improve delivery efficiency, Dingdong Maicai purchases fresh goods from the place of origin/brand suppliers and delivers them directly to the regional storage center. Then, based on this center, it densely deploys forward warehouses that integrate warehousing, sorting, and distribution in the city, ultimately achieving the effect of delivering goods to users in as fast as half an hour.

In this way, when users place an order, Dingdong Maicai can deliver the goods to their door quickly, ensuring the convenience of fresh food shopping and a good user consumption experience.

In addition, with the epidemic still recurring, through this door-to-door delivery method, users can avoid going to crowded places, achieving a safer epidemic prevention effect.

2) Big data promotes turnover, and “7+1” quality control keeps products fresh (good quality)

Dingdong Maicai has empowered supply chain management with technology through big data and other means. By accurately predicting sales (the overall prediction accuracy is over 90%, and over 95% for popular products), and strictly controlling the number of SKUs in the forward warehouse, it has achieved an unsold fresh food loss rate of only 1% (traditional fresh food loss is 30%). The most direct result of high turnover rate is that users can enjoy the freshest fresh products every day.

In addition, according to Liang Changlin, the founder and CEO of Dingdong Maicai, in order to better control the quality of fresh products, Dingdong Maishen not only has more than 500 quality control personnel to achieve a purchasing quality control ratio of approximately 1:1, but also has created a "7+1" quality control process.

The process emphasizes seven links, from planting and harvesting at the place of origin, to receiving and sorting at the large warehouse, to inspection and packaging at the forward warehouse, to door-to-door delivery for users to receive the goods. All of these are strictly controlled by our own employees. If the user is not satisfied with the goods after receiving them, they can choose to return/exchange them within seconds, forming the eighth link "+1". Based on this, users can place orders on Dingdong Maicai with complete confidence.

3) Direct sourcing from global production areas, with good prices and a wide range of products (rich product categories, favorable prices + increased income for farmers)

Whether the prices are affordable and whether the fresh food categories are complete and rich are the core factors that users consider when choosing a fresh food e-commerce platform. Dingdong Maicai has not only greatly expanded the product categories on its platform by directly sourcing from production areas around the world, but has also cut out the multi-level distribution links in the traditional fresh food supply chain, leaving more profit space for upstream farmers and itself, while also bringing more affordable prices to end users.

4) Cloud warehouse allocation, more stable production and sales (providing farmers with a long-term stable and convenient trading model)

In order to solve the problem of unsalable agricultural products due to the lack of long-term stable supply and marketing relationships with farmers in direct purchasing areas, Dingdong Maicai has provided a solution through the cloud warehouse model.

The cloud warehouse model is a platform that conducts inventory analysis and forecasting based on consumption data, realizes intelligent inventory allocation across the entire platform, and improves resource allocation and circulation efficiency. Through this unified scheduling method, the platform's procurement volume at the source will be relatively stable, and because it is based on the total amount of the entire platform's business scope, the procurement volume will also be larger.

4. Conclusion

Through the above analysis, we can find that compared with other ways of fresh food consumption, Dingdong Maicai better meets the needs of users and suppliers, which is one of the reasons why it can develop smoothly and rise rapidly.

6. Commercial Value Analysis

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

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

1. Increase the number of users

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

1) Advertising

Online advertising . Promotion is achieved through direct advertising on various online channels (such as promotion on TikTok and WeChat Moments), cooperative promotion with other brands (such as cooperative promotion with the national diving team + Yuexianhuo), and initiation/sponsorship of event promotions.

Offline advertising . The brand is promoted through "mobile promotion" by displaying the brand logo on the delivery personnel's uniforms and vehicles, distributing flyers in public places, posting posters on bulletin boards at stations near communities, and sponsoring advertisements (such as the "Ding Dong Fresh Card" campaign launched with China Unicom).

2) Offline marketing

Dingdong Maicai’s predecessor, Dingdong Community, focused on providing convenient community services, so it is very skilled and efficient in offline community promotion and new customer acquisition. Dingdong Maicai uses a large number of staff to guide community residents in real time near various communities in target cities to download and use the Dingdong Maicai APP, and then provides them with rewards (such as cooking oil and coarse tea), thereby promoting and attracting new users offline and acquiring a large number of new users.

3) Word of mouth

Word of mouth plays a crucial role in attracting new customers. Because fresh food consumption is a high-frequency and rigid demand, if the products are not only of good quality and low price but also provide a great product experience, and win user recognition, it is easy to spread word of mouth and attract friends and relatives. Not only is the cost low, but the effect is often very good. Dingdong Maicai has made a lot of efforts for this purpose, and the results are very good. It has become popular in the "Circle of Friends" because of its good reputation.

Here are a few examples:

• Dingdong Maicai gives free ingredients such as garlic and shallots to users who place orders. Although there are not many things and the value is not high, the user may just forget to order these ingredients, and the platform has considered it for you and gives them away for free, which seems very thoughtful.
• Some users may be concerned about delivery fees, so Dingdong Maicai directly announced that delivery fees are free across the entire platform.
• In order to encourage users to place orders, platform members can receive additional free fresh products after daily basic consumption.

4) Social media acquisition

Dingdong Maicai encourages old users to promote the platform to their friends and guide them to register on the platform through various rewards, thereby completing social networking and attracting new users. The specific methods are:

• The platform encourages old users to attract new users through social media by rewarding them with large coupons (a coupon worth 40 yuan off for every 59 yuan spent on each new user they invite). At the same time, the platform also provides new users with large coupons to attract them.
• Initiate a gift-giving event. For example, for the “Eat Watermelon for Free” campaign, old users can get a 1.25kg premium small watermelon by simply inviting two new users to help (registration must be completed).
• New users can open red envelopes. Old users share the "lucky red envelope" with new users. If the sharing is successful, the new user can get a lucky red envelope (up to 20 yuan), and the old user will receive a sharing reward of 10 yuan.

5) Community Operation

Through official operation of social media such as Weibo and Douyin, the number of fans of Dingdong Maicai products is maintained and expanded, while daily platform promotion is carried out to expand its brand influence and acquire new users.

2. Improve conversion rate

After guiding users to the platform through various means, the platform is only valuable after the users make purchasing decisions (that is, convert into paying users). So how does Dingdong Maicai improve its conversion rate?

1) New User Gift Pack

Dingdong Maicai provides an attractive gift package for new users who have just entered the APP, which not only includes a 108 yuan new user red packet, but also selects a variety of popular fresh products for new users to try at a price. Faced with these discounts, most new users will be tempted to place orders.

2) High-frequency promotions + push reminders

For users who are still hesitating and waiting, Dingdong Maicai often launches more aggressive promotional activities, accompanied by push reminders for users. Many new users will be attracted to place orders and thus become paying users, thereby improving the conversion rate.

3) Product interaction design

Dingdong Maicai is essentially an e-commerce product, and its interactive design also follows the idea of ​​the industry's funnel model. The design of every link is striving to improve the "conversion rate". Next, we will conduct research and analysis from the shopping guide page - details page - transaction page .

① Shopping guide page (home page + list page)

The homepage is the first page that users see when entering the APP. It is naturally the window with the largest traffic, so it plays the role of distributing traffic. Users can be roughly divided into three categories:

1. Users with clear goals;
2. The target is not very clear.
3. Users without clear goals.

Therefore, the homepage needs to accurately guide these three types of users:

For users with clear goals, the platform provides a search bar at the top of the page, which is also the most conspicuous place (area 1 in the above picture). Such users can directly search for specific products, thereby entering the product details page and transaction page and quickly completing the shopping process.

For users whose goals are not very clear, the platform provides clear entrances to each category at the top of the page (area 3). Such users can quickly enter the relevant category list page for further target screening, and then enter the product details page and transaction page to quickly complete the shopping process.

For users who have no clear goals (who are also the largest number of users), what the platform needs to do is to attract their desire for impulse consumption as much as possible, so as to achieve the goal of placing an order for shopping.

To this end, the platform provides a large number of areas on the homepage (areas 2, 4, 8, 10, and 11), further divides this type of user, and promotes different promotional activities in a targeted manner, thereby attracting users to further shop and consume.

For example, areas 2 and 4 are activities with specific themes and related products; area 8 uses the platform's selected products for limited-time purchases to create a sense of scarcity and attract users to buy; and area 10's Dingdong Huixuan is a special offer for the platform (there may be minor defects, but the price is very low).

In addition, the platform has placed promotional entrances in relatively prominent positions on the homepage for its green card members (areas 5 and 9) to increase stickiness, Dingdong Fishpond (area 6), and social media to increase the number of users (area 7), while taking into account other key points. As our eyes scroll down the page:

The "Guess You Like" module page, which is displayed by default, is essentially designed for users who have no clear goals. The page is presented in the form of a combination of functional cards (such as areas 1, 3, 5, 6 and 7) and product cards (such as area 2). The functional cards include:

• The platform strongly promotes its own popular product - Boxing Shrimp (Region 1);
• Generate exclusive frequently-purchased lists for different users to facilitate quick repurchase (area 3);
• Efficient recommendation through the ranking list formed by the platform's popular products (area 5);
• The new social approach of attracting new users, "Help with gifts - Eat watermelon for free", increased the number of platform users (Region 6);
• Attract users to order fresh ingredients by recommending popular recipes (area 7).

The remaining product cards are mostly displayed with high-definition pictures + product names + prices. Here we take the "8 free-range chicken eggs" in area 2 as an example for analysis. Usually, the products recommended here are the results of the platform's backend big data calculations. For example, if I placed an order for eggs 4 or 5 days ago, the platform will remember this period, and when it estimates that I have finished eating them, it will specifically promote eggs to me, so that the possibility of me repurchasing them after seeing them will be very high.

In addition, if the product has a high sales volume and is on the best-selling list, there will be a corresponding logo at the bottom of the card. For example, this egg is "TOP 1 in sales of meat, poultry and eggs". Moreover, through this logo, users can directly enter the complete popular ranking list to view and purchase, as shown by the arrow in the figure above.

The list page of Dingdong Maicai is also designed with a focus.

First of all, the platform still places a search box at the top (area 1), so users can search at any time and quickly enter the details page.

Secondly, the platform uses Region 2 and Region 5 as two dimensions to segment product categories. Users whose goals are not particularly clear can quickly locate them through these two scales and enter the relevant detail page.

For users, the sales volume and price of goods are the two most important reference factors in the shopping process, so the platform provides special filters for these two on the list page (area 3). Users can filter and sort as needed to view related products.

Area 4 is a display and list of specific products, where you can see clear pictures, descriptions, prices and other information of the products. The platform also attaches different labels according to the characteristics of the goods. for example:

• The beef shank and minced meat in the picture below are specially marked with red "special offer" labels, and we can see that the prices are discounted by 7 yuan and 3 yuan respectively, which reflects the cost-effectiveness and attracts users to place orders;
• Chicken breasts are marked with a red "Limited Time Offer" label to create a sense of scarcity;
• Paigu instantly displays that someone has placed an order 5 minutes ago, using other people's purchasing behavior as a trust endorsement, while also making users follow the crowd and stimulating their desire to consume.

② Details page

The product details page is the page with the strongest consumption experience in the entire shopping process, so it is also an important part of determining whether users will buy products. The main direction of efforts made by the platform on this page is to help users make quick decisions - join in buying a car .

The first thing you see after entering the product details page is the high-definition and attractive product pictures (area 1), which helps users confirm their goals and create a desire to consume.

The upper left corner of the picture shows the information of the user who just purchased the product (area 2). The purpose is to create trust and endorsement through the purchasing behavior of others. In conjunction with the "limited-time rush purchase" discount information (area 3 and 4) below, it creates a very cost-effective and scarce quality, thereby stimulating users to have the urge to consume immediately, otherwise the discount may be gone and they will feel like they lose.

Areas 5 and 6 are information about delivery time and discount discounts respectively. As part of the background conditions, users can confirm that they are confident that they can buy goods here. Not only can they be delivered instantly, but they also have additional discounts, which is very cost-effective.

The fixed shopping cart column (area 7) at the bottom guides users to place orders at any time and accelerate the completion of consumption behavior; and by collecting products, it is easier for users to complete the repurchase of products next time, indirectly increasing the purchase frequency.

Further down is the evaluation module (area 8), which displays 3715 reviews and a 99.41% positive review rate. After clicking, you can enter the detailed page of the evaluation, including pictures and text. The huge number of reviews and the extremely high praise rate correspond to high sales, high quality and high popularity; on the other hand, the huge number of user reviews is also a kind of trust endorsement, which facilitates users to build a sense of trust.

Following closely behind are the "Recommended Practice" module (area 9) and the "Frequently Buy/Similar Products" module (area 10). The two functions are roughly the same. Through their correlation with the target products, they attract users to generate additional consumption, thereby increasing the average customer price.

Looking further down is the product introduction page (area 11). Here, the platform creates a good sense of real product consumption experience through high-definition and detailed product graphics and text descriptions, thereby improving users' consumption willingness.

At the end (region 12) the platform also specifically noted "our mission", which is actually to establish consumer protection for users, and to explain to users that their products are fresh, high-quality, and have complete after-sales guarantee services. In this way, users can build a sense of trust and security, so that users can purchase products with confidence without worries.

The end of the product details page is the "Guess You Like" module. This is actually a recommendation module, which provides products similar to the target product. Because if the user keeps shopping until the end but still does not purchase the target product, it is likely that it means that he is not satisfied with it. Therefore, the platform here attracts users to continue to complete the goal of placing orders and consumption by recommending similar products.

③ Transaction page (shopping cart page + paid page)

When the user finally selected the required products on the product details page, he came to the shopping cart page. Since the next step is the final transaction page, the main purpose of the platform here is to increase users' willingness to pay, ensure that users complete transactions, and at the same time increase the average customer price of this shopping as much as possible.

As shown in the figure above, in order to enhance users' willingness to pay , the platform:

• In terms of price display of products, it focuses on red to display the discount information (area 3), showing its cost-effectiveness;
• Free ingredients are given intimately in the four areas of the area to indirectly enhance users' willingness to complete consumption;
• In the price settlement office (area 5), ​​the delivery fee of 0 yuan is displayed in eye-catching red, huge discount information (107.50 yuan discount of 40.80 yuan), and the red settlement button remind/hint that the user is a cost-effective transaction, so place an order quickly.

In addition, what the platform has spent more time here is to find ways to increase the average customer price :

• Overall discount information at the top of the page (area 1);
• As long as the single transaction amount exceeds 59 yuan, you can enjoy a great value exchange (area 2). On the exchange page, if the threshold of 59 yuan has been met, it will be displayed, such as areas 6 and 7, and the limited exchange (scarceness) and super value prices, and stimulate users to place an order quickly; if it is not met, it will be displayed, such as areas 8 and 9, with attractive prices but dust-stuffed shopping carts (that is, they cannot be purchased), which will lure users to enjoy discounts by raising orders. The next step is the order-making area that the user just thought of, which can be collected immediately, and speed up the process of increasing customer unit price by shortening the process of thinking and hesitation of users;
• You can enjoy a great discount (area 3) if you spend two items, and the discount information + exemption information is clearly marked, reflecting the cost-effectiveness;
• Single-piece package products are superimposed for discounts (area 10). If they are not satisfied, they will prompt the entry to form a order (area 13 and 14). The idea is similar to the value-for-money purchase.

The end of the shopping cart page is also the "Guess You Like" page (recommended module, area 12), but unlike the recommendation module (similar products, used to replace target products), the recommended products here are related to the shopping cart, because since it is on the shopping cart page, it means that the user has confirmed to purchase the target product, so the main purpose of the recommendation is to increase the average customer price as much as possible.

Then why are the related products and how are they recommended?

For example, when I buy lobster, Qianle-People tofu, and some common vegetables with hot pot, the more frequent labels in the goods in the backend shopping cart may be hot pot, so the recommendation module will recommend duck blood that is also a hot pot label. If I am indeed preparing to make hot pot, it is very likely that I will place additional orders when I see duck blood. Therefore, it is easier to achieve the purpose of increasing the average customer price.

Finally, let’s talk about the paid page (that is, the order page). This page is the last page for users to shop, so the main purpose here is to ensure that users complete order payment (the platform also specially displays green card membership information (area 16) here, hoping to attract traffic through discount information).

It can be said that many designs on this page are based on this point, such as:

• Indicate the expected delivery time and determine the time information (area 15);
• Indicate overall discount information and show cost-effectiveness (region 17);
• The information after the discount is marked, and the red eye-catching button urges users to place an order and enjoy the discount (area 18).

3. Increase average order value

The average order value is affected by two factors: the single purchase amount and the purchase frequency . The increase in these two factors can play a role in increasing the average customer price, so the following analysis will be conducted from these two perspectives.

1) Single purchase amount

Dingdong Maicai mainly guides users to generate as much/extra consumption as possible when making consumption, thereby increasing the amount of a single purchase. The specific usage methods are listed as follows:

• Hold promotional activities frequently (provides coupons for full discount);
• Exchange low-priced and high-quality products for a super value of 59 yuan;
• You can enjoy a discount if you have a few items on the same product;
• Recommend related items in the shopping cart.

2) Purchase frequency

Dingdong Maicai mainly increases the frequency of users' purchases through its green card membership system and high-frequency promotions .

Green card membership system . When a user becomes a green card member, he will stimulate the purchase frequency by enjoying special offers:

• Every day, as long as you shop to meet a certain basic consumption, you can get a free fresh product (it costs 39 yuan or more, while the average customer unit price of Dingdong Maicai is 50-60 yuan). No one wants to miss this cheapness, which will stimulate many people to consume at high frequency, which will increase the purchase frequency;
• There are 4 exclusive coupons available for purchases every week. You can get discounts for any product. Limited-time coupons every week also stimulate users' desire to consume and increase the frequency of purchase;
• Green card members themselves also enjoy exclusive discounted prices. Once users have the idea of ​​spending, they will consider that they can enjoy discounted prices on Dingdong Maicai, which indirectly affects the frequency of purchasing.

High-frequency promotions . Dingdong Maicai often holds large-scale shopping events and notifies users in the form of push messages. Each event includes a large number of discounted items and discounted coupons. Through these high-frequency promotions, it will also stimulate and increase the frequency of users' purchases.

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

7. Product iteration analysis

In order to deeply analyze the version iteration rhythm of Dingdong Maicai and explore the product iteration logic, the author iterated the iteration of all core versions of Dingdong Maicai from the official revision of V8.0.0 to V9.26.3 as follows (data source: Cool Chuan).

According to the curve distribution of the cumulative download volume of Dingdong Maicai on Cool Pass, it can be seen that the curvature of user growth has continued to increase since V8.24.0 (i.e. January 12, 2019), which is a "J-shaped" curve, so Dingdong Maicai is divided into two stages for analysis:

1. Phase 1: Verify user needs and polish user experience

Before January 2019, the V8.0-V8.23 version, the main goal of this stage is to verify user needs and polish the user experience.

At this stage, Dingdong Maicai not only launched the basic functions of fresh shopping (shopping guide page, details page, and transaction page functions) to verify user needs, but also focused on exploring new products, conversion, and stickiness, and launched a series of functions, hoping to accumulate a set of its own strategies through these efforts. for example:

• Invite gifts, new users to open red envelopes and share WeChat recipes (recruit new);
• Newcomer welfare zone and group buying (conversion);
• Super value exchange (average customer price);
• Sign in to receive points and green card members (sticky).

Another core point that Dingdong Maicai focuses on - optimizing the user experience of the entire shopping process . It puts the greatest effort to polish details, because as a new product without much fame, this is the "first favorable feeling" given to users and an important cornerstone of long-term development.

Specifically, it provides functions such as product traceability, purchased user reviews, online customer service, etc. on the product details page to ensure reliable and smooth shopping. It provides refund portal, quick coupon collection, rebate points (can be offset by cash), and repurchase on the order details page to ensure after-sales, discounts and convenience. In addition, it also provides a promise of overtime compensation, giving it a convenient and fast brand impression.

From this stage, the APP rankings have steadily increased, from outside the 1,000th place at the beginning of the online launch to around 80th. The main reason is Dingdong Maicai's deep accumulation in the early stage, taking "super user thinking" as the product development direction, focusing on providing high-quality fresh products and polishing APP products user experience.

2. Phase 2: Seize the opportunity of the epidemic and explore new operating methods

From February 2019 to the present, the version from V8.24.0 to V9.26.3 is the rapid growth period of Dingdong Maicai. It can be seen that the user growth rate continues to rise during this stage, especially during the epidemic.

In this stage , expanding the number of users and retaining old users has become the focus of product iteration.

In terms of expanding the number of users , Dingdong Maicai seized the opportunity of the epidemic very well. It attracted a large number of users through the addition of new semi-finished dish modules, contactless receipts, and reservations for orders, and achieved a leap in the number of users.

In terms of retaining old users , Dingdong Maicai has continuously explored new ways of playing activities, such as supporting live broadcast rooms, Dingdong Farm, limited-time and limited-time rush purchases, smart recommendations, product matching recommendations, etc., to stimulate old users to repurchase.

At the same time, Dingdong Maicai has always insisted on optimizing the user's shopping process experience , and has improved details from the homepage, product details page, shopping cart to after-sales page, and completed an overall UI revision.

From the data point of view, at this stage, the number of users of Dingdong Maicai showed explosive growth and there was no sign of slowing down. This shows that Dingdong Maicai's series of actions at the product level and operation level have also achieved good results at this stage.

Overall , Dingdong Maicai has a particularly good rhythm. In the early stage, we focus on polishing products and are not in a hurry to promote them, because even if many new users are attracted through large-scale promotion, these users will gradually be lost because the user experience is still unstable.

When the user experience stabilized and coincided with the sudden outbreak of the epidemic, Dingdong Maicai seized the opportunity to respond in time and launched a series of epidemic prevention campaign functions, coupled with the previous solid basic skills, successfully attracted fans quickly.

Since then, Dingdong Maicai has begun to constantly try new product activity functions in terms of product form, retaining old users, meeting the different needs of users at different levels, and stimulating their repurchase. This is the overall iteration step of Dingdong Maicai.

8. Product structure analysis

In the iterative analysis, we analyzed the iterative steps of Dingdong Maicai’s product functions. Next, let’s take a look at what 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 the product structure brain diagram of Dingdong Maicai V9.26.3:

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

1. Overall analysis

When consumers use Dingdong Maicai, there are 4 scenarios:

1. Learn what you care about before buying groceries;
2. Know the information about specific products when buying groceries;
3. Confirm relevant information when making payment;
4. I am not satisfied with the product after buying groceries.

2. Specific analysis

Scene 1: What functions does Dingdong Maicai meet before buying groceries?

Before buying groceries, users may have just heard of the name Dingdong Maicai, but they don’t know about this platform. They can quickly understand it through the introduction at the top of the homepage.

Then users can be divided into two situations. One is to clearly (or relatively clear) know what they want to buy, so they can directly enter the relevant product details page through the homepage search bar or the entrance to each category to buy; the other is to be unsure what they want to buy, so the platform also provides suggestions and references through functional modules such as guessing you like and hot-selling recommendations. In addition, for the high-frequency demand of "what to eat", the platform also independently "what to eat" (i.e. recipe recommendation) as a first-level function placed in the bottom navigation bar.

Finally, what users are more concerned about is the promotional information. The platform also carefully divides the event banner area, event area, limited-time rush purchase, special promotion and other modules on the homepage, so users can understand it as needed.

The functions mentioned just now can basically find the entrance on the product homepage, or be presented as a first-level function in the bottom navigation bar. This design is quite reasonable, because as a brand new user who is not familiar with Dingdong Maicai, after registering, you can directly enter the homepage. All the content users want to know can be quickly found, and the operating cost is very low.

Scenario 2: The needs of users when buying groceries and what functions does Dingdong Maicai meet?

When buying groceries, users' focus is on the product itself, such as product quality, price, origin and other information, so Dingdong Maicai provides high-definition product carousels and information summary at the top.

For new users, this platform is unfamiliar, so the evaluation of purchased users is required as a reference basis (trust endorsement). Therefore, the platform then displays this information and presents the overall number of evaluations and overall praise rate at the top, so users can quickly understand it. Perhaps users will not understand the specific method of making this ingredient, so the platform next provided recommended methods and thoughtfully prepared the side dishes involved in the method, which can be added directly to the shopping cart with one click.

Finally, there are product details, which can bring users the strongest consumption experience here, so the platform places various high-definition detailed pictures of the product here to meet users' needs to understand product details.

The above functional platforms are arranged and designed based on the degree and scope of users' needs, so users can obtain the required information most efficiently, which will bring users a very good user experience.

Scenario 3: What functions does Dingdong Maicai meet when paying?

What users care about when making payment is overall discount information and delivery time. Various discounts are specific means for the platform to show the cost-effectiveness to users and to prompt them to place orders and purchase as soon as possible.

Regarding the discount, Dingdong Maicai has divided three functions. First, the full discount coupons for all products are placed at the top; second, the value-for-value exchange is enjoyed for purchases over 59 yuan, with a certain threshold, but the exchange price is very attractive, located below the coupon; finally, the order is a discount. Since the situation of each product is different, this can be designed to follow each specific product.

Regarding delivery time, the platform provides users with the option to choose after they click on the settlement as the last confirmation item.

Scene 4: What functions does Dingdong Maicai satisfy after buying groceries?

After buying and receiving the goods, users may be dissatisfied with the goods they receive, and then after-sales demand arises. There are 2 methods for this platform. First, users can quickly initiate the after-sales process through the "My Order-After-Sales/Refund" in the middle of the first-level function of the "My" page of the bottom navigation bar; or they can also contact the platform staff through the "Contact Customer Service" function under the same page for relevant confirmation.

The above functions are located in the center of the page, which is very conspicuous and can be easily found by users.

3. Conclusion

From the above analysis, we can find that the functional design of Dingdong Maicai can well meet the needs of users in four scenarios: before, when buying groceries, when buying groceries, when buying groceries, and after buying groceries. At the same time, the high-frequency functions required by different users have a prominent focus and reasonable distribution in the product structure, which can be considered a product with relatively excellent design.

9. Operation path analysis

The saying "Products are responsible for giving birth, and operations are responsible for raising them" also indirectly reflects the close relationship between products and operations.

So how did Dingdong Maicai operate this product so that it can grow rapidly in a short period of time? The author has sorted out the following according to the AARRR model since its establishment:

1. Acquisition

Recruiting new users means increasing the number of users. The previous article has been described in detail in "6.1 Increase the number of users", and I will now make a simple list.

• Advertising (including online and offline);
• Offline ground push;
• Social recruitment;
• Community operation;
• Word of mouth spread.

2. Inspire activity

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 of the APP. The previous article has been described in detail in "6.2 Improve Conversion Rate", and I will now briefly list it.

• New user gift package;
• High-frequency promotional offers + push reminder;
• Product design/strategy.

3. Improve retention

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, Dingdong Maicai mainly did the following things:

• Implement green card members (members can receive free dishes every day and exclusive coupons every week);
• Implement the points system (receive points by signing in and placing an order, and points can be withdrawn);
• Dingdong Farm (sign in, place an order to get feed, feed to raise fish with feed to get real fish);
• Establish a recipe community (encourage users to upload recipes and communicate to create a community atmosphere).

4. Increase income (Revenue)

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

5. Share and disseminate (Refer)

In order to guide users to spread the word spontaneously, Dingdong Maicai has done the following:

• Assuming social responsibility and implementing the e-commerce poverty alleviation strategy, 61 national-level poverty-stricken counties have been connected and dozens of e-commerce poverty alleviation model counties have been created;
• To help charity and create a good corporate image, Dingdong Maicai has carried out a series of social welfare activities such as "wearing a helmet on travel, safety accompany you" and "green and environmental protection, garbage classification";
• Various activities are launched on social platforms to encourage users to participate, such as "I have a field in Dingdong" and encourage users to participate in the field recognition and transplanting activities in Dingdong, and the 527 Wife Festival Loving Wife Feast Call, etc.;
• Promote recipe exchange and sharing activities and create a recipe exchange community.

Above, the author systematically analyzed the reasons behind the rise of Dingdong Maicai from seven parts: industry, competitors, user value, commercial value, product iteration, product structure, and operation. It can be seen that no product can be successful casually, which must be the comprehensive role of internal and external reasons such as "time, place, and people".

10. Future Outlook/Optimization Suggestions

Through the above analysis, we have understood the reason for the rapid rise of Dingdong Maicai. Where will the "vegetable basket" go in the future?

Next, the author will use the SWOT model to conduct a system analysis, hoping to draw effective conclusions from it.

1. Reasonably "adjust" existing business models

As the model for Dingdong Maicai to start prices, in addition to maintaining its competitiveness in core first- and second-tier cities, Dingdong Maicai also needs to explore new and suitable business models for the sinking market (such as exploring new business models such as community group buying, self-pickup in the counter, offline store franchise, etc.) in third- and fourth-tier cities to expand their business scope and profit margins. After all, the model of forward warehouses in first-tier cities is too expensive. If the platform wants to achieve profitability as soon as possible, it really needs to change the single business structure.

2. Open up adjacent tracks for fresh food consumption

There is no doubt that the business of fresh food products is Dingdong Maicai's core business, but after this track gradually gains a foothold, can we consider promoting the track adjacent to fresh food consumption, such as personalized professional nutrition customization?

This attempt can not only deepen the influence of Dingdong Maicai in the fresh food track, but also improve the single business structure, broaden the moat, and increase profit margins, so as to form differentiated competition with direct competitors such as fresh food e-commerce, thereby consolidating its own advantages.

3. Be cautious in adhering to the country's bottom line and develop rationally

The policy restrictions are used as a sword of Damocles on Chinese enterprises. If Dingdong Maicai wants to achieve more lasting development, it must strictly abide by national laws and regulations and develop within the scope expected by the country. The state encourages the Internet to help develop agriculture, but Internet companies also need the standard of operations, and take it as a warning to the incident of community group buying being criticized by official media, carefully consider it and develop it reasonably.

*All the above data are compiled from the public information on the Internet.

Author: LESSISMORE

Source: LESSISMORE