Analysis of Dingdong Maicai’s Competitive Products

With the development of the Internet era, the e-commerce industry is also developing continuously, and fresh food e-commerce is no exception. The author of this article combines the case of Dingdong Maicai APP to conduct competitive analysis , conducts market analysis of the fresh food e-commerce industry from different aspects, and describes its future development trends. Let's take a look.

1. Purpose of Competitive Product Analysis

Understand the development status of the fresh food e-commerce industry, analyze the competitive situation of Dingdong Maicai through SWTO, and explore the future development strategy of Dingdong Maicai.

By comparing the functions and designs of competing products, we can understand the shortcomings of the Dingdong Maicai APP and make planning, design and analysis for the next step of functional iteration.

2. Market analysis of fresh food e-commerce industry

1. Industry Background

The epidemic that swept the world in 2020 brought an opportunity for "wild growth" to the fresh food industry. Some leading fresh food e-commerce businesses achieved significant growth, and three fresh food e-commerce platforms, JD.com, MissFresh and Dingdong Maicai, successfully completed their IPOs.

However, the industry's competitive landscape is still far from stable. With the rise of community group buying, problems such as difficulty in storing food, high supply chain and logistics costs have been exposed. The competition in the fresh food industry has become increasingly fierce. Many emerging fresh food e-commerce companies are facing bankruptcy, and the industry situation has turned from hot to cold.

This spring, repeated outbreaks have sounded the alarm in many parts of the country. People who are under lockdown and quarantine at home have lost the opportunity to dine out. Fresh food e-commerce companies have seized the opportunity to actively provide a large number of epidemic prevention packages and promote their own pre-prepared meals, hoping to usher in a new turning point.

2. Macro-environment PEST analysis

1) Politics

The rapid sale of fresh agricultural products is an issue that the country attaches great importance to.

Since 2012, the Central Government’s No. 1 Document has repeatedly proposed “developing agricultural products e-commerce and other trading methods”, “strengthening the construction of agricultural products e-commerce platforms”, “supporting e-commerce, logistics and other companies to participate in the construction of agricultural e-commerce platforms”, etc.

In 2015, the "Guiding Opinions of the State Council on Actively Promoting the 'Internet Plus' Action" was issued, and "Internet Plus Modern Agriculture" became one of the 11 key action projects, which effectively promoted the in-depth integration of the Internet and agriculture. The rise of fresh food e-commerce is an inevitable trend.

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

In July 2021, the "Management Specifications for E-Commerce Cold Chain Logistics and Distribution Services" issued by the State Administration for Market Regulation was implemented, which standardized e-commerce cold chain logistics and distribution services and provided safeguards for the development of fresh food e-commerce.

2) Economy

In 2021, the per capita disposable income of residents nationwide was 35,128 yuan, an increase of 9.1% over the previous year.

The improvement of residents’ income level provides an economic basis for the market demand for fresh food.

In addition, food, tobacco and alcohol always account for the highest proportion in China's per capita consumer expenditure.

In 2021, the per capita consumption expenditure on food, tobacco and alcohol of the national residents was 7,178 yuan, an increase of 12.2%, accounting for 29.8% of the per capita consumption expenditure.

As an industry with strong demand for people's livelihood consumption, fresh food has both an extremely high proportion of consumers and an extremely high consumption share, and its market prospects are evident.

(Data source: National Bureau of Statistics)

3) Society

(1) People born in the 1980s and 1990s provide a broad fertile soil for the development of Internet fresh food e-commerce

With the development of the economy and the changes of the times, my country's consumer groups have gradually changed. At this stage, people born in the 1980s and 1990s have become the backbone of consumption, and fresh food e-commerce users aged 35 and below account for 55.7%.

Consumers born in the 1980s and 1990s are relatively less sensitive to the price of fresh produce. They pay more attention to convenience when purchasing fresh produce and have higher requirements for the quality of fresh produce.

At the same time, there is a demand for "faster" delivery speed, which makes fresh food e-commerce stand out in the fierce competition in the fresh food market.

(Data source: iResearch)

(2) The epidemic has accelerated the online penetration of fresh food, and consumers have gradually developed the habit of online shopping for fresh food

The “stay-at-home economy” during the epidemic has increased the demand for online shopping of fresh food. Consumers are staying at home to prevent and control the virus and are more inclined to choose home delivery services.

In the early stage of the epidemic, the number of times consumers used fresh food e-commerce apps increased significantly; after the epidemic eased, the number of times consumers used fresh food e-commerce apps declined, but it was still much higher than before the epidemic.

Fresh food platforms have successfully cultivated users’ consumption habits, and users’ consumption on fresh food platforms has become more of a daily routine.

(Data source: iResearch)

(3) The accelerated pace of life, smaller family structures, and an aging population are stimulating the demand for pre-prepared meals

The birth of the "lazy economy": iMedia data shows that 71.9% of consumers buy pre-prepared meals to save time, and the majority of users are in first- and second-tier cities, accounting for 65.5%, and the majority are young and middle-aged people aged 20-40, accounting for 81.3%.

From the perspective of family structure: According to the data of the seventh national census, the average population per household is 2.62 people.

The miniaturization of family structure has a certain impact on residents' eating habits: the number of people eating at each meal decreases, and in order to reduce food leftovers or waste, the demand for pre-prepared meals that can be customized for single or multiple people increases.

The "ritual sense" of meals has decreased, and residents are more inclined to simplify and speed up the cooking process.

Aging trend: There is a clear trend of aging population at present, and pre-prepared meals can also meet the needs of the elderly for simplified cooking.

4) Technology

A series of new technologies such as 5G, Internet of Things, big data, and artificial intelligence empower the entire fresh food delivery industry chain, achieving cost reduction and efficiency improvement.

Upstream: Develop smart agriculture; rely on artificial intelligence, 3S and other modern information technologies to integrate with agricultural production to achieve precise management and visual diagnosis of agricultural production, and start quality control from the source.

The development of smart agriculture promotes the standardization and intensification of production, provides a basis for large-scale procurement, and effectively reduces procurement costs.

Midstream: Promote cold chain technology and logistics by introducing insurance systems, temperature control systems, smart warehouse management systems, etc., integrate various information into the Internet of Things platform, and realize transparency and data-based logistics and transportation.

The systematic operation of logistics and transportation and real-time dynamic monitoring throughout the entire process can reduce the loss of fresh food during transportation and improve the effect of cold chain transportation.

Downstream: Optimize intelligent algorithms and optimize routes and orders through intelligent scheduling systems. Under the guidance of intelligent algorithms, product replenishment reminders and purchasing suggestions can be given in advance, and automated marketing can be achieved based on population attributes.

Relying on artificial intelligence and big data technologies, we can automate operations and improve operational efficiency.

3. Competitive Situation - Porter's Five Forces Model of Dingdong Maicai

1) The degree of competition among competitors in the same industry

As a rising star in the e-commerce category, many capital giants have entered the fresh food e-commerce industry, and the overall competition in the industry is relatively fierce.

Judging from the current layout, Alibaba has deployed Taoxianda and Ele.me new retail in the O2O platform model, Hema Fresh in the store-warehouse integrated model, and continues to invest in the community group buying platform Shihuituan to layout the sinking market.

In addition to its own JD Fresh business, JD has also launched the O2O platform model of JD Home Delivery, the store-warehouse integrated model of 7fresh, and has made a strategic investment in the leading community group buying platform Xingsheng Youxuan.

Meituan has the O2O model of Meituan Flash Purchase, the forward warehouse model of Meituan Grocery Shopping, and the community group buying model of Meituan Select.

In addition, Pinduoduo and Didi have also entered the community group buying track. In addition, leading fresh food e-commerce platforms such as MissFresh and Duodian continue to be favored by capital. The fresh food market with more models has brought huge competitive pressure to Dingdong Maicai.

(Data source: iResearch)

2) Threat of new entrants

At present, the domestic fresh food e-commerce industry is gradually forming a development trend of full industrial chain resources and omni-channel resources. Operating costs are gradually increasing, and the requirements for capital are constantly increasing. At present, the competition situation in the entire industry is still relatively fierce.

On the whole, the industry's overall entry barriers continue to increase, and the threat from new entrants is relatively weak.

3) Threat of substitutes

The market size of my country's fresh food e-commerce industry continues to expand, but its penetration rate is still relatively low for the entire fresh food market, and some platforms are unable to meet consumers' requirements for product quality, timeliness, and other aspects.

As a result, traditional offline markets (supermarkets, vegetable markets, small fresh food convenience stores, etc.) are still the main purchasing channels for consumers, and the current threat of substitutes in the fresh food e-commerce industry is relatively large.

4) Bargaining power of suppliers

The supply of goods in the fresh food e-commerce industry is affected by the special properties of the products, and the premium space for products is limited. There are many alternative suppliers for most agricultural products, and the bargaining power of suppliers is relatively weak.

Dingdong Maicai has cut out the multi-level distribution links in the traditional fresh food supply chain by directly sourcing from production areas around the world, giving itself stronger bargaining power.

5) Bargaining power of buyers

Fresh food e-commerce products have strong bargaining power among buyers due to the competitiveness of the industry, the special attributes of agricultural products and the low degree of service differentiation.

4. Market size and trends

In recent years, the transaction scale of China's fresh food e-commerce industry has maintained steady growth as a whole. In 2021, the transaction scale of fresh food e-commerce reached 465.81 billion yuan, a year-on-year increase of 27.92%.

At present, the penetration rate of fresh food e-commerce in China is relatively low, but it has maintained a growth trend in recent years. The penetration rate reached 7.91% in 2021. There is still huge market space for China's fresh food e-commerce.

With the encouragement and improvement of policies, the maturity of the development model of fresh food e-commerce, the formation of users' habit of online shopping for fresh food, the increasingly wide coverage of fresh food e-commerce users and the increasingly mature technology, it is expected that fresh food e-commerce will continue to maintain rapid growth in the future.

(Data source: China Business Industry Research Institute)

Against the backdrop of rising residents’ income levels and upgrading of their food consumption, the cold chain logistics system and catering supply chain system are becoming increasingly perfect, and pre-prepared meals are entering a boom period.

In 2021, the market size of China's pre-prepared meal industry reached 345.9 billion yuan. Stimulated by the repeated epidemics in the spring of this year, the demand for pre-prepared meals has once again experienced explosive growth, and is expected to exceed one trillion yuan in 2026.

(Data source: iiMedia Research)

3. Competitive product selection

By searching for the keywords "Dingdong Maicai" and "Fresh Food" on the official platform of Qimai Data, we selected the top 10 related platforms, gave priority to the same type of forward warehouse-to-home delivery model and top-ranked platforms, and finally selected "Daily Youxian" as a competitor for comparative analysis.

(Data source: Qimai Data)

4. Competitive Product Analysis

1. Users and Positioning

1) Product positioning

2) User analysis

(1) Regional characteristics

The users of Dingdong Maicai and MissFresh are concentrated in first- and second-tier cities. MissFresh was first launched in Beijing and has a relatively large user base.

Therefore, it has a higher share in Beijing and Tianjin, basically on par with Dingdong Maicai, and the number of users in the other top ten regions is lower than that of Dingdong Maicai.

Affected by the outbreak of the epidemic in Shanghai at the end of March this year, the number of users of both platforms has shown explosive growth. Dingdong Maicai, which took Shanghai as its starting point and base camp, has far surpassed MissFresh.

(Data source: Baidu Index)

(2) Gender characteristics

The number of male users on both platforms is slightly higher than that of female users, and this gender gap is more obvious among Dingdong Maicai users.

(Data source: Baidu Index)

(3) Age distribution

Users of both platforms are concentrated between 20 and 39 years old, accounting for more than 60%. The proportion of Dingdong Maicai users between the ages of 20 and 29 in the total Dingdong Maicai users is lower than the proportion of MissFresh users in the same age group.

The proportion of Dingdong Maicai users over 40 years old in the total Dingdong Maicai users is higher than the proportion of MissFresh users in the same age group.

The proportion of users between 30 and 39 years old is barely equal between the two sides. In general, MissFresh users are younger than Dingdong Maicai users.

(Data source: Baidu Index)

V. Functional Analysis

1. Functional structure diagram

2. Functional comparison

VI. Visuals and Experience

1. Home

Dingdong Shopping:

• ①There are more product categories and activity entrances;
• ② Four tags are set for the products displayed on the homepage to help users find content of interest while browsing. As the screen slides, these labels will be adsorbed at the top, making it easy for users to switch;
• ③Products are displayed using static thumbnails.

Daily Fresh:

• ①Putting "Daily Sign-in" and "Redeem Points for Gifts" on the homepage can remind users to pay attention. Signing in can attract users to log in daily, increase user activity, and achieve the goal of cultivating loyal users and retaining new users. At the same time, the red envelopes obtained by signing in can also encourage users to place orders; exchanging points for gifts is also to encourage users to place orders and give reviews. Dingdong Maicai’s check-in function is placed on the “My” page, which is easy to be overlooked;
• ② For promotional information of "Today's Flash Sale", use a red border to attract users' attention;
• ③Some product thumbnails will be in the form of animated images to highlight the deliciousness of the products and stimulate users' appetite and desire to buy.

2. Category Page

Dingdong Shopping:

• ①The first-level classification, second-level classification and product list are on the same page. Users can browse products by making a selection in the first-level category selection box, or by clicking a blank space outside the box to give up the selection, without page jumps;
• ②The user can then swipe left or right or expand all to change the first-level category.

Daily Fresh:

• ① The first-level and second-level categories are on the same page, forcing users to select the second-level category before jumping to the product list page. This is suitable for users who have clear purchasing needs. For users who are just browsing, it increases the user's selection burden and the page jump also seems cumbersome;
• ② Users can only reselect the first-level category by sliding left and right. If they need to expand all categories, they need to return to the previous page, which is more troublesome to operate;
• ③ Place some recipes in the product list in the form of videos to attract users’ attention and stimulate their desire to buy.

3. Product details page

Dingdong Shopping:

① The product specifications and reasons for recommendation should be presented clearly and concisely on the first screen of the page, so that users can quickly understand the product and generate interest. Detailed product information can then be viewed by scrolling down the page.

Daily Fresh:

• ① Setting up a recommendation official to endorse the product can impress users more, but the recommendation reasons and specification information need to be displayed on the drop-down page, which is easy to be missed;
• ②The promotional price is prominently displayed to stimulate users to buy at a low price.

4. Shopping cart page

Dingdong Shopping:

• ① Prompt the user to use the coupon at the checkout counter and directly inform the user of the difference between the coupon and the usage threshold, which can help users to combine orders and increase the average order value;
• ② The countdown for the event is not displayed, but the discounts offered by the event are displayed, so that users feel that they are getting a good deal and are encouraged to place orders as soon as possible;
• ③ For expired products, you need to enter the product details page to set up arrival reminders, and the operation steps are cumbersome.

Daily Fresh:

• ① Available coupons will be displayed above the product list. You need to click to view the specific coupon amount and the difference from the usage threshold;
• ② Prompt the countdown to the end of the flash sale to create a sense of urgency for users, but do not indicate the amount of the discount;
• ③You can set arrival reminders directly on the shopping cart page to facilitate batch operations.

5. Checkout page

Dingdong Maicai: Displaying preferential prices on the checkout page can make users affirm their current purchase and promote their next purchase.

MissFresh: MissFresh will pop up a trade-in pop-up window to remind users to trade in, aiming to increase the average order value.

6. What to eat page

Dingdong Maicai: Use "What to Eat" as an independent bottom navigation, and present the content in a double-column card style. Double columns provide users with more content choices within a limited visual space, making it easier for users to quickly locate content of interest and giving users more initiative.

However, users can only see the card cover on the homepage. If they want to learn more, they need to click in to view it.

MissFresh: The "What to Eat" module is placed in "My" - "My Services", and the content is presented in a single-column information flow style. Users can quickly switch content by swiping down.

The format of large pictures + multiple pictures can more easily attract users' interest. Users can directly like, comment, follow and share the page, which increases user interaction.

However, this method presents very little content on a page, reducing content diversity, and some content is folded and needs to be expanded or clicked in to view.

VII. Operation and Commercialization

1. Operational model

Dingdong Maicai and MissFresh both adopt the forward warehouse business model. Dingdong Maicai has expanded rapidly in recent years. As of the end of 2021, it has nearly 1,400 forward warehouses.

After consolidating its core business, Dingdong Maicai chose to trace its source upwards. It has built three agricultural demonstration parks and signed 118 order planting bases, increasing the proportion of direct sourcing from the source to 79.1%.

It also vigorously develops its own brands, develops pre-prepared food categories, and builds 10 food R&D and processing factories to continuously improve its new product R&D and brand innovation capabilities.

In 2022, three large-scale, modern fresh food complexes will continue to be built to achieve lower procurement costs, more competitive sales prices and larger sales scales.

(Data source: iResearch)

MissFresh’s business can be summarized as a multi-dimensional community retail layout strategy of “(A+B)×N”.

Among them, A represents instant retail in the forward warehouse, B represents the smart vegetable market, and N represents the retail cloud.

MissFresh focuses its forward warehouses on first-tier cities and gradually withdraws from second- and third-tier cities where there is no hope of profitability. The number of forward warehouses has been reduced from 1,500 in 2019 to 625 at the end of the second quarter of 2021.

At the same time, targeting the sinking market, digitally and intelligently transform traditional vegetable markets and develop “smart vegetable markets”.

We also use the technical capabilities accumulated in the vertical retail field to develop a "retail cloud" intelligent system to help traditional retailers transform into digital ones.

(Data source: iResearch)

2. Profit model

Dingdong Maicai and MissFresh currently make profits mainly through product sales, and secondly by collecting membership fees.

MissFresh is expanding its B-side business, and its future revenue sources will be more diversified.

8. User Data

1. Downloads

As of the end of March 2022, the cumulative downloads of Dingdong Maicai in the Android market reached 709 million times, far higher than the 432 million downloads of MissFresh (data source: Qimai Data).

2. Number of active users

In September 2021, the number of monthly active users of Dingdong Maicai APP reached 34.71 million, a year-on-year increase of 94.2%, making it one of the top ten e-commerce companies in China and ranking first in China's fresh food e-commerce list.

The number of monthly active users of the MissFresh APP was 9 million, a year-on-year increase of 15.5%. During the epidemic, the public's demand for purchasing fresh food online has increased significantly, and both platforms have maintained a relatively high user growth rate during the epidemic.

(Data source: Quest Mobile)

3. Search Index

Judging from the search index in the past 90 days, Dingdong Maicai has a clear advantage over MissFresh, especially during the regional epidemic outbreak in March and April this year, when the search index of Dingdong Maicai rose rapidly, while that of MissFresh did not fluctuate much.

(Data source: Baidu Index)

IX. Conclusion

1. SWTO analysis

Catalysed by this year's epidemic, fresh food e-commerce has ushered in new business opportunities. However, the layout of industry giants and the emergence of numerous business models have once again intensified competition.

If Dingdong Maicai wants to achieve higher market penetration and realize profitability, it must seize opportunities, maintain its advantages, eliminate threats, reverse disadvantages, and do the following:

(1) Continue to control the quality of fresh products and enhance user trust

For a fresh food e-commerce company, ensuring the quality of its products is fundamental so as to gain the trust of consumers.

Dingdong Maicai has been exposed for food safety issues many times this year, which has really made consumers uneasy. The exposure of this problem requires Dingdong Maicai to comprehensively rectify its management, place food safety in an important position, and remain vigilant at all times.

(2) Research, develop and create differentiated products to continuously enhance product power and competitiveness

Product power is the primary driving force. In order to win users with high-quality products, Dingdong Maicai needs to continue to work hard on R&D and brand innovation capabilities.

On the one hand, we must continue to do a good job in the research and development of our own-brand products. At the same time, we can join forces with more well-known food brands, give full play to their respective advantages, and develop differentiated and better products, so as to have stronger pricing power.

On the other hand, we will continue to deepen our presence in the upstream of agriculture, build our own agricultural bases or carry out customized procurement from production areas, and strengthen the quality of agricultural products and food safety from the source.

(3) Continue to strengthen the development of smart supply chain systems and continuously improve digital operation capabilities

"Supply chain management" is the most important part of fresh food e-commerce and the key for enterprises to break through and win in the melee.

The intelligent supply chain system developed by Dingdong Maicai runs through the entire chain of user ordering, base procurement, sorting warehouses and forward warehouse distribution, replacing traditional manual operations and management with an efficient and accurate management platform and system, greatly reducing procurement costs and improving operational efficiency.

In the future, Dingdong Maicai will need to continue to increase its R&D investment in intelligent supply chain systems to further improve its supply chain management capabilities.

(4) Continue to exert efforts in the pre-prepared food market and seek for profit breakthroughs

Compared with the alarming loss rate of fresh food and high operating costs of forward warehouses, pre-prepared meals are easier to control costs and achieve large-scale expansion, which can achieve the goal of reducing costs and increasing efficiency, and is expected to find a new growth curve for Dingdong Maicai.

On the one hand, it should rely on its channel advantages to focus on the C-end, focusing on "dish research and development" to cater to the needs of C-end users in terms of price and quality.

On the other hand, it can open up the B-end market with lower costs and higher efficiency, transform the platform role, and become a supplier to directly compete with pre-prepared food factories and catering companies.

(5) Change business model and expand into a broader lower-tier market

Users in third- and fourth-tier cities are more sensitive to price and less sensitive to convenience.

Dingdong Maicai can learn from the community group buying models of Meituan Youxuan, Duoduo Maicai and others, and attract users in third- and fourth-tier cities with relatively lower prices.

You can also try to develop B-side business in third- and fourth-tier cities and supply goods to offline vegetable stores. This can save the cost of building forward warehouses and is more in line with the actual situation in third- and fourth-tier cities.

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

(6) Accelerate APP iteration and continuously upgrade user experience

Good products always maintain a rapid update and iteration process. For an APP to survive for a long time, it must keep users fresh.

By optimizing product design through product iteration, adding new functions and new gameplay, etc., we can increase user stickiness and create value for the product.

2. Product iteration strategy

• Added product list function. For example: repurchase list, praise list, new product popularity list, etc.
• Added filtering by brand after searching for products;
• Add product review sorting and filtering functions. For example: add filter tags such as with pictures, latest, good reviews, bad reviews, etc.
• Supports the use of shopping cart without login;
• Support users to upload recipes by themselves, as well as like and comment on other people’s recipes;
• Supports presenting some product thumbnails in animated form;
• Add some recipes display on the category page;
• Support setting arrival reminders for expired products directly on the shopping cart page.