Daily Fresh Product Analysis Report

On July 23, 2020, MissFresh announced that it had completed a new round of financing of US$495 million. This financing is also the largest financing in the fresh food delivery industry. This huge amount of financing has pushed MissFresh to the forefront.

In November 2014, MissFresh quickly entered the fresh food e-commerce market with its novel “forward warehouse” model, becoming an industry unicorn at the fastest speed.

As of now, this is the tenth round of financing completed by MissFresh in its six years of establishment. Affected by the epidemic this year, consumers' demand for fresh food has increased significantly. The epidemic has transformed users' guided passive consumption into active consumption, and at the same time cultivated users' habit of purchasing fresh food online. So what is the current development status of the entire industry?

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

This article will analyze from the following aspects:

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

1. Industry Analysis

Fresh food e-commerce refers to transactions that use the Internet platform to deliver fresh food products directly to consumers through self-built logistics or third-party logistics.

As China's e-commerce model becomes more and more mature, online shopping has naturally begun to extend from categories such as clothing, 3C, mother and baby products to the fresh food sector. Fresh food e-commerce has developed rapidly since its emergence. So what are the reasons behind it?

The PEST model will be used for analysis in the following research.

1.1 Politics

In recent years, the government has attached great importance to agricultural production and circulation.

According to incomplete statistics, in 2019, the government issued more than 40 policy plans related to agricultural products and cold chain logistics, guiding the healthy development of agriculture and cold chain logistics in multiple dimensions, and promoting the optimization and improvement of the infrastructure of the fresh food industry at the policy level.

The 2019 "Digital Rural Development Strategic Outline" proposes to promote the use of new-generation information technology in agricultural production, operation and management, deepen the comprehensive demonstration of e-commerce in rural areas, and cultivate rural e-commerce product brands. Strengthen agricultural digitalization and cultivate rural e-commerce brands;

The 2019 "Guiding Opinions on Financial Services for Rural Revitalization" established and improved a multi-channel funding system, broadened the sources of financing for rural revitalization, and encouraged financial institutions to develop exclusive loan products and small payment settlement functions for rural e-commerce. Strengthen financial support and support social capital to help farmers;

The 2019 "Opinions on Developing Circulation and Promoting Commercial Consumption" proposed to improve the agricultural product logistics system, increase the construction of processing and distribution facilities, and expand offline and online sales channels. Strengthen the construction of cold chain facilities and backbone networks for agricultural products;

The 2019 "Notice on Promoting the Interconnection between Farmers and Merchants to Improve the Agricultural Products Supply Chain" clearly stipulates that the proportion of central fiscal funds in various regions to support post-harvest commercial processing facilities and cold chain logistics of agricultural products must not be less than 70%. Central government financial support will be provided to improve the circulation of agricultural products.

1.2 Economy

Agricultural product output continues to rise, and per capita consumer expenditure of urban residents is growing rapidly: China's overall fresh product output has increased year by year, laying a good supply foundation for the development of fresh food e-commerce;

On the other hand, as per capita consumer expenditure continues to increase and the quality of life of residents continues to improve, higher requirements are placed on food quality, safety, and convenience, creating space for the development of fresh food e-commerce.

Survey data shows that the frequency of online shopping for fresh food is positively correlated with household income. As monthly household income increases, the frequency of users shopping for fresh food online is also increasing. Among users whose monthly household income exceeds 30,000 yuan, 36.8% shop for fresh food online four times or more per week. Users with monthly personal income of more than 8,000 yuan account for 43.6%.

The fresh food e-commerce market has received great attention from investors. With e-commerce giants such as Alibaba and JD.com entering the market, the fresh food e-commerce market has developed rapidly.

1.3 Society and Culture

In recent years, food safety issues have been frequently exposed, and consumers are becoming more and more aware of food safety and paying more and more attention to information such as the origin and source of food.

Fresh food e-commerce mainly sells directly from the place of production, which shortens the intermediate links, makes product information more transparent, and can meet consumer demand to a certain extent. With the upgrading of consumer demands and concepts and the emergence of new farmers, fresh food e-commerce will continue to develop and upgrade.

In addition, as the scale of mobile users and the penetration rate of mobile online shopping continue to increase and the concept of purchasing fresh food online becomes more and more popular, consumers' demand for purchasing fresh food online will continue to expand.

1.4 Technology

New technologies: 5G, Internet of Things, big data, and artificial intelligence empower the entire fresh food delivery industry chain to achieve 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.

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

According to Analysys data, the penetration rate of active users of fresh food e-commerce and active users of the entire network have both increased. After years of cultivating user habits and expanding manufacturers' operating areas, the number of active users of fresh food e-commerce has grown steadily in recent years, and the penetration rate of active users across the entire network has increased from 2.0% in 2017 to 4.2%.

The average quarterly growth rate in 2019 exceeded 20%. Under the influence of the COVID-19 pandemic, fresh food e-commerce ushered in a period of traffic dividends. The number of active users in the first quarter of 2020 increased by 65.7% compared with the same period last year.

In addition, according to iResearch data: the market transaction volume of China's fresh food e-commerce industry reached 279.62 billion yuan in 2019, an increase of 36.7% over the previous year. Due to the impact of the epidemic in 2020, consumers' demand for fresh food delivery has increased rapidly, and the transaction scale of the fresh food e-commerce market will increase significantly. It is estimated that by 2023, the transaction scale of the fresh food e-commerce market will exceed 800 billion yuan.

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.

2. Competitive product analysis

Faced with this fast-growing track and trend, a large number of participants have emerged, including offline fresh food stores and new online fresh food companies with self-operated forward warehouse models, such as: MissFresh, Dingdong Maicai, PuPu, Meituan Maicai and other companies.

MissFresh and Dingdong Maicai are direct competitors. Next, we will take the two companies' growth paths and business models as the entry point to gain a deeper understanding of the differences between the two.

2.1 Business Model of Fresh Food E-commerce Industry

2.1.1 Traditional Fresh Food E-commerce

Model introduction: Fresh products are delivered directly to consumers through the Internet via self-built logistics or third-party logistics.

Layout of cities: nationwide layout

Coverage: >10km

Delivery time: 1-2 days

Advantages: Low customer acquisition cost due to early user habits; strong brand advantage and credibility

Disadvantages: Long delivery time, high product loss rate; reliance on the strength of the capital chain.

Representative companies: Tmall Fresh, JD Fresh, and Fruitday

2.1.2 “Platform + Home Delivery” Model

Model introduction: The platform cooperates with offline supermarkets, retail stores and convenience stores to provide home delivery services to consumers.

Layout cities: Mainly first- and second-tier cities

Coverage: 1-3 km

Delivery time: 1-2 hours

Advantages: Distributed around users to meet immediate needs

Disadvantages: Cooperating with offline merchants, unable to control product quality

Representative companies: JD.com, Meituan, and Ele.me

2.1.3 “Forward warehouse + home delivery” model

Model introduction: Layout storage points integrating warehousing, sorting and distribution in places closest to users, shorten the distribution chain and reduce e-commerce distribution costs.

Layout cities: Mainly first- and second-tier cities

Coverage: 1-3 km

Delivery time: within 1 hour

Advantages: Distributed around users, improving delivery efficiency, the forward warehouse model can also reduce product loss and reduce cold chain delivery costs.

Disadvantages: Large initial investment in supply chain and warehousing

Representative companies: MissFresh, Dingdong Maicai

2.1.4 “In-store + Home Delivery” Model

Model introduction: In-store consumption + online shopping + instant delivery, providing an integrated online and offline consumption experience

Layout cities: Mainly first- and second-tier cities

Coverage: 1-3 km

Delivery time: 30 minutes

Advantages: Providing consumers with an integrated online and offline experience; online processing and production can effectively reduce spoilage

Disadvantages: The model is too heavy, and the store and labor costs increase

Representative companies: Hema Fresh, 7Fresh

2.1.5 Community Group Buying Model

Model introduction: The group buying platform provides product supply chain logistics and after-sales support, the group leader is responsible for community operations, and users pick up the goods in the community

Layout cities: second-tier, third-tier and fourth-tier cities

Coverage: 500m-1km

Delivery time: 1-2 days

Advantages: Low customer acquisition cost, light operation model, easy to scale up

Disadvantages: The platform's product variety is limited and there is a lack of comprehensive group leader management experience

Representative companies: Xingsheng Youxuan, Shixianghui

2.2 Daily Fresh

It was founded in November 2014 and received a US$5 million angel round investment from Yuanjing Capital and Guangxin Capital that year.
In April 2015, MissFresh’s WeChat Mall was officially launched, and in May it received a US$10 million Series A financing round led by Tencent.
In November 2015, MissFresh officially launched its 2-hour express delivery service and received RMB 200 million in Series B funding led by Tencent that year.
In March 2016, MissFresh APP was officially launched, and in April of that year it received RMB 230 million in B+ round financing led by Yuanyi Investment. In December, its MAU ranked No. 1 among fresh food e-commerce companies, and its revenue increased by 527% year-on-year.
In March 2017, MissFresh received a US$230 million Series C financing led by Tiger Global, Yuansheng Capital, Jeneration Capital, Tencent, and Lenovo Capital, entering the ranks of unicorns.
In June 2017, the unmanned office retail project MissFresh was launched; in November, MissFresh's express delivery service was accelerated to 1-hour delivery for members, and in December of the same year, it received a US$100 million Series D financing led by Jeneration Capital. MissFresh received a US$200 million financing ecological chain fund led by Tencent CDH Investments, and San Sheng Venture Capital was established.
In April 2018, Daily One Tao, a professional selected social e-commerce company invested and incubated by MissFresh, was launched, and in August of the same year it received US$450 million in financing led by Goldman Sachs, Tencent, Jeneration Capital, and Davis Selected Advisers; in November, Daily One Tao received US$100 million in financing led by Yuansheng Capital and DCM.
In July 2020, MissFresh received a strategic investment of 495 million yuan led by Goldman Sachs, Tencent and Tiger Global.

2.2.1 Business Model

MissFresh’s business model is the “forward warehouse + home delivery” model.

Delivery time: 1-2 hours, actual delivery time is about 30 minutes, and the forward warehouse covers 1-3 kilometers.

2.2.2 Positioning

Full category fresh food layout and product selection.

Since the implementation of the full-category strategy, MissFresh has evolved from a fresh food e-commerce company to an online comprehensive supermarket. The SKUs in the forward warehouse have increased from more than 1,000 to more than 3,000, covering 12 major categories including fruits, vegetables, meat and eggs, aquatic products, wine and beverages, snacks, daily necessities, etc., realizing one-stop purchase of fresh food and daily necessities.

In addition, based on the accumulation of front-end user data and the big data empowerment of Tencent Smart Retail, MissFresh has reversely established a digital supply chain, accurately selected products according to user needs, and continuously promoted the standardization and branding of fresh products.

2.2.3 Category Source

Mainly direct purchase from the place of origin/wholesale purchase in the city.

MissFresh has hundreds of professional buyers around the world, a composite team that understands both planting and e-commerce.

With more than 300 buyers in more than 30 countries and regions, among all categories on the platform, nearly 90% of fruits come from production areas and factories, about 50% of vegetables, 70% of meat and eggs, and a small amount of the rest is purchased from urban wholesale markets.

2.2.4 Customer Acquisition

Red envelope marketing, omni-channel membership marketing, social marketing, and Tencent smart retail support.

With the support of Tencent Smart Retail, MissFresh has far surpassed most of its competitors in terms of user density by combining social relationship chains with high-frequency consumption of fresh food categories.

MissFresh’s efforts in social operations include: red envelope marketing, omni-channel membership marketing, and an independent social e-commerce distribution platform: Daily Tao. These efforts have further leveraged the advantages of the WeChat social platform to develop social e-commerce, and have led to an exponential increase in the user density of MissFresh.

2.2.5 Logistics

The ultra-fast cold chain logistics system of “city sorting center + community forward warehouse”.

At present, a rapid cold chain logistics system of "city sorting center + community forward warehouse" has been established in 20 major cities across the country; since February 2019, the 2.0 version of forward warehouses has been upgraded nationwide. Compared with 1.0, the SKUs in 2.0 have increased from more than 1,000 to 3,000.

In addition to the original refrigeration, freezing and normal temperature areas, functional areas such as Little Red Cup Coffee and Live Seafood have been added to provide users with freshly ground coffee, fresh fish and live shrimp and other commodities. The average warehouse area has increased from 150 square meters to 300-500 square meters, and the number of forward warehouses nationwide has increased to 1,500.

After the upgrade, the order volume of the forward warehouse increased significantly, with a daily order peak of 2,000 orders and an annual sales per square meter of 100,000-120,000 yuan, which is 5-6 times that of traditional offline stores.

2.2.6 Business Efficiency Improvement

After the front-end warehouse became the recognized standard model in the fresh food e-commerce industry, MissFresh expanded its scale by improving overall operational efficiency.

It achieved profitability in August 2017, and achieved nationwide profitability at the end of the year. The profit was used for the continuous optimization of the business model. Now, leveraging the support of Tencent Smart Retail's "all-touchpoint retail", it is creating the "Smart Fresh Billion Plan" which integrates "smart marketing", "smart logistics" and "smart supply chain".

The forward warehouse model will be upgraded from 2.0's 3,000 SKUs, of which 1,500 will be upgraded to 3.0's modular, unmanned, and intelligent 30,000 SKUs in "100 cities and 10,000 warehouses." This means that MissFresh will focus on users, improve its own operational efficiency through intelligent empowerment, and provide users with a better shopping experience.

2.3 Dingdong Shopping

In March 2014, Shanghai Yibaimi Network Technology Co., Ltd. was established and the Dingdong Community APP was launched.
In May 2017, after successfully transforming into the home grocery shopping business, "Dingdong Communities" was officially renamed "Dingdong Grocery", with fresh groceries delivered to your home in as fast as 29 minutes.
In May 2018, it received a pre-A round of financing led by Gaorong Capital.
In October 2018, Dingdong Maicai had a total of 119 offline service stations, serving most communities in Shanghai; in July, September, October, November and December of the same year, it completed five rounds of investment, including A round, A+ round and strategic round. According to the information previously released by Dingdong Maicai, its past investors also included Gaorong Capital, Dachen Venture Capital, Red Star Macalline, Tiger (China), Sequoia China, Today Capital, Chinese Culture Fund and Olink Investment.
In March 2019, the daily order volume exceeded 200,000; it received a B+ round of investment led by Today Capital and Oling Investment.
In May 2019, Dingdong Maicai had a total of 345 offline service stations; in July of the same year, it received a B+ round of investment led by Star Capital and Longfor Capital, and the average daily order volume has exceeded 400,000.
In May 2020, it received a Series C investment from the U.S.-based BlackBerry Ventures.

2.3.1 Business Model

Similar to MissFresh, Dingdong Maicai’s business model is also a “forward warehouse + home delivery” model.

Delivery time: 29 minutes, the forward warehouse covers 1 kilometer.

2.3.2 Positioning

The company is positioned in the family grocery shopping business, with Shanghai as its core city, focusing on the three meals a day life scenarios, and using high-frequency and rigid fresh products as its main operating categories.

Dingdong Mai’s single warehouse has about 1,700 SKUs, mainly vegetables, covering all categories of fresh produce such as fruits, meat, poultry, eggs, seafood, etc., providing consumers with one-stop shopping for products needed for cooking.

2.3.3 Category Source

Wholesale purchase in the city + direct supply from brand suppliers.

Dingdong Maicai adopts the method of city wholesale procurement + direct supply from brand suppliers, and started direct procurement in early 2020.

Dingdong Maicai adopts the "7+1" quality control process to conduct quality control management of fresh products throughout the entire chain, from procurement to transportation to delivery to users, which can effectively ensure product quality and improve user experience.

2.3.4 Customer Acquisition

Dingdong Maicai’s main way of acquiring customers is offline promotion, using “gifts for invitations” to encourage old customers to bring in new customers; “0 yuan for delivery + 0 yuan for delivery”, with no minimum delivery threshold, can attract some users.

Dingdong Maicai’s main way of acquiring customers is offline marketing, with more than half of its new customers acquired through offline marketing. New customers acquired through invitation gifts and natural growth each account for about 1/4. The cost of acquiring a new ordering user is more than 30 yuan, and the customer acquisition cost is relatively low in the entire industry.

Dingdong Maicai uses offline marketing as a cold start method to enter new cities. After obtaining the first batch of stable seed users, it further acquires new customers by attracting new users from old online users.

Dingdong Maicai’s main channels for acquiring customers include:

Place online ads on the MamaBang platform previously founded by founder Liang Changlin to accurately target young mothers;
Conduct offline promotion at the entrance of residential areas and other places where target groups gather, and quickly accumulate a large number of user groups;
Use "gifts for invitations" to encourage old customers to bring in new customers, and further increase the platform's user registration volume and monetization rate through social effects.

2.3.5 Logistics

Vegetable market + APP forward warehouse.

Dingdong Maicai bypasses the biggest Achilles' heel of the fresh food market, the cold chain problem, by "following the crowd" on the end supply chain and providing the "ultimate experience" of the front-end server. The circulation of vegetables, meat, eggs and aquatic products does not require a cold chain. It’s just that when Dingdong Maicai’s system can continuously and quickly turn over, and the high repurchase rate of users forces the delivery team to race against time, the issue of the cold chain is no longer that important.

The logic behind Dingdong Maicai is very simple: the vegetables purchased wholesale on the same day are sold on the same day.

At present, the 2.0 version of Dingdong Maicai's forward warehouse has expanded to six cities, including Shanghai, Hangzhou, Ningbo, Suzhou, Wuxi and Shenzhen, with nearly 550 warehouses, an area of 300 square meters and 1,700 SKUs.

2.3.6 Business Efficiency Improvement

As few vertical SKUs as possible; centralized bulk purchasing; membership system design; high-quality service; investment after increased revenue to feed back user benefits; refined operations and increased scenario-based services.

By cultivating users' sense of certainty, we can improve user satisfaction, increase the frequency of repurchases, and increase revenue scale, which will in turn provide funds and resources to feed back into improving efficiency in all links. From customer acquisition, service dimensions, cost structure to supply chain, we will continue to enhance our sense of certainty and growth will enter a positive cycle.

2.4 Summary

From the above analysis, it can be seen that MissFresh and Dingdong Maicai are both fresh food e-commerce companies. The delivery time is basically around 30 minutes, and the business model is the "forward warehouse + home delivery" model, which is a direct competitor.

However, compared with Dingdong Maicai, MissFresh entered the fresh food e-commerce industry earlier and has a longer development time; MissFresh's financing was also smoother and the amount of financing was relatively larger, which provided it with sufficient ammunition to form a leading advantage and continuously widen the gap with its competitors.

The two have different business models:

Daily Youxian is a one-stop shopping service for all categories of fresh food + daily necessities supermarkets, while Dingdong Maicai is a full-category fresh food. Relatively speaking, Daily Youxian is easier to make a profit. If it only sells fresh food, it will require a higher gross profit margin for fresh food.
Daily Youxian sources its products directly from the place of origin, while Dingdong Maicai mainly sources vegetables from wholesale markets or brand suppliers. Relatively speaking, direct purchase has lower costs and more transparent and controllable quality. Of course, Dingdong Maicai also started to purchase directly from the place of origin since the beginning of 2020;
Compared with Dingdong Maicai, MissFresh’s customer acquisition method will grow faster;
In addition, MissFresh has established an ultra-fast cold chain logistics system in 20 major cities across the country, solving the Achilles' heel problem in the fresh food industry.

Finally, based on the existing number of users and market size, in order to achieve a higher online fresh food penetration rate and a larger market share, both companies are continuously improving efficiency and optimizing marketing, supply chain, and logistics. However, the specific effects are still unknown.

3. User value analysis

In the "self-operated forward warehouse + home delivery" model of fresh food e-commerce market, there are three main participants: consumers, suppliers, and platforms. The business logic diagram of MissFresh is as follows:

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

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

3.1 Consumers

In recent years, food safety issues have been frequently exposed, from Sudan red eggs, Sanlu toxic milk powder to gutter oil, clenbuterol, formaldehyde soaked baby cabbages, sulfur smoked winter bamboo shoots, adding malachite green to make fish live longer, and so on. Various industry scandals continue to challenge the bottom line of food safety, causing a crisis of confidence among the public in food safety.

In this context, consumers are becoming more and more aware of food safety, paying more and more attention to information such as the origin and source of products, and paying more attention to product quality when purchasing fresh food.

According to the survey data of China Internet Consumers Association in March 2018, 70.0% of consumers consider the quality of products/services when shopping, and 64.4% of consumers consider price. In the fresh food sector, the emphasis on product quality is more obvious. 57.0% of users said that when choosing a fresh food e-commerce platform, they pay most attention to food safety, and price is the second consideration, accounting for about 11.8%.

In addition, as people's lives become more affluent and the pace of work accelerates, the time available to go to offline vegetable markets or supermarkets for fresh food, which are daily necessities needed for three meals a day, is very limited.

For most families, they go to nearby large supermarkets on weekends to buy food or daily necessities for the week. Some items that have a long storage period are purchased as frequently as once a month. After get off work, the chances of being able to go to the nearby market to buy fresh vegetables, seafood, and meat are relatively rare.

After generating strong demand for safe, rich, cheap, convenient and time-saving fresh products, consumers currently adopt the following purchasing methods:

3.1.1 Purchase from large supermarkets

The site selection of large supermarkets usually takes population and transportation factors into consideration, covering an area with a radius of 3-5 kilometers, a permanent population of more than 100,000, and convenient transportation. Therefore, the coverage of large supermarkets is limited, that is, there are spatial and geographical restrictions, large populations, and prosperous areas, and the probability of having large supermarkets is relatively high.

Large supermarkets have a wide range of categories and guaranteed product quality, but their coverage is limited. Therefore, going to a large supermarket is usually time-consuming.

3.1.2 Purchase at the market

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

Therefore, buying vegetables at the market is not very convenient, the variety is not rich enough, and the safety of the products needs to be verified.

3.1.3 Fresh Food Convenience Stores

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

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

It can be seen that the above three methods each have their own advantages and disadvantages, and none of them can meet the current needs of consumers well.

3.2 Suppliers

3.2.1 Agricultural product growers in production areas

The lack of smooth sales channel connection has led to unsalable products. Some large planting bases have their own brands, and some products are directly supplied to supermarkets, and a small part is exported.

Most growers reported that although their crops were purchased by merchants, they did not have a stable, long-term purchasing relationship with the merchants. Most of them received their crops from merchants wherever they went, and a small number of them signed purchasing contracts with the merchants in advance.

Due to their lack of understanding of market information, growers also encounter some price-cutting phenomena. They are also afraid that they will not be able to sell their products, so they sell them at a low price, feeling that this is better than letting them rot in their hands. Funding is still a key issue that bothers growers: land rent, pesticides, fertilizers, labor, mechanical equipment, etc., everything costs money, but agricultural products generally take too long to pay back.

Due to the lack of stable and long-term purchasing relationships, the problems of agricultural products being suppressed in price and slow payback, the most common solutions currently adopted by agricultural product growers in the production areas are:

3.2.1.1 Sales to intermediaries

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

However, because the quality of agricultural products is greatly affected by factors such as climate, temperature and humidity, soil, and natural disasters, general middlemen dare not sign long-term and stable purchasing relationships with agricultural product growers in the production area.

Therefore, the middlemen will take whatever they want wherever they go. They will buy the good ones in large quantities and the bad ones at a lower price or even not want them at all.

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

3.2.1.2 Street stalls selling to tourists

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

3.2.1.3 Borrowing from banks/relatives and friends

In most cases, agricultural product growers have to borrow the funds they need in the early stages from friends and relatives, and the amount they can borrow is limited. People who have a certain prestige and credit in the local area can borrow through rural bank cooperatives. Although the amount is more than what they can borrow from friends and relatives, the loan period is usually shorter and there is interest.

It can be seen that the above methods cannot meet the needs of agricultural product growers in the production areas well.

3.2.2 Brands/Wholesalers

Geographical restrictions and limited customer acquisition capabilities: Large markets are subject to obvious regional restrictions and are unable to meet the purchasing needs of cross-regional customers. The cost for out-of-town customers to view goods is huge, resulting in the loss of a large number of customers.
High risk of returns: Fresh produce has a short shelf life, and has already gone through the sorting, packaging, and transportation processes from the producers to the wholesalers in the city wholesale market. It is prone to damage and is therefore prone to returns.
Difficulty in capital turnover and normalization of credit sales: Due to the large quantity of goods, the cost naturally rises, and customers often buy on credit. Repeated collection efforts and non-repayment leads to difficulties in capital turnover for merchants.

3.2.2.1 Sales to large supermarkets

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

Usually, the larger customers are the local large supermarkets, which purchase relatively large quantities. However, due to the short shelf life of fresh produce, they have already been sorted, packaged, and transported by the time they arrive at the city wholesale market, and are easily damaged, so returns are very likely to occur.

In addition, with large supermarkets, the payment is settled monthly or quarterly after the goods are sold, which can easily lead to difficulties in capital turnover.

3.2.2.2 Sales to hotels/restaurants

Hotels/restaurants have limited purchasing quantities, severe price cuts, and meticulous selection, which leads to large losses.

3.2.2.3 Sales to small vendors

The trading places between local brands/wholesalers and customers are basically in the local agricultural wholesale markets. Some small vendors are also customers of the middlemen, but the quantity and variety of their purchases are generally limited, and there is a phenomenon of buying on credit. After buying on credit, you may not be paid back despite repeated collection, which will lead to difficulties in capital turnover.

It can be seen that none of the above methods can meet the needs of brands/suppliers well.

3.3 Platform

From the above analysis, we can find that when it comes to purchasing fresh products for three meals a day, the existing solutions for consumers have the following problems:

Is the product safe?
Whether the product categories are rich;
Whether the product price is advantageous;
Is it convenient to purchase the product?
Is it time-saving to buy products? The problems with existing solutions for agricultural product growers in the production area are:
Lack of long-term and stable acquisition relationship with customers;
There is price suppression;
The problem of slow return on investment; the problems with the existing solutions of brands/wholesalers are:
Limited customer acquisition capabilities;
There is a high risk of being returned;
Difficulty in capital turnover and the normalization of credit transactions;

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

3.3.1 Product quality control: direct purchase from the origin/city wholesale purchase

MissFresh has hundreds of professional buyers around the world, a composite team that understands both planting and e-commerce.

The intermediate links have been shortened, product information has become more transparent, and consumers' demands for product quality and safety have been met to a certain extent.

3.3.2 Product categories: full-category fresh food layout and product selection

3.3.3 Product prices are relatively cheap

Among all the categories on the platform, nearly 90% of fruits come from production areas and factories, about 50% of vegetables, and 70% of meat and eggs.

At the same time, under the fast turnover model of the forward warehouse, the warehouse turnover is controlled at 2.5 days, and the loss rate is 1%; with the cost efficiency and economies of scale formed by the forward warehouse, the price of similar products of Daily Youxian is cheaper than that of large supermarkets.

3.3.4 Convenient purchase: order through APP/Mini Program, home delivery service

Place an order through the APP/mini program according to your own needs, and the platform will deliver the goods to your home within 1 hour, and members can enjoy the fastest delivery service in 30 minutes.

3.3.5 Forward warehouse model: saving delivery time, achieving delivery within 1 hour and 30 minutes for members

As the pioneer of the forward warehouse model, MissFresh has established an ultra-fast cold chain logistics system in 20 major cities across the country through the "city sorting center + community forward warehouse" model, providing members with delivery services in as fast as 30 minutes and realizing data-based management of large-scale distributed warehousing systems.

3.3.6 Signing a strategic cooperation agreement with the production base

MissFresh usually signs strategic cooperation agreements with product production bases, including long-term and stable acquisition relationships, reasonable and standardized acquisition prices, and supply chain financial services.

Usually the platform will cooperate with a third-party bank. The platform will ask the third-party bank to provide low-interest financial loans to growers in the production area to ensure the capital investment required for their production. The platform will give part of the profits to the bank, so that the bank will be more willing to do so.

3.3.7 Provide O2O sales channels

Fresh food e-commerce platforms add an O2O online sales channel by purchasing agricultural products directly from their origins or through brand owners/wholesalers.

3.3.8 0 fees, 0 returns, 0 account period

MissFresh provides suppliers with: 0 fees - no entry fees or promotion fees of any kind; 0 returns - 0 returns for qualified products; 0 account period - supply chain financial services, T+1 payment collection.

High-quality supplier threshold - strict qualification review - high-quality products - price advantage - stable supply.

3.4 Summary

Summary: Through the above analysis, we can find that compared with other offline ways of purchasing fresh products, this explains why MissFresh is so popular.

4. Commercial value analysis

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

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

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

4.1 Increase the number of platform users

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

There are four main ways: advertising, social media acquisition, word of mouth, and live streaming.

4.1.1 Different forms of advertising

Platform advertising: Platforms near residential areas;
Car body advertising: mainly for fresh food logistics;
Community advertising: community bulletin boards or large screens in some communities; posting promotional posters in mailboxes in some high-end communities to let some busy office workers know about this convenient home delivery service;
Flyers and posters: mainly for opening or promotion;
Others: Print small brochures or additional advertisements (shopping bags, employee uniforms) jointly with other partners;
Carry out various special promotional activities.

4.1.2 Social Networking

MissFresh’s method of attracting new customers mainly relies on its social mechanism, that is, attracting new customers by having old users share with their WeChat friends and Moments. There are currently four main forms:

1) Before purchasing

Share to get red envelopes and coupons. That is, share the invitation link with friends, and both you and your friends will receive red envelopes or coupons. Friends will receive free coupons/low-price coupons/red envelopes for sharing. The coupons or red envelopes obtained must be used to register and log in to the platform to place an order. New users are acquired in this way.

In addition, the more people you invite, the richer the rewards.

2) Purchasing

Share to win prizes, red envelopes, and coupons. During the purchase process, a banner carousel will appear: Eat fruit for free. Invite friends to water the trees together to accelerate their growth. When the trees mature, you and your friends will receive prizes, which will be delivered to your home free of charge.

The red envelopes and coupons you get from sharing are the same as before purchasing. Whether it is prizes, red envelopes or merchandise coupons, users need to register and log in to the platform to place an order before they can be used. In this way, the platform continuously acquires new users.

3) After purchase

Share to win prizes, red envelopes, and coupons. The process and mechanism are the same as for purchasing. In addition, after purchase, you will also receive a free membership card. Members can share the membership experience card with friends, and friends can enjoy the same benefits as a 3-day member with the card.

4) Non-purchase process

Mainly sharing pictures, texts and videos to attract new users.

For example, the main content on Weibo is event previews, cooperation promotions, and forwarding comments, and the current number of fans has reached 405,000; the content of the WeChat public account is mainly product event discounts and new product launches, and is equipped with app and mini-program purchase links; the official Douyin account of MissFresh mainly focuses on store visits, food tastings, and popular science knowledge, and the current number of fans has reached: 489,000.

4.1.3 Word of mouth

For any product, word of mouth plays a crucial role in attracting new customers. There are many alternative consumption channels for fresh food, and consumers are easy to switch, so the reputation of the product is very important.

Daily Youxian’s products are updated relatively quickly, the product variety is rich, and the promised delivery time is relatively timely, so it has formed a relatively good reputation.

4.1.4 Livestreaming

Short videos and live broadcasts are popular. In this trend, MissFresh has also seized this opportunity and followed the trend of the times to attract customers.

On June 6, 2020, Xu Zheng participated in a mini-program live broadcast event initiated by Qingtenghui with the theme of "Wine, Food and Friends", and started his live broadcast debut. Also appearing in the same frame were Jiang Xiaobai founder Tao Shiquan, and celebrities Zhao Wei and Jing Wei served as "National Product Selectors" to assist throughout the event.

During the live broadcast, Xu Zheng recommended the "treasure of the store" of MissFresh, which has been selling well for four years. When talking about his views on the live broadcast sales model, Xu Zheng said that he defined it as a super sale, which is a resonance of the three elements of people, goods and venue under a special background. Xu Zheng predicts that the market size of the entire live broadcast this year should exceed one trillion.

4.2 Improve conversion rate

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

From the user's purchase process, we can see how Daily Youxian improves conversion rate:

Login->Home->Product List->Product Details->Add to Cart->Checkout

4.2.1 Home Page

4.2.1.1 New users can get a 108 yuan new user bonus after registration

The red envelopes for new users are mainly discount coupons, which are valid for one week. Their main purpose is to stimulate users to place orders for consumption.

4.2.1.2 Newcomer Exclusive Products

MissFresh provides special benefits to first-time users of the APP, such as a 0.99 yuan shopping zone.

4.2.1.3 Free shipping for the first order from new customers

In view of the fact that new users do not have enough understanding of the platform and are afraid to buy more, MissFresh launched a benefit of free shipping for new users’ first order to stimulate users to purchase products.

4.2.2 Product List Page

4.2.2.1 After users enter the product list page, clear product images, prominent discount prices, and product popularity will reduce users' decision-making time and guide users directly to the product details page.

At the same time, the inventory quantity displayed on the product list page tells users how much product is in stock. If users do not buy it now, it will be gone once it is sold out.

4.2.2.2 The banner carousel makes the mall’s hot-selling products more prominent, which can effectively guide consumption and facilitate transactions.

The banner carousel that automatically scrolls and displays on the product list page gives people a novel and lively visual sense. Through the banner carousel, users can find out what is popular in the market recently, what everyone is buying, and the large number of product transactions attract users to make selections.

4.2.3 Product Details Page

After users select the products they are interested in on the product list page, they enter the product details page. The product details page carries the user's consumption experience, and the design of the page directly affects the user's purchasing behavior. How does MissFresh's product details page help users make quick decisions and add products to the shopping cart?

4.2.3.1 Establish consumer protection: quality inspection report, service commitment, after-sales guarantee

By providing product quality inspection reports, service commitments and after-sales guarantees, we build user trust and a sense of security, allowing users to purchase with confidence and without worries.

4.2.3.2 Creating a sense of consumption scenario

Through the pictures of products and product details, a good and real product consumption experience is created, and the offline usage scenarios are restored. The real usage scenario pictures make users feel that this is the product they want.

4.2.3.3 Demonstrating cost-effectiveness

People all have a consumption principle of obtaining the greatest benefit at the lowest cost, commonly known as value for money. By comparing prices, the atmosphere of value for money is highlighted, making users feel that it is a good deal to buy now, and it would be a loss if they do not buy at this time.

4.2.3.4 Create popularity

Popular products always give consumers more trust.

4.2.3.5 Sales volume of products

The sales volume of goods reduces the user’s decision-making time and increases the user’s trust in the goods.

4.2.3.6 Creating a sense of urgency

The time countdown tells users that if they don’t buy now, they may never get this low price again.

4.2.4 Shopping Cart

Through the previous series of designs, the product has been successfully added to the shopping cart, and payment is only one step away. Next, let’s take a look at how the MissFresh shopping cart page is designed to speed up user decision-making and payment.

4.2.4.1 Notification of price discount information

When products are discounted or on sale, they must be displayed in the shopping cart in a timely manner to make users feel that it is a good deal. Shopping is now very cheap and if they don’t buy now, they will miss out on the discount.

4.2.4.2 Display coupon information

Allow users to pay more cheaply using coupons, demonstrate profit-sharing, and accelerate willingness to pay.

4.2.4.3 Using the Principle of Reciprocity: Gifts

The free gifts we often see are a small favor in exchange for a greater willingness to buy. Although we already know that this is a promotional method, we are still more likely to accept that it is given for free.

4.2.4.4 Create scarcity of products

By displaying the inventory quantity, you tell users that if they don’t buy now, it will be gone once it’s sold out.

4.3 Increase Average Order Value

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

4.3.1 Increase the single consumption amount of a single user

4.3.1.1 Operational methods such as discounts, discounts, and red envelopes

Through red envelopes, discounts, concessions, etc., guide users to buy more items from a single product, and enhance users' willingness to purchase additional purchases. They also feel that it is cost-effective when purchasing.

4.3.1.2 Related recommendations

By analyzing the attributes of the current product, user purchasing behavior, and transaction data, we recommend related products, such as products.

4.3.1.3 Multiple coupon information

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

4.3.1.4 Free shipping order

To enjoy free shipping, buy more items.

4.3.1.5 Event Promotion

Through various product promotion activities, guide users to purchase more products.

4.3.2 Increase the consumption frequency of a single user over a period of time

4.3.2.1 "Today's flash sale" is a limited-time special offer event. It is open on time at 8 o'clock every day, and the price of the product will be much cheaper.

4.3.2.2 "Youxian Vegetable Market": Get 0 yuan on time for 7:00 every day; get 0.99 yuan for today's special sale on the entire network; get 0.99 yuan for all day; choose 3 pieces of 9.9 yuan; eat meat for 9.9 yuan.

Various forms of promotional activities have brought real cheapness to customers, attracting customers to come back next time.

4.3.2.3 “What to eat”: Content marketing

The content is mainly about food display and recipe sharing, and is equipped with purchasing links for related ingredients. Make content an experience environment in the purchasing chain, thus bringing a good user experience. Excellent content can attract users' continued attention and improve user stickiness to a certain extent.

4.3.2.4 “Exclusive Membership”

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

4.4 Summary

From the above analysis, we can find that in order to optimize its revenue model, MissDai Youxian has done a lot of work, constantly attracting new users, increasing conversion rate and customer unit price. At present, the effect is still very good, so investors are constantly increasing their investment, because MissDai Youxian's commercial value is quite great.

5. Product Iteration Analysis

In order to deeply analyze the iteration rhythm of the version of MissFresh and explore the product iteration logic, the author iterated the iteration of all core versions of MissFresh from the launch of the V1.0 WeChat Mall to the V9.8.77 app version as follows:

Based on the above function iteration and download volume curve chart (which belongs to the S-type), Daily Youxian can be divided into three stages for analysis:

The first phase: the startup stage, V1.0-V2.0.1 in 2015, WeChat Mall was officially launched. The goal of this phase is to verify user needs and improve basic functions.
The second stage: growth stage, from 2016 to March 2020, the app was officially launched. In this stage, the products mainly acquire large amounts of customers through various discount activities, social means and membership system settings, expand the user scale, and grow rapidly.
The third stage: maturity stage, from April 2020 to the present V9.8.36-V9.8.77, this stage, the product continues to optimize various functions, continuously polishes the user experience, and develops steadily.

5.1 Startup Phase

2015 V1.0-V2.0.1, verify user needs and improve basic functions.

From the launch of V1.0 on April 27, 2015 to the V2.0.1 version on December 21, 2015, it is the cold start stage of MissFresh.

The main goal of this stage is to verify user needs and improve basic functions, such as: after the basic functions of the mall are improved, support from multiple regions will be added, shopping cart discount prompts, accurate selection of delivery addresses, and new check-in and recharge functions.

At the beginning of its launch, how can the mall products be promoted and users can save money by themselves?

So the "group buying activity" function was added. The group buying model mainly involves users saving money by buying and sharing with others that they can make money. That is, through the mechanism of making money by sharing members, members can spontaneously promote products and become distributors in the mall.

5.2 Growth Stage

2016-March 2020 V3.0.5-V9.8.27, expanding user scale and growing rapidly.

From March 2016 to March 2020, the version from V3.0.5 app officially launched to V9.8.27 is the rapid growth period of MissFresh, and expanding its user base has become the focus of product iteration.

During this stage, the focus is on acquiring a large number of customers and expanding the user base through various promotional activities, social means and membership systems. From its inception to March 2020, as a main force in the rise of the fresh food e-commerce industry, monthly active users have firmly ranked first in the first echelon.

In June this year, according to Trustdata data, the monthly active number of daily Youxian was 11.6 million, continuing to lead the industry.

5.2.1 Promotions

The fresh food e-commerce industry began to appear in 2005. In 2012, Chucheng's online marketing was successful, which was called the first year of fresh food e-commerce; in 2016, the fresh food e-commerce industry entered a reshuffle period, so as a new e-commerce company, MissFresh has made efforts to attract users to the platform from all dimensions.

For example: From the beginning, through the large discount of the first order, new customers purchase 0 yuan, to the inventory remaining reminder to create a scarcity and flash sale countdown to show the creation of a sense of urgency to attract new users to place orders.

In addition, we will continue to increase the stored value benefits, from recharge of 99 yuan to recharge of more than 1,000 yuan, extend the activity cycle, increase the repurchase rate and user stickiness.

5.2.2 Social means

Invitation is gifted, and users are motivated to communicate. After satisfying old users, they can spread it by inviting friends and giving rewards or discounts to gain new users.

Scan the QR code and download the app to participate in the event immediately and divide the 100 million cash red envelope activity. This not only improves user activity, but also guides users to actively attract new products and make the platform known to more people.

5.2.3 Membership

For a time, major e-commerce companies were attracting users through different discounts and promotions, and retaining users who had entered the platform through the membership system, and the competition was very fierce. Users can be promoted to a member by placing two orders on Daily Youxian, and purchase two orders in a natural month to become a member and register as a member by downloading the app.

5.2.4 New features

The delivery time of traditional fresh food e-commerce platforms is 1-2. It is time-consuming and labor-intensive to go to a noisy vegetable market or supermarket. On this basis, it is available for daily fresh food products to be launched in 2 hours and fast delivery services, which greatly reduces the time cost of people shopping and brings a lot of convenience.

In November 2017, it will be upgraded to a 1-hour fast delivery service for fresh products. By November 2019, it will be upgraded to a 30-minute delivery service for fresh products.

In addition, with the increasing number of platform users, problems and refunds can only be solved by contacting customer service online, which puts great pressure on customer service. Therefore, the platform has also added online customer service and online refund functions to improve after-sales service.

Daily Youxian also masters scarce resources from the upstream, so "high-end products" are launched to sell domestic and foreign high-end fresh products that are scarce on the market, such as Shangri-La, and the royal family specializes in ruby pomelo, to meet the needs of high-end users, attract high-end user groups, and enhance the brand image of "global fresh food".

When a user urgently needs the product or the product does not arrive within the expected time, the user usually needs to contact customer service, and then the customer service will query it before there will be results. This increases the communication process and is not efficient.

Therefore, at this stage, MissFresh has added "courier contact function, real-time positioning function, and arrival reminder function". The process of product transportation is humanized. Users can view the courier's location in real time, contact the courier directly, and receive reminders when arriving, providing users with a lot of convenience.

"National Giving" is launched in more than 20 cities across the country, actively expanding its national business.

Food safety is the focus of users' attention. On this basis, the "Fruit and Vegetable Quality Inspection Report Can Be Queryed" function launched by MissFresh and Youxian is later changed to the "New Rest and Rest and Rest and Rest" function to allow users to buy with confidence and eat with peace of mind.

In order to better serve users, the platform also optimizes other details, such as adding feedback portals, product price reduction reminders, order value exchange reminders, and the first screen directly supports car additions and optimized payment methods. New coin payment and Alipay payment are added to the payment function, so that users will not lose users due to users' payment habits.

When the online user traffic reaches a certain level, MissFresh begins to expand offline and online integration of new businesses such as convenience purchase, which brings user traffic to the online.

It is difficult to make a profit by selling fresh food only. From the perspective of profit model, Youxian Youxian will carry out its business to the supermarket model. Therefore, with Youxian Supermarket, Youxian Supermarket has expanded its product categories from fresh food categories such as vegetables, fruits, aquatic products to 100-day categories including beauty, personal care, cleaning, health care, etc., to achieve the extension of fresh food e-commerce to online comprehensive supermarkets.

5.3 Mature stage

From April 2020 to V9.8.36-V9.8.77, product functions continue to be optimized and steadily developed.

From March 2020 to the present, this stage is the maturity period of MissFresh. Continuously optimize functions at the product level, including homepage components and what to eat.

In order to consolidate its leading position, the daily operation activities of Youxian are still continuing at this stage, such as: 5th anniversary carnival shopping, hot crayfish coming, small shock coming, live broadcast of big names, Youxian vegetable market one billion subsidy, and food expert recruitment order.

5.4 Summary

Overall: MissFresh is a platform that is developing steadily and constantly improving. The startup phase focuses on verifying user needs, polishing user experience, and improving product functionality.

After having a stable functional foundation, we enter the development stage, that is, the growth stage, and continuously carry out large-scale operation activities to acquire a large number of users, entering the first echelon of fresh food e-commerce industry. When the number of users reaches a certain scale and enters the maturity stage, the product level is still constantly optimized.

At the same time, in order to continuously increase the number of users, operational activities continue, this is the overall iteration step of Daily Youxian.

6. Product structure analysis

In the iterative analysis, we analyzed the iterative steps of MissFresh’s product functions. Next, let’s take a look at what user needs these functions meet and how they are distributed in the entire APP.

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

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

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

6.1 What needs do consumers have before placing an order and what functions does MissFresh meet this needs?

First of all: Whether the platform is safe and reliable is related to consumers' consumer rights and trust. According to this demand, the platform has set up qualifications and rules buttons on the homepage. Consumers can directly view various business licenses and certificates of platform qualifications and business qualifications, and can use the platform to purchase products with confidence.

Secondly: Food safety is always the focus of consumers' attention. According to this demand, the platform has designed an icon portal to view its test report on the details page of each product. Consumers can view the test report of the product to see whether the residual amount of insecticides and fertilizers on the product meets the standards.

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

For users with clear target needs, such as consumers who want to buy tomatoes, they can enter "Tomatoes" in the search box on the homepage to jump to the product list page, and all kinds of tomatoes on the platform are presented. At this time, you can quickly select the required products based on price, sales, whether there are discounts, and delivery time to improve efficiency.

For users with unclear target needs, the platform displays some promotional activities information, product banner carousel pictures, billion-dollar subsidy new vegetable blue, today's flash sale, Youxian vegetable market, brand special offers, and today's special milk on the homepage. These can provide consumer references for consumers who do not have clear target needs.

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

Because the next step in purchasing ingredients is cooking, the process of consumers searching for food by themselves is inevitably tedious and waste time. The platform sets recipes in "what to eat" to provide users with more convenience; in addition, some foodies will salivate the finished food after seeing the recipe, thereby enhancing the chance of placing an order.

At the same time, the platform will place its positioning on the homepage to facilitate consumers (for old users) to add new consumption addresses and improve shopping efficiency.

6.2 What are the needs when placing an order, and how does MissFresh meet it?

During the preparation process of placing an order, the shopping cart shows the information (quantity, price, delivery time) of the added product display at a glance. You may like the function to recommend more related products to users, improve users' shopping needs, and increase purchase rate.

During settlement, the product discount details next to it allow users to understand the discount details more clearly and increase the shopping experience. In terms of discounts, if consumers want to view the usage of coupons and product coupons, they can view the available coupons at the top directly.

The basic delivery fee conditions for the Jisuda product are prompted on the "Do Settlement" button at the bottom. In order to enjoy free shipping, you can make up orders to buy more products.

On the order settlement page, MissFresh supports four payment methods: reserved value balance, WeChat, Alipay and Huabei. Avoid users’ payment habits differently.

6.3 What needs do consumers have before receiving the goods, and how does the platform meet them?

When the delivery stage is reached, users usually want to view order information and logistics and delivery information. The platform has set up a function of viewing order messages and checking delivery conditions on the My-My Order page. Users can monitor the logistics process in real time and have a more control over the delivery of products.

If you regret it after placing an order, you can use the cancel order function provided by the platform to cancel it with one click.

6.4 What are the consumer needs after receiving the goods, and how does the platform meet it?

The platform improves after-sales functions.

If consumers are not satisfied with the goods, they can directly apply for a refund. There is a "to be evaluated" function on the platform, but the evaluation is not currently supported. If you need a shopping receipt, you can apply for an invoice. If users want to buy another order, they can click "Add another order" directly in my order, which is very convenient.

6.5 Summary

From the above analysis, we can find that the functional design of MissFresh can well meet users' needs before, before, before and after ordering, and at the same time, the high-frequency functions required by different users are highlighted and distributed reasonably in the product structure, which can be considered a product with relatively excellent design.

7. Operational Path Analysis

According to the Trustdata data report, in June 2020, Daily Youxian continued to lead the way with a monthly active number of 11.6 million, with Hema and Dingdong Maicai following closely.

So how did MissFresh promote this product so that it can grow rapidly in a short period of time?

The following is a sorting out its operational activities from four aspects as follows (because the detailed data of operational activities cannot be obtained and the different forms of operational effects cannot be analyzed, so it is only briefly listed and classified for your reference):

7.1 Content Operation

The Daily Youxian platform focuses on content operation. Through diversified forms such as pictures, texts, short videos, e-commerce live broadcasts, etc., it builds content operation channels within and outside the platform around food stories, cooking skills, etc., so that content becomes an experience link in the purchasing chain, thus bringing a better user experience.

Excellent content operation can attract user attention, increase the activity of platform users, and promote consumption conversion. At the same time, content operation is also an effective carrier for in-depth communication between fresh food e-commerce brands and users, and can improve user stickiness to a certain extent.

7.1.1 Picture and text operation

The channels for image and text operation are mainly Weibo and WeChat public accounts; the Weibo mainly focuses on event previews, cooperative publicity, and forwarding comments, and the number of fans currently reaches 404,000; the content of WeChat public accounts is mainly product event discounts and product new products, and is equipped with app and mini program purchase links.

7.1.2 Short video

MissFresh has promotion channels outside the site, such as: Douyin and Xiaohongshu. The content operation focuses on brand promotion; the content focuses on store exploration, tasting, and popular science of cold knowledge. At present, the number of followers of MissFresh’s Douyin account has reached 490,000.

7.2 User Operation (AARRR Model)

User operation is the top priority of Daily Youxian’s operation. It constantly attracts new users to consume and place orders and retain them. At the same time, it often organizes holiday promotions, which has a positive impact on the retention and activity of users on the platform.

7.2.1 New recruitment

The way of attracting new products by Youxian is mainly based on its social mechanism, that is, attracting new products through the sharing of old users to WeChat friends and friends circles. Its current main forms are as follows:

1) Before purchasing

If you share the red envelope and commodity coupon, you will share the invitation link with your friends. You and your friends will receive red envelopes or commodity coupons. Friends will receive free commodity coupons/low-priced commodity coupons/red envelopes for sharing. The product coupons or red envelopes you have to register and log in to the platform to place an order before you can use it. This way, you can obtain new users.

In addition, the more people invited, the more rewards are.

2) Purchasing

Share prizes, red envelopes, and commodity coupons. During the purchase process, banner carousels the picture: Eat fruit for 0 yuan, invite friends to water the tree together, accelerate growth, and mature trees. Both yourself and your friends will receive the prize and deliver it to your home with free shipping.

The red envelopes and coupons are shared as before purchasing. Regardless of prizes, red envelopes or commodity coupons, users need to register and log in to the platform to place an order before they can be used. In this way, the platform continuously acquires new users.

3) After purchase

Sharing prizes, red envelopes, and commodity coupons is the same process mechanism as when purchasing. In addition, after purchase, there is also a free membership card, and member users can share the membership experience card to friends. Friends can enjoy the same benefits as 3 days of membership with the card.

7.2.2 Promote activity

Don’t eat dirt after February 2018. Daily Youxian will start Wednesday’s half price daily event;
The "New Year's Goods Festival" of Youxian in January 2019 will be launched;
In November 2019, daily Youxian 11·11 50% off discount, "Fresh" will be the whole city, "50% off daily real product" flash sale and other activities;
In January 2020, the "Fresh New Year's goods are available on call, and the daily Fresh Fresh will not close during the Spring Festival" event was launched;
Other such promotional activities include: launching the "National Delivery" channel, "Spreading 100 million cash red envelope activity", "618 Promotion", "Double Eleven Super Fresh Festival", "New Year's Day Open", "Daily Youxian Spring Festival will not close", "17 Fresh Festival", etc.;
Sign in to the fresh coin system, fresh coin can be directly deducted cash during settlement;
Enjoy member privileges: double points, member tasks, and super member day.

7.2.2 Retention

New users will receive 15-day membership
A large number of red envelopes and discount activities, new users will directly receive 108 yuan red envelopes
Purchase a red envelope for stored value cards

Member privileges: Member exclusive price

7.4 Event operation

7.4.1 Method 1: Vlog, short film, documentary

In March 2020, Youxian invited actor Shangkan to film vlog records the meaning of eating at home and her;
In March 2020, Daily Youxian recruits food experts online, and the platform provides ingredients, cooks food and makes vlogs to record the beauty of food;
In January 2018, Youxian released the heart-warming short film of the Spring Festival "For Love, Let Home, Unusual";
2020.4 Daily Youxian released the heartwarming short film "Thank you for your three meals and four seasons";
In February 2020, Youxian released the documentary "Our Heroes", recording what is happening in Beijing in the empty city during the epidemic and what these ordinary couriers are experiencing.

7.4.2 Method 2: Cooperate with brand owners

In February 2018, MissFresh resurrected the Beijing beverage "Mochi" of the 1990s, conducting a successful nostalgic marketing. In May, MissFresh exclusively launched the 2018 new Mochi;
In November 2019, MissFresh signed a strategic cooperation with Fonterra, the world's largest dairy processing and exporter, to jointly explore the best cost-effective dairy products in the new consumer market through reverse customization. The first developed high-quality low-temperature fresh milk has been launched on MissFresh;
In March 2020, MissFresh and Chilean Fruit Exporters Association reached a strategic partnership to provide users with more high-quality and low-priced Chilean fruits;
In April 2020, MissFresh signed a contract with the Institute of Feed Research, Chinese Academy of Agricultural Sciences, and announced that the two parties had reached a cross-border strategic cooperation, and the cooperation between the two parties would transform scientific research results into table food;
In April 2020, Fengxiang Co., Ltd. signed a strategic cooperation agreement with MissFresh, joined the MissFresh "10 billion club" plan, and will cooperate to promote the innovation and upgrading of healthy chicken products, and will also cooperate in the integration of precise marketing and online and offline channels;
On May 29, 2020, Vitamin reached a strategic cooperation with MissFresh, forwarded and followed this editor @2 friends, and on June 18, 3 fans were drawn to send a box of Vita lemons;
On June 5, 2020, @Jiujiuya brand Weibo reached a strategic cooperation with MissFresh. Follow this editor @2 friends. On June 18, 3 fans were drawn to give away the [Price] 50 Yuan YouFresh Reserve Value Card;
On June 26, 2020, MissFresh reached a strategic cooperation with General Mill, and its Wan Chai Wharf, Haagen-Dazs and other home-stayed Kuaishou Delicious, ready to get it. Forward and follow this editor @2 friends. On July 9, 3 fans were drawn to give you a 50 yuan Youxian deposit value card;
On August 3, 2020, the Daily Youxian Super Talk "Water Cleansing and Washing Delicious, Enjoy a Live Life anytime and anywhere" @Haier Water Cleansing and @Maire Youxian's official Weibo invites you to go to the hot together in summer#. Repost and follow @Haire Water Cleansing. On August 8, [1 person], the little cutie gives you [100 Yuan JD Card] + [Daily Youxian Nut Gift Pack].

7.4.3 Method 3: Cross-border cooperation

From April 24 to 25, 2018, the series of advertising videos of "You Are Tasty" by Youqiyi was launched on Tencent, Youku, iQiyi and other video platforms;
On August 17, 2018, Daily Youxian and QQ Music created a marketing campaign with the theme of "Hearing 19°C Summer". By launching fruit lists online, offline flash interactions, etc., enriching user consumption experience;
In August 2019, it cooperated with pop-up stores to land in Beijing, with limited claw machine business, expanding brand awareness through claw machines, and conducting online live broadcasts;
In November 2019, MissFresh and Tencent Weishi launched the Hairy Crab Driving Short Video Challenge;
In December 2019, MissFresh and Tencent Weishi jointly launched a fancy cherry eating activity. As long as you upload videos, free cherries are waiting for you to eat to increase your brand influence;
In January 2020, Youxian and Huawei Music brought the topic "When music collided with food", and users spoke the most impressive food songs to guide users to actively interact;
In February 2020, a "Win-Win Activities" was launched to help catering retail companies, sincerely invite offline catering brands across the country to join, jointly develop finished and semi-finished fast food products. At present, many catering companies including Haidilao and Xibei Xiaomian Village have joined the "Win-Win Action";
In February 2020, MissFresh cooperated with Tencent Smart Retail to enter the WeChat payment portal. It can buy vegetables and shop by staying at home through WeChat during the epidemic, which is more convenient;
In March 2020, MissFresh cooperated with Tencent Weishi to participate in the "Assisting Farmers in Action" to help small fruit farmers in the region sell agricultural products;
In April 2020, MissFresh cooperated with Dream Garden to join the "Dream Spring Tournament" to award users a luxury reward package;
In April 2020, the fifth anniversary celebration was jointly signed with the clothing brand Jiao Nei, and brought fresh food elements into the clothing market with the theme of "a mobile supermarket."
On June 6, 2020, Tencent Qingtenghui and WeChat Mini Program Live created the "Tencent Qingteng Star CEO Live Broadcast Festival", with Zhao Wei as the "National Product Selection Officer", and conducted live broadcasts with Jiang Xiaobai founder Tao Shiquan, Xu Zheng, founder of MissFresh, and Sun Huaiqing, chairman of Marumei Co., Ltd. CEOs;
On June 1, 2020, MissFresh and Suntech Institution jointly distributed benefits to all adults. Suntech Institution provides students with daily premium red envelopes worth 100 yuan.

7.4.4 Method 4: Take advantage of the hot spots

In July 2018, May 2018, the "Crayfish Food World Cup" marketing and promotion activity was launched in conjunction with the World Cup, from creating an interesting shrimp eating process to providing an immersive football watching experience, attracting the active participation of many foodie fans;
On May 20, 2020, #520 confessed to MissFresh# Forward this post @MissueFresh's official Weibo and @2 friends On May 28, he drew 1 Xiaoxianda [Price] worth 50 yuan fruit gift box;
On June 5, 2020, #Mangzhong Today, forwarded Weibo and @ 2 friends. On June 22, I won 3 Xiaoxianda [Price] 1 fruit gift box worth 50 yuan;
On June 25, 2020, #Happy Dragon Boat Festival#, forward this post @日本語天官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网官网�
On July 6, 2020, #Today's Xiaoshu# forwarded this Weibo post and @ 2 friends. On July 22, I will draw 1 Xiaosheng [Price] Youxian Nut Gift Box;
On August 7, 2020, the Daily Youxian super talked about "Today's Beginning of Autumn", forwarded this article @大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大大

7.4.5 Method 5: Helping public welfare

In February 2020, Daily Fresh produced a rap video titled "Give Me 5" to encourage citizens to buy groceries at home during the epidemic;
The "Contactless Confession" activity was launched on February 14, 2020;
In February 2020, MissFresh launched a community assistance project, setting up "contactless delivery storage shelves" in multiple cities, which can be applied for free and installed in place to meet people's needs during special times;
In March 2020, Youxian will launch an epidemic prevention work meal in Beijing to support and encourage those struggling to work;
On March 8, 2020, the Daily Youxian launched the "Listen to Women" campaign, and the "Eating at Home" charity advocated by 10 actresses. Daily Youxian hopes that eating at home can attract more attention and people can also have more care for the female group.

8. Summary

Through the overall analysis of the fresh food e-commerce industry and MissFresh, we can draw the following conclusions:

1) Common factors such as policies, economy, society and culture, and technology have promoted the vigorous development of the fresh food e-commerce industry, and will continue to maintain a certain high growth rate in the next few years.

2) In the report of Trustdata in June 2020, the leading effect of the fresh food e-commerce market was revealed. Daily Youxian continued to lead the way with 11.6 million monthly active users, with an average customer price of 75 yuan, a repurchase rate of over 80%, a loss rate of 1%, and inventory turnover of 1.5 days. It is the only fresh food company in the industry that is fully profitable.

3) In the fresh food e-commerce industry market, there are three main participants: consumers, suppliers, and platforms. If the platform wants to achieve rapid growth, it must meet the needs of good consumers and suppliers.

4) The current core business of MissFresh is "forward warehouse + home delivery".

GMV is a data metric commonly used by the e-commerce industry to measure whether its core business is healthy, so to maintain positive revenue growth:

First of all: we must increase the number of users on the platform, and Daily Youxian acquires new users through major forms such as advertising, social recruitment, reputation, and live broadcasts;

Secondly: The conversion rate needs to be improved, because after users come to the platform, they will only be valuable to the platform only when they convert them into paid users. Different forms of discounts and promotions designed by Daily Youxian attract users to place orders on the homepage, product list page, product details page, and shopping cart page;

Finally: it is necessary to increase the average customer price. Daily Youxian increases the average customer price from two aspects: one is to increase the amount of single consumption; the other is to increase the frequency of consumption over a period of time.

Overall, MissFresh has done a good job, so investors have continued to increase their investment.

5) Judging from the download volume curve displayed by Cool Pass data (Missue Daily Youxian S-shaped) and the specific situation of version function iteration, the development of Missue Daily Youxian since its establishment is divided into three stages (starting, growth, and maturity stages), and the rhythm is particularly well grasped.

First, focus on verifying user needs, improving core basic functions, and then investing in large-scale promotion to acquire users and achieving rapid growth; then, continuously optimize products, improve user experience, and achieve steady development.

6) The target users of Daily Youxian are consumers, so all functional designs are focused on meeting consumers' needs.

There are four main scenarios for consumers to use APP: before placing an order, when placing an order, before receiving the goods, and after receiving the goods. By sorting out the functions of MissFresh, we can find that most of the consumers' needs can be well met, which is an excellent product.

7) The wine is also afraid of the deep alley. On the basis of paying attention to making good products, Daily Youxian also attaches importance to product operation. Through the analysis of its operation path, we know that it has made unremitting efforts in the operation of "content, users, members, and categories".

The above is an analysis report made by myself for the purpose of being familiar with the industry, so I did not give any suggestions on the optimization direction of the product. I hope it will be helpful to everyone. Due to personal abilities, there must be some inadequate analysis. The boss is welcome to give me some advice. Thank you!

Finally, SWOT analysis is conducted on MissFresh e-commerce companies.

9. SWOT Analysis

9.1 Strengths Advantages

The competitive advantages of MissFresh are mainly concentrated in four aspects:

9.1.1 Direct procurement of origin + strict quality control

MissFresh has hundreds of professional buyers around the world, all of which are compound teams that understand planting and e-commerce. There are more than 300 buyers in more than 30 countries and regions, and the food buyer team is deeply involved in the origin of food ingredients worldwide.

Among all categories on the platform, nearly 90% of the fruits come from the place of origin and factories, about 50% of the vegetables, 70% of the meat and eggs, and a small number of the other are purchased by urban markets. After screening, the ingredients arrive at the urban sorting center from the place of origin. Only after passing the sampling inspection can they be put into the warehouse and arrived at the community distribution center.

9.1.2 Rich product categories

MissFresh has evolved from fresh food e-commerce to online comprehensive supermarkets. The SKU in the forward warehouse has increased from more than 1,000 to more than 3,000, covering 12 major categories such as vegetables, fruits, meat, eggs, poultry, aquatic products, wine and beverages, snacks, daily necessities, and one-stop purchase of fresh food and daily necessities.

9.1.3 A perfect cold chain logistics system

As the pioneer of the forward warehouse model, MissFresh has now established a Jisuda cold chain logistics system in more than 20 major cities across the country through the "urban sorting center + community forward warehouse" model.

This fully ensures the "high-quality quality" of the products and the 1-hour delivery speed, provides members with as fast as 30 minutes of delivery services, and realizes data management of a large-scale distributed warehousing system.

9.1.4 Social membership operation to strengthen user stickiness

Daily Youxian maintains user stability with a membership system and high membership privileges, and promotes user stickiness based on social platforms; and with the help of the membership system, it helps collect consumer preferences, accurately user portraits, and achieve more effective marketing promotion.

9.2 Weakniesses disadvantages

The fresh food e-commerce industry pursues distribution efficiency. The forward warehouse model fresh food e-commerce takes products closer to consumers, improving logistics distribution efficiency and experience, which is its advantage.

However, relatively speaking, the forward warehouse model is a capital-density investment and is an asset-intensive and operation-intensive model.

From the perspective of the performance cost composition of fresh food e-commerce forward warehouse model, the distribution costs of large warehouses to forward warehouses and the last kilometer are relatively high (original warehousing centers: about 5% of the fulfillment cost. If the supplier supplies to the warehousing centers, there will be basically no expense or loss; the regional warehousing centers to forward warehouses: about 20% of the fulfillment cost, including the operation and transportation costs of large warehouses; the forward warehouses to consumers: about 50% of the fulfillment cost, including the operation and distribution costs of forward warehouses. Therefore, the gross profit margin is only 20%~25%).

In addition, the forward warehouse model is generally wirelessly-free stores, lacking offline traffic entrances, and requires high marketing costs and high subsidies to attract traffic and acquire customers.

Overall, the forward warehouse model requires high cost investment and a long return cycle. Therefore, the forward warehouse model is actually a disadvantage of Daily Youxian.

9.3 Opportunities

The epidemic has catalyzed new business opportunities, and semi-finished clean vegetables may become an opportunity point for daily fresh food.

During the epidemic, the semi-finished product market has accelerated its development, and semi-finished product dishes + online sales have opened up the situation of new retail of catering. While many catering companies have launched semi-finished products, some mainstream fresh food e-commerce platforms have also begun to expand and deploy the semi-finished product market.

For catering companies, the online sales of semi-finished dishes can reduce the losses caused by the closure of dine-in due to the epidemic by selling semi-finished dishes online; for fresh food e-commerce companies, they can use their community layout and supply chain advantages to deliver semi-finished dishes to consumers.

In addition, the gross profit margin of semi-finished dishes is higher than that of fruits and vegetables, and fresh food e-commerce can increase profit margins while expanding sales categories.

Overall, the epidemic has indirectly promoted the development of semi-finished vegetables. When people's lives return to normal, iResearch analyzed that the sales of semi-finished vegetables will still maintain a certain scale of growth. The reason is that the outbreak of the epidemic has enhanced consumers' awareness of semi-finished vegetables.

And now the post-80s and 90s have become the mainstream group in the market. They are paying more and more attention to convenient, quality, nutritious and healthy foods. Under the wave of lazy economy, consumers will still maintain a certain popularity with semi-finished clean vegetables.

9.4 Threats

The threat mainly comes from the accelerated expansion of traditional retail supermarkets and the continuous expansion of giants' layout in fresh food e-commerce.

Affected by the epidemic, fresh food e-commerce will usher in rapid growth. At the same time, competition in the fresh food e-commerce industry will continue to upgrade. Traditional retail supermarkets accelerate the expansion of online channels, and the giants' layout in fresh food e-commerce is also continuing to expand, which will promote the accelerated reshuffle of the original industry structure.

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