Daily Fresh product analysis!

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

The development of fresh food e-commerce has benefited from the accelerated development of e-commerce, the increase in user scale, the advancement of logistics cold chain technology, etc.

However, with the entry of companies such as Hema and JD.com, how should fresh food e-commerce companies manage and operate their business if they want to establish their own unique competitive advantages?

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

In this article, the author conducted a product analysis and evaluation on MissFresh. Let’s take a look at MissFresh’s business operations.

1. Industry Analysis

As the world's most populous country, China has an extremely large consumer group. According to data from the National Bureau of Statistics, Chinese residents' consumption of major fresh foods reached 3.1 trillion tons in 2019.

As people's consumption concepts and consumption levels improve year by year, people's demand for fresh products continues to grow.

The fresh food e-commerce industry is a livelihood industry that targets young people born in the 1980s and 1990s and has a market size of trillions of dollars.

Then why has it only started to develop rapidly in recent years? So next we use the PEST model to explore the reasons behind this.

1. Politics

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

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

In January 2019, the State Council issued the "Guiding Opinions on Deepening Consumption-Driven Poverty Alleviation and Helping Win the Battle Against Poverty" to promote the export of agricultural products from poor areas through e-commerce.

In February 2019, the State Council issued the "Opinions on Promoting the Organic Connection between Small Farmers and Modern Agricultural Development", supporting the development of e-commerce economy in rural areas and promoting well-known e-commerce companies to help small farmers sell fresh agricultural products.

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

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

2. Economy

According to the seventh national census in 2020, the total population size of the mainland reached 1.41 billion, and the urbanization rate of the permanent population reached 63.9%. Relevant data from the fourth national economic census showed that my country's GDP in the first quarter was 24,931.0 billion yuan.

Calculated at comparable prices, the year-on-year growth was 18.3%, and the per capita national income increased significantly. The consumption demand of residents began to upgrade from the basic consumption of food, clothing, housing and transportation. The increase in consumption willingness will create new market space and new industry opportunities.

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

iResearch data shows that due to the large income distribution gap in my country, there is a trend of consumption stratification. When shopping for fresh products online, consumers in first- and second-tier cities and consumers in lower-tier cities value product quality, while consumers in lower-tier cities value product prices more.

3. Society and culture

With the development of the economy and the times, my country's consumer groups have changed, and those born in the 1980s and 1990s have become the backbone of consumption.

At the same time, people born in the 1980s and 1990s are relatively less sensitive to the price of fresh food. They pay more attention to the convenience of purchasing fresh food, have higher requirements for the quality of fresh food, and have higher requirements for delivery speed.

Due to the epidemic, the online penetration of fresh food has accelerated, and the number of times consumers use fresh food e-commerce apps has increased significantly.

After the epidemic stabilized, the number of times consumers used fresh food e-commerce apps dropped slightly, but was still much higher than before the epidemic.

This shows that the epidemic has cultivated users' habit of using fresh food e-commerce for consumption.

4. Technology

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

The entry of giants such as Alibaba and JD.com into the market, the integration of online and offline, and the continuous increase in investment in infrastructure construction such as supply chain and logistics under the O2O model have brought about a series of innovative models and revitalized the fresh food e-commerce market.

Cold chain logistics and distribution use "high-standard foam boxes + low-temperature ice bags" for multiple insulation, allowing fresh food e-commerce to meet the requirements for the freshness of fresh foods such as fruits and vegetables, further promoting the development of the fresh food e-commerce industry.

iResearch predicts that the fresh food retail market will continue to grow in the future, and the scale of China's fresh food retail market will reach 6.8 trillion yuan by 2025.

2. Competitive Product Analysis

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

Fresh food e-commerce is a rising star in the e-commerce category, and many capital giants have invested in the industry.

Judging from the current layout, Alibaba has laid out the O2O platform model of Taoxianda and Ele.me new retail, and Hema Fresh, an integrated warehouse and store.

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

Meituan has the O2O Meituan Flash Purchase and the forward warehouse model Meituan Grocery Shopping.

In addition, Pinduoduo and Didi have also entered the community group buying track. In addition, leading fresh food e-commerce startups such as MissFresh and Duodian continue to be favored by capital, and there are many players in the fresh food e-commerce industry.

1. Daily Fresh

MissFresh was founded on October 30, 2014, and received US$5 million in angel round financing from Yuanjing Capital and Guangxin Capital in the same year. It officially started operations in December 2014.

In May 2015, it completed a US$10 million Series A financing, and in November of the same year, it completed a RMB 200 million Series B financing.

In April 2016, it received RMB 230 million in B+ round of financing.

In the first half of 2018, MissFresh’s user base in the fresh food e-commerce industry exceeded 50%, leading the industry for four consecutive quarters.

In 2018, we have completed the layout of all categories of selected fresh produce, and established an ultra-fast cold chain logistics system of "city sorting center + community forward warehouse" in 20 major cities across the country, providing users with self-operated all categories of selected fresh produce within 1 hour.

In the early morning of June 9, 2021 (Beijing time), MissFresh submitted a prospectus in the United States, planning to be listed on the Nasdaq with the code "MF" and intends to raise US$100 million.

Daily Fresh’s business model is the forward warehouse model

1) Product source

“Only products that can withstand layers of selection can be called selected” - MissFresh has a purchasing team that insists on “customer first” and has in-depth cooperation with high-quality production areas across the country and even the world.

In order to seek high-quality ingredients, the buyer team went to the United States, Chile, South Africa, Peru, Australia and other countries for in-depth exploration of high-quality origins. Based on the principle of "adapting to the times and local conditions", they selected high-quality ingredients with suitable climatic conditions and geographical environment.

2) Category

More than 4,000 selected products cover 12 major categories, including fruits, vegetables, meat and eggs, aquatic products, snacks, dairy products, light meals, grains and oils, beverages, fast food, light meals, daily necessities and other one-stop shopping for all kinds of fresh food, but there is no live seafood, only frozen products.

3) Product quality

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

4) Density of forward warehouses

MissFresh adopts a two-level distributed warehousing system of "city sorting center + community micro-warehouse". Establish urban sorting centers in North China, East China, and South China, and set up forward micro-warehouses in business districts and communities based on order density, adopting the "self-operated + franchise" model for opening warehouses.

According to the prospectus, 16 cities have been launched, with 631 forward warehouses covering a radius of three kilometers. In cities that are not covered by forward warehouses, MissFresh also provides traditional e-commerce services.

5) Delivery

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

6) User Acquisition

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

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

2. Dingdong Shopping

Dingdong Maicai was founded in April 2014 and received angel round financing in the same year.

Dingdong Maicai was launched in May 2017 and first expanded into Shanghai.

By the end of 2019, nine cities including Shanghai, Shenzhen, Hangzhou and Suzhou had been opened.

Dingdong Maicai entered Beijing in April 2020 and is acquiring new users through subsidies and discounts.

On April 6, 2021, it completed a US$700 million Series D financing.

In June 2021, it completed a US$330 million D+ round of financing, and on June 9, it submitted an IPO application to the U.S. Securities and Exchange Commission.

1) Business model

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

2) Product source

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

3) Category

2000+SKUs of fresh dishes cover all the items needed in the kitchen. You can also buy live seafood, which can be delivered in oxygen boxes or with water. You can also choose to have the seafood slaughtered, so you can eat the freshest ingredients.

4) Product quality

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

5) Forward warehouse density

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

6) Delivery

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

7) User Acquisition

① Mom Helper

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

② Group buying + sharing

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

③ Ground promotion

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

④ Tik Tok advertising

3. Conclusion

From the above, we can see that the business models of Dingdong Maicai and MissFresh are similar, but MissFresh was launched earlier and has priority in acquiring more users.

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

There are slight differences in product categories. MissFresh has more fresh products from home and abroad, while Dingdong Maicai has few overseas products. So in terms of product diversity, MissFresh has more choices.

From the supply side perspective, Dingdong Maicai mainly adopts urban wholesale procurement.

Dingdong Maicai’s brand suppliers supply directly on demand every day, and then standardize the products in its own city sorting centers, saving labor costs for source procurement, warehousing costs, high cold chain transportation costs, etc., to achieve the goal of simplifying the supply chain.

MissFresh purchases directly from the source. Although its cold chain transportation is relatively complete, the cost of its products may be slightly higher compared to urban wholesale procurement such as Dingdong Maicai.

In terms of user experience, the target user group is office workers, and young people account for the majority, but many young people nowadays are not very good at cooking.

Taking this factor into consideration, Dingdong Maicai has set up recommended practices and one-click add-to-cart functions on the product details page to facilitate users' purchases.

On the "What to Eat" interface of MissFresh, users are provided with recipe choices. There is an ingredient selection button in the recipe details interface (which enables one to add ingredients to the cart with one click). The two methods are slightly different.

However, the starting purposes are different, all of which save users’ time and help increase user stickiness.

3. User Value Analysis

In the fresh food e-commerce market, there are three main participants: users, merchants, and platforms. The business logic diagram of Daily Fresh is as follows:

If a platform wants to achieve rapid growth, it must meet the demands of users and the needs of merchants, while providing good service.

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

1. User

Most of the people born in the 1980s and 1990s, who are the main force of fresh food e-commerce consumption in the Internet era, are located in cities.

First- and second-tier cities are home to a huge number of young people who have a strong desire to buy and have strong spending power. They also increasingly attach importance to quality, price, and delivery speed.

According to a report previously released by Wanlian Securities Research Institute, the scale of China's fresh food market is huge and shows an increasing trend year by year. It is expected to exceed the 6 trillion mark in 2023.

In contrast, the penetration rate of e-commerce in the fresh food sector in online shopping is only between 1.3% and 3.6%.

High frequency and rigid demand, fresh food has always been a product with high demand and high repurchase rate.

After generating a strong desire to purchase, users currently adopt the following methods:

1) Wet Market

Every city, every community, and every place where people gather will have a vegetable market selling fresh food.

Although the freshness of fresh products can be guaranteed, the sales direction of the vegetable market is relatively single, the quality of each merchant is uneven, and the category is not rich enough, which limits the choices of customers.

At the same time, it is also very unfriendly for office workers who work during the day to buy fresh food.

In addition to the impact of the epidemic, there are many restrictions on offline vegetable markets, where people gather.

2) Supermarket

60% of users choose this method to buy fresh food, which is a very high proportion.

The reason for choosing this method is mainly because the product categories are concentrated, the volume is large, the freshness of the ingredients is guaranteed, it is more formal and standardized, and there is supervision and management by the market regulatory department.

But there are also some disadvantages:

First of all, supermarkets are not available in all places where people gather. Especially large supermarkets, there is basically only one at a long distance and cannot meet the needs of everyone.

At the same time, the distance required to travel when purchasing is also a problem, which has a great impact on people who do not have convenient transportation.

Secondly, supermarkets, like vegetable markets, also have a certain timeliness, which also has certain limitations for office workers who work during the day.

Finally, due to storage constraints, supermarkets rarely have cross-regional fresh produce, and most of them are local fresh produce.

3) Community fresh food store

Community fresh food mainly serves community residents. There are few mobile consumers and the consumer group is relatively fixed. Special attention should be paid to service and quality to ensure user retention.

The advantages are that it can meet the general and basic needs of users in the community, it is short in distance, convenient, and can buy fresh products. In terms of food selection, it is mainly daily fast-moving consumer goods, such as vegetables, peppers, potatoes, eggs, pork, chicken, and soy products.

But the disadvantages are also obvious. First of all, there are too few categories. Generally, community fresh food stores are relatively small, and the fruits, fresh products and other products sold are very few, only a few basic ones. Secondly, although there are services such as home delivery, there are no professional delivery personnel. If the order volume increases, it is very easy for there to be a shortage of personnel, resulting in the failure to arrive on time. Finally, due to poor storage conditions in the store, there will be quality problems caused by improper storage of products, and it is not easy to provide after-sales service and protect rights.

4) Online shopping platforms

The post-80s and post-90s are a generation born out of the Internet, and they have long developed the habit of online shopping. Therefore, online shopping for fresh products is also very common. Before the emergence of ultra-fast home delivery platforms such as MissFresh, consumers mainly relied on large-scale comprehensive online shopping platforms such as Tmall and Taobao. Although such platforms can provide a wide variety of products and save transportation costs, they also have some problems:

Firstly, the delivery time is long. Ordinary online shopping logistics time is long, usually 2-3 days, and the fastest delivery time is the next day, which cannot meet the timeliness needs of consumers.

Secondly, transportation damage often occurs: fresh products are usually easily bumped and the damage rate is higher during long-distance transportation.

It can be seen that these four methods have their own advantages and disadvantages, and none of them can meet the current needs of users well.

2. Merchants

1) Research and development

In the fresh food market, users have increasingly higher requirements for product quality, and merchants also need to research and develop and upgrade their products.

However, many businesses do not have the relevant technology and experience and are unable to carry out secondary research and development and upgrades of their products, resulting in stagnation and being unfavorable to future product sales.

2) Brand

Many businesses do not have their own brands. Faced with competition from peers, they can only engage in price wars, which is not conducive to their own and the industry's development. Therefore, developing their own unique brands has become an urgent need for businesses.

3) Channels

Sales channels are also a major pain point for merchants. There are many merchants who have production but lack channels. These merchants suffer losses all year round or have weak profits. They urgently need a platform to help them expand sales and increase profits.

4) Data

Most businesses do not conduct data analysis on sales, which results in them being at a loss in the second year of sales and not knowing how to optimize sales and upgrade the industry.

5) Funding

Since fresh food has high costs, high losses, short shelf life and complex operations, if merchants are not careful, they may suffer losses due to a broken capital chain.

3. Platform

From the above analysis, we can find that the main problems with users' existing solutions for purchasing fresh food are:

• The product categories sold are not rich enough, and there is a lack of fresh ingredients from different regions;
• The quality of fresh produce varies;
• There are greater time restrictions on purchases for office workers and other purchasing groups;
• Even with delivery services there are problems;
• The epidemic has a significant impact on user purchases;
• After-sales service is difficult.

Similarly, merchants also have needs for delivery and business expansion. As a platform, how does MissFresh better meet their needs and attract them to this platform?

1) Forward warehouse mode: the fastest delivery service is 30 minutes;

A high-speed cold chain logistics system of "city sorting center + community forward warehouse" has been established in 16 major cities across the country, providing users with self-operated selected products with the fastest delivery service of 30 minutes.

MissFresh adopts the forward warehouse model, establishing warehouses and stores in places with a large number of community users to store products for distribution, which is equivalent to a small warehousing and distribution center.

The platform's suppliers only need to supply goods to the forward warehouse, or the sorting center can deliver them to the forward warehouse to achieve last-mile coverage.

Forward warehouses are generally built in areas with a large number of residents and low traffic. They can serve community residents within a three-kilometer radius and can also reduce rental costs.

Thanks to its proximity to community residents, the forward warehouse model can achieve a service level of delivering goods to consumers in as fast as 29 minutes, thereby improving consumers' shopping experience.

The efficient delivery efficiency of the forward warehouse was also mentioned above, so the fresh cold chain food involved in the forward warehouse model meets the community residents' daily immediate needs for fresh food.

2) Online shopping: buy online anytime, anywhere;

As a fresh food e-commerce platform, MissFresh can meet consumers' needs for flexible shopping without being restricted by time or location.

Office workers can make full use of fragmented time such as commuting, lunch breaks, and meals to purchase goods, and then make appointments for home delivery, saving the time cost of shopping in stores.

3) Product richness: one-stop shopping for fresh produce;

A professional team of buyers selects over 4,000 products directly from origins around the world, covering 12 major categories including fruits, vegetables, dairy products, meat and eggs.

From domestic to imported, the rich product selection can meet the various personalized needs of consumers.

4) Quality is guaranteed: you can eat with more peace of mind;

Fresh products are 100% batch-inspected for quality, giving you peace of mind when you receive them.

5) Merchants are guaranteed: development will be better;

In 2020, MissFresh held the first supply chain ecology conference in the fresh food retail industry and officially launched the "10 Billion Club" plan.

It was announced that it will support 100 billion-level cooperative suppliers in the future, and provide multi-dimensional empowerment in R&D, brand, channel, data, capital, etc., to grow together with upstream and downstream partners.

4. Commercial Value Analysis

MissFresh’s current core business is online purchase, “forward warehouse model + home delivery”.

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

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

1. Increase the number of platform users

In order to achieve sustained growth in revenue, it is necessary to continuously inject fresh blood. Adding new users is the most important guarantee for corporate revenue. So how does MissFresh increase its user base?

There are four main ways: advertising, online invitations, offline promotion and word of mouth.

1) Advertising

• Physical advertising: various types of investment promotion billboards, subway advertisements, bus station advertisements, express tricycle advertisements, uniforms and work supplies for employees in the fresh food industry, etc.;
• Online advertising: advertising on various video platforms, such as Tencent Video's "You're Delicious Too"; brand filming: Just Thirty Years Old
• Send coupons via SMS to attract new users and recall old users.

2) Online invitation

Invite and get gifts: Invite friends and get red envelopes.

Existing users can get red envelope rewards by inviting new users and users who have not placed an order in 60 days. They can also invite WeChat friends and face-to-face invitations with one click. There are detailed invitation guides and participation steps on the invitation interface.

At the same time, you can also check invitation records, etc.

Help and get it for free: Invite friends to like the post to get prizes.

At the same time, the rules require that newcomers can assist twice, and the maximum number of assists per person is 10 times per day, which is also conducive to the growth of the number of users.

3) Offline promotion

Sales guys invite new users to register or recall old users by distributing gifts or coupons at supermarket entrances, community gates, vegetable markets, and commercial centers.

At the same time, users can also receive red envelope rewards by entering the invitation code of the sales guy.

4) Word of mouth

For fresh food e-commerce companies, word of mouth plays a crucial role in attracting new customers.

Because fresh food is a type of product that users have a strong demand for, the user experience is very important, but there are many purchasing channels and consumers tend to switch.

Therefore, a good reputation is very important. It can not only retain old customers, but also attract new customers. At this time, recommendations from friends become extremely important.

Daily Youxian has a wide range of products, timely delivery, and complete and convenient after-sales service, so it has established a relatively good reputation.

2. Improve conversion rate

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

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

1) Log in

Simple login

Provide one-click login via mobile phone number and one-click login via WeChat to simplify user registration steps and increase user convenience.

Newcomer tasting products and exclusive coupons

After new users log in, they can see the products that are “newcomer’s first try”, that is, cheap products at various discounted prices, and marked as limited in quantity and while stocks last, to stimulate consumption.

At the same time, new users can get exclusive coupons for new users and free shipping on their first order after registration. The red envelopes have a validity period, which can stimulate users to place orders.

2) Home page

Rich categories and clear classifications.

The categories are rich, and all kinds of fresh products are clearly categorized, allowing users to see their selection direction at a glance and optimizing the user selection steps.

The carousel displays hot-selling products or activities, such as: Youxian New Year Festival, buy New Year goods and get an IPAD for free, etc., creating a purchasing scenario and a reason for users to buy.

Today’s flash sale: discover great products, stock up for the family, and enjoy member benefits. Flash sale products use price discounts to induce users to consume, and countdowns create a sense of urgency.

3) Product list page

Select your product.

It is inevitable that it is dizzying to choose from such a rich and diverse range of products. The platform uses some simple classifications, user usage, and comprehensive user data to push targeted products to users, guessing what you may like and selecting good products.

At the same time, the search interface also guides users by introducing promotional activities in text form.

4) Product details page

• Quality Assurance: Each product is batch inspected and verified to ensure quality.
• Limited-time flash sales: Countdown to discounted prices increase users’ sense of urgency and stimulate orders.
• Free shipping for members: Free shipping for members can speed up the user's payment process and increase the possibility of users paying for membership.
• Create tutorials: Create some simple tutorials to teach users and increase the likelihood of purchase.
• Fast delivery: delivery in as fast as xxxx time, giving users a fast delivery user experience.

5) Shopping cart

Provide coupon reminders and final price confirmation again to protect user rights.

Explain the delivery speed again so that users can plan their time for delivery.

At the same time, the following information will be pushed below, allowing users to select the products again after payment, increasing the possibility of a second purchase.

6) Checkout page

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

After cancelling the order——Waiting for payment page

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

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

7) Delivery

Users can check the delivery status on the order interface: including delivery time, delivery personnel information and delivery location, as well as delivery modifications, after-sales service, etc.

3. Increase average order value

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

1) Increase the single consumption amount of a single user

• Discounts, full discounts, red envelopes and other means: Use coupons, red envelopes, full discounts, profit sharing and other means to guide users to buy more goods, increase their willingness to make additional purchases, and feel that the purchase is cost-effective after the purchase.
• Guess you like it: Through data analysis, analyze the products currently viewed by the user and recommend related products.
• Add to order, etc.: When the amount is less than the discount threshold, the price difference will be displayed, and you can directly click "Add to order".
• Shipping fee: encourage users to buy more items, or place a combined order, or apply for free shipping as a member, and enjoy this offer by reaching the free shipping threshold.

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

• "Today's Flash Sale" is a limited-time special offer event that starts every 8 hours. The price of goods will be much cheaper, increasing the frequency of purchases.
• Send coupons to inactive users from time to time and send text message notifications to encourage users to purchase on the platform.
• "Help and get it for free" is a form of social marketing that aims to attract new purchases through the help of friends.
• Community red envelope benefits are provided in the form of red envelope QR codes. It is a form of community marketing that distributes preferential benefits in the community every day.
• The "Guess What You Like" module provides users with choices in the form of content marketing. Users can take a look when they don't know what to eat. Continuous production of high-quality content improves user stickiness.
• In order to retain its high-quality user base, MissFresh launched a membership service called "HOME Membership". Since users have prepaid the fees in advance, they must continue to consume on the platform to maximize their membership benefits. Therefore, paid members also have the characteristics of high loyalty and high repurchase.

4. Conclusion

From the above analysis, we can find that the platform has set up various marketing points in every process and every link, using gifts, red envelopes, coupons, and high-quality reviews.

Free shipping for group orders and combined orders; giving red envelopes to members, etc., continuously attracting new customers, improving conversion rates, and increasing average order value to maximize commercial value, thereby attracting more investment.

According to data from iResearch Consulting, calculated by GMV, MissFresh ranked first in China's DMW retail industry in 2018 and 2019, and ranked second in 2020.

In addition, the average customer unit price of MissFresh's forward warehouse instant retail is 94.6 yuan, which is higher than other forward warehouse companies. The AI ​​application rate has reached the leading level in China's forward warehouse instant retail industry, and the fulfillment profit margin is also higher than the average level of the other three major players in the industry.

5. Product Iteration Analysis

In order to deeply analyze the version iteration rhythm of Daily Youxian and explore the product iteration logic, the author summarizes all the core version iterations of Daily Youxian from V1.0.0 to V0.9.59 as follows:

According to the curve distribution of the cumulative downloads of Daily Youxian on Kuchuan, it can be seen that the development of the product is similar to an "S-shaped" curve, so the following analysis is divided into five stages:

Daily Youxian Android cumulative download channel distribution chart (Source-Kuchuan):

1. Cold start phase

Before January 2016, MissFresh’s versions V1.0 – V1.0.5 mainly focused on optimizing basic functions.

In order to optimize the user's consumption and shopping experience, the main focus during this stage is to fix the problem that the shopping cart, product information, etc. cannot be fully displayed.

Added new functions such as coupon reminder, sign-in and recharge. In order to help users choose products more personally, a new module called “My Shelf, You Are the Boss” has been added.

At the same time, in order to avoid users being unable to pick up goods due to delivery address issues, and to reduce delivery costs, the platform has also added delivery address labels and multi-region displays.

These are all functions that help users optimize their purchase path. This is a very good way to improve user experience.

2. Initial development stage

Starting from March 4, 2016, that is, version V3.0.0-V4.1.0, MissFresh was in the development stage.

During this period, MissFresh mainly started to add various activities and systems, including membership systems and gift-giving invitations, in order to expand its user base. The focus of product iteration is to attract new users and retain old users.

In order to reduce user loss caused by the cumbersome registration of new accounts, MissFresh provides mobile phone login support.

In order to attract new customers, MissFresh has continuously increased its efforts in rewarding friends for inviting them, from 50 yuan for each friend invited, to 60 yuan for each friend invited, to 6 yuan gift vouchers, etc., using the strategy of giving more rewards the more people invite.

Taking into account users' desire for bargains, old users continue to recommend the platform to their relatives and friends. At the same time, it also has a certain degree of impetus for new users.

During this period, in addition to attracting new users, we also increased the number of users on the platform. In order to improve user stickiness, MissFresh has added a membership system.

For example: Place two orders per month and become a member easily. Members can enjoy super low prices, exclusive member products, exclusive fresh delivery and super-fast refunds, and other benefits.

The newly added online customer service and refund functions facilitate user consultation, after-sales refunds and a series of other issues, allowing users to rely on the platform with greater confidence.

3. Steady development period

In the versions of Daily Youxian V4.1.0-V5.9.0, the pace of attracting new users has slowed down. During this period, the iteration of products was mainly aimed at improving user stickiness and enhancing user experience.

In terms of attracting new users, the platform has launched benefits such as welfare club, daily check-in, and cumulative rewards for inviting new users, which help attract new users. In terms of retaining old users, MissFresh continues to optimize basic functions at the product level. In order to increase user retention and repurchase rates, the platform has undergone a visual revision, launched a points mall, added points rebates for consumption, allowed member points to be exchanged for merchandise, and enabled a buy-one-get-one-gift model.

The platform has added many new features to make the product more complete and improve customer satisfaction. New services have been added, such as arrival reminders, the ability to check product delivery progress on orders, nationwide delivery channels, scheduled delivery of pre-sale products, and tomorrow's delivery of sold-out products.

at the same time. New search and evaluation functions have also been added to help users find target products more accurately and enhance consumers' confidence in purchasing products. The addition of feedback portals helps collect user information and facilitates product iteration.

In order to make users feel more assured about the source of the goods, the platform has launched a function to query the quality inspection reports of fruits and vegetables, and view the relevant quality inspection reports on the product details page.

4. Rapid development period

In MissFresh versions V6.0.0-V9.8.0, since attracting new customers and retaining them has always been the main theme of the development period, MissFresh has also been committed to improving its membership system and optimizing new customer acquisition activities.

After going through the previous stages of development, MissFresh is currently in a period of rapid development. The page design has been revised several times, and the interaction details have been updated many times. Enhance visual interactivity, strengthen precise delivery, put people first, and improve user experience to further enhance user stickiness.

5. Maturity period

From March 2020 to the present, it is the maturity period of Daily Youxian. Continuous optimization functions at the product level, including order settlement page, what to eat, increasing comment rewards, etc.

In order to consolidate its leading position, daily Youxian's operating activities continue at this stage, such as: Youxian New Year's Festival, red envelopes for stored value before the Lantern Festival, 618 promotions, etc.

6. Conclusion

Overall: MissFresh is a platform for steady development and continuous progress.

During the cold start stage, it mainly focuses on realizing the basic needs of users to polish the user experience, improve product functions, and focus on repairing and optimizing consumer shopping paths.

After having a stable functional foundation, it enters the development stage. During this period, it continues to attract new users through various preferential activities and social activities, expand the user volume, retain old users through a series of operation operations such as various activities and reward mechanisms.

When the number of users reaches a certain scale and enters a mature stage, in order to continuously increase the number of users, the product level is still constantly polished to improve the user's stickiness and user experience, and operational activities continue to continue.

This is the overall iteration step of Youxian.

VI. Product structure analysis

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

This is mainly analyzed through product structure. The following figure is the product structure brain diagram of MissFresh:

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

Overall analysis: Daily Youxian users are consumers, so they focus on analyzing the potential needs of consumers.

According to the consumer's shopping process, it can be divided into four usage scenarios: before placing an order, when placing an order, when checking, and after purchase.

1. What do consumers need before placing an order? What functions does Daily Youxian meet this need?

First of all, food safety is the focus of consumers' attention. The platform provides an entrance to "test report" on each fresh product details page according to this need, so that users can purchase with confidence.

When users want to place an order to purchase, you should know whether the platform can be delivered to their address? Therefore, when entering the system, the user positioning is preferred. When the user wants to switch the address, he can select the address through the homepage.

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

For users with clear target needs, you can enter the product name in the search box on the homepage, such as "beef" to search for all beef brands sold on the platform. At this time, users can quickly filter out the required products through evaluation, sales and prices.

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

At the same time, for new users who have just entered the platform, there is also a module for "newcomers to try new products", which not only provides many coupons with great strength, but also provides category references for users to choose from.

At the same time, the platform also carefully considered the exquisite life requirements of member users and launched the HOME exquisite life section, using vivid pictures and text to match delicious food to increase users' desire to buy.

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

When a user places an order, if he wants to know whether all the products he needs have been added to the shopping cart, he can enter the shopping cart page, and the quantity, price, etc. are clear at a glance.

In checkout, users want to know if the product they have selected can use coupons?

There are buttons for available coupons above the cart items, and you can see how many coupons you have and what type of coupons are.

You can also assign orders to a full discount. If the user still wants to purchase more products, you can also click the purchase button to purchase more products.

If the user is not satisfied with deleting the product, the delete button is in the upper right corner, which is very convenient and fast.

The platform has free delivery fees from time to time. Users want to know whether the product they have selected has reached the free delivery threshold. Select the product they want to buy on the shopping cart page. Details of the delivery fees are displayed above the checkout button for users' reference.

On the cashier page, Daily Youxian supports five payment methods: WeChat, Alipay, Huabei, Yunflash Payment, and stored value balance to avoid users giving up payments in different payment habits.

3. What do consumers have after settlement? How does Daily Youxian satisfy?

When a user places an order, he usually wants to view his or her order information and delivery information. The platform displays order information for each stage in my or my order.

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

4. What needs do after-sales consumers have and how does the platform meet it?

When the user receives the product, if after-sales processing is required, he can apply for an after-sales refund or claim.

When users want to publish the product satisfaction, delivery satisfaction, etc. they receive on the platform, they can click the To be Evaluated → Evaluation Points button to evaluate.

In response to users' purchasing habits, the platform sets the "Another order" button, and adds all the products in the previous order with one click, which is simple and fast.

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

5. Conclusion

From the above analysis, we can find that the functional design of MissFresh can well meet users' needs before, when placing an order, when placing an order, when placing a settlement, and after purchase. At the same time, the product structure is highlighted and distributed reasonably, and can be considered a product with relatively excellent design.

7. Operation path analysis

The so-called "products are responsible for giving birth, and operations are responsible for raising children" also reflects the close relationship between products and operations from the perspective of the situation.

So how did MissFresh operate this product so that it can grow rapidly in a short period of time? The author has sorted out the main operating activities since its establishment in MissFresh. According to the AARRR model, the author has sorted out the following questions about the main operating activities.

1. User operation

1) New recruitment

In order to attract new products, MissFresh mainly uses offline promotion, online invitation, assistance from new and old users, and word of mouth passed on by users after use.

In addition, a large number of advertisements are also placed to increase the number of users:

Including various physical advertisements: investment promotion billboards, subway advertisements, bus station advertisements, express tricycle advertisements, fresh food industry employee wear, work supplies, etc.; and online advertisements: various video platform advertisements, such as Tencent Video "You Tasty Also", etc.; shooting brand films: "Only Thirty Years Old" and so on

2) Inspire activeness

When a user downloads and registers Max Youxian, he needs to activate the user to open and use it, thereby improving daily active users and monthly active users. In order to improve user activity, Max Youxian mainly uses various activities to carry out:

• 2021-10-18 Boiling Hot Pot Festival event was held;
• 2021-9-23 Mid-Autumn Festival hairy crabs and mooncake activities are launched;
• 2021-8-02 The Youxian Crab event was launched for the sixth time;
• 2021-7-05 Summer fruits will be launched in a comprehensive new event;
• 2021-6-22 mid-year promotion and grain opening activities;
• 2021-06-11 618 promotion activities;
• 2021-05-12 The highly anticipated Foodie Festival is online;
• 2021-04-12 Youxian’s 6th anniversary is underway, with good goods and discounts every day;
• 2021-02-01 Before the Lantern Festival, you will receive red envelopes when you recharge the balance of Youxian;
• 2020-12-21 The winter solstice is like the year, 10% off for 2 dumplings and 20% off for 3 dumplings and 20% off for 3 dumplings and 3 dumplings;

User activity can also be promoted through the Daily Youxian HOME member privileges: free member dishes, exclusive member coupons, free member coupons, exclusive member price, member family card, Wednesday member day, double points rebate.

There are also special prices for first-time members to be opened.

3. Improve retention

After promoting user activity, it is also necessary to improve user retention rates in order to continuously create value for the platform. In order to improve user retention rates, Daily Youxian mainly does the following:

• A large number of red envelopes and discount activities, such as newcomers’ fresh food, members’ full discount special sessions, full discounts, and orders full discounts;
• HOME member rights: free member tasting, member exclusive coupons, member free postage coupons, member exclusive price, member family card, etc.;
• For members, there are discounts such as double points refund:
• Added HOME membership limited selection module and exquisite life module to accurately provide exquisite content for member users to choose:
• Regularly push event messages to users, send discount text messages, etc.

4) Share and disseminate

In order to guide users to spread spontaneously, MissFresh mainly does the following:

1. Invitation gifts: Old users invite new users, both parties can get dozens of cash red envelopes and coupons to stimulate users to share with their friends;
2. Help to get free: Users get free gifts by helping to invite friends to help freely.
3. Establish a content sharing module "what to eat" and promote it through sharing on various social platforms.

5) Increase income

Regarding the methods of increasing income, we have introduced the business value analysis in detail in the section, and will not go into details here.

Above, the author analyzes the reasons behind the rise and development of MissFresh from eight parts, including typical models of industry and fresh food e-commerce, competitors, user value, commercial value, product iteration, product structure, and operation.

It can be seen that MissFresh has done well in these aspects, and the entire product is becoming more mature, which is why MissFresh has been able to achieve today's results.

8. Future Outlook/Optimization Suggestions

Through the above analysis, we have understood the reasons for the rapid rise of MissFresh. So where will this "head" unicorn go in the future?

Next, the author will use the SWOT model for systematic analysis, hoping to draw effective conclusions from it.

1. Internal Advantages (Strengths)

• The financing and strategic layout of MissFresh: MissFresh was launched in 2015 and was listed on the US stock market in June this year. It has capital investments such as Goldman Sachs, Tencent, Times Capital, and Davis Selected Advisers. After years of accumulation, the operating experience accumulated over the years is not comparable to that of other fledgling companies.
• Forward warehouse model: high coverage rate to meet the needs of urban users;
• The categories provided by Daily Youxian include 12 major categories including vegetables, fruits, meat, poultry and eggs, aquatic products, wine and beverages, snacks, daily necessities, etc., which greatly meet the daily needs of users.
• Product quality control: It has a complete quality inspection system and inspection report, so that users can buy with confidence and eat with confidence:
• The overall user experience of the app is relatively good, which can well meet the needs of users in different scenarios such as before, at, and after purchase. It is deeply loved by users. A good user experience is the vitality of a product.

2. Internal disadvantages (Weaknesses)

• At present, MissFresh is mainly distributed in first- and second-tier cities, and its penetration rate in third-tier and below cities is not very high. Because the cost of forward warehouse is relatively high.
• The fresh food industry is very competitive , and the development of daily fresh food is difficult

3. Opportunities

• Policy: With the strong support and preference of the country for the cold chain logistics industry, China's cold chain transportation system will also develop rapidly. Building a cold storage network, improving operational capabilities, and refined warehouse management will become the development trend of the cold chain logistics industry.
• Society: Affected by the epidemic, downstream suppliers have turned online, which will accelerate the development of fresh food e-commerce to a certain extent.

4. External Threats

At present, fresh food e-commerce is in a situation where multiple models coexist. Nowadays, advertisements from major fresh food e-commerce companies can be seen everywhere. On the subway, on the bus and on the radio, each company is competing for the quality of fresh food, the speed of delivery, and the variety of products.

Affected by the epidemic, fresh food e-commerce has ushered in rapid development, and competition in the fresh food e-commerce industry will continue to escalate.

Many capital giants have invested in the fresh food e-commerce industry. Judging from the current layout, Alibaba has deployed Taoxianda, Earn's new retail with O2O platform model, and Hema Fresh with integrated warehouse and store.

In addition to operating JD fresh food, JD has laid out O2O's JD home delivery, 7fresh, integrated warehouse and store, and Xingsheng Youxuan, a leading investment community group buying platform.

Meituan has O2O Meituan flash sale, Meituan Made in forward warehouse mode, etc. In addition, Pinduoduo and Didi have also poured into the community group buying track. In addition, the leading fresh food e-commerce companies such as startups, Daily Youxian and Duodian continue to be favored by capital, and there are many players in the fresh food e-commerce industry.

5. Summary and suggestions

Through the above analysis, we can see that if MissFresh wants to continue to develop better, it must optimize and improve in the following aspects:

First of all, MissFresh provides a wide range of products that can meet the needs of various target users. In the future development, it will attract more high-quality suppliers to settle in, which will increase the brand's influence and help improve user stickiness.

While ensuring the advantages of diverse types, we must also strictly control the quality of products, increase the intensity of merchant quality inspection, improve user experience, and reduce user loss.

Secondly, in terms of attracting new users in Daily Youxian, the main users they attract are C-end. This type of user has a lot of uncertainty. It can be carried out through various activities and various operational methods.

From the version 9.8.10 of MissFresh, it can be seen that in this version, the platform launched a module for in-app purchases for enterprises. It can be seen that the target users of the platform are not just the C-end. In the future development, MissFresh can learn from some of the advantages of other platforms, and it is crucial to explore other users.

Regarding the attitude of the supply chain, the advantage of MissFresh is the forward warehouse model. For MissFresh, increasing the supply chain protection and increasing the forward warehouse coverage may also be a major way to increase competitiveness.

Finally, MissFresh's forward warehouses are mostly distributed in first- and second-tier cities, so users in third- and fourth-tier cities will be a blue ocean for MissFresh. Then MissFresh can open up new sales models and channels, and turn their vision to low-tier cities such as third- and fourth-tier cities to expand more users.

Author: Wang Zai 7582

Source: Wang Zai 7582