Pre-position includes

01

Daily Fresh basically ran out of a pre-warehouse template, and new players quickly entered.

In April 2017, Ding Dong bought vegetables was born in Shanghai, the hinterland of the U operator, and also adopted the pre-position mode. Founder Liang Changlin military background, is a continuous entrepreneur, has founded the parent-child website YY network, mother and child community APP mother help, and in the 020 track hot time founded Ding Dong community, but failed.

Dingdong community provides convenient services for the life of community users, including second-hand transactions, living fees, housekeeping, carpooling, community BBS and so on. Liang Changlin saw the high-frequency demand for buying food and cooking from the community service, and led the old employees to transform and do Ding Dong buying food after the closure of Ding Dong community.

Ding Dong buy food early financing is very difficult, pre-position mode of early investment is high, in front of many years of hard work U shopkeeper, as well as rich and bold daily fresh, founder Liang Changlin has seen 150 investment institutions have not got money. However, Han Rui of Gaorong Capital met Liang Changlin by chance, and decided to invest after meeting and chatting, 13 days later, he made a payment.

Gaorong Capital's approach is to look for structural opportunities - new supply, new demand and new people - and then look for projects that fit the bill. Gaorong Capital has been paying attention to the field of fresh food since 2014, investing in a number of O2O platforms, investing while researching, and finally determining the three directions of fresh food track investment: 1, in the first and second tier cities to find the ultimate fast target, with money for time, such as Ding Dong buy food and Pu Pu supermarket; 2, in the sinking city to find the ultimate province of the target, with time for money, such as Pinduoduo; 3, the pursuit of extreme convenience in the scene of what you see is what you get, such as Aunt Money.

Gaorong Capital is also optimistic about the pre-warehouse model, they believe that if the optimal solution to infinite consumer demand is called the "robotic cat model", the closest business model to the "robotic cat model" is the pre-warehouse. In the pre-position mode, Gaorong Capital also invested in Pipu supermarket. Pupu Supermarket was born in 2016, has experienced four financing, but behind the investors are very mysterious, can only know that Gaorong Capital invested 10 million yuan in pre-A round, B round has completed 155 million US dollars.

Han Rui is also optimistic about Ding Dong buy food because of its data performance. Ding Dong shopping online within 18 months, the user retention rate reached more than 40%. Previously, Liang Changlin had founded the mother and infant life service platform, whose users were highly overlapping with the target users of Ding Dong Buy food, and Ding Dong Buy Food was lower than its peers in terms of new cost.

At the same time, the coverage area of Dingdong Buy menu warehouse continues to shrink with the operation time, and the order density continues to increase, which means that user experience optimization and operation optimization are in the same direction. Han Rui judge ding dong buy food more chance to run through the pre-warehouse model. Gaorong Capital has since invested in three more rounds.

Han Rui also pointed out that Ding Dong buy food at that time the re-purchase rate is also higher than peers. Ding Dong buy vegetables weekly repurchase rate has exceeded 50%, according to public data, monthly repurchase rate is not excellent.

In 2019, Liang Changlin disclosed the "smile curve" painted by Ding Dong's repurchase rate data, Ding Dong's repurchase rate stabilized at more than 20% after its launch in May 2017, and when Gaorong Capital invested in May 2018, Ding Dong's monthly repurchase rate was about 23%.

The data of several other layout pre-warehouse is: In April 2018, Chen Zhiyu, vice president of Walmart China, revealed that the pre-warehouse monthly re-purchase rate of Shenzhen Uncle Sam member store exceeded 50%; The monthly repurchase rate of both daily excellent fresh and U shopkeeper has reached 80%.

The growth rate of Ding Dong shopping is very fast. Four months after its launch, the daily orders have exceeded 6,000, and six months later, the daily orders can reach 16,000. In June 2018, the GMV exceeded 36 million, and the number of service stations (pre-warehouse) in Shanghai reached 58. In the pre-position mode that has been recognized by investors, it is the most likely to become the second player.

At that time, Ding Dong buy food financial situation is worrying, Liang Changlin is planning to sell the house to support the development of the company, the founder has the determination to burn the boat, but also increased the determination of investors to Ding dong buy food.

It is worth noting that Gaorong Capital has formed a relatively mature cognition of the pre-position when it entered the market, and several data seized are very key to the pre-position model, which is rare among the many early investors in the pre-position model.

There are reasons for this, and it is also likely to be influenced by Gao Rong Capital's new partner, Chen Yaochang.

Mr. Chan has extensive retail experience, having served as President and CEO of Walmart China and Executive Director of CP Lotus. Walmart is also one of the retail giants layout pre-warehouse model, in early 2018, Walmart and Jingdong logistics cooperation, in Shenzhen Uncle Sam member store to implement pre-warehouse model, 40 minutes delivery.

In February 2018, Chen Yaochang joined Gaorong Capital, and in May, Gaorong Capital invested in Ding Dong Maicai. In January 2019, Chen Yaochang attended the fresh suppliers Conference of Ding Dong Maicai in Shanghai as a strategic advisor of Ding Dong Maicai.

02

By 2018, the daily fresh is undoubtedly the first in the industry, the monthly turnover of the end of 2017 exceeded 280 million, and the order volume was 3 million. At the beginning of 2018, Daily Fresh achieved revenue balance in the Beijing area, and began a regionalization strategy to increase investment in the East China region where Shanghai is located. Ding Dong, a rising star, is also booming.

After long-term observation, investors have a more systematic and in-depth understanding of the pre-position model, and basically locked in the momentum of these two platforms.

Chen Yaochang, a new partner of Gaorong Capital, saw this project after the company invested in the pre-A round of Ding Dong Buy food, and he found that the data such as the re-purchase rate of Ding Dong Buy food was much better than he imagined. Chen Yaochang estimates that if it reaches 30% of the market share in Shanghai, that is about 20 billion yuan of scale, Ding Dong Buy food will have 1,000 pre-positions, which is very powerful. In his view, the pre-position mode has come at the right time. Since then, Gaorong Capital has continued to bet on series A+ and Series B.

Ding Dong Maicai immediately opened the rush mode, as of October 2018, Ding Dong Maicai built 119 pre-storage warehouses, double the same period last year, covering most of the communities in Shanghai.

Today's capital Xu Xin, who had lost in the U shopkeeper, also publicly expressed optimism for the first time about the fresh to home appliances characterized by the pre-position warehouse. In December 2018, Today Capital participated in the investment of Ding Dong Maicai. In January of the following year, Xu Xin stood on the platform of the 2019 Fresh Suppliers Conference held by Ding Dong Buy Food. In this activity, Xu Xin mainly said two points: optimistic about the pre-position mode; Watch Ding Dong buy food.

In Xu Xin's view, Ding Dong has unique advantages among competitors in the same model: vegetable category, high-density distribution of pre-warehouse, and high permeability bring high frequency of use; The delivery is fast enough to meet the needs of the user's kitchen scene.

Xu Xin believes that high frequency just need to be the entrance of traffic, in the foreseeable future, the platform can sell wine, can also sell quilts in winter and summer to sell seats, there is a flow of the entrance will have the future. This is also the basis for her to judge that the fresh track can run out of the e-commerce giant.

Ding Dong Buy vegetables entrepreneurial team has the experience of Ding dong community, and mainly veterans, to create Ding dong buy vegetables "iron army" distribution team, the execution is very strong. Those are all plus points. This round of Capital Today investment, Sequoia China also joined.

At the end of 2018, the number of pre-positions of Ding Dong, which was established less than two years ago, in the Shanghai area opened to 200, with a daily order volume of about 150,000, an increase of more than 100 times in a year and a half, and GMV reached 740 million yuan. In 2019, Ding Dong Maicai began to go out of Shanghai and build warehouses across the country, and by December 2019, Ding Dong Maicai had built nearly 600 pre-warehouses.

The company raised only one round that year, but it raised $450 million, led by Goldman Sachs, Tencent, Time Capital, and Davis Selected Advisers.

In 2018, the data of Daily Youxian still led its peers, with GMV 4.7 billion, which was nearly 7 times that of Ding Dong Shopping. It has also done well in eastern China. In 2018, the daily GMV in East China increased by 7 times, and the number of advance warehouses in Shanghai and surrounding cities was 400, achieving a monthly growth rate of 30% in the first half of 2019.

At this stage, more traditional retailers were inspired by the pre-warehouse, such as Jingdong's 7FRESH and Alibaba's Hema Fresh, using the model of pre-store and post-warehouse, choosing a location close to the community, which can both consume in the store and deliver instantly.

The epidemic has brought the development of the pre-warehouse to a climax. Daily fresh Wang Jun said that the epidemic has brought more than two years of penetration speed to the entire fresh food industry. During the New Year's Eve to the fourth day of the day, the paid-in transaction volume increased by 321% over the same period last year, and the unit price of customers rose from 80 to 90 yuan to 120 yuan.

Since the end of 2019, Ding Dong Maicai has surpassed Daily Premium fresh in monthly revenue. During the Spring Festival, Ding Dong Maicai has added more than 40,000 new users every day, and the unit price of customers once reached 70 yuan, almost double before, and even the monthly revenue of February alone in 2020 exceeded 1.2 billion yuan. The monthly re-purchase rate has also continued to increase, surpassing 40% by August 2020.

Taking this opportunity, Ding Dong bought vegetables out of the Yangtze River Delta, has entered Beijing, Nanjing, Guangzhou, Hebei, Zhejiang, Anhui, Sichuan and other important cities and provinces, only in November 2020 within a month, nearly 10 new cities opened, the speed is amazing.

03

The pre-position model is still not fully profitable, and on the way to continue to optimize the model, Daily fresh and Ding Dong Buy food are moving towards a different future.

As the pre-warehouse fresh platform accounts for only 0.67% of fresh retail, the scale is too small, and the upstream supply chain lacks bargaining power, and the gross profit is lower. Today, the gross profit margin of the box fresh fresh with a higher customer price is more than 20%, the community group purchase with a lower customer price buys more food, and the gross profit margin of more than 50%, while the Dingdong Buy food and daily fresh gross profit margin of the middle price is only about 19%, and the daily fresh gross profit margin of the first quarter of this year even fell to 12% (Daily fresh may not count the platform discount into the marketing and sales costs, Instead, it is directly deducted when calculating gross profit, resulting in high unit price but low gross profit, and Dingdong mainly buys vegetables, and the tax is lower).

However, the biggest reason is the high performance cost caused by the pre-position mode. Performance costs mainly include the wages of outsourced riders and workers, storage rental and transportation costs of goods from the central warehouse to the front warehouse. The performance cost of community group purchase may be as little as 1 yuan, and the pre-position mode will require dozens of dollars. However, the high performance cost is not due to the early investment but to the later operating results.

In 2020, the number of pre-warehouse of Ding Dong Buy vegetables is 950, and the daily excellent fresh food is only 631, resulting in the overall performance cost of Ding Dong Buy vegetables is much higher than the daily excellent fresh food. However, according to the prospectus, the performance cost of each order in 2020 is about 20.4 yuan, and the daily excellent fresh is 19.6 yuan, which is not much different from the level.

The annual order volume of daily fresh is only more than 80 million, while Ding Dong Buy food is nearly 200 million, which is more than twice that of daily fresh. The improvement of the performance cost is significant, and the performance cost of workers' wages, advance warehouse rent and transportation costs can be diluted rapidly with the increase of the performance cost. The orders of a single warehouse are basically fixed in the users within a few kilometers around, so the re-purchase rate of users is the core of reducing the performance cost.

However, the unit price of Ding Dong food buyers is only 65.7 yuan, and the daily fresh is 94.6 yuan, deducting incentives, taxes and other payments, the income of each of the two companies is about 57 yuan and 76.3 yuan, a difference of nearly 20 yuan. This is also an important reason for Ding Dong to buy food losses are much higher than the daily good fresh.

Therefore, if the pre-position mode wants to achieve profit, there are two indicators that need to be optimized, namely, the re-purchase rate and the customer unit price.

Daily fresh and Ding dong buy food differentiation occurred.

At first, the two positioning will be slightly different, Ding dong buy vegetables to start, daily fresh to start with fruit, customer unit price is higher. In the future development, they each have a choice.

Daily Good fresh focuses on increasing the price of customers. In 2019, Daily Fresh began to transform and reduce its scale. That year, Daily Fresh laid more than 1,500 advance warehouses in 22 cities, and now only 631 advance warehouses are distributed in 16 cities. At the same time, Daily fresh also joined the cloud supermarket (next day) plate, increasing household appliances, 3C digital, watch accessories and other higher price categories.

Ding Dong buy food is focused on improving the re-purchase rate. Ding Dong Maicai started with only 12 warehouses in Shanghai, and the number has grown to more than 1,000 in June this year, covering 33 cities. Liang Changlin stressed the importance of re-purchase rate every time he was interviewed, and did not value the customer unit price. In his view, the customer unit price of about 60 yuan meets the actual consumption demand of most families.

At this stage, the two almost completely overlap in the category, but the future differentiation will intensify, and may achieve misplaced competition. Regardless of the choice, the front-loading mode still needs to burn money.