Ding Dong buy food why do you insist on "do heavy"?

Secondly, Ding Dong continues to optimize the commodity structure and enhance the commodity power. They classify goods into three grades, "average, better, excellent", and now there are more and more goods in the better and excellent grades, such goods have a better "product price ratio" and higher gross profit.

In addition, Ding Dong hopes to enhance commodity power by creating a new type of consumption scenario. One example is that in 2021, they launched a children's channel, featuring quality ingredients suitable for children, which is popular with treasure mothers.

Increasing investment in infrastructure construction is also a latitude for Ding Dong to enhance commodity power, and it is also the basis for realizing the above three attempts.

Why insist on "doing weight"?

In the words of Xu Xin, the queen of investment - Today's capital, "The last fortress of e-commerce is fresh, and those who get fresh get the world."

This sentence highly summarizes the difficulty of fresh electricity suppliers - from the field to the table, there are too many links, each link is not easy to do, fresh is the most difficult industry to be transformed by the Internet.

But Ding Dong buy vegetables investors include Gaorong capital, today's capital is sure, if someone can make fresh electricity business, Liang Changlin has a very large probability is one of them.

For how to make fresh electricity suppliers, Liang Changlin and Ding Dong investors reached a tacit understanding: this business only in the industrial chain to do deep, do heavy, in order to form a moat.

Since its establishment in 2017, a large amount of money has been invested in infrastructure construction, including the layout of pre-warehouse, sorting center, construction of food processing plants, quality control and research and development investment, which is to do deep and heavy in the industrial chain.

Ding Dong's "do heavy", one of which is the layout of the pre-bin. Up to now, Dingdong Shopping has a total of about 1,400 pre-storage warehouses, with an area of about 500,000 square meters.

Although the market has mixed reviews on the pre-position mode, Ding Dong's management still believes that the pre-position is one of the ideal models for fresh e-commerce. It can not only store goods, but also keep them as fresh and alive as possible, ensuring delivery speed, as fast as 29 minutes.

In addition to the advance bin, there is a sorting center. Up to now, Dingdong has leased about 60 urban sorting centers with an area of more than 400,000 square meters. They have always insisted on doing their own processing and sorting of fresh goods. The advantage of this is that on the one hand, it can improve efficiency through automation technology and big data; On the other hand, fresh goods can be fully inspected.

In addition, Ding Dong's "heavy" is also reflected in the upgrade of the supply side.

Ding Dong has always adhered to the origin of direct mining model, Liang Changlin personally grasp the supply chain. At present, Ding Dong has 3 agricultural demonstration parks, and a total of 118 order planting bases have been signed. As of the end of the third quarter of last year, the proportion of Ding Dong buying vegetables directly from the source was as high as 79.1%.

In addition to direct mining, Ding dong buy vegetables also built their own processing plants. At present, they have 10 food research and development processing plants, which is also the guarantee for Ding-dong to launch its own brand products.

As of December last year, Ding-dong's own research and development and processing of goods sales have accounted for 7.2%. In 2022, Ding Dong Maicai will also start construction of three larger fresh complex.

The investment in research and development and quality control manpower is also a big expense. The R & D team uses big data mining analysis, AI, IOT and other technologies to create a set of intelligent supply chain system that runs through the whole link to help forecast sales and reduce inventory and losses.

Ding Dong management revealed that they have also increased research and development investment in cutting-edge technologies, including participating in the development of cooking robots and some agricultural planting and picking robots.

Judging from the financial report, Ding Dong's research and development investment continues to maintain a substantial growth trend. In Q4 last year, its research and development expenses reached 285 million yuan, an increase of 117%.

The other side of the coin is that "doing heavy" has also become a "gold-swallowing beast", which has also made Ding Dong Buy food bear the pressure of the capital chain for a long time.

On the call, however, Dingdong executives emphasized that the company currently has 5.2 billion yuan in cash reserves and 900 million yuan in approved and pending bank lines of credit. "Cash reserves are sufficient to last until profitability."

Today, Ding Dong buy food, it seems to be taking a similar road with Jingdong and Amazon: endure losses, desperately do heavy.