How to grow quickly and profitably regionally

The usual gross profit margin of fresh food is 30-50%, and the daily excellent fresh through exquisite operation management and cost control management can reduce the average performance cost to only ten yuan, so that the customer unit price can be easily profitable at about 100 yuan. Daily Youxian's recent financial figures also show positive cash flow and regional profitability in the Beijing area.

Challenges ahead

Daily fresh along the way seems to be very smooth, easy to get angel investment at the beginning of the business, and then in less than two years to enter the first echelon of fresh electricity suppliers, and now in the operating data to achieve positive cash flow. However, for the fresh e-commerce market, which is still in the growth period and has many variables, there is the rapid rise of today and the unknown challenges of tomorrow.

In response to the possible challenges ahead, the author interviewed Mr. Zhang Chengdong, Vice President of marketing of Daily Youxian, and the following are the three main questions raised by the author and Mr. Zhang Chengdong's answers.

Q1: Select SKU, small size packaging, Tmall fresh supermarket is also similar. The difference is that there are few 2 hours of daily excellence, and Tmall has more advantages in volume, how to deal with the competition?

Zhang Chengdong: For now, 2-hour delivery is a competitive difference, but also a competitive barrier. Pre-position mode requires a certain amount of operational accumulation, but also has technical barriers. Building our own front positions is a key strategy that we have been resolutely executing, a strategic determination and execution capability that may not be available on some other platforms.

These are on the one hand, at the same time, we are also doing branding efforts, have their own brands and strive for the exclusive agency of some brands, so as to ensure the advantages of channels. At present, we have created several independent brands, such as Razvette, which imports pork in cooperation with farms in France and Spain and processes it in China. In the depth of brand cooperation, and the domestic time-honored month Sheng Zhai signed a strategic agreement to expand the market.

In addition, in our B+ round of financing, there are 10 million level credit provided by Huachuang to create fresh supply chain financial services, to provide T+1 payment to high-quality suppliers, and closer cooperation with suppliers can deepen the relationship and reduce procurement costs.

Q2: Daily Fresh is currently targeted at middle and high income people, who have the purchasing habit of prioritizing efficiency over decision-making. How does the penetration of this market segment continue to increase? Will there be a stage bottleneck?

Zhang Chengdong: At present, the market penetration space is still very large, and many peers are needed to build the market. On the other hand, it can reduce costs through better operation, improve quality, and increase the competitiveness of the traditional model, which will further improve the penetration rate.

In the current wave of consumption upgrading, the upgrading of fresh consumption and even the entire grocery consumption is very interesting. As long as we can continue to create value in product quality, origin brand, selling price and distribution efficiency, this penetration rate will continue to increase.

Q3: Are there any plans to expand SKU? What if after the expansion of SKUs, the high efficiency + low cost operating model formed by the previous selection of SKUs fails to a large extent?

Chang: There are plans to expand SKU, but not too much. When we expand SKU, we will consider from two aspects: on the one hand, we will continue to present consumers with the feeling of selected supermarkets, just like the famous foreign supermarket chains Costco and Aldi; On the other hand, the impact on the operating model should also be considered. So even if we expand SKUs, it won't be too much and it won't affect our core competencies.

In the future, daily fresh may encounter more challenges, we wish these fresh e-commerce entrepreneurs can continue to explore innovative business models, and use more advanced management models to make the industry more efficient, lower costs, and enhance added value, which is not only beneficial to e-commerce practitioners, but also to the source of producers and terminal consumers. This is also the real value of fresh electricity suppliers.