Wen | Kan Jian Finance
After half a year’s silence, community group buying enterprises began to impact the capital market.
According to media reports, on the night of June 9, Ding Dong, one of the domestic community group buying giants, submitted the application documents for IPO listing to the US Securities and Exchange Commission, with a maximum fundraising amount of 100 million US dollars, which means that the "first share of community group buying" is about to be born.
As a community group buying enterprise established only four years ago, the listing of Ding Dong’s grocery shopping undoubtedly started the first shot of the impact of community group buying on the capital market, but judging from the data in the prospectus, the huge losses behind it made people worry about its future.
In four years, from the "dark horse" counterattack to listing.
Speaking of Ding Dong buying vegetables, you have to mention one person-Liang Changlin, the founder of the company.
Unlike most Internet entrepreneurs, Liang Changlin was a soldier before starting a business. After being admitted to the National University of Defense Technology at the age of 18, Liang Changlin has been serving as a soldier in the army. It was not until he was discharged from the army in 2002 that Liang Changlin began his entrepreneurial career.
From this point of view, Liang Changlin is somewhat similar to Ren Zhengfei, the founder of Huawei, who also started his business after retiring from the army.
Ding Dong’s grocery shopping was established when Liang Changlin started his business for the third time. Before that, Liang Changlin worked as a software and a community app. In 2005, the "mother-baby community-Yaya. com" was founded by Liang Changlin, and the first two ventures not only saved the first bucket of money for him, but also accumulated rich experience.
After reselling Yaya.com to Good Future Group in 2016, in April 2017, the community group buying business was officially launched.
At this time, the competition in the community group buying industry has been extremely fierce. Box Horse Fresh, which is backed by Alibaba, has been established for a long time and has a lot of capital support, and fresh supermarkets like Yonghui Supermarket are fighting. It is not easy for Ding Dong to buy food without much background to occupy a seat.
However, Liang Changlin saw the shortcoming of community group buying at that time-the delivery time was too long.
At that time, most of the community group purchases were "the next day". If you want to buy food, you must place an order the day before. No matter the freshness of the dishes or the convenience of buying food, it is not high. In view of this shortcoming, Liang Changlin adopted a brand-new mode-pre-warehouse mode, that is, directly mining through the place of origin, establishing pre-warehouses in various places to radiate the surrounding 3 km area, and users can deliver goods to their homes soon after placing orders with their mobile phones. This mode is also called "tap water mode".
It is with this model that Ding Dong soon opened the market and became a dark horse in the community group buying industry.
At the beginning of 2017, there were only 12 pre-warehouses for buying food, and the service targets were limited to Shanghai residents; However, in 2021, four years later, there were nearly 1,000 pre-warehouses for Ding Dong’s grocery shopping, and the number of users nationwide exceeded 30 million. In the end, Ding Dong, who fought back all the way, submitted an application in the near future and is expected to become the "first group purchase in the community" in China.
Double revenue, huge losses, Ding Dong buy food AB side.
Being able to stand out from numerous community group purchases, the pre-warehouse mode of Ding Dong grocery shopping can be said to be indispensable.
According to the information in the prospectus, since its establishment, the revenue of Ding Dong’s grocery shopping has been expanding continuously. In 2020, its revenue reached 11.336 billion yuan, an increase of 192% compared with that in 2019. In the first quarter of 2021, the revenue of Ding Dong’s grocery shopping reached 3.802 billion yuan, the GMV (transaction amount) reached 4.304 billion yuan, the total order was 69.7 million, and the average number of trading users reached 6.9 million.
Judging from the revenue data, the mode of buying food in front of the warehouse has undoubtedly been recognized by consumers.
However, although this model allows it to quickly open the market and occupy a place in the highly competitive community group buying industry, the disadvantages behind it also make Ding Dong heavily in debt.
As the "magic weapon" for Ding-Dong to win the grocery shopping, although the pre-warehouse model has brought consumers a good consumption experience, its disadvantages such as high investment and uncertain income every day are also very obvious.
Unlike "Next Day Delivery", because it is not clear how many orders will be generated every day, more dishes need to be prepared in the front warehouse where Ding Dong buys vegetables, which will undoubtedly cause a lot of losses; In addition, due to the need for timely delivery, Ding Dong needs to configure a large number of pre-warehouses, which in turn makes the loss continue to increase.
It is precisely because of these drawbacks that Box Horse stopped the pre-warehouse mode in March last year. "There are problems in traffic, gross profit competitiveness and daily loss." Hou Yi, CEO of Box Horse, even pointed out that "the front position is a false proposition".
According to the data in the prospectus, in the first quarter of 2021, the net loss of Ding Dong’s grocery shopping was about 1.385 billion yuan; Prior to this, in 2020 and 2019, Ding Dong lost 3.177 billion yuan and 1.873 billion yuan respectively. In other words, in less than three years, Ding Dong lost 6.434 billion in buying vegetables.
Competition is intensifying, and listing is only the beginning of the journey.
Last year’s epidemic made community group buying a hot potato in the capital market, and the giants rushed into the community group buying industry. However, with the tightening of supervision, after entering 2021, community group buying began to slowly cool down.
However, with Ding Dong buying vegetables and submitting the listing application, the 2.0 war of community group buying may start at any time.
From the current point of view, although the revenue has exceeded 100 times, Ding Dong does not have much advantage in the community group buying industry. Because there is no Internet giant as a backer, Ding Dong does not have its own traffic, and it still needs to rely on external advertisements and high internal subsidies to attract users.
In addition, although it is expected to become the "first share of community group buying", Ding Dong’s grocery shopping has not opened much gap with other community group buying enterprises.
According to media reports, group buying enterprises in the head community have developed rapidly in the past two years. For example, at the beginning of this year, the Ten Clubs of fresh old players in the community covered 220 cities, and the daily order volume exceeded 15 million. The daily orders for buying more vegetables and choosing orange hearts all exceeded 10 million pieces, and the peak daily orders for the US Mission reached 27 million pieces.
From this point of view, Ding Dong’s listing in the United States is just the beginning of the journey. In order to survive and become a leader in the highly competitive community group buying industry, Ding Dong still has a long way to go.
