Four questions that fresh e-commerce entrepreneurs must answer

I received an invitation from my friend Mars tonight. Brother Dong gave JD.com O2O MT and All manager a training and sharing of fresh and fresh O2O. It is also a coincidence, because last year, when I was in the head office of Tencent e-commerce, I made two e-commerce reports on the expansion of fresh products. I was very familiar with du Fei of Tuotuo Industrial Co., Ltd., and I basically visited and scanned six or seven major domestic e-commerce companies that made fresh food. I went to the origin, went to the warehouse, went to the terminal, and read some financial data. Since the beginning of the year, many people have been talking about fresh e-commerce, and none of the ten thousand have made money. Many people may not understand what freshness is all about, even what they are doing. Of course, Brother Dong is not an authority, and these two reports were made a year ago. Many situations have changed, and they are only from their own point of view to understand their views on fresh e-commerce!

Question 1: how big is the market? What stage are you at?

Any category of e-commerce depends on how high the space and ceiling of the category itself are. But there are three levels of questions about how big the market is. One is how big is the fresh market? One is how big is the fresh e-commerce market? And how big is the market of traditional fresh e-commerce and O2O fresh e-commerce in different modes? The market is big enough, so what is the difficulty of being a fresh e-commerce business?

So fresh, in a broad sense, can be understood as agricultural and sideline products e-commerce, about more than 4 billion yuan, plates than clothing, household appliances 3C communications these categories put together a larger scale, after all, food is the most important thing for the people. But many of them are produced and sold by themselves, and the ones really sold in the circulation market are about 2.5 trillion. And we sell in the e-commerce channel, a lot of industrial agricultural products, soybeans, grain and oil are not there. So those who can go through online channels should have 1.5 trillion of them, such as fresh food, vegetables, fruits and some aquatic meat products. Generally speaking, the scale is still relatively large. But at present, e-commerce, mainly tea, some fruits, and other relatively resistant to transport and storage, do not have such high requirements for the cold chain. According to the data of Ali Research Institute, the annual fresh e-commerce transaction volume is estimated to be 13 billion in 2013 and double to 26 billion in 2014, so compared with the overall e-commerce, while the clothing category has reached a scale of 400 to 500 billion, the proportion of fresh e-commerce is very low. It should be said that it is a very minority demand, and it is still in the stage of educating users to cultivate online purchase habits, although it is very hot. If you do not just sell a product, do fresh e-commerce to the layout stage, if you burn a lot of money at this time, you may become a martyr, if you still remember the article I wrote before.

Question 2: what is the difficulty of doing a good job of fresh e-commerce?

Fresh e-commerce is difficult to make money, many people's intuitive response is cold chain logistics, logistics costs are high; marketing is difficult, minority demand to find users is high cost, inventory management is difficult, inventory loss is high.

Brother Dong visited or telephoned Wechat to exchange a judgment of the six or seven largest fresh e-commerce companies in China. The difficulty of fresh e-commerce lies in the supply chain.

The supply chain determines the gross profit margin. For example, if imported meat products are of overseas origin, the price is very low, and the gross profit margin can reach more than 50%. If you only get the goods through traditional third-party channels, it would be nice to have a gross profit margin of 30%. Do B2C fresh e-commerce many do not make money, but Taobao there are many producing areas to sell specialty fruit sellers still make money.

The supply chain determines inventory depletion, good goods will be more resistant to storage and transportation, the shelf life will be longer, and the secondary screening of defective products will be less. The appearance is better, and it will also reduce the loss caused by the return and exchange of goods. Some fresh e-commerce companies wear out more than a dozen points, while good ones can be controlled to within three or five points. Many fresh e-commerce companies are not cheap, but in the end, when they calculate gross profit margins, they find that they are not high, because gross profit margins are eaten up by wear and tear.

Supply chain determines user experience, word-of-mouth and turnaround rate, the core of users is to buy goods, fast is only one aspect. JD.com has made Aksu apples before, I have also bought them, and they look very bad. Bought once will not want to buy a second time, and the direct feeling of JingDong Fresh is very bad. If the goods are poor or unstable, it is not recommended to promote them on the platform.

As for the problem of cold chain logistics, not only does not cover the national third-party logistics, the cost of each order is still very high. Therefore, today's fresh e-commerce companies basically adopt a self-built approach. Fresh e-commerce has made a local business. The reason leading to the previous problem is the lack of demand, fresh e-commerce is still a relative minority demand rather than public demand. This is an inverted process, as long as there are enough orders, third-party logistics will do it. For example, Shunfeng cold chain, Shunfeng did not really make fresh to make fresh before.

Question 3: what is the value of fresh e-commerce?

To answer this question, you have to understand what is the core pain point of traditional freshness.

Before leaving JD.com, I chatted with Hong Jing of Hillhouse Capital and was asked what categories I liked. I said, I am very optimistic about agriculture. Because agriculture has the most pain points, and it can be solved by means of mobile Internet. Where is the pain point of traditional freshness?

One is the imbalance between supply and demand, that is, the imbalance between production and wholesale demand. Last month, I had dinner with Deng Jinhong, the boss of an acre of farmland. This guy came out from Baidu, took hundreds of people to the countryside, went to the farmers' market, and dealt with a group of people who were "the most uneducated" and had no Internet genes. Put these people together on the platform of one mu of land, initially as an information platform, and now the transaction has been done. One mu of land will become a very powerful agricultural e-commerce company in the future. For more details, it is inconvenient for Brother Dong to disclose here.

One is the imbalance between traditional sales and consumer demand, and the loss is too high. For Shang Chao, festivals, weather and other factors will affect the demand of users, and the supply quality of the wholesale market is also unstable. The operating area of Shang Chao is limited, and you can't purchase all kinds of goods. if you can't sell it, it will become a waste product the next day. While users buy, picking and picking will bring huge wear and tear. On the other hand, Brother Dong basically cooks by himself every day. As a fresh user, when he goes to the supermarket to buy, it is usually small and medium-sized supermarkets that offer a limited choice of goods; the second is to go early and go late, and sometimes there are not necessarily goods to sell; third, the service is inconvenient and must be bought by himself without providing door-to-door delivery service.

Question 4: what should fresh e-commerce do?

High-end, you can take the traditional e-commerce model, similar to Tuotuo Industry Society, Tiantian Orchard can.

Middle and low-end localization of O2O, of course, is a bigger business, not very optimistic about the traditional model, mainly because the logistics cost is too high. Dong GE should rely on the existing offline business super system to do localized O2O. If there is more, it is not convenient to say more. Brother Dong thinks that through the third point, there will be some inspiration! Next week, I will go to Shanghai to meet the founder of Yixun. He is doing a fresh e-commerce for O2O and is said to be doing a very good job. In the future, we will have time to deeply introduce and interpret the specific different ways of playing fresh e-commerce!