Fresh online, the price is high and the sale is not profitable

Under the tide of online shopping, although the unit price of online fresh is 30% more expensive than offline, Chinese consumers' online purchase of fresh food has increased by nearly 23 times in the past four years. At the same time, the boss frequently entered the game, and the small platforms died one after another. Online and offline fresh retail is engaged in a battle of differentiation.

The online customer base is 30% expensive and the new customer base is not short of money.

Online fresh retail has just started in recent years, but it is growing rapidly. According to the "fresh consumption trend report in China: the way to win the fresh Market in the New era" (hereinafter referred to as "the report") jointly released by the Boston Consulting Company (hereinafter referred to as "BCG") and Ali Research Institute, the fresh e-commerce market soared from 4 billion yuan to 95 billion yuan in 2012-2016, growing nearly 23 times in four years. It is estimated that the market size will reach 347 billion yuan in 2020, and nearly 30% of urban households will buy fresh products through online channels.

Chinese consumers are less satisfied with offline fresh food, which is satisfied by fresh e-commerce. According to the report, consumers' satisfaction with online fresh channels is 24%, but it is 7% higher than offline. It is worth mentioning that consumers pay about 30% more per unit price of fresh food online than offline. At the same time, more than 60% of consumers want to buy fresh products of better quality, and price is not the main motivation for online shopping.

There are three major consumer forces driving fresh online growth. 32% of the upper middle class and the wealthy buy fresh food online, while only 16% of the emerging middle class; the average age of consumers who regularly patronize fresh e-commerce is 31; and experienced consumers who have been shopping online for five years will start buying fresh food on a large scale, spending 3.4 times as much as those who are less experienced. Lu Zhenwang, CEO of Shanghai Wanshi Business Consulting Co., Ltd., said that online fresh must take the middle-to-high-end route in order to open the characteristic gap with offline retail.

It is too early for the giants to stir up the game and talk about profits.

Online freshness is facing huge bottlenecks such as scattered sources, low commodity standardization, high wear and tear, imperfect logistics and so on.

Lu Zhenwang told Beijing Business Daily that the supply chain cost of fresh e-commerce is high, and the cost of warehouse, transportation and refrigerated delivery is more than 40%. Fresh products are easy to deteriorate, and the damage rate is more than 10%. At present, domestic independent fresh e-commerce platforms are losing money, and the only way to make a profit is to raise the unit price. At present, more than 4000 fresh e-commerce companies across the country make a profit of 1%, remain flat, lose 88%, and make a huge loss of 7%.

Therefore, in the existing pattern of fresh e-commerce, it is almost the rich background of e-commerce bosses in control of the situation, failed to find a small platform to rely on the mountain have fallen down one after another. Yitai.com, a fresh e-commerce platform in Shanghai, fell into bankruptcy last week, and all the goods were removed from the shelves. Earlier, delicious Qiqi announced its closure; Love Xianfeng laid off a large number of staff. Analysts said frankly that the fresh e-commerce market competition is very fierce, Alibaba, JD.com and other e-commerce giants to join, for small and medium-sized fresh e-commerce is undoubtedly "even worse." Lu Zhenwang said that from the fresh pattern on the front line, Tmall supermarket is the largest, investing in easy fruit network to open up logistics services and integrating and utilizing resources. The giant is not in a hurry to make a profit. at present, most of the sellers who make a profit in fresh e-commerce are sellers in the place of origin, or they only do the platform and do not set foot in the whole industry chain. "it is very difficult to get involved in the supply chain profit."

What to fight under the battle line of the channel?

Although online growth is fast, offline retail is still the main channel for freshness. The report shows that by 2020, China's fresh consumer market will account for about 75% of the offline market share of 85%. At the same time, fresh products need high-frequency purchases to ensure freshness. 36% of respondents buy fresh vegetables more than three times a week, with an average of 4.1 channels.

Domestic retail industry is adding fresh supermarkets one after another. Not long ago, the supermarket expanded the scale of the fresh supermarket, with a sales area of about 200MUR 500 square meters, with more than 80% of the products being fruits, vegetables and meat. Wang Zengqing, general manager of the supermarket, has said that Beijing is actively relieving non-capital functions, and some fresh markets have moved out or disappeared, but there is still demand for residents.

In the face of online fresh food, BCG partner Lu Huang said that the offline sales of baked and cooked food products still have obvious advantages, and offline retailers should highlight the differences of fresh food to compete for passenger flow. At the same time, online fresh has not yet fully opened the market in small cities, offline retailers have every opportunity to accelerate the promotion of low-line urban layout, cultivate consumer demand, and seize the market.