Fresh food e-commerce will see two strong situations. Small platforms are struggling to survive in the cracks

　　On one hand, the vertical fresh food e-commerce is falling down one after another, and on the other hand, the giants are entering the market one after another.

　　On August 3, the fresh food industry caused another wave, and Yiguo Group, a full-category fresh food operation platform, received a US$300 million Series D financing from Tmall. With the help of Yiguo Fresh’s leading cold chain logistics capabilities, Tmall Supermarket will ultimately achieve “morning and evening food” of high-quality ingredients nationwide.

　　At that time, Yiguo was already the core supplier of Suning’s fresh food sector, protecting Suning’s fresh food quality and service for more than half a year.

　　After experiencing the ups and downs of the previous two years, a new round of melee has begun with the participation of giants. Is fresh food e-commerce destined to be just a game for giants?

　　Melee: Many giants enter

　　Hema Fresh, which has founded a new form of fresh food supermarket, has been rumored to be a project that Alibaba has incubated for more than two years. But it was not until a few days ago that Jack Ma and Alibaba Group CEO Zhang Yong appeared in Hema Fresh’s Shanghai store to support him, that this fact was made public. People suddenly realized that Alibaba had already made a big investment in fresh food.

　　The pace of several other e-commerce companies has not stopped. On August 3, Tmall invested US$300 million in Yiguo Fresh, which once again attracted public attention. In fact, Alibaba Group and Tmall have previously participated in the third round of financing of Yiguo Fresh. This financing will be mainly used for the construction and expansion of the cold chain logistics infrastructure of Anxianda, a subsidiary of Yiguo Fresh.

　　It is worth mentioning that Suning is also an investor of Yiguo, and Suning Fresh is exclusively operated by Yiguo.

　　Since August, Suning has launched the 818 Fever Shopping Festival and regards the fresh food war as an important battlefield.

　　It is reported that Suning will upgrade its "Su Xiansheng" channel strategy to Suning Fresh, switching the second-level entrance to the first-level entrance, which shows its importance to fresh food; not only that, Suning will also use 818 to launch many major promotional activities to try to occupy the commanding heights of fresh food category traffic and profitability.

　　As Alibaba and Suning in the same camp, their real opponent is JD.com.

　　JD.com has always been ahead of its pace in fresh food. In January 2016, JD.com's Fresh Division was officially established. In addition to making efforts in the fresh food cold chain, it has also taken the pace of globalization.

　　At present, JD Fresh has laid out 11 fresh food cold storage nationwide and has achieved self-operated delivery in nearly 300 cities. Not only that, JD has also signed a cooperation agreement with international logistics giant Yamado Holding Group Co., Ltd., which Yamado will provide JD with fresh food cold chain technology and service consultation that meets international standards.

　　In July this year, JD Fresh Canada Pavilion officially opened, and Canada became the country to open a fresh food restaurant on JD.com; in September, JD Fresh will usher in the opening of its second national fresh food restaurant - the French Pavilion, and Norwegian Pavilion, Denmark Pavilion, etc. will also be moved in one after another. In addition, JD Fresh’s unique overseas direct purchasing model will also extend to countries such as Spain, South Africa, and Chile.

　　Industry insiders believe that Alibaba, Suning and JD.com have raised the strategic position of fresh food business to an unprecedented level, which means that from now on, these e-commerce giants will shift from low-frequency categories such as home appliances and 3C to high-frequency fresh food products.

　　In fact, in addition to the three e-commerce giants of Alibaba, Suning and JD.com, Meituan, which focuses on life classification services and takeaway services, has also targeted the fresh food business. On July 19, its first store of "Zhangyu Fresh" led by its integrated online and offline retail format, officially opened in Beijing.

　　Dilemma: Supply chain quality control becomes a problem

　　Fresh food has always been considered the hardest bone in the e-commerce field. According to the "2016 China Online Retail Market Data Monitoring Report" released by the China E-Commerce Research Center recently, only 1% of the more than 4,000 fresh food e-commerce companies across the country have achieved profitability, 4% remained the same, 88% suffered losses, and the remaining 7% were huge losses.

　　Previously, many entrepreneurs broke into the fresh food field, trying to get a share of the pie, but after experiencing the lively period, they announced their withdrawal.

　　Data shows that from 2016 to 2017, a total of 14 fresh food e-commerce companies in China declared bankruptcy.

　　E-commerce observer Lu Zhenwang told the Legal Weekly reporter that fresh food e-commerce cannot avoid the problems of supply chain and quality control. These are problems that cannot be solved by one's strength in the short term. In addition, fresh food e-commerce has just entered the market and has relied on low-price strategies to attract new users. Once the financing breaks, the platform will be unsustainable.

　　Pattern: Two super strong situations will form

　　Since the fresh food business is so difficult to do, why is the interest of giants increasing instead of reducing?

　　Lu Zhenwang believes that the dividends of Internet users are fading, and fresh food , as a category with high customer stickiness and high consumption frequency, will become a weapon for e-commerce giants to seize existing users.

　　The reporter noticed that in addition to developing its own fresh food business, giants are also looking for potential fresh food platforms and participating in the layout through investment and equity investment.

　　For example, Alibaba, Tencent, JD.com and Baidu have invested in Yiguo Fresh, MissFresh, Tiantian Orchard, and Womai.com respectively. With the support of the former, they will obtain more capital and traffic support.

　　"The giants have huge amount of funds and traffic to enter the market. They have enough strength to burn money and will surely win this war in the end; fresh food platforms that have received support from the giants can survive, and those small and medium-sized fresh food e-commerce companies that have neither characteristics nor have found support from the giants will not escape the fate of being out of the game." Lu Zhenwang said.

　　Cao Lei, director of the China E-Commerce Research Center, believes that the fresh food e-commerce industry has now entered the stage of reshuffle and elimination. After a round of reshuffle last year, surviving companies may usher in explosive growth in fresh food e-commerce.

　　"Influenced by factors such as the overall policy environment, rising user penetration rate, model determination, improved standardization, and the development of warehousing and cold chain logistics technology, 2017 will be the starting point for the entire industrial chain of fresh food e-commerce to begin to mature, and 2018 will become a golden age for fresh food e-commerce to turn losses into profits." Cao Lei said.

　　Cao Lei also pointed out that the current fresh food market structure is gradually becoming clearer, forming a situation of two super and many strong ones. The two supers refer to the two giants Alibaba and JD.com, while the strong ones represent the platforms such as COFCO Womai.com, Benlai Life, and Daily Youxian. In addition, there are many small fresh food platforms that are struggling to survive in the cracks.

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