The Covid-19 lockdown around the world introduced online grocery to many shoppers for the first time, boosting an industry that had long been mostly ignored.
In China particularly, the older generations often worry about buying perishable food items without scrutinizing them in person.
Still, venture investors are bullish on the future of online grocery. One beneficiary is China’s MissFresh, which announced it had launched its Distributed Mini Warehouse-supported fast home delivery operations in Ningbo.
Its Distributed Mini Warehouse-supported (DMW) fast home delivery operations in Ningbo offer a stunning range of more than 4,300 products to be delivered in 39 minutes on average.
By placing mini-warehouses closer to customers, the six-year-old startup is able to offer fast and efficient delivery to households.
Few players are able to compete in e-grocery, for the business requires early investment in large-scale cold chains and expensive user acquisition to make home deliveries profitable.
Unsurprisingly, almost all forerunners in China’s online grocery are backed by or collaborate with an internet giant.
With this latest expansion, MissFresh strengthens its DMW network — which integrates warehousing, sorting and distribution to streamline the retail distribution chain — in East China and now operates in 17 first- and second-tier cities.
According to China Insights Consultancy, a market research firm, the size of China’s fresh groceries and daily necessities retail industry has grown at a compound annual rate of 7.2% from 2016 to 2020; the industry is estimated to grow 6.5% annually to US$2.4 trillion by 2025.
MissFresh’s launch in Ningbo is in line with its strategy to continuously expand its DMW network in first- and second-tier cities. The launch will also bolster MissFresh’s East China regional supply chain and operations.
To start, MissFresh plans to open 10 DMWs in Ningbo – covering Yinzhou, Haishu and other core urban areas of the city – and provide customers with fruits, vegetables, meat, eggs, live seafood (more than 70 live seafood offerings – comprising fish, prawns, crustaceans and shellfish), rice, noodles, grains, oil, convenience foods, and other high-quality products.
These will be delivered swiftly to customers’ homes within the DMWs’ one- to three-kilometer radius.
Currently, more than 80% of the company’s products are directly sourced from the place of origin, and 100% of its fresh products are subject to strict quality inspection — this helps MissFresh to ensure that its products are the best value for its customers.
Some question how many new adopters will stick to on-demand grocery shopping in post-lockdown life.
Research suggests they may.
China saw 11.6 million more daily active users of e-grocery in May compared to the same period a year before, according to research firm QuestMobile.
Consumers may be hooked to the convenience, but those who see their corner stores shutter due to lost business during the lockdown don’t have a choice but to go digital.
CEO and co-founder Xu Zheng currently own 15.3% of MissFresh. He also holds 74.1% of the voting rights.
Sources: MissFresh, PR Newswire, TechCrunch.com, QuestMobile, Protocol.com