Missfresh Limited primarily engages in providing fresh foods and groceries to end customers through its self-owned online ecommerce platform and distributed micro-warehouse networks (DMW) through its subsidiaries. As a supplement to the DMW offering, the company also provided the next day delivery services to individual and enterprise customers.
The company is a pioneer in on-demand DMW retail, offering hourly delivery of high-quality grocery from its technology-enabled DMWs to consumers’ doors...
Missfresh Limited primarily engages in providing fresh foods and groceries to end customers through its self-owned online ecommerce platform and distributed micro-warehouse networks (DMW) through its subsidiaries. As a supplement to the DMW offering, the company also provided the next day delivery services to individual and enterprise customers.
The company is a pioneer in on-demand DMW retail, offering hourly delivery of high-quality grocery from its technology-enabled DMWs to consumers’ doorsteps. Most goods on the company’s Missfresh mobile application and mini program were directly sourced and individually managed to ensure high quality and safety standards. The company operated 546 DMWs in 17 cities in China as of December 31, 2021. The company’s on-demand DMW retail business was powered by its AI-powered, end-to-end Retail AI Network, which focused on direct procurement and quality standardization, covering the entire value chain from origin, quality control centers and DMWs to consumers, ensuring the high quality of its products.
The company has also prioritized building Retail AI Network, its proprietary technology platform, with its technology and data-driven mindset to improve user experience, optimize operational efficiency and increase scale.
The company has pioneered the intelligent fresh market business model. The company’s intelligent fresh market business aims to optimize the fresh market shopping experience without detracting from fresh market’s unique appeal. The company converts fresh markets into smart fresh malls by reconfiguring the floor plan, improving the business mix and introducing new service offerings; providing merchants with SaaS-based service package, including electronic payment, online marketing, CRM tools and business planning; and through its SaaS-based service packages, it helps merchants at its intelligent fresh markets manage offline private traffic and realize additional monetization. The company generates revenue from rent collected from individual merchants, annual fee or commission based on gross merchandise volume (GMV) of its intelligent Merchant SaaS product, commission fees collected from online e-commerce business and other value added services.
The company has also started to platformize its pioneering business model and proprietary Retail AI Network through its retail cloud business initiative. The company provides business partners and other enterprises with:
Digitalized operations throughout the business cycle, including all integrated under one technology-driven system and optimized based on data accumulation, optimization, and AI-powered decision-making processes;
Omni-channel operation capabilities with online sales channels through mobile applications or mini programs that help broaden user reach and increase customer loyalty with the ability to virtually demonstrate products and services;
Smart merchandising by utilizing data analytics capabilities that allow retailers to automatically identify popular products and adjust price discounts on inventory close to the end of their shelf life and accelerate clearance;
Smart marketing based on consumer behavior and big data analytics that generate targeted marketing messages to improve the efficiency of consumer acquisition and increase consumer spending; and
Smart store operation with AI and smart IoT devices that analyze customer behaviors and in-store flows and provide intelligent recommendations on product assortments, store layouts, and inventory tracking to improve the accuracy of service recommendations. The interactive kiosks, AI-powered bots and automatic checkout counters will also reduce the stress of store manager, enhance customer service and efficiency.
In the future, the company plans to further adjust its business strategy to transition to an integrated online and offline platform to drive and upgrade the digitalization of China’s neighborhood retail industry, leveraging its extensive market know-how on the grocery supply chain and pioneering technological innovations, such as its proprietary Retail AI Network. To achieve this goal, the company plans to develop private label products to meet the emerging needs of customers, while it could also provide value-added services to and share resources with different players in the neighborhood retail industry, such as traditional retailers in China that are moving online, and other online and offline retailers and e-commerce companies focused on grocery product category. With this commitment, the company can continue helping traditional retailers to realize and upgrade the digitalization.
On-Demand DMW Retail Business
In 2021, the company’s on-demand DMW retail business generated revenue from sales of groceries on its Missfresh mobile application and mini program. Before the shutdown of the company’s on-demand DMW retail business, it once offered on-demand delivery of more than 5,000 SKUs of its individually managed products from its strategically located neighborhood DMWs to consumers in 36 minutes on average. The company relied on smart supply chain, smart logistics, and smart sales and marketing systems in its proprietary Retail AI Network. Finally, the company’s online and offline operations were fully integrated as it operated the end-to-end value chain of neighborhood grocery retail, allowing it to meet consumer needs for speedy delivery of quality products.
Historically, fresh produce sales had been a major component, but over the years the company expanded its offerings to include more SKUs with a more diversified portfolio of products. As of December 31, 2021, 43% of the company’s GMV was from fresh produce, such as fruits, vegetables, meat and seafood and dairy, while fast-moving consumer goods accounted for 57% of its GMV.
Intelligent Fresh Market Business
The company’s intelligent fresh market business aims to optimize the fresh market shopping experience without detracting from fresh market’s unique appeal. The company converts fresh markets into smart fresh malls by reconfiguring the floor plan, improving the business mix and introducing new service offerings; providing merchants with SaaS-based service package, including electronic payment, online marketing, CRM tools and business planning; and through its SaaS-based service packages, it helps merchants at its intelligent fresh markets manage offline private traffic and realize additional monetization. The company generates revenue from rent collected from individual merchants, annual fee or commission based on GMV of its intelligent Merchant SaaS product, commission fees collected from online e-commerce business and other value-added services. The company is also exploring options to provide SaaS to other fresh markets that are not managed by it, for which it can charge market operator a SaaS subscription fee. The company’s participation helps the fresh market merchants further embrace the trend of online and offline integration, digitalization and intelligentization and achieve lower cost and higher operating efficiency. As of December 31, 2021, the company had entered into contracts to operate 83 fresh markets in 21 cities in China and had started to operate 64 of them in 17 cities in China.
Standardization, Intelligent Business Planning and Optimization: The company standardizes the placement of merchant stalls, reconfigure the floor plan, improve the business mix and introduce new service offerings, for the purposes of boosting offline sales and offer value-add services, such as priority stalls. The company leverages the scale of its smart fresh malls to bring in more products and service providers, including bakery chains, hair salons and food delis so that its fresh markets become a destination for consumers with a variety of needs.
SaaS-Based Service Package for Merchants: The company helps merchants achieve digitalized operation through electronic payment processing, marketing tools, and business planning.
Omni-Channel Enablement: The company links fresh market merchants and consumers through omni-channel purchase options. Through SaaS-based service package it provides to its merchants, it helps merchants convert their offline private traffic into online traffic.
Retail Cloud Services Business Initiative
The company is committed to revolutionizing the neighborhood retail industry outside of its DMWs and intelligent fresh markets. The company’s technological capacity and infrastructure are naturally appealing to third parties who want to engage in online retail and digital operations. Leveraging the significant scale of the company’s business, cutting-edge Retail AI Network, and AI capabilities from years of operation, it started its retail cloud business initiative in 2021 to provide business partners and other enterprises, starting from supermarkets, with a cloud and AI-based SaaS. To offer value-added services and share resources with different players, the company’s retail cloud SaaS provides business tools to manage all aspects of their businesses, including omni-channel marketing, private traffic, merchandising, supply chain, fulfillment, DMW and operational optimization.
The company’s end-to-end solutions embedded in its Retail AI Network have established a high barrier to entry in an industry characterized by high transaction frequency, high inventory loss rate and needs for convenient delivery. With acute knowledge of the needs of the company’s retail cloud services clients, ranging from local supermarkets to neighborhood grocery stores, it is ready to disrupt conventional practices in the neighborhood retail industry at a large scale.
Technology and Data Security
The company’s proprietary Retail AI Network is an AI-enabled technology platform designed for the operational management of long-value chain retail business. The company’s Retail AI Network consists of smart supply chain, smart logistics, and smart marketing systems, bridging all value chain junctions, including inventory replenishment, procurement, turnover management, merchandising, logistics, and marketing. Using standardized management based on SaaS and AI-powered decision-making, it ensures effective decision-making and efficient execution. With its Retail AI Network, the company breaks down end-to-end operations into modules to ensure seamless management and transaction with its consumers.
Within each module of operation, the company implements a certain level of automation. After over five years of iteration, in 2021, the company’s proprietary Retail AI Network automated over 90% of the decisions in inventory replenishment, procurement and promotional pricing.
The company relies on major cloud service providers to maintain its technological infrastructure. The company is committed to protecting its users’ personal information and privacy. The company has established and implemented a strict platform-wide policy on data collection, processing and usage. The company collects personal information and other data that is related to the services it provides, such as cell phone numbers, device information and delivery status, and use the collected data for its operations, all with users’ consent.
The company maintains a comprehensive and rigorous data security program. The company takes technological measures to ensure the secure processing, transmission and usage of data. The company has also established stringent internal protocols under which it grants classified access to confidential personal data only to limited employees with strictly defined and layered access authority.
Intellectual Property
As of December 31, 2021, the company had 194 authorized patents, including 105 inventions, 45 utility models and 44 designs; besides it also had 188 additional patent applications in China, including 177 inventions, 5 utility models and 6 designs. As of December 31, 2021, the company also had 81 computer software copyrights in China relating to various aspects of its operations, 616 trademark registrations and 30 trademark applications in China and 24 trademark registrations and 6 trademark applications outside China. As of December 31, 2021, the company had registered 39 domain names, including www.missfresh.cn, among others.
Seasonality
In 2021, the company experienced seasonality in its business, reflecting a combination of traditional retail seasonality patterns and new patterns associated with neighborhood retail in particular. For example, the company experienced fluctuations in user traffic and purchase orders during weekends, national holidays, promotional seasons, such as November 11th. Overall, the historical seasonality of the company’s business has been relatively mild and may increase further in the future. With its limited operating history, the seasonal trends that the company has experienced in the past may not apply to, or be indicative of, its future operating results.
History
Missfresh Limited was founded in 2014.
