Author | Sage
Edit | grab the cake
When almost all kinds of electric goods have turned into the Red Sea, fresh e-commerce has become a hot and cruel battlefield.
Why do you say that?
When God fights, children suffer. Giants have joined in, weakening the competitiveness of small and medium-sized brands. In addition, this is a very money-burning industry, which has caused many fresh e-commerce capital chains to break, and the war situation is terrible.
But strangely, Ding Dong, who bought food without any giant's blessing, miraculously "survived" and continued to expand.
In 20 19, the annual GMV of Ding Dong's grocery shopping exceeded 5 billion yuan, the monthly revenue exceeded 700 million yuan, the average order volume at the end of the year exceeded 500,000, and nearly 550 pre-warehouses were opened in six cities across the country.
So, what makes Ali's box horse fresh and Tencent's daily fresh cooperation become the three giants in the fresh field?
In this article, we will use growth thinking to uncover the secret of the rapid growth of Ding Dong's grocery shopping business!
As the Internet giants continue to March into fresh e-commerce, the competition in the fresh e-commerce industry is becoming increasingly fierce, and it can be said that it has gradually entered the industry melee period.
Generally speaking, before a product/business grows on a large scale, we should pay attention to:
What kind of products are we going to make? (In what scenario, what needs of which target users are solved)
What is our business model? How to acquire customers, activate customers, retain customers and realize customer realization?
Have we created the products that people need? (Did you find PMF for the product? )
When we ensure that the products we manufacture are what users need, we need to pay attention to:
How to find the leverage point to incite the rapid growth of business?
Of course, in the whole product/business development process, we can gradually explore the promotion mode of our business growth, which is AARRR or RARRA. (Note: AARRR refers to customer acquisition, activation, retention, revenue and self-dissemination; RARRR refers to retention, activation, self-propagation, income, and customer acquisition)
At this stage, Ding Dong's product direction is not to buy food, but to focus on community O2O services and constantly explore ways to adapt to community ecology.
However, the products of this period ignored the attributes of the community itself, and the products focused on attracting new customers, which could not guarantee the user experience.
1, community personnel gather, the demand is complex, and the product is "greedy for perfection" and cannot focus on meeting the specific needs of users.
2. The product activation cost is high, which can't guarantee users to reach the Aha time quickly and ensure users' activation, not to mention the subsequent retention.
Finally, Ding Dong founder Liang Changlin summed up the failure of this three-year community product as two core points:
1. All home-to-home services must reach the critical power generation density to be commercialized, and it is difficult to make profits for home-to-home services that cannot reach the critical power generation density and have low frequency;
2. Any commercial domestic service assisted by the power of "idle people" in the community is unreliable. Although the cost of "people" is extremely low, it is also the most difficult to control and standardize. This will make the user experience of household clothes very poor and lose the core competitiveness. "
The author believes that these two lessons have played a great role in the success of the follow-up "Shopping in Ding Dong" products.
At this stage, Ding Dong determined the new positioning of the product and completed the complete exploration of obtaining, activating, retaining and realizing from customers.
On this basis, Ding Dong completed six rounds of financing within one year, and quickly occupied most community markets in Shanghai, which verified the core value of the products.
First, the product positioning is clear.
A good positioning of products is to make products have a clear customer acquisition goal, vision and market foothold.
Excellent products can closely combine the characteristics of products with the needs of users and help users deepen their understanding of products. Ding dong shopping is like this.
As early as before 16, the main products of China fresh market segment were mostly fruits, such as Tiantian Fresh and Tiantian Orchard. Therefore, in consumers' cognition, people use fresh app to buy fruits more than vegetables, meat, eggs, poultry and aquatic products.
After learning the experience of community failure in Ding Dong, founder Liang Changlin took the high-frequency and just-needed "food shopping" of community users as the starting point and the "kitchen" of users as the core scene, and quickly occupied users' minds.
Second, low-cost quick customer acquisition+activation
In terms of obtaining customers, shopping in Ding Dong mainly relies on advertising and marketing activities during the exploration period:
1. With its own advantages, it placed advertisements on the previously founded "Mama Gang" and accurately acquired a large number of young mom users.
2. Customers get users by sharing red envelopes in groups, and then get user feedback at any time through the operation of WeChat community to ensure the service experience of loyal users.
Ding Dong's grocery shopping has just been launched for four months, but the daily order volume has reached more than 4,000, with about 500- 1 1,000 customers every day. The per capita customer acquisition cost is about 8 yuan, and the gross profit per order is more than RMB 10.
In guiding activation, Ding Dong distributed 0 yuan and four coupons to stimulate users to place orders quickly and experience the Aha moment of products.
Third, the pre-warehouse mode+big data accurate prediction
In terms of business model, Ding Dong provides fresh food service to consumers through the model of "mobile order+pre-warehouse delivery+home delivery within 29 minutes", and ensures the quality and delivery speed of fresh food with the mature "excellent fresh food every day" pre-warehouse model.
Pre-warehouse, as its name implies, is a series of small storage centers around the community. Each front warehouse is a small and medium-sized warehouse distribution center.
In purchasing, every day, a special purchasing team will purchase fresh dishes from urban wholesale markets and brand suppliers, and choose this purchasing method at the beginning. Compared with the direct purchase from the source, the purchase price is more stable, the replenishment is easy, and the purchase efficiency can be guaranteed.
After purchasing, it will be transported to the central warehouse for unified treatment, and the cold chain will be transported to the front warehouses of each community. Ding Dong adopts this kind of distributed storage to ensure efficient transportation.
In terms of distribution, Ding Dong has independently developed the order system, warehousing system and distribution system. Based on the artificial intelligence forecasting system, on the one hand, they can reduce the loss of unsalable goods to only 1%, on the other hand, they can make intelligent recommendations according to user preferences and warehousing data.
After the consumer places an order, Ding Dong plans the optimal distribution path according to the intelligent scheduling of the self-built logistics system, and then it is delivered by the self-owned distribution team in Ding Dong within 30 minutes, which ensures the distribution efficiency. Once the product has quality problems, it can be directly exchanged at home, greatly improving the user experience.
In the future, with the increasing amount of data, the accuracy of the prediction model of big data will become higher and higher, thus continuously reducing the cost of the supply chain.
At this stage, Ding Dong gradually expanded its market scope, reaching Shenzhen in the south and Beijing in the north.
2065438+August 2009, Ding Dong bought vegetables and entered Shenzhen, starting the first cross-regional supply chain attempt.
Based on the product exploration experience in Shanghai, it took the team members 46 days to complete the preliminary user survey, the construction of the supply chain background, the opening of the general warehouse and the pre-warehouse, and the deployment of front-line personnel.
In the early stage, more than 60 pre-positions were opened in Shenzhen, with an average daily order of 70,000 orders.
Technically, version 3.0 of Qiancang was developed in Shenzhen. Compared with the 2.0 version of the front bin, the area of the 3.0 front bin is about 250, which opens up a special closed freezer area, reduces the number of switches of the freezer, and has better refrigeration effect.
In April 2020, Ding Dong began to buy vegetables in Beijing, and actively acquired new users through subsidies and preferential treatment.
Looking back on the development of grocery shopping in Ding Dong, how did it find the leverage point to incite the rapid growth of business step by step?
Liang Changlin, founder and CEO of Ding Dong, mentioned a formula for calculating revenue: v = (A+B+C+……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
According to this revenue formula, we can see that the key leverage point is to find the growth factor of business index growth.
Ding Dong's position here is to continuously improve the "repurchase rate", and the repurchase rate will continue to increase-the expansion of revenue scale-the promotion of brand influence-more new users register-more users repurchase, thus finding the growth flywheel of the enterprise.
How to improve the repurchase rate?
There are three affirmations in Ding Dong's internal opinions, which are the principles to ensure the user's service experience-category determination, quality determination and time determination.
Ding Dong focuses on providing 2000+SKU fresh dishes, covering vegetables, aquatic products, meat, eggs and poultry, fruits, drinks and snacks, kitchen supplies, etc. 16 categories, covering all the items needed in the kitchen, and meeting the needs of users to complete one-stop shopping.
Ding Dong strictly follows the "7+ 1 quality control process", "source quality control, processing warehouse quality control, processing process quality control, inspection quality control, sorting quality control, customer quality control and after-sales quality control" to ensure quality.
So as to ensure a good reputation and make the repurchase rate of Ding Dong reach 40%-50% after 27 months of shopping.
Time determination: constantly upgrade the technology of pre-warehouse and optimize the big data algorithm.
By the end of 20 19, Ding Dong had opened nearly 550 front warehouses in six cities across the country. The front warehouse is equipped with different storage areas such as cold storage, freezing and normal temperature, as well as aquatic areas for breeding live fish and shrimp.
Pick-up personnel are in the warehouse, holding a PDA to scan the code and input commodity information. Customers can check the sorting status of goods in time through mobile phones, and the inventory is updated in real time, which greatly improves the operational efficiency of products.
In terms of profit, as of July 2020, Ding Dong has set up a front warehouse for about one year, with a daily order volume of about 1 1,000 orders. When the single warehouse income is about 20 million yuan, the income will be higher than the cost.
And with the increase of time, the income is super-linear and the cost is sub-linear, which shows that it is a correct mode for Ding Dong to choose the pre-warehouse.
In the initial stage, with the rapid growth of products/services, it is necessary to find a clear product positioning (which target users meet what needs in what scenarios), choose a relatively mature business model that has been verified, continuously optimize the user experience path, and complete the exploration of users from activation, retention to realization.
After the product has been verified by the market, it is very important to locate the leverage point of business growth, which determines the business growth model.
When we go back to Ding Dong to buy food, we will find that this is the secret of the rapid growth of its business.
-Today's interaction-
Have you ever used Ding Dong to buy food?