For the value of the front warehouse fresh food e-commerce, the Commercial Observer two days ago in the review of the front warehouse article, there is a detailed description.

Although the front warehouse is currently under pressure, but this form also has the value of breakthroughs and reference places, there are future possibilities, so do not be in a hurry to beat to death.

The front warehouse fresh food e-commerce facing the problem is that it is difficult now, so, need to be able to hold on to live into the future.

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Live

Front warehouse fresh food e-commerce the biggest challenge now is the problem of profitability. All companies should be losing more money.

The chart above is a recent review and update of a single warehouse financial model for a domestic front-loaded warehouse fresh food e-commerce company. The numbers are a combination of actual + expected.

Below, Commercial Observer will show the hurdles that front-loaded warehouses must now pass to survive, based on this financial model.

Starting threshold

From this financial model, the opening cost of the front warehouse is 525,000 yuan, and the rental cost is 3.5 yuan per square meter per day. Compared with the fresh food store, this cost has decreased by a certain margin, which is an important advantage of the front warehouse to do fresh food at the moment.

Labor costs and rental costs are the first two major costs of fresh food store operations. Front warehouse rental costs are lower, the opening investment is relatively low, the replication will be faster.

Some of the front warehouse enterprises now also want to 3 yuan per square meter daily rental costs, a single warehouse 300 square meters in the direction of doing. But look at the actual situation, may not be able to fully do.

"Human efficiency"

From this financial model, you can see that the front warehouse to survive, the biggest challenge is the cost of manpower, which can also be said to be the cost of fulfillment. This can even be regarded as a "dead end" of the front warehouse.

Compared to the fresh food store, the front warehouse rental costs, opening costs, although low, but now have to pay the labor cost is higher than the fresh food store. And labor costs are the first major cost of fresh food operations.

With this single warehouse financial model set the break-even value, a single warehouse 1000 single operating scale to break-even, all need 10 warehouse sorting staff, each workload is 100 single daily sorting. Plus 16 distribution staff, each with 62.5 single daily distribution. So, a 1000 day single standard front warehouse break-even, all need 26 staff ratios. Community fresh food store to do 1000 days single level, the number of employees rationed as long as about 15 people.

This number doesn't count the labor to sort the gross vegetables in the general warehouse into pre-packaged goods suitable for online sales. Nor does it count the cost of ground-up labor ($8 for first order, $12 for reorder, etc.).

At the same time, the 26-employee count ration in the warehouse is only a target value, not necessarily for every warehouse. Fresh orders, on the other hand, are concentrated in the hours before the meal, and the order volume is unevenly distributed. Weekends are the peak of orders from the front warehouse, while mid-week is relatively less business. This, in turn, will result in idle and waste of manpower and so on.

Some marketers say that the general front warehouse is in accordance with the single burst 80% of the members of the reserve and commodity stocking, so the order valley manpower a lot of idle.

This is also the front warehouse to do the biggest problem of fresh food, ping efficiency to do high, but human efficiency is a problem.

When the order volume reaches a certain level after the increase, the inevitable need to increase labor, at this stage, there is no way not to increase labor. Because fresh non-standard perishable, technology in the field of fresh food has not been able to replace manual labor, labor costs are very rigid.

So, although the positioning of e-commerce, but the front warehouse is a more labor-intensive model, does not reflect the efficiency advantage of e-commerce can serve consumers one to many. The fresh food business is another low gross margin business with little revenue.

Compared to the food delivery business of the catering takeout platform, the front warehouse has more labor involved in sorting in the warehouse and pre-packaging and sorting in the main warehouse. Fresh business gross profit amount and revenue is much lower compared to food and beverage.

Compared to community competitors, such as community fresh food store, community fresh food store to do 1000 daily single level, the number of employees of the ration is only about 15 people. The number of employees is one-third or even one-half less than the front warehouse.

Where are the labor savings?

Community fresh food stores do not need to hire people on-site picking fulfillment, it is the consumer to come and pick. The front warehouse to do every single on-site manual picking and packing.

The community fresh food store does not need to be delivered to the home, because the layout of the community in the mouth, the consumer is by the way to buy. The front warehouse needs delivery staff.

The front warehouse to do fresh, to attract customers, to build competitiveness, establish thresholds, to protect the user experience and customer unit price. But also to do live fresh, aquatic fish ponds, oxygen tanks, with aquatic staff, processing staff. Such a configuration, not to mention the community fresh food store, is the general small and medium-sized food markets are not. This is all high consumption, high labor cost link.

But having done this, the front warehouse has no way to completely replace the business of the community fresh food store. Although the front warehouse and community fresh food store has a similar, are based on the community to do small business circle business, the number of operating items are in the 2000-3000 or so. But in the shopping scene, there are still differences.

The community fresh food business, in fact, is divided into two scenes. In the middle of the week, consumers have to go to work and are tired of going to work. At this time they either eat takeout, or more casual cooking, many will be on the way home from work, by the way to the community fresh food store to simply buy a few dishes to cook, the elderly cooking is also every day to buy food to cook, so the community fresh food store's customer unit price are about 20-30 yuan.

The front warehouse to do this business, the customer unit price is very difficult to mention, now the front warehouse to mention the customer unit price is mainly by promotions to mention, but mid-week, many consumers do not want to be too rich, buy too much, too much time to cook. The price per unit can not be raised, it can not afford such a large expenditure on labor costs, so it is not possible to sell very cheap.

In the mid-week market, the business of the community fresh food store, the front warehouse can not be stolen. Because it is convenient for consumers to buy on the way to and from work. Community fresh food store also has no limit on the price per customer, must need to buy how many consumers to provide services, fit the consumer wants to simple, do not want to buy more demand.

On weekends, consumers stay at home, a bit of time, leisure cooking, while wanting to refine a bit, spend a better family, friends get together time, cooking will do a little more sumptuous, accustomed to the Internet service, hope that the convenience of young people to cook, but also mainly in the weekend to do. At this time with the front warehouse service is more, the customer unit price can be raised, the front warehouse to sell so many live fresh.

So, the front warehouse cut into the fresh market, in fact, a major performance is to divide the weekend market, the weekend market supports the profit model of the front warehouse. It has a great impact on the box horse and so on, at the same time, it is also under pressure, if you rely on the weekend enough?

Above, that's the biggest challenge of the front warehouse right now, the labor cost is very high, and it's all more labor-intensive compared to the physical retail models that are already out there. So, with such high labor costs, it's historically difficult to replace a labor-intensive business with a more labor-intensive one.

So is it possible to reduce labor costs with front-loading?

Businesses are trying to do it. Realistically, many companies have lowered the order volume of a single warehouse, so that some warehouses have been "deliberately" to reach the level of 950, 800 daily orders.

The future, many companies are also trying to do unmanned warehouse model, because the warehouse does not need to face consumers, there is no theft, field service and other issues, so the warehouse unmanned application, theoretically can be better to do, but at present the fresh non-standard perishable, the reality of the application, there are a lot of challenges, but also very difficult.

Previously, the United States Mission released a conceptual video of the unmanned warehouse. There are also companies have actually done, there has been a field operation test, but the delay in the release, may still be the reality of the application of some of the problems have not been resolved.

So you have to live to hold out until that day comes.

Attrition rate

From this financial model, the front warehouse break-even value is set, the attrition rate is set at 3 points, the gross margin after the loss is set at 30%, and the distribution apportionment (the cost of vehicles and other expenses from the warehouse to the front warehouse) is set at 2 points.

The loss rate of this value, can not be realized, if the supplier apportionment of a little bit, a little bit of efficiency, the surface seems to be able to do. But there is some pressure.

Because much of the loss of the front warehouse is a hard loss, the store's expiration date of the goods, you can site promotions discounted clearance, to recover some of the losses. The front warehouse of the expiration date of the goods, if discounted, online is very difficult to sell. Because consumers do not know, or will not log in APP to buy in time.

Also based on digital operations, but there are also offline clearance channels, while doing a greater range of radiation, can better predict the demand for the big store model of the box, its loss rate may be around 5%.

At the same time, 3% of the loss value to be combined with 30% of the loss of gross margin to see, to realize the loss of gross margin of 30%, at present, the entity retailers can not be achieved. Therefore, if the front warehouse to attract consumers to the line, the current stage, the price at least can not be too much higher than the entity retailers, then, after the loss of 30% gross profit margin can not be realized is a problem.

But what about the future, with the companies are doing base direct procurement, do private label, do fresh processing, food, power value chain in the middle and upper reaches, gross margin is also improving, according to the foreign market, can also do very high.

The front warehouse provides a more convenient service, directly to the consumer's home, this part of the premium space, the front warehouse does not necessarily need to sell absolutely cheap to get customers, but to sell the quality of this part of the future gross margin space.

But the front warehouse is currently in the processing, food, private brand level, there is no foundation, many also did not start to do.

So, it is still to survive and then continue to improve.

Headquarters costs

This financial model is only a single warehouse model, and does not count the headquarters costs.

Headquarters costs include marketing costs (traffic costs such as subsidies), overhead, and finance costs. For example, personnel technology costs (building data platforms, doing APP costs) and so on.

Headquarters costs are a big piece of cost. If statically calculated according to the break-even value in the table, the front warehouse may have to achieve a sales scale of hundreds of billions of dollars in order to earn a little profit.

This is mainly because the revenue from fresh food is too small, and the labor cost of the front warehouse is too high.

Two

Mission

Above, from the point of view of the former warehouse's own operation, we talked about the question of whether the warehouse can survive. In fact, the main is a few pieces of cost pressure, headquarters costs, labor costs, wear and tear costs.

And in the external competitive environment, the front warehouse fresh food e-commerce head is still racked with a knife, is the United States group.

Meituan is likely to become the ultimate reaper of the market.

Many market participants, especially entrepreneurs, almost all believe that the front warehouse fresh market, if up, may ultimately be the United States market, and even the entire fresh to the home market can not jump out of the United States "five finger mountain".

Because whether it is from the headquarters costs, or labor costs, or wear and tear costs, the United States Mission has a great opportunity to make better efficiency, it can better solve the problem.

What you have, Meituan has. What you don't have, MMT has.

Piece by piece.

Headquarters costs a piece, Meituan has Meituan Takeout, billion users, daily orders of more than 30 million single, so, Meituan to do just need to be extended from the catering of the personal consumption scene to the fresh food of the family consumption scene can be, and then extend the low-line market, the middle-aged and old people user market.

There is no problem with the flow, and you don't need to spend too much money. Data platform, APP, technical architecture, headquarters staff costs, etc., Meituan to do front warehouse, and even to the home business, can be apportioned from the Meituan takeaway and other businesses, the implementation of the business cost is lower.

The piece of human cost, Meituan has Meituan Special Delivery. Such a large capacity base, coupled with the previously constructed catering and other merchant base, the front warehouse manpower idle, waste and other issues, Meituan can optimize. Catering and fresh orders can complement each other, and fresh orders occur earlier than catering orders.

Attrition costs a piece. Meituan has Meituan fast donkey, do catering and other fresh ingredients delivery B2B business. Then, the front warehouse of the expiration date of the goods is not through the Meituan fast donkey "distribution" to the catering small and medium-sized merchants to solve the problem of wear and tear?

Zhou Zhong, the front warehouse in addition to doing some C-end retail business, but also as a fast donkey's warehouse, to help do B-end market. This can be done, now the front warehouse main consumption scene is in fact on the weekend, some warehouse weekend daily order volume can be double the mid-week daily single volume. Mid-week "idle capacity" can not be utilized to do B-side business?

Think about it, if the small and medium-sized catering business can be 1 hour up to fulfillment, it is not to meet the small and medium-sized catering to buy how much to use how much to buy with the demand, faster than the food court vendors are delivered, the user experience has been raised by a level.

On weekends, the front warehouse to do home user market. Not sold out of the fresh, discounted through the fast donkey sold to small and medium-sized restaurant business. And small and medium-sized business needs flexible, will want.

This can solve the problem of loss, but also build the overall competitiveness of fresh food. B-side to do the scale, C-side retail to do the profit.

"Commercial Observer" before looking at Yonghui's Fuzhou market, observing the Yonghui stores afternoon discount promotional fresh goods sales, these dying goods are who is buying it?

Many are small and medium-sized restaurants near the stores. We visited these small and medium-sized restaurants in the neighborhood around the Yonghui stores, and these restaurants know Yonghui's promotional prices very well and often go to purchase. It's just that in the past two years, with the rise of B2B platforms such as Meicai, they have had a relatively large diversion from this market.

Therefore, if Meituan find the profit model of the front warehouse, its internal mandatory implementation of the relevant KPI, Meituan is likely to be a reaper, it is fully capable of solving, optimizing the front warehouse some of the main problems faced at the moment. Traffic, fulfillment, loss, Meituan have ready-made channels, just Meituan at the moment does not seem to move, still trying. It may not need to rush.

At present, the daily order volume of Meituan takeout has exceeded 30 million orders, how many daily orders of Taobao?

For one takeout business alone (where consumers use food provided by restaurants), Meituan (Meituan Takeout + Dianping) has surpassed 30 million daily orders.

If Meituan future in the food business (stock market, that is, the fresh market. Consumers buy home cooking, "creation" before eating the food), in the food business (growth market, consumers buy home can directly eat the food, such as cooked food, boxed lunches, baking, etc.). It is produced intensively through centralized kitchens and is a bit cheaper than catering. With the aging and single population increasing, the growth of Chinese food is very good) level can find a profit model and establish market influence.

Will Meituan surpass Taobao in the number of daily order transactions?