First | Sanjieke01

Author | Sprinkles

Editor | Handcake

When almost all of the e-commerce categories have become a red sea, fresh food e-commerce has become a hot and cruel battlefield.

Why?

A fairy fights, the kid suffers. giants have joined, so that the competitiveness of small and medium-sized brands become weaker, coupled with this is a very burning industry, resulting in a lot of fresh food e-commerce business chain breaks, the war situation is miserable.

But strangely, Dingtong grocery shopping, which is not backed by any giants, has miraculously 'survived' and continues to expand.

In 2019 Dingtong grocery shopping's annual GMV exceeded 5 billion yuan, single-month revenue exceeded 700 million yuan, the average daily order volume at the end of the year exceeded 500,000 orders, and nearly 550 front warehouses were opened in six cities across the country.

So what makes it the big three in fresh food with Ali's BoxMa Fresh, and Tencent's partnership with DailyVantage?

In this article, we will use the growth mindset to dismantle the secrets of Dingtone's fast-growing grocery business!

As Internet giants continue to enter the fresh food business, the fresh food business industry is increasingly competitive, and it can be said that the industry is gradually entering a period of chaos.

Generally speaking, a product / business to do large-scale growth before we focus on thinking:

What do we want to do a product? (what needs of what target users in what scenarios)

What is our business model? How do we acquire, activate, retain, and cash in?

Have we created a product that people want? (Has the product found its PMF)

After determining that the product we're making is what users want, we need to focus on:

How do we find leverage points to pry the business into rapid growth?

Of course, throughout the product/business development process, we will be able to gradually explore our own business growth propulsion model, whether it's AARRR, or RARRA.(Note: AARRR refers to customer acquisition, activation, retention, revenue, self-propagation; RARRR refers to retention, activation, self-propagation, revenue, and customer acquisition)

At this

At this stage, Dingtone's product direction is not grocery shopping, but focusing on community O2O services, and constantly exploring ways to adapt to the community ecosystem.

However, at this stage, Dingtone's products ignored the attributes of the community itself, and focused on acquiring new customers, which did not guarantee the user experience.

1, the community gathered, the needs of the more diverse, the product "greedy for the whole" can not focus on meeting the specific needs of users.

2, the product activation cost is high, can not guarantee that the user quickly reach the Aha moment, to ensure that the user's activation, not to mention the subsequent retention.

In the end, Dingtone founder Liang Changlin summarized the failure of this 3-year community product as two core points:

1, all home services must reach a critical generating density in order to be commercially viable, and it's hard to monetize a low-frequency service that doesn't reach a critical generating density;

2, anything that uses "idle people" inside the neighborhood is not profitable. Any commercialization of the home delivery service with the help of the power of "idle personnel" in the community is unreliable. Although the cost of "people" is very low, but also the most difficult to control, it is difficult to standardize. This will make the home service user experience is poor, lose its core competitiveness."

I believe that these two lessons have played a huge role in the success of the subsequent "Dingtone grocery" product.

At this stage, Dingtone identified a new positioning for the product and completed a complete exploration from customer acquisition, activation, retention, and realization.

Based on this, Dingtone completed 6 rounds of funding in one year and quickly captured most of the community market in Shanghai, validating the core value of the product.

A clear positioning of the product

A good positioning of a product is one that gives it a clear goal of customer acquisition, a vision, and a foundation to build on in the market.

Great products are able to closely integrate product features and user needs to help users deepen their knowledge of the product, which is the case with Dingtone Grocery.

As early as 16 years, most of the main products in China's fresh food market segments are fruits, such as Daily Fresh, Daily Orchard, etc., so the consumer's cognition, we use the fresh food APP more to buy fruits, rather than vegetables, meat, eggs, poultry, aquatic products.

After learning from the failure of Dingtone, Liang Changlin, the founder of Dingtone, identified the high-frequency and immediate needs of community users as the entry point for "grocery shopping", and took the user's kitchen as the core scenario to quickly capture the user's mind.

Second, low-cost and rapid customer acquisition + activation

In terms of customer acquisition, the Dingtone grocery shopping during the exploration period mainly relied on two aspects of advertising and marketing activities:

1.

2, take the group, share the red packet way customers to get users, and then through the WeChat community operation, at any time to get user feedback, to ensure that the service experience of loyal users.

Dingdong buy groceries just online 4 months, but the daily single volume has reached more than 4,000, daily customer acquisition of 500-1,000 people or so, per capita customer acquisition cost of about 8 yuan, gross profit of more than 10 yuan per single.

In terms of guided activation, Dingtone hit 0 yuan delivery, four large coupons to stimulate users to quickly order to experience the product Aha moment.

Three, the front warehouse mode + big data accurate prediction

In the business model, Dingtone grocery shopping through the "mobile order + front warehouse allocation + 29 minutes even if the delivery to the home" mode to provide fresh food to the home service, Daily Fresh

The Dingtone grocery shopping through the "Daily Fresh" mode to provide fresh food to the home service. The company's newest product is a new, more sophisticated version of its previous model, which is now available on the market in a wide range of colors and sizes.

The front warehouse, as the name suggests, is a series of small storage centers around the community. Each front warehouse is a small to medium sized storage and distribution center.

Procurement, every day there will be a dedicated procurement team from the city wholesale market and brand suppliers to purchase fresh food, in the start-up period to choose this procurement method, compared to the source of direct procurement, procurement price stability is higher, replenishment is easy, procurement efficiency can be guaranteed.

After purchasing, they are transported to the central warehouse for unified processing, and then cold-chained to the community front warehouses. Dingtone uses this distributed warehousing to ensure efficient transportation.

Distribution, Dingtone buy groceries independently developed order system, warehousing system, distribution system, based on artificial intelligence prediction system, on the one hand, they will be merchandise stagnant loss down to only 1%, on the other hand, can also be based on user preferences and warehousing data to do intelligent recommendation.

After consumers place an order, Dingtone Buying will intelligently schedule and plan the optimal distribution path based on its own logistics system, and then Dingtone's own distribution team will deliver the goods within 30 minutes to guarantee the distribution efficiency, and once the product has a quality problem, it can be exchanged directly on the doorstep, which greatly enhances the user's experience.

In the future, as the amount of data becomes larger and larger, the accuracy of the big data prediction model will become higher and higher, thus reducing the cost of the supply chain.

At this stage, Dingtone gradually expanded its market scope, going south to Shenzhen and north to Beijing.

In August 2019, Dingtong grocery shopping marched into Shenzhen, starting the first cross-regional supply chain attempt.

Based on the experience of product exploration in Shanghai, it took 46 days for team members to complete preparations such as user research, construction of the supply chain backend, opening of the main warehouse and front warehouse, and frontline staffing.

In the early days, more than 60 front warehouses were opened in Shenzhen, with a daily average of 70,000 orders.

At the technical level, the 3.0 version of the front warehouse was developed in Shenzhen. Compared with the 2.0 version of the front warehouse, the 3.0 front warehouse has an area of about 250, and a special closed freezer area was opened, which reduces the number of times that the freezer is opened and closed, and the cooling effect is better.

In April 2020, Dingtone Grocery opened for business in Beijing, and is actively acquiring new users through subsidies and discounts.

Looking back at Dingtone Grocery's history, how did it find the leverage to pry the business into rapid growth?

Dingtone's founder and CEO, Changlin Liang, mentioned a formula for calculating revenue: V=(a+b+c+......) *d^n , with V being the revenue, a+b+c being the various types of traffic, d is the repurchase rate-based growth factor, and n is the number of purchases.

Based on this revenue formula, you can see that we want to grow revenue at a high rate, and the key leverage point is to find the growth factors that grow the business exponentially.

Dingtone is positioned here to consistently increase the "repurchase rate" , repurchase rate continues to increase - scale of revenue - -Enhanced brand influence -More new user registrations -More user repurchases, thus finding the growth flywheel of the business.

How do you increase repurchase rates?

Dingtone internally says there are three determinations that are the principles they use to safeguard the user's service experience - category determination, quality determination, and time determination.

Dingtone focuses on providing 2000+ SKUs of fresh food, covering vegetables, aquatic products, meat, eggs, poultry, fruits, wine, snacks, kitchen supplies, and other 16 categories, which covers everything you need in the kitchen and meets the needs of users to complete one-stop shopping.

Dingtone strictly follows the "7+1 quality control process", which includes "source quality control, processing warehouse quality control, processing process quality control, front warehouse quality control, inspection quality control, sorting quality control, customer quality control, and after-sales quality control" to ensure quality.

Thus ensuring a good reputation, allowing Dingtone to buy groceries 27 months after the repurchase rate of 40% -50%.

Timing: constantly upgrading the technology of the front warehouses and optimizing the big data algorithm

By the end of 2019, Dingtone Grocery has opened nearly 550 front warehouses in 6 cities across China, which are set up with different storage cooler areas for refrigerated, frozen, and ambient temperatures, as well as a live fish and live shrimp breeding The company's products are also available for sale in the market.

Warehouse picking staff, handheld PDA code entry commodity information. The customer side of the cell phone, you can access the commodity sorting status, inventory real-time updates, greatly enhancing the operational efficiency of the product.

In terms of profitability, as of July 2020, Dingtone grocery shopping was established about a year ago, daily volume of about 1,000 single, a single warehouse revenue of about 20 million yuan, the revenue will be higher than the cost .

And as time goes on, revenues are super linear and costs are sub-linear, suggesting that Dingtone chose the right model for its warehouse.

In the startup phase, the first thing you need to do for rapid growth is to find a clear positioning for your product (what needs do you have to solve for your target users in what scenarios), choose a proven business model that's relatively mature, and optimize the user experience path to complete the exploration of user activation, retention, and cash flow.

After the product has been validated in the market, it is critical to position the product at the leverage point for business growth, which determines the growth model of the business.

Going back to Dingtone Grocery, we see that this is the secret to its rapid business growth.

--- Interactive Today ---

Have you used Dingtone for groceries?