In response to recent reports regarding Dingdong Maicai’s “large-scale withdrawal”, the grocery e-commerce platform responded on Monday that the information was untrue. The company also said that the changes to some individual front warehouses in Tianjin, Anhui and other regions were normal business adjustments, and that the adjustment scale was small, causing little effect on the normal operations of the company.
Earlier, on May 30, it was reported that Dingdong Maicai’s sites in Xuancheng and Chuzhou would pull up their services. Subsequently, the topic “Dingdong Maicai to Withdraw from Anhui Market” began trending on domestic social media platforms soon after as rumors swirled about the possible abolition of several business in a few different regions, including Xuancheng and Chuzhou. Its sites in other cities such as Tangshan, Zhongshan and Zhuhai also stopped service at 18:00 on May 31.
There are many signs that Dingdong Maicai is slowing down and gradually shrinking its “battlefield.” According to the company’s financial report, as of December 31, 2021, it has established 1,400 front warehouses and sorting centers in 60 cities across China. However, in the fourth quarter of 2021, the number of its new front warehouses was only 25, which was one tenth of the increase in the third quarter. The number of front warehouse increased in the first three quarters of 2021 topping 139, 147 and 239 respectively.
According to its financial reports of the fiscal year 2021 and Q4, its revenue in 2021 was 20.12 billion yuan, up 77.5% year-on-year, but its net loss reached 6.43 billion yuan. Q4 revenue hit 5.48 billion yuan, a year-on-year increase of 72.0%, while net loss were 1.096 billion yuan. The net loss in the same period of 2020 was 1.246 billion yuan; Gross profit margin was 27.7%, up 9.5 percentage points from the previous quarter.
The company also pointed out in its financial report that Shanghai achieved overall profit in December 2021, and the whole Yangtze River Delta region achieved a UE correction in that quarter, and the overall loss rate was greatly optimized, with remarkable results in efficiency. In this regard, Liang Changlin, founder and CEO of the company, said that “last year’s Q4 performance exceeded the best performance since the establishment of the company, which marked the optimization of the company’s efficiency”.
However, Dingdong Maicai is still burning through cash on the whole. The company’s net losses were 1.873 billion yuan in 2019 and 3.177 billion yuan in 2020 while net losses in the four quarters of 2021 were 1.385 billion yuan, 1.937 billion yuan, 2.011 billion yuan and 1.096 billion yuan respectively. Although the loss within a single quarter have narrowed, the company’s accumulated losses has exceeded 11 billion yuan since 2019.