Chinese logistics and fresh groceries delivery firm Dingdong Maicai on Tuesday released its results for the fourth quarter ended December 31, 2021. The published data indicate an increase of 72% year-on-year to $5.48 billion in revenue for Q4. Total 2021 revenue was $20.12 billion, up 77.5% year-on-year.
In Q4, Dingdong Maicai had a net loss of 1.096 billion yuan ($173 million), while that in Q4 of 2020 was 1.246 billion yuan. Calculated by non-GAAP, the net loss was about yuan 1.034 billion, while that in 2020 was 1.239 billion yuan. Both developments indicate narrowing losses.
In addition, the company announced it had achieved profits in December in Shanghai, and oversaw a positive UEM (unit economics model) in Q4 across the Yangtze River Delta region.
In response to Q4 results, Liang Changlin, founder and CEO of Dingdong Maicai, said that the company had the best performance in Q4 since its establishment, and would drive growth mainly from consumption upgrades and commodity power.
The financial results indicate a gross margin of 27.7% in the Q4 of last year, up 9.5% sequentially from Q3. The increase in gross margin was attributable to increased merchandising power. Dingdong Maicai stated in its earnings report that its scale advantage and its production and processing capabilities contributed to the profit margin on the production side. In addition, it continues to optimize the category structure of its merchandise, which progressively increases the GMV share of high-quality merchandise.
In terms of commodity data, the financial report shows that Dingdong Maicai has over 20 OBM now, and will further increase investment in research and development, especially in infrastructure construction, supply chain systems, agricultural technology and food R&D.
As of Q4, 2021, Dingdong Maicai had 10 food R&D and processing plants, about 60 sorting centers and about 1,400 front warehouses with an area of 500,000 square meters. In addition, it plans to construct three large-scale and modern fresh-keeping complexes this year, so as to bring about more efficient development, production and transportation of commodities.
Yu Le, chief strategy officer of Dingdong Maicai, said in a teleconference that the largest obstacle for 3R dishes is the sales channel, while this is a most important core competitiveness of Dingdong Maicai. In Q4, 2021, its GMV exceeded 900 million yuan.
Liang Changlin also debunked rumors in a conference call about the company laying off 10,000 employees, adding that the labor inspection authorities in Shanghai had conducted a field investigation and found no major changes in the company’s employee flow from previous years.