Embattled Missfresh Conducts Business Restructuring Plan
Xu Zheng, the founder of Chinese fresh grocery e-commerce company Missfresh, which is caught up in a mounting capital crisis, has said that the firm is now intensively pushing forward a business restructuring plan, China Entrepreneur Magazine reported on September 6.
At the end of August, Missfresh sold its “Bianligou” vending machine business to YoPoint Business Technology Co., Ltd. for a price of 30 million yuan ($4.3 million). According to Chinese business data platform Tianyancha, Bianligou has completed two rounds of financing worth $197 million, but now it has been sold for only $4.3 million. An individual in charge of Bianligou said that the value of its equipment, team and customer resources is far more than 30 million yuan.
The buyer, YoPoint, is a platform-based internet enterprise providing intelligent retail terminal and SaaS services. YoPoint’s latest fundrasing was completed in November 2018. Wang Eryong, the founder of YoPoint, entered Missfresh’s Bianligou in mid-July this year, and began to gradually take over the team and various businesses. According to sources, the acquirer only paid 500,000 yuan to 1 million yuan in the early stage, and it is not known whether all the subsequent balances have been paid.
Missfresh, which was established in 2014, listed publicly in US in June 2021. According to a LatePost report, in the first half of 2021, Missfresh accelerated investment for the listing, including issuing large coupons, spending 20 million yuan every month on Douyin and other promotion channels. Its order volume doubled from that at the beginning of 2021.
The radical strategy has also brought increased losses to Missfresh. In Q2 2021, its gross profit margin of was 7.5%, while net losses reached 1.4332 billion yuan, an increase of 321.8% year-on-year.
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In the second half of 2021, a core strategy of Missfresh was to find a new growth points, such as the smart food market and retail cloud. In mid-June last year, a retail cloud business was unveiled. It didn’t start large-scale marketing until November, during which more than 40 contracted users joined in. However, with recent negative news about Missfresh, many customers have terminated their cooperation with the platform.
The smart food market was launched in the second half of 2020. Because the food market model needs to acquire a large number of market management rights, the input cost is high, while actual operations are not satisfying.