What is really meaningful is to continue to solve the main contradictions in the development process of the industry and continue to accumulate long-term value.
On the morning of April 27, Xu Zheng, founder and CEO of Daily Youxian, sent an internal letter to all employees. On the occasion of the company’s fifth anniversary, he reviewed the company’s five-year history, analyzed the current market environment, and made comments on the industry. Give your own judgment on future development trends.
Regarding the current market environment, Xu Zheng emphasized that "spring is the soil for innovation and winter is the friend of value." The online fresh food supermarket industry has a large number of people, high frequency, rigid demand, and large volume. It is not difficult to burn money to expand, but there is no significance. What is really meaningful is to continue to solve the main contradictions in the development process of the industry and continue to accumulate long-term value.
Looking at the development trend of the industry, Xu Zheng believes that online fresh food supermarkets will become the main purchasing channel for mainstream people, and the industry will also undergo three qualitative changes:
1. From the group stage of sprinting at the level of tens of billions to the long-distance running at the level of hundreds of billions Knockout round
2. From breaking the tie in the last mile of logistics to winning in the first mile of the supply chain
3. From the competitive model in the first half to the hard work in the second half
Xu Zheng revealed that Daily Fresh Food has already reached tens of billions in volume Achieved nationwide profitable growth at all levels, and in response to the qualitative changes in the industry, what Daily Youxian has to do is to persist in profitable growth, adhere to the heavy supply chain, and adhere to technology-driven.
The following is the full text of the internal letter:
Dear Youxian people:
With the major stage victory in the country's fight against the new coronavirus pneumonia epidemic, with the successful conclusion of our protective action of "serving users in three good ways and caring for employees in three safety" during the epidemic period Officer, we have also celebrated our company’s fifth anniversary. First of all, on behalf of the company, I would like to thank you all for your hard work, especially those of Youxian who are working on the front line. Your simple words, "Someone must stay during the epidemic" are really touching. In this special period of the epidemic, and at this special moment of the fifth anniversary, I use this method to share some of my thoughts and feelings with you.
Looking past, using dreams as horses and breaking bones as knives
Five years ago, 18 people started our business in an apartment of more than 200 square meters in Qilin Community, Wangjing. In the blink of an eye, we have experienced countless times of persistence and struggle, success and failure, joy and suffering, praise and doubt in the past 2,000 days and nights where we have used dreams as horses and broken bones as knives. We were not defeated by various difficulties, but continued to grow amidst setbacks. There are too many people, too many things, every bit of it, all vividly in my mind.
In the past five years, we have solved the industry problem of the last mile of online fresh food supermarkets by innovating the front-end warehouse model. We have carved a bloody path among countless players. Not only has our business reached tens of billions, but we have also gathered a team. The team with long chain, cross-region, dare to fight tough battles and can win the battle has won the recognition and trust of millions of users.
Every time I think of these, I am moved, grateful, and even more grateful. The original intention, because we believe it, we see it, so we gather together to do something of long-term value together.
Look now, spring is the soil for innovation and winter is the friend of value.
Recently, everyone has seen various information on the Internet about the global epidemic outbreak and the global economic recession. This is not sensational, this is what we have seen for a long time. Reality. There will be two completely different worlds before and after the epidemic, and the global economy will also follow the objective laws of cycles: spring birth, summer growth, autumn harvest, and winter storage.
Spring is the soil of innovation, and winter is the friend of value. Spring will hatch many innovative seeds, different models and species, different teams and genes, everything will be renewed, and a hundred flowers will bloom. But in winter, the fittest will survive, eliminating the false and retaining the true, leaving behind those outstanding species and genes that truly create user value, employee value, shareholder value, and social value.
The online fresh food supermarket industry is popular, high-frequency, urgently needed, and large in volume. If you just burn money to scale and grow, it's not difficult at all, but it doesn't make any sense. What is really meaningful is to continue to solve the main contradictions in the development process of the industry, so that users can enjoy better products, better services, and better prices at home, and continue to accumulate long-term value.
Today, through the in-depth operation of the "full category selected products + front warehouse cold chain logistics + social membership operation" model, we have achieved nationwide profitable growth on the order of tens of billions.
Winter is our friend.
Looking at the future, profitable growth, heavily stocking the supply chain, practicing basic skills
Cognition determines the layout, and actions determine the outcome.
Looking forward to the next five years, the online fresh food supermarket industry will enter a stage of rapid growth. User coverage will spread from the early stage crowd to the mainstream crowd. User penetration will upgrade from supplementary purchasing channels to main purchasing channels. Online fresh food supermarkets will become mainstream. The main purchasing channel for people. The current epidemic has amplified the speed and intensity of this long-term trend. The online fresh food supermarket industry will also undergo three qualitative changes:
the first qualitative change , from the group stage of a tens-billion-level sprint to the knockout of a hundred-billion-level long-distance race.
From the final point of view, online fresh food supermarkets will definitely have a higher industry concentration than offline traditional supermarkets, but the industry structure will not be Winner Takes All, but will consist of multiple oligarchs worth hundreds of billions.
Now, among various players in different city levels, different business models, and different organizational genes across the country, there are less than 10 companies that have reached the tens of billions scale. It can be said that they have surpassed the previous tens of billions level group matches. out.
In the next knockout round from tens of billions to hundreds of billions, those players whose business cannot achieve profitable growth will find it increasingly difficult to operate. There are two main reasons behind this: On the one hand, if the scale of tens of billions cannot achieve profitability, it means that there are still some fundamental problems in the business structure, business model, and business operations. Basically, there is no hope of making profits even if the scale of tens of billions is reached in the future. On the other hand, in the process from tens of billions to hundreds of billions, if we still rely on burning money for expansion, it is estimated that it will reach 300 billion in 3-5 years. If the average loss is 10%, it will be 30 billion. This kind of capital consumption is also Unaffordable for most companies.
As far as we are concerned, we must keep an eye on the general trend, maintain strategic focus, adhere to the business strategy of profitable growth, and achieve rapid growth of more than 10 times in 5 years on the premise of positive operating profits. , be a friend of time.
The second qualitative change is from the last-mile logistics that broke the game to the first-mile supply chain that wins.
In the past five years, the entire online fresh food supermarket industry has provided users with a more convenient shopping experience than offline traditional channels through the breakthrough of the last mile solution, and the corresponding companies have also reaped the rewards of growth.
As online fresh food supermarkets gradually upgrade to become the main purchasing channel for mainstream people, user demand pain points have also changed from convenience to one-stop shopping of all categories, high quality and low prices, and even unique products, which must be solved by industry development. The main conflict will shift from last-mile logistics to first-mile supply chain.
As far as we are concerned, we must give full play to the supply chain genes and advantages of the team. Just like building front-end warehouses back then, we can restock the supply chain faster, more accurately, and more ruthlessly than anyone else, from fruits and vegetables to meat. From eggs, aquatic products, pre-made cooked food, packaged food to daily necessities, all categories are accelerating the "Ten Billion Club Plan". It will take 3-5 years to discover, incubate and aggregate a number of high-quality supply chain resources to establish 80% direct source supply chain resources. A supply chain ecology of procurement, 50% co-branding and 20% strategic investment.
The third qualitative change is from the fighting mode in the first half to the internal strength fighting in the second half.
The online fresh food supermarket industry is still essentially a retail industry, and the ultimate competition is operational efficiency. The entire industry of
has gone through so many years and so many players' practice. By the middle game, it has passed the first half of the competition mode and entered the second half of the competition mode of teamwork, execution, efficiency, and internal strength. As the old saying goes, practicing boxing without practicing martial arts will end up in vain. This boxing is the pattern move, and this skill is the basic internal skill.
As far as we are concerned, we must insist on using organizational drivers to connect people and technology drivers to lock things. We must decompose the entire business value chain into the smallest granular operational actions, and then combine business best practices, expert organizations and The three IT&DT technologies are packaged into core capability components with stable output, leading cost, and optimal efficiency, creating a smart chain retail system in the digital era. Compared with the traditional chain retail system in the industrialization era, it can achieve operational efficiency advantages of larger scale, longer chains, and more regions.
Our mission: Let every family buy with ease and eat with confidence
Entrepreneurship is a group of people with a common mission, vision, and values, a collective journey. What is the mission of
? Mission Mission, as the name suggests, is something that everyone works hard to do. It comes from an almost paranoid altruistic heart, inspires the truth, goodness and beauty of human nature, and ignites everyone's love from the heart. During this epidemic, all of us at Youxian have stayed true to our responsibilities and worked against the trend to serve users and protect people's livelihood. This responsibility that we all share is our company mission.
’s new five years,
’s new journey,
we are on the mission together,
allows every family to buy with ease and eat with confidence!
Xu Zheng
April 2020
