Industry observation during the epidemic period of iResearch: How can fresh food e-commerce maintain a healthy development after the war against "epidemic"?

Core Summary:

The Industrial Observation in the Epidemic Period is a series of research reports launched by iResearch on the operational problems of enterprises in the new economic field during the epidemic prevention and control period and after the recovery of the epidemic, based on their own industrial understanding and user insight, aiming to help enterprises achieve rapid development and enable business decision-making through the strength of research. This issue focuses onFresh food e-commerceIndustry, discuss the impact of the epidemic on the supply side and demand side of the industry, find opportunities for industry development, and provide decision-making support for enterprises in the industry to obtain short-term opportunities and substantial development.

The sudden COVID-19 has greatly reduced the number of residents going out. Many families, based on the pressure scenario of closing their doors, have chosen to meet their needs by placing orders and delivering goods to their homes through fresh e-commerce platforms, and the order volume of major fresh e-commerce platforms has soared. The sharp increase of orders on the fresh food e-commerce platform also exposed the industry pain points such as low distribution efficiency and insufficient product supply. When a large number of orders are pouring in, how can fresh e-commerce optimize the supply chain? When the epidemic is over, will the users forced to buy food online in the special period continue to do so? How to enhance user stickiness and retain the fresh food platform need to be considered urgently. This article will discuss how to optimize the existing fresh food supply chain system and how to retain users after the epidemic, hoping to help the development of the whole industry and enterprises in the industry.

1、The epidemic accelerated the integration of fresh e-commerce industry and channel reform

1.1 Supply side: agricultural products are unsalable under the epidemic situation, forcing farmers to contact the fresh food e-commerce platform

After the outbreak of the epidemic, "the whole people grabbing food online" has led to a sharp increase in the number of fresh e-commerce orders, which is in short supply. In contrast, agricultural products are unsalable nationwide, and farmers have suffered heavy losses. The unsalable agricultural products are mainly due to the following reasons: First, during the epidemic prevention period, traffic control was implemented in many places, and roads were closed andlogisticsThe low rate of returning to work leads to the transportation of agricultural products being blocked; Secondly, after the outbreak of the epidemic, large-scale agricultural product trading centers and agricultural markets were temporarily closed, and offline trading of agricultural products nearly stopped. According to the data of the Ministry of Commerce, fresh products accounted for only 28.3% of China's agricultural product online sales in 2018, and offline channels such as offline agricultural markets and large-scale agricultural product trading centers are the main sales channels of fresh products. From the perspective of industrial chain, the traditional industry of fresh products still has a long chain, many circulation links and low overall efficiency.

During the epidemic prevention and control period, the traditional offline sales channels relied on by farmers were blocked, and more and more agricultural product producers began to actively contact the fresh e-commerce platform. The e-commerce platform also helped slow selling agricultural products to reach consumers directly through "green channels", centralized procurement, reducing intermediate links and other ways according to their supply chain and logistics capabilities. At the policy level, the government also introduced relevant policies to facilitate the connection between the agricultural product base and the fresh food e-commerce platform, and promote "direct procurement from the origin". In the short term, this will accelerate the online penetration of the supply side, facilitate the upstream to promote the development of online channels, and accelerate the supply chain penetration of fresh food e-commerce; At the same time, the absolute scale of direct procurement in fresh e-commerce production areas will be further improved.

1.2 Supply side: The epidemic situation has become a booster for the development of fresh food e-commerce, and the giant has entered the community "vegetable selling" market

As fresh products are non-standard products with immediate demand, they are easy to wear and tear, low quality, etc., and have extremely strict transportation requirements, so the penetration rate of fresh products is far lower than other categories such as clothing and footwear, 3C products, food and beverage. The outbreak of the COVID-19 at the beginning of 2020 has changed the consumption habits of most residents. For those who are not able to go out, the fresh food delivery platform has become an important choice. The order volume and daily active users of several fresh food online platforms have increased significantly.

During the epidemic prevention and control periodJD.COMIn addition to the fresh food platforms such as Home, RT Mart, Yonghui Supermarket, and Bubu High also seize the opportunity of expanding online channels, give play to the traditional advantages of local warehouses, and open their own APP orWeChatApplets develop online "home to home" business, serve the communities three kilometers around, and provide consumers with delivery services. In addition, other enterprises with high offline outlets radiation effect, such as oil giant Sinopec, have also started to "cross border" online vegetable sales "and enter the fresh food field; At the same time, more and more fresh food supply chain enterprises focusing on To B business began to dabble in the C-end market. According to the analysis of iResearch, the outbreak of the epidemic has caused a large number of users to flock to the fresh food e-commerce platform. The change of users' consumption habits will accelerate the channel change of the fresh food industry. The traditional online to home business of supermarket will gradually become the standard configuration. The competition in the fresh food e-commerce market is becoming increasingly fierce. The fresh food e-commerce with strong supply chain management ability is more likely to win in the breakthrough.

1.3 Demand side: users' online demand for fresh food has surged, and improving the quality of goods and SKU coverage is the direction of users' operation

From the demand side, the sudden epidemic has broken the life rhythm of many people. For people trapped at home by the epidemic, fresh food e-commerce has become the choice of many families, and the demand for online fresh food has surged. For fresh food e-commerce, the influx of a large number of users has brought about a turnaround for many fresh food e-commerce platforms, and their brand awareness has also been greatly improved while the order volume has surged.

After the epidemic, the user scale and order volume may decline significantly. How to retain users from the epidemic and cultivate more users for high-frequency consumption is an urgent problem for fresh food platform to think about. According to the research results of iResearch, when consumers choose e-commerce platforms during the epidemic prevention and control period,Contactless distribution is the most important factor. In addition, users pay more attention to commodity quality and commodity richness than price, so improving commodity quality and SKU coverage is the direction of user operation.

2、The epidemic situation promotes the online penetration of fresh food, and strengthening the supply chain capability is the key to the success of the fresh food e-commerce platform

During the epidemic prevention and control period, a number of fresh food e-commerce platforms saw a significant increase in users and orders. At the same time, fresh food supply also brought a huge test to the supply chain and performance capability of e-commerce platforms. If enterprises want to be able to cope with the situation freely, they should also continue to optimize the existing fresh food supply chain system. Both the supply chain of the platform and the logistics of the platform should be guaranteed to deliver goods in time, so as to enhance user habits and improve user retention based on user experience. According to the analysis of iResearch, there are several points worth focusing on in optimizing the existing fresh food supply chain system and how to retain the incremental users during the epidemic prevention and control period after the epidemic.

two point oneAccelerate the standardization construction of products from upstream origin, and improve the efficiency of cooperation between fresh e-commerce and upstream

Under the epidemic, the traditional offline sales channels relied on by farmers were blocked, resulting in unsalable agricultural products, forcing farmers to contact the fresh e-commerce platform, which will promote the development of fresh online channels from the upstream supply side. The small farmer business model in China makes the upstream decentralized and the degree of standardization low, leading to the difficulty in implementing standards. The lack of standards on the production side has led to the inability to guarantee the quality of goods from the source of fresh food, and also affected the large-scale procurement of the fresh food e-commerce platform. Therefore, the low standardization of products is a key problem hindering the cooperation between the fresh food e-commerce platform and the upstream. In order to ensure the efficiency of cooperation between the fresh e-commerce and the upstream, and increase effective supply, iResearch believes that the fresh e-commerce platform should continue to help the standardization construction of fresh products in the upstream origin, increase the direct procurement from the origin, ensure the quality of goods from the source, and reduce losses. Specifically, we can start from two aspects:

(1) Selected categories.The overall supply and marketing of the fresh food industry are small and scattered, with many trading links and complex varieties. The source standardization requires a lot of manpower and capital. In the short to medium term, the upstream and downstream of China's fresh food supply chain do not have the basic conditions for large-scale standardization. If the fresh food e-commerce platform carries out the standardization of all categories from the beginning, it will create huge pressure on its own survival and development. Therefore, the source standardization should first select the categories, standardize the selected categories at the source, run through the standardized process of some single products, and deeply operate a small number of commonly used trading categories to strengthen the voice of the supply chain and form a large-scale effect. In this process, the experience of product standardization is gradually accumulated, and the successful experience is extended to other products to form a virtuous circle and relieve the financial pressure of the platform.

(2) Give priority to the source standardization of this selected category.Through the online information system, the purchase and sales of fresh food can be completely completed. The information system can be used to collect user data, break the information circulation barrier, and establish the sales database of the fresh food platform. According to the data feedback of the platform, determine the low price of some single products with large sales volume. On the one hand, it can make the planting direction of the base more accurate; On the other hand, through the analysis of purchasing data, farmers can be guided to farm and breed fresh products according to market demand. The fresh food platform can adopt the strategy of "core category prying" to select some single products with large sales volume as low prices. By creating standardized popular single products, the fresh food products with stable quality and outstanding price advantages can be established to form the platform's affordable and high-quality reputation, so as to enhance the stickiness of the platform's existing customers and constantly attract new customers.

two point twoPromote the construction of cold chain logistics capacity of fresh food e-commerce platform, and reduce the consumption of fresh food circulation

The storage and distribution loss of fresh food in the circulation link accounts for about 30% - 40% of the total process loss. There are two main reasons for the high storage and distribution loss rate of fresh food in the circulation link: (1) The traditional fresh supply chain involves multi-level supply chain, requiring multi-level transportation, loading and unloading; (2) Domestic infrastructure is backward, demand and supply are unbalanced, and cold chain coverage is low. After integrating the supply chain, the fresh e-commerce platform can shorten the circulation level and reduce the number of fresh loading and unloading, but at the same time, it should also promote the construction of cold chain logistics infrastructure, effectively reduce the loss of fresh circulation and ensure the quality of goods. Through this epidemic, the industry will pay more attention to food safety. All parties realize the importance of accelerating the coverage of the cold chain, and consumers are more willing to pay for the cold chain logistics services. In the future, as consumers pay more attention to the quality of fresh goods and become accustomed to paying for cold chain transportation of fresh products, cold chain logistics is expected to further develop.

two point threeOrderly expand the categories required by new users, and help the platform's incremental users transform into existing customers

During the epidemic prevention and control period, users gave greater "tolerance" to the goods and services provided by the e-commerce platform. However, once the epidemic ends, if the needs of platform users, especially the new users during the epidemic prevention and control period, cannot be met, the platform will lose these users. Irui believes that with the improvement of the epidemic situation, the pace of work and life will gradually return to the right track, and the demand for home cooking will certainly shrink. Some of the demand for online fresh food that was originally unable to go out will shift to offline. Especially the main crowd of the elderly who buy vegetables will still go to the food market or supermarket to buy fresh products, and the online consumption is dominated by young people.

According to the research results of iResearch, when consumers choose e-commerce platforms during the epidemic prevention and control period, in addition to non-contact distribution, product quality and richness become the most important factors for users. By optimizing the supply chain capacity of the platform and strengthening the standardization construction and cold chain logistics construction in the upstream, the e-commerce platform can guarantee the demand of new users for the quality of fresh goods. In terms of expanding the platform's commodity SKUs to ensure the platform's commodity richness, the e-commerce platform should (1) screen people with high similarity to the main user groups of the platform according to the new users' portraits and consumption data during the epidemic prevention and control period and in combination with the platform's own customer positioning, orderly expand the platform's commodity categories, and ensure the new users' demand for categories; (2) Intelligent recommendations can be made for the refined needs of a single segment of the population. For example, for office workers or bento workers, semi-finished dishes or clean dishes may be their preferred dishes; (3) The platform follows up marketing activities in a timely manner, such as incentives for new customers. After the end of the epidemic, it is necessary to maintain large-scale growthprice war, subsidies, promotion and other activities are inevitable, but the way to sustainable and healthy development is to retain customers, ensure the quality of goods, delivery timeliness and personalized supply.

Recently, iResearch will release the Research Report on China's Fresh B2B Industry in 2020 and the Research Report on China's Fresh E-Commerce Industry in 2020, respectively, to systematically analyze the fresh 2B and 2C markets, point out the solutions to industry problems, and help the fresh platform to better build a competitive barrier suitable for its own endowment in the industry reform.