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Why the US fresh e-commerce "volume" is not moving

via:凤凰网     time:2022/7/23 8:01:02     readed:95

Instacart (Instacart) was reported to have been downgraded again by investors. The new valuation is about $15 billion, down nearly 40 percent from the previous $24 billion. It is the second time Instacart's valuation has been cut in the past four months, reflecting the difficulties facing us grocery ecommerce in general. Instacart aside, grocery retailer DoorDash has lost a third of its value in six months, while Shopify is down about 50 per cent. Once the capital market darling of the United States fresh e-commerce enterprises for "volume" motionless?

The way people live and consume has changed dramatically as a result of COVID-19. In the United States, food delivery, errands and other services have quickly caught on, with several fresh food e-commerce providers experiencing a wave of exponential growth in 2020. Instacart, one of the most representative of these companies, is doing very well, increasing its total orders five times in 2020 to reach $1.5 billion in revenue and attracting a lot of capital.

However, as the outbreak continued, problems began to emerge. Fresh e-commerce appears to be expanding rapidly, but it is not a "quick money" industry. Fresh produce has a limited profit margin, while storage, wastage, labor, and marketing costs a lot of money, and generally "burn money." When the environment and market expectations change and financing becomes tight, life becomes difficult.

At present, the ECONOMIC growth of the United States is slowing down, inflation is soaring, interest rates are rising, and the epidemic has become a normal trend. The overall environment and market expectations for the development of fresh food e-commerce have changed. Once the expansion mode maintained by "burning money" cannot continue, fresh e-commerce will face business contraction, category adjustment and even close some sales channels and other problems.

Fresh food industry has been known as the blue sea of e-commerce industry, but "good prospects, difficult to profit" is always difficult to get rid of the "magic spell". The epidemic has accelerated the development of fresh food e-commerce in the United States, but the market surge will not become the norm. After the ebb of capital, how to maintain customer stickiness in the normal operation, reduce costs, improve hematopoietic function, is a difficult problem faced by fresh electricity suppliers.

As industry analysts say, fresh e-commerce is a slow business, and to be profitable, it needs to survive a long incubation period. In the process, the industry will become more bifurcated. In the United States, fresh e-commerce in recent years to present a "hundred flowers bloom" situation, in addition to Instacart and GrubMarket and other "new stars", Amazon, Wal-mart and other traditional big players are also in the long-term layout, industry differentiation is inevitable.

In the current environment, fresh electricity business this door "burn money" business for investors has not "sweet". Dependent on the capital market, "new stars" need to cheer up and make business adjustments according to the market environment, highlighting their advantages and characteristics. In addition to improving customer experience and supply chain and distribution system and other core competitiveness, restraint of the desire to "burn money" is probably also a required lesson for fresh e-commerce.

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