Recently, Dingdong Maicai released its performance report for the third quarter of 2023. Dingdong achieved a revenue of 5.14 billion yuan in this quarter, compared to a total revenue of 5.94 billion yuan in the same period last year. The net profit reached 2.1 million yuan, and the net loss for the same period last year was about 340 million yuan. In this quarter, Dingdong Maicai also achieved a net profit margin of 0.3% under the Non Gaap standard, thus achieving four consecutive quarters of profitability under the Non Gaap standard. The GMV for the third quarter was around 5.67 billion yuan.
Site shrinkage and offline consumption regression leading to a decrease in total revenue
For the decrease in total revenue, the financial report explained that it was mainly due to the withdrawal of stations from multiple cities and stations in 2022 and the second quarter of this year, as well as the higher interest of consumers in offline consumption. After the epidemic, consumer tourism activities also increased, which led to a decrease in sales. According to previous reports from Nandu, Dingdong Maicai closed down stations in May last year, including Chengdu, Chongqing, Xuancheng and Chuzhou in Anhui, Tangshan in Hebei, and Zhuhai in Guangdong. At that time, Dingdong Maicai stated that it was based on routine optimization and adjustment of certain regions.
From the perspective of revenue structure, the product revenue in the third quarter was about 5.08 billion yuan, compared to 5.87 billion yuan in the same period last year; The service revenue was 57.2 million yuan, compared to 70.1 million yuan in the same period last year. The financial report mentioned that the number of members affected by the epidemic temporarily increased significantly in the third quarter of last year.
The total operating costs and expenses were 5.16 billion yuan, a decrease of 17.6% compared to the same period last year. The performance fees are continuously optimized, with a cost of approximately 1.2 billion yuan in the quarter, a year-on-year decrease of 24.8%. The percentage of performance fees in total revenue has decreased from 26.8% in the same period of 2022 to 23.3%. The performance fee rate for this quarter improved by 3.5 percentage points year-on-year to 23.3%; The average daily order volume per warehouse increased by 6.6% year-on-year.
It is reported that in this quarter, Dingdong Buycai improved the speed and efficiency of contract fulfillment by adjusting its transportation capacity structure and optimizing attendance scheduling. The proportion of real-time orders within 40 minutes increased by 6.8 percentage points year-on-year, and the shortest available time shortened by 14.3 minutes year-on-year.
Create leading items to lower purchase prices
Liang Changlin, founder and CEO of Dingdong Maicai, discussed the changes in regional GMV during a conference call after the financial report. He said that due to the impact of the COVID-19 pandemic in the same period last year, Shanghai's GMV has significantly converged to within 10% year-on-year, although it still has some decline compared to the same period last year. Meanwhile, in the third quarter, the month on month growth resumed, reaching 7.8%. On the basis of the growth in the second quarter, Jiangsu and Zhejiang benefited from the continuous expansion of user orders. In addition, there has been a significant increase in the frequency of old users placing orders, and the third quarter still continues to achieve double-digit year-on-year/month on month growth. At the same time as rapid growth, both Jiangsu and Zhejiang regions as a whole have been profitable for four consecutive quarters.
In addition, Liang Changlin emphasized that commodity strength is the first driving force for the development of Dingdong's vegetable buying business. "Since the beginning of this year, we have always focused on the direction of 'wide SPU, narrow SKU', selected SKU strategies, as well as the advantages of supply chain and commodity strength, to create top tier large items. Through our high-quality supply chain and large-scale sales, we have achieved the lowest purchase price of products. According to him, Dingdong's monthly sales of vegetable buying in the third quarter exceeded 5 million SKUs, An increase of 10 compared to the first quarter; The number of SKUs with monthly sales exceeding ten million has increased by three compared to the first quarter.
Indeed, in recent years, Dingdong Buycai has increasingly attached importance to extending its upstream supply chain. The platform hopes that consumers can now not only "buy vegetables on Dingdong", but also "buy Dingdong's dishes", and has initially established the mentality of "whatever you want to eat, go to Dingdong". At present, Dingdong Maicai's own brand has covered four categories: prefabricated vegetables, meat, rice noodles, and bean products, and many of these products can now be developed and produced through 12 self operated factories. Dingdong said that the company has formed a full chain closed-loop supply chain from processing to direct delivery to users, ensuring the supply, quality, price, and efficiency of goods to the greatest extent possible.