In the early years, due to the adjustment of the macro environment and changes in the competitive landscape, the public had doubts and concerns about the survival of Dingdong Maicai. Today's results indicate that we have firmly survived. "On the evening of November 16th, Liang Changlin, founder and CEO of Dingdong Maicai, stated at the financial report meeting.
On the evening of November 16th, Dingdong Buycai (NYSE: DDL, stock price of $190, total market value of $449 million) released its performance report for the third quarter of 2023. In the quarter, Dingdong Maicai achieved a revenue of 5.14 billion yuan, an increase of 6.2% month on month, and a GMV of 5.67 billion yuan, an increase of 6.4% month on month. And achieve a net profit margin of 0.3% under the Non Gaap standard.
At this point, Dingdong Maicai has achieved four consecutive quarters of profitability under the Non Gaap standard. At the same time, the quarter also achieved overall profitability under the Gaap standard. To achieve this goal, as early as the third quarter of 2021, Dingdong Maicai began to temporarily suspend its scale expansion and shift towards pursuing profitability. Now, Dingdong Maicai has finally proven its own survival ability.
In the past two years, against the backdrop of moving towards profit goals, Dingdong Buycai has further adjusted its positioning. At the financial report meeting, Liang Changlin said, "We are not only a retail channel company, but also a food enterprise with product research and production capabilities
Commodity strength has become a common driving force for fresh retail platforms, and compared to Hema, which has announced the launch of a "discount" transformation, there has been no significant change in the development strategy of Dingdong Maicai.
However, during the conference call, Liang Changlin stated that on the basis of delicious food, Dingdong also made a low price for buying vegetables, calling it "good goods sell cheap". "Ultimately, the quality of the products will improve and the prices will decrease
Will pay more attention to the growth of the South China and North China markets
In addition to revenue data, Dingdong Buycai also disclosed some key data.
According to Dingdong Maicai, its total order volume increased by 6.0% month on month in the quarter, and the monthly average purchase frequency of users further increased year-on-year and month on month. Among them, the monthly average purchase frequency of green card members reached 6.9 times.
Specifically, the GMV of Dingdong Maicai in the Shanghai region increased by 7.8% month on month in the quarter, while the GMV of Jiangsu and Zhejiang regions both increased by more than 13% month on month. The number of users who placed orders has continued to expand, and the region has achieved overall profitability after covering headquarters expenses for four consecutive quarters.
Liang Changlin also stated that due to the impact of the high base epidemic in Shanghai during the same period last year, GMV has significantly converged to within 10% year-on-year, although it has decreased slightly compared to the previous year.
According to Dingdong Maicai's quarterly report, as of the third quarter ended September 30, Dingdong Maicai's revenue for this quarter was 5.14 billion yuan, compared to 5.94 billion yuan in the same period last year.
Screenshot of Dingdong Buying Vegetables Financial Report
Dingdong Maicai also stated that its refined operation, which began in the Yangtze River Delta region in the first half of this year, is continuously improving its service side operational efficiency. In this quarter, the proportion of real-time orders within 40 minutes of pre position positions increased by 6.8 percentage points year-on-year, and the shortest possible duration decreased by 14.3 minutes year-on-year.
In addition, in the quarter, the fulfillment fee rate of Dingdong's purchase of vegetables 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.
At the financial report meeting, Dingdong Buycai repeatedly emphasized its progress in commodity strength.
It is reported that Dingdong Maicai has vigorously optimized its product structure this year, selected and replaced products, and focused on developing resources in large and explosive products. By selecting SKUs, as well as supply chain and large-scale sales, we aim to improve the price competitiveness of our products while ensuring quality.
In this quarter, Dingdong Maicai revealed that the number of SKUs with monthly sales exceeding 5 million increased by 10 compared to Q1, and the number of SKUs with monthly sales exceeding 10 million increased by 3 compared to Q1.
It is understood that Dingdong Maicai's own brand currently covers 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. According to its introduction, the "Handmade Paper Leather" series of products has been online for more than two months, with sales exceeding 16 million yuan.
For the future, Dingdong Buycai also stated on a conference call that multiple indicators in Jiangsu and Zhejiang regions are currently rapidly improving. "While continuing to consolidate the scale and profitability of these two regions, we will also pay more attention to the growth of the South China and North China markets
In addition, Dingdong Maicai had a net operating cash flow inflow of 130 million yuan in the quarter. As of the end of Q3, the balance of cash and cash equivalents, short-term restricted funds, and short-term investments was 5.63 billion yuan.
Will it shift from defending to attacking?
It is worth mentioning that during the conference call, in addition to stating that Dingdong Buycai has passed the "difficult period", Liang Changlin also stated that the continuous profitability for four consecutive quarters indicates that Dingdong Buycai's combat effectiveness and quick response ability have once again been verified.
Ding Dong has the ability, energy, and resources to return to the track of growth when buying vegetables later, "said Liang Changlin.
Hema previously stated that a new procurement model will be introduced on October 13th, initiating a "discounted" transformation. Hema stated that currently, the discount transformation has started with Hema Fresh's offline stores and will expand to online stores in the future, ultimately making all Hema products more competitive in price. In Hema's view, "discounting" is not selling cheap goods, but through the construction of a vertical supply chain to sell good goods cheap, ultimately achieving "upward movement in product quality and downward movement in product prices".
In addition to Hema's sweeping reforms, Yonghui recently announced that it will add "genuine discount stores" to its nationwide stores and simultaneously add discount zones on online apps/mini programs to provide surprise discounts on food and supplies. At the same time, Bubugao, which is currently restarting, has also placed a low price label. According to reports, in order to increase customer traffic to offline stores, Bubugao Supermarket has also complied with the current low price strategy of the retail industry and announced a reduction of about 15% in the average selling price of its products.
At this financial report meeting, Liang Changlin also made a statement on the commodity price strategy.
He stated that after the epidemic, users' consumption intentions and preferences have changed, and real-time retail will eventually return to commercial essence, providing consumers with better service capabilities, stable quality assurance, and price competitiveness determined during the shopping process.
In response to analysts' questions, Liang Changlin stated that people are now paying more attention to efficiency and low prices. In this matter, low prices are an improvement in efficiency, not a decrease in quality.
Next, will Dingdong launch another offensive when buying groceries?
Based on the current economic situation, I think our product positioning is relatively advantageous. We focus more on products that are closely related to people's livelihoods. For example, vegetables are our traditional advantageous category, and consumer stickiness will be higher. On the basis of leveraging our advantageous category of products, we will place more emphasis on the strategy of 'wide SPU, narrow SKU', "said Liang Changlin, We will also increase the investment of promotional and discount resources on the basis of the continuous construction of the above advantages and capabilities, further enhance the penetration and sales of top large items, and also provide better touchpoints for the more price sensitive population
As of the close of the US stock market on November 16th, Dingdong Maicai closed at $1.90, a decrease of 7.32%, with a total market value of $449 million.
转播
