Growth fueled by the pandemic begins to wane off, and firms such as Missfresh are now in a dire position.
Chinese online grocery provider Missfresh (Chinese: 每日优鲜, MF:NASDAQ) updated its mobile application today, indicating the shutdown of the 30-minute express delivery service. Now, customers are only left with the option of next-day delivery. Besides, employees also received the notice and closed stores on July 27.
Since this year, the firm’s businesses have undergone several rounds of contraction. It has the right to operate in 17 cities, but by the end of June this year, it only has prepositioned warehouses in only 13 cities. It closed businesses in 9 cities, including Nanjing, Hangzhou, Qingdao and Shenzhen, within the span of three days.
Besides, the firm faces problems at the cash flow level. Since March this year, the firm has been repeatedly reported to default payments to suppliers. There are also cases of delayed salary payments for current employees of the company.
However, a glimpse of hope comes from Donghui Group (Chinese: 山西东辉集团), which reached an agreement with the firm for CNY 200 million in equity investment. This may not be enough as the firm is expected to record a net loss of CNY 3.7 billion for the year 2021.
The online grocery market is fiercely contested. Emerging forces such as Duoduo Grocery (Chinese: 多多买菜), the online grocery app of e-commerce platform Pinduoduo; Meituan Select (Chinese: 美团优选) and the now-defunct Chengxin Youxuan (Chinese: 橙心优选) entered the industry in 2021.
Besides, the firm also received warning letters from NASDAQ regulators. At the time of release, its stock price was below $1 and did not yet release its fiscal report for the fourth quarter of 2021.