Will Miss Fresh Get Fresher After the New Round of Fundraising?
COVID-19 and China
Fresh grocery pictures on Miss Fresh web page. Photo: Credit to Miss Fresh website

According to LatePost on June 17, Miss Fresh (每日优鲜), a Chinese online platform selling fresh groceries with a valuation of over USD 2 billion is looking for financing. It has already made approaches to DST Global, Soft Bank, as well as its previous funding round investor Tencent.

As of the time of writing, details about company’s funding remain undisclosed. Miss Fresh, however, stated publicly that as a unicorn in the fresh grocery sector, it has attracted lots of attention from VCs and will keep connecting with these investors.

The representative of Miss Fresh also said that with the cost-saving advantage brought by the front warehouse model and the remarkable results of SKU expansion strategy, the company had been showing positive cash flow for 11 consecutive months in Beijing. As Miss Fresh is gradually replicating the model in East China, South China and Central China, the rapid growth of regional markets and the scale effect can be seen clearly.

Founded in 2014, Miss Fresh has completed seven rounds of fundraising with a total funding of more than CNY 5.6 billion. Tencent, its Series A lead investor, also followed up with investments in its Series B, Series C and Series D rounds.

Unlike FreshHema (盒马鲜生), Super Species (超级物种) and 7Fresh, who represent the so-called new retail and provide both online and offline services in selling fresh goods, Miss Fresh is operating an online-only model. Users can place an order through the Miss Fresh app and the goods will be delivered within one hour. Instead of focusing on brick-and-mortars supermarkets, it has more than 1,500 warehouse locations chosen via big-data selection, saving on labor and operating costs. After its last round of fundraising, Miss Fresh claimed that the company was planning to build 10,000 front-warehouses in 100 cities, reaching more than 100 million families.

However, in the fresh grocery sector, both Internet giants and traditional retail enterprises have to face the current capital ebb and consumption decline. In early March 2019, Hema adjusted their store system to "one big four small". Now a 4000 square meter Hema as the one that’s big, and Hemacaishi, Hema mini, Hema F2, Hemaxiaozhan are the “four small” ones, targeting customers in nearby communities. Coincidentally, the CEO of 7Fresh was transferred to another department and the company’s thousand-stores target set previously is far from accomplishment. Yonghui separated from its new-retail branch Super Species turning it into an independent company after a huge loss of RMB 1 billion in two years.

As for Miss Fresh, it received only one investment in two-years with its valuation increasing by mere CNY 500 million.

Observers have not been optimistic about the fresh groceries expansion strategy in the recent years due to them operating on money-burning mode. But the convenience those companies bring to people's daily lives is real and somehow has changed consumers' purchasing habits.

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