A New Fresh Grocery Successor DAILUOBO Completes Series A Fundraising
DAILUOBO, a residential-community-based fresh groceries chain store, completed its Series A funding round with CNY 634 million. Hillhouse Capital and Morningside Venture Capital invested in this round of fundraising.
DAILUOBO (呆萝卜), a residential-community-based fresh groceries chain store, completed its Series A funding round with CNY 634 million. Hillhouse Capital and Morningside Venture Capital invested in this round of fundraising.
DAILUOBO operates on a new model called “today's order, tomorrow's take” with most of its stores located in densely populated communities. Customers will purchase goods from DAILUOBO’s app online in advance, get an order number and pick up the goods the next day. The fixed amount of goods will be delivered to each store through its self-built warehousing and logistics. While earliest batches can be delivered around 1 to 2 am, the latest batch will be arrived no later than 5 to 6 am.
The innovative model of DAILUOBO is attractive to both consumers and investors. In Aug 2018, the comapny received its angle round of funding with tens of millions of US dollars -- an over-the-average amount of money.
With companies come and go, the battle for fresh groceries markets is never off the table. Alibaba initiated the long-standing topic of “new retail” and launched FreshHema, the online-offline fresh groceries store assisting its new concept. Meanwhile, competitors like Tencent, JD.com and Meituan fearlessly rushed into this gaming field with the preparation of deep pockets. Since 2013, the market size has grown at a rate of 6% per year and reached CNY 2 trillion by 2018. However, the high loss rate of 25% to 30%, the lack of cold chain logistics, high distribution costs and other reasons have hampered the development of a large number of pioneers. The survivors are either those with strong capital support or players like Qiandama and DAILUOBO, who innovate a step further in the new retail experiment.
For DAILUOBO, the “quantity-fixed” model can greatly reduce the high loss of in the traditional fresh groceries markets; on the other hand, it is also suitable for the fast-paced lifestyle people who take time cost into consideration during shopping.
One of the competitors Qiandama, who is famous for “Never Sell Overnight Pork” and offers different discounts depending on the time of the day, solve this high loss issue cleverly as well. However, DAILUOBO’s order-and-pick-up service has been showing greater advantages in terms of business expansion. Compared with Qiandama who has opened 1000 stores in six years, DAILUOBO is even faster with 2,000 stores opened in two years.
Although the business is not just about speed and money, the two consecutive rounds of financing is a proof for the sustainable operation model in the softening market of fresh groceries.