2015 is known as the first year of fresh electricity business, driven by capital into a large number of entrepreneurs such as Yiguo, SF Preferred, Su Xiansheng, iResearch consulting data shows that in 2015, the new establishment of fresh electricity business more than 260. But two years later, there were only nine fresh e-commerce start-ups, turning the blue sea into the red sea.
Fresh e-commerce industry red sea, the road is more difficult
Fresh who gets the world, fresh e-commerce potential market is huge, but the road is not easy to go. Under the Red Sea fresh electricity suppliers want to stand, but also need to solve the following problems.
First, logistics costs are high. Fruits, vegetables, aquatic products and other fresh with the characteristics of perishable damage, short shelf life, can only rely on cold chain logistics transportation. However, the cost of refrigerated warehouse and temperaturely-controlled refrigerated storage insulated vehicle required by cold chain logistics is very high, not to mention the storage environment of refrigerated warehouse needs different temperature areas such as freezing, refrigeration and constant temperature, which is expensive to establish. The price of a temperaturely-controlled refrigerated storage insulated vehicle is 2 to 3 times that of ordinary freight vehicles. Data from China E-commerce Research Center show that the average logistics cost of an order for fresh e-commerce is more than 50 yuan, and the cold chain cost accounts for 40% of the total cost and 25%-40% of the sales.
In addition, fruits and vegetables and other fresh profit itself is low, advertising costs are high, high cost and low profit operation mode makes many e-commerce difficult to bear its weight.
Secondly, quality is difficult to ensure, difficult to obtain customers. Fresh products are non-standard products, there is no corresponding standard planning in China, the quality is difficult to control. On the one hand, in terms of production place, fresh products lack large-scale output and self-run costs are high. Many e-commerce companies purchase from farms, making production safety difficult to control. In the process of transporting products to consumers, long transportation time or product decay will affect consumers’ fresh purchasing experience.
On the other hand, quality and passenger flow is proportional, only quality pass, passenger flow will increase. However, when e-commerce companies purchase offspring from a third party for sale or carry out secondary packaging, the real production date will be blurred and there will be food safety risks.
Fresh short shelf life, people often when the choose and buy this kind of product will be undertook strict earnest attitude to screen, if the customer in a electric business platform bought a fresh product quality is not good or no safety guarantee, next time won’t patronize this appliance merchant, but turned to other electrical business, such as a user on zhihu for fuzzy production date, Doubt the safety of the products and stop buying fresh food on the e-commerce platform.
Third, high marketing investment. As we all know, money – burning marketing is a common problem in the fresh electricity business industry. Fresh belongs to the low price of high frequency of consumer goods, in order to gain more sales, fresh electricity enterprises tend to adopt various promotion methods, such as coupons, free shipping, etc., but such promotions accumulation to only a small part of the customer, and the money is too big, easy to cause the enterprise capital chain rupture, delicious groups is so closed.
To sum up, fresh e-commerce industry is full of challenges, burning subsidies and price war has been difficult to maintain the survival of fresh e-commerce, but also led to the disappearance of many fresh e-commerce. Although early players such as Tuotuo Have survived, there are still challenges in the future, which should not be taken lightly.
The transformation of The enterprise positioning of The Tuo Tuo Workers’ Association has been challenged again
As one of the earliest players in the fresh e-commerce industry, Tuo Tuo Workers experienced the downturn in the fresh e-commerce industry in 2016, the shuffle period in 2017, with years of accumulated experience and customer resources are still active in the industry. Now, in order to seek development, Tuo Tuo workers changed the enterprise positioning, e-commerce is no longer the main direction of the company’s development, a large number of capital and manpower will be invested in the production end. But the new transformation has also brought new challenges.
From the consumer side, Tuo Tuo Workers for a single consumer group, small market share, coupled with safety problems, the enterprise is struggling. On the one hand, Tuotuo Industrial Co., Ltd. is positioned in the high-end market, mainly for high-end elite group products and maternal and child products. It is understood that Tuotuo Industrial Co., Ltd. launched the “Chopsticks Club” business on February 20, 2017, adopting the directional invitation system, and providing consumers with exclusive butler and delivery services.
While this custom service won the favour of high consumption crowd, for Tuo Tuo workers club share the high cost, but such a high-end elite crowd is just a small part of the public, the market for small amount, and the higher consumption, customer the corresponding requirements will be higher, in the long term, the estimate is also difficult to prop up enterprise high quality service from production to distribution to the integration of a cost.
On the other hand, lack of security causes customer loss. According to the Beijing Morning Post reporter, The Tuo Tuo commune account registration and mobile phone number modification does not need too rigorous verification, only the new number received by the verification code, if the registration did not set a payment password, then the new number received by the verification code directly order, complete theft brush. Such a simple payment setup is bound to produce security loopholes, Tuo Tuo workers, Ms. Zhang had encountered theft brush events.
Although Tuotuo later explained the incident and promised to strengthen the security of its account information, the incident has had a negative impact on Tuotuo. People have the mentality of “once bitten, twice shy” for online shopping. Safety incidents will inevitably affect customers to choose the e-commerce again. For e-commerce, safety construction is the primary task, after all, when online shopping, the primary consideration of customers is safety and reliability.
From the production end, Tuotuo Workers had to face the problem of increased production input, but still less output and difficult to make profits after returning to the production end. According to a reporter from Beijing Business Daily, as of April 2017, the Tuotuo Farm could provide 58 kinds of vegetables, but only 31 of them were for sale due to seasonal reasons. In addition, according to an old employee, the variety of vegetables provided by tuotuo farm has decreased in recent years, and many kinds of agricultural products are often out of stock.
Thus, tuotuo’s farm output is not that large. In addition, high-quality agricultural products have strict requirements on soil, climate, water quality and other conditions. If the investment in e-commerce is reduced, it remains to be proved whether the enterprise’s revenue can support the high cost investment in the agricultural production end. And the company’s scale expansion speed is slow, the market lacks the patience to wait for the company’s scale to expand, Tuo Tuo workers at this time to turn to the production end is a risky move.
How should the future road of fresh electricity supplier of Tuo Tuo Workers go?
Tuo Tuo workers not only faced with the consumption end and production end of internal problems, but also faced with fierce competition in the industry. Now, due to the participation of the traditional retail industry, fresh e-commerce market gradually active, and alibaba, Tencent and other major platforms to join the fresh industry is intensified the fierce competition, fresh e-commerce industry accelerated the shuffle pace. Under the circumstances of the former Wolf and tiger, The Tuo Tuo Community wants to lay a solid foundation, occupy a place, differentiated management or as a way out.
First of all, to create a unique quality. Fresh e-commerce industry homogenization phenomenon is more serious, brand characteristics, quality will only become a strong driving force to occupy the market share of Tuo Tuo Workers. At present, the organic fresh market has not reached saturation, and Tuo Tuo workers mainly provide users with organic, natural fresh goods, therefore, Tuo Tuo workers should be organic brand characteristics, improve brand recognition.
In addition, The Tuo Tuo society should strictly monitor the production process, establish standard agricultural planting base, the soil and water quality and other regular safety testing, grasp the quality of products. And the value of fresh products lies in the freshness, Tuo Tuo workers in the production end to ensure the quality of the product at the same time, also should pay attention to the preservation of the transportation process, should actively improve the cold chain logistics system, ensure the freshness of the product, reduce the product loss in the process of transportation.
Secondly, expand the scale of production end and develop diversified agriculture. In the face of increasingly diversified user needs, Tuotuo Workers should expand production scale, increase product types, increase efforts to produce scarce products with high user recognition, to avoid the situation of shelf shortage.
Qu Feiyu, co-founder of Ruijinlin Group & CEO of Ruiyun Zhirui, once told reporters from the investment circle that experience and leisure will be one of the trends of fresh consumption in the future. Tuo Tuo workers clubs can also follow this consumption trend, on the production side to carry out the fresh experience leisure places, increase harvest, measures, such as offline sales model, and actively cooperate with offline enterprise, increase the front positions, radiation surrounding for the center with offline outlets within a few kilometers of user groups, area as the unit for centralized distribution, to expand the sale scope, Reduce product damage during transportation.
Finally, to high-end, extended to all aspects of consumer groups. In order to get high customer unit price, Tuo Tuo workers and focus on high-end consumer groups, but IResearch data shows that in 2017, the average customer unit price of 51-100 yuan of consumers accounted for 30%, the average customer unit price of 101-200 yuan of consumers accounted for the highest 39.5%, only 17% of consumers to buy fresh customer unit price in 201-300 yuan, Only 9.8% of customers have a unit price of more than 300 yuan. It shows that moderate consumer prices are more popular in the broad low-end market, and only a small number of high-end consumers.
Tuo Tuo workers focus on a single crowd, afraid it is difficult to maintain production costs, should be given priority to high-end consumer groups, appropriate lower posture, for the majority of low-end consumer groups, in order to maximize profits.
In general, although the fresh e-commerce industry has a huge market development space in the future, fresh itself is an industry struggling with time and space. The problems such as high cost of storage and logistics system, lack of information technology personnel and excessive capital investment have existed for a long time and need to be solved urgently. Tuo Tuo workers in the future of fresh electricity business road to move forward, should seize the “fresh” character quality, precipitation self, posture down, into a wider market.
Article/Liu Kuang public account, ID: Liukuang110