The remaining temperature of Meituan's additional offering to raise US $10 billion plus community group buying has not dissipated, and the capital market may usher in another major event in the field of fresh e-commerce.

Missfresh Limited formally submitted a prospectus to SEC on Tuesday night and plans to list on NASDAQ under the stock symbol "MF", with JPMorgan Chase & Co, Citigroup, CICC and Huaxing as co-lead underwriters.

As a community retail enterprise that pioneered the "pre-position" model in China, Missfresh Limited continued to be sought after by all kinds of capital after its establishment in 2014. Top institutions such as Tencent, Tiger Global Fund, Goldman Sachs Group, CICC Capital, time Capital and other top institutions entered one after another. Tencent also participated in round An in 2015 and followed for four more times.

So, why is the capital so optimistic about Missfresh Limited, and what is the development status and potential of Missfresh Limited? Let's take a look at the prospectus.

Self-operated pre-positioned real-time retail has become the industry leader.

Different from the community group purchase "pre-sale + next day + pick-up" model, the front warehouse model represented by Missfresh Limited focuses on the "instant + convenience + high quality" delivered to home as soon as 30 minutes. In contrast, residents in first-and second-tier cities have a higher income, a faster pace of life, and are more willing to pay a premium for convenience and quality, so they tend to prefer the latter in fresh consumption.

According to the statistics of Mob Research Institute, among fresh e-commerce users, those from first / new first / second tier account for 28.2% / 30.5% / 15% respectively, totaling 73.7%. The distribution characteristics of centralized first-and second-tier cities are very obvious. Missfresh Limited therefore focused on the key layout of first-and second-tier cities. According to the prospectus, as of March 31, 2021, Missfresh Limited had set up 631 front positions in 16 key cities, focusing on meeting consumers' demand for convenience of high-quality goods. The cumulative number of trading users exceeded 31 million. And Missfresh Limited in 2020 GMV 7.6 billion, in the front position real-time retail sector accounted for 28% of the market share, ranking first in North China.

According to the prospectus, Missfresh Limited's core customer price reached 98 yuan, with an average per capita spending of 2106 yuan in the 12 months to 2021Q1, a steady increase from 1725 yuan, 1851 yuan and 2044 yuan in 2018, 2019 and 2020. Core customers account for about 21% of the total users. As far as all Missfresh Limited users are concerned, the age distribution is mainly for the young group of 26 to 45 years old. The unit price is about 94.6 yuan, ranking first in the industry.

The best customer unit price in the industry stems from Missfresh Limited's strong supply chain capacity and the whole process optimization brought about by the intelligent retail network.
According to the prospectus, the direct recovery rate of Missfresh Limited's fresh products in the place of origin is more than 90%, and has more than 4300 SKU products and more than 20000 SKU products reached the next day, the purchase automation rate is 97%, and the front warehouse replenishment rate is 98%, which well meets the needs of consumers for one-stop shopping.

In terms of customer experience and operational efficiency, Missfresh Limited has a refund rate of only 0.6% under the unconditional refund policy, achieving a golden balance between a low inventory loss rate of 2.5% and a low sales rate of 6%. The average daily gross profit margin of each rider is 50.2%, and the gross profit margin in 2020 is 19.4%. At the same time, the performance fee rate is only 25.7%, which is the lowest in the industry according to company data. Missfresh Limited's unit economic model has reached the best in the industry.

Considering the temporary low penetration rate of fresh e-commerce and Missfresh Limited's long-term investment in technology, under the scale effect brought by the expansion of customer base, high repurchase rate, and further optimization of efficiency, the per capita performance cost is expected to continue to reduce. Missfresh Limited's visibility for sustainable and healthy development is very high.

Big water and big fish, multi-dimensional layout of community retail to explore greater growth space

On the basis of becoming the leader of real-time retail in the front position, Missfresh Limited set his sights on the broader community retail market. After all, the front position is more suitable for consumer groups in first-and second-tier cities, entering other levels of cities, meeting the needs of diversified people means larger market space and higher industry ceilings.

According to the iResearch report, the scale of China's community retail is 11.9 trillion in 2020 and is expected to grow to 15.7 trillion by 2025, which is far more than the catering market started by Taobao, JD.com and Meituan.

Among them, the size of the digital community retail industry is expected to increase from 2.5 trillion in 2020 to 7.2 trillion in 2025, and the online penetration rate of community retail will increase from 20.9% in 2020 to 45.5% in 2025, which can be understood as the largest and fastest growing market segment in China in the future. According to the prospectus, in addition to the front position of real-time retail, Missfresh Limited will also capture the huge dividend of community retail digitalization through a multi-dimensional layout of smart markets and retail clouds.

1) Wisdom Market: the vegetable market still accounts for 56% of the market share in China's fresh channels. Even with the rapid development of e-commerce in China in recent years, the vegetable market still has a very stable foundation. In the future, consumers in the vegetable market need a better shopping experience, and merchants in the vegetable market need better operational efficiency.

Missfresh Limited launched the Wisdom Farm business in the second half of 2020 and plans to use this business model to promote the standardization of the vegetable market and the transformation and upgrading to a small fresh community mall. Missfresh Limited will transform the vegetable market in three aspects:

• Transform the site and hardware, optimize the combination of merchants and introduce new business type

• Provide merchants with full-process SaaS service packages, including electronic payment, online marketing, CRM tools and business planning, to enhance the digital level of the vegetable market.

• Help merchants open up online e-commerce channels, establish online private domain traffic, and increase revenue.

According to the prospectus, Missfresh Limited has signed operating agreements with 54 vegetable markets in 14 cities and operated in 33 Canadian vegetable markets in 10 cities.

2) Retail cloud: Missfresh Limited's retail cloud is a SaaS platform for the community retail industry, which is the spillover of its core competence of digital operation (namely intelligent retail network RAIN). Missfresh Limited launched the retail cloud business in 2021, which aims to empower a wide range of community retail participants, such as supermarkets, vegetable markets and local retailers, through intelligent omni-channel marketing, intelligent supply chain management and store-to-home capabilities. help them start their business digitally and run their business efficiently.

According to data from iResearch Consulting, with the increasing demand for digital from various retailers, the transaction size of China's super retail cloud-driven market will reach 190 million by 2025. Missfresh Limited, who has entered the retail cloud, has once again expanded his development space through border extension.

Finally, an interview with Missfresh Limited CFO Wang Meng vividly illustrates why Missfresh Limited has a higher ceiling under the multi-dimensional format layout through the analogy between Lianjia and KE Holdings Inc..

"China's community retail industry is extremely fragmented and fragmented," Wang said. If you take the front position and engulf all the top 10 supermarkets in the country, it will only account for 6% of the whole fresh and fast consumer market, but the platform has a chance to achieve 25% or even 40%. The front position is not only our good vertical business, but also our prototype, our digital system is completely born out of it, it will continue to provide data to help optimize the system. Just like the relationship between Lianjia and KE Holdings Inc.. KE Holdings Inc. currently manages more than five times as many stores as Lianjia. This is the value of the platform, it can solve the ultimate problem of the industry. "