Daidairadish burning billion yuan a year, expanding, selling cars, closing stores, struggling to survive

 Daidairadish burning billion yuan a year, expanding, selling cars, closing stores, struggling to survive

Winter eat radish, but less than 10 days, fresh e-commerce stay radish staged a Waterloo..

On November 21, dairou was exposed as underpaid.

On the 22nd, some suppliers besieged dairadishs headquarters in Hefei.

On the same day, on the official WeChat public number, the radish said that due to poor capital management, the daily operation of the company was seriously affected.

Later, the radish stores began to close.

On November 29, time weekly reporters rushed to stay in Hangzhou center of radish, only to see people go to Loukong. The staff of the convenience store at the entrance of the office building said: all the staff of that company left in a few days.

On the evening of the 28th, Liu Feng, CTO of dairadish, announced in a circle of friends that the dairadish Hangzhou center had been closed on the same day and that all the employees of the center had been settled.

On November 29, the former head of the production and research team of dairadish Hangzhou Center (pseudonym) denied Liu Fengs claim to the times weekly, saying: no one left the Hangzhou center on November 26, and everyone was asked to finish all the resignations that day.

At present, daidaidairou owes more than 300 employees in Hangzhou center two months wages, and all employees social security fund is completely cut off in November, which means that some people cant buy a house or a car, and they need to accumulate another two years..

In fact, the capital gap of dailuozi is not only the salary of employees.

On December 1, according to Li Yang, a dairadish supplier in Hefei told the times weekly that at present, the capital gap of dairadish is not only 50 million yuan of wages for all employees, but also more than 40 million yuan of deposit from partners, 58 million yuan of recharge from customers and 150 million yuan of money owed to suppliers.

This is an incredible amount of money owed.

Tianyancha shows that since August last year, dairadish has obtained more than 700 million yuan through three times of financing.

From 700 million yuan financing to 300 million yuan financing gap, what makes staying in radish become a beast of money in more than a year?

Founder sells famous cars to pay wages

Tianyancha shows that the main operating body of dairadish is Anhui Caicai e-commerce Co., Ltd., which was founded in October 2015 with a registered capital of 5 million yuan. Its legal representative is Li Yang, executive director and general manager, as well as a major shareholder and ultimate beneficiary.

According to its shareholding structure, Li Yang is the largest shareholder with a 90% stake.

Before the crisis, dairou had more than 1000 stores and 3000 employees in 19 cities of Anhui, Jiangsu, Henan and Hubei provinces.

On November 27, Li Yang said in the siege of many employees: at present, the companys book is only 1 million yuan.

He also said that in addition to declaring bankruptcy, the only way is for the company to develop again so that he can repay the money.

On the same day, Li Yang said that he would sell three cars with a total value of 5 million yuan to pay Hefei employees.

The total salary in Hefei is 5.9 million yuan, and the remaining 900000 yuan will be given to you within 10 days. Is it OK to pay the salary first? Li Yang discussed with his staff at the scene.

However, he said that the salary of the staff in Hangzhou center, including the production and research team, was more than 30 million yuan, which he was unable to pay at present.

Fortunately, local employees in Nanjing and Maanshan.

According to Li Yang, dairadish has sold off its local assets under the supervision of the government. For example, Nanjing sold 2.8 million yuan of frozen goods in the warehouse for employees to pay.

On November 29, Yu Tian (pseudonym), an employee of dairadish Hefei headquarters, told time weekly that the reason why Li Yang promised to pay Hefei employees for car sales was that he hoped the business in Hefei would survive.

According to the solution revealed by Li Yang on November 27, dairou will cut the businesses of Wuhu, Nanjing, Maanshan and other cities like a man of arms, leaving only the businesses of Hefei.

In the video obtained by time weekly reporter Yu dairadish in Nanjing, Li Yang gave the reason: why to protect Hefei? Its not because Hefei is the largest city, its because Hefei is the closest to profitability! Cut off other businesses, we can use more than one month to make Hefei profitable, and the companys profits can continue to be funded.

After appeasing Hefei employees, Li Yang also temporarily appeased suppliers in Hefei.

The Hefei supplier told the times weekly that the current solution given to them is debt to equity and promised that if they resume supply, the payment will be settled now.

We are willing to provide the cash. If Hefei dairadish can survive, the payment may still be obtained.. The supplier said.

On December 1, a store manager in Hefei told time weekly that the store is now open normally. Some stores with good performance have resumed operation and are ready to do it slowly. If we can hold on, we will hold on.

However, internal employees are not confident about this. Although Li Yang promised to sell cars to pay for employees in Hefei, several employees in dairadish city told time weekly that they had not received their salaries as of December 2.

The supplier hopes dairou can survive, but Li Yang only focuses on the outside, regardless of the inside, and doesnt know how to live if the inside doesnt operate. Yutian said.

RMB 700 million in financing in one year

How much money did the company lose after four years of establishment?

In November 25th, Li Yang revealed on the public account that since last August, radish has earned over 700 million yuan in value equal to the US dollar financing, that is to say, with the current capital of the carrot, the hole is 300 million yuan. Over a year, the loss of radish is over 1 billion yuan.

Li Yang has expressed the purpose of the money many times in recent days.

In November 25th, in the public address, Li Yang said that all the money that had been blended into the companys development.

On November 27, Li Yang explained to employees that dairou spent more than one billion yuan in Nanjing, 34 million yuan in Wuhu and 34 million yuan in Maanshan.

In addition, Li said publicly that the financing was spent on user recruitment, team expansion, store expansion and supply chain construction.

The staff in Hefei told me that the daily running water of dairadish is 4 million yuan, so the monthly running water estimate is 120 million yuan, the Hefei supplier told the times weekly

Dairadishs burning money is reflected in the pursuit of low-cost excessive subsidies and excessive expansion.

There used to be a lot of one point shopping activities, but later they gradually became less. The price of radish is really cheap. Vegetables are 40%? 50% cheaper than the market price. On November 29, the manager of a daidairadish store in Hefei revealed to the times weekly.

On December 1, Song Min, CEO of Guangzhou Yungu Technology Co., Ltd., who has experience in fresh e-commerce operation, told the times weekly that in order to maintain this price for a long time, it is inevitable that daizao radish will lose money.

When the selling price is 40% cheaper than the market price, the selling price is basically its purchase price. In this case, if the store owner doesnt lose money, then daidairou may need to subsidize the supply chain. In addition, all personnel and logistics costs should also be posted. Song Min said, if the purchase cost cant be controlled, there will be more losses.

That is to say, one more store for dairadish is thanks to one share of the money.

According to the data, from June 2016 when dairou opened its first store in Hefei to todays more than 1000 stores, its expansion speed is amazing.

In November 25th, Li Yang said in a public article: our expectations and demand for growth are too high, underestimating the speed of fresh burn money , resulting in excessive consumption.

In fact, it is the normal operation of fresh e-commerce to obtain user traffic through losses in the early stage.

On November 30, Cui Lili, executive director of the E-commerce Research Institute of Shanghai University of Finance and economics, told the times weekly: in the competition in the field of fresh e-commerce, enterprises need more sufficient funds to play brands and pull user traffic in the early stage, so that after a period of time, Pingtai can have an advantage in user scale. When the user experience is recognized and the user scale is large enough, the platform will think that it has a moat.

Hard to achieve profits

But this does not mean that fresh e-commerce will lose money for a long time.

On November 6, before the event, daidairou published an article saying that the important barrier of fresh retail is scale efficiency. If there are enough outlets and density, it can obtain a very large active advantage in supply chain procurement, back-end logistics cost and other aspects.

With a relatively high regional coverage density, fresh e-commerce can achieve a healthy capital turnover balance. On November 30, Lai Yang, President of Beijing Institute of Commerce and circulation strategy, told the times weekly.

In all areas of daidaidairadish business, only Hefei area meets the requirement of quite high regional coverage density. This is also the reason why Li Yang said it is possible to make profits in Hefei.

At present, dairou has more than 600 stores in Hefei, that is to say, it is well beaten. In terms of core varieties, it can establish a reasonable supply chain relationship with the upstream production base by virtue of a large enough purchase volume. If daidairadish is delivered directly from the production base, then at least it can obtain the profit that the wholesale market can earn. Song Min said.

That is to say, only through the early losses in major cities to achieve the same scale benefits as Hefei, can dairadish achieve a comprehensive profit. Therefore, before the outbreak of the crisis, dairadish repeatedly announced that it would open 10000 stores in 50 cities across the country.

In Cui Lilis view, as a start-up enterprise, daidairadish needs to continue to invest capital if it wants to achieve this goal. Once the financing is not guaranteed, the capital chain of the enterprise will be seriously threatened. It can be expected that the back pay or even the collapse of the enterprise.

Fresh e-commerce must have capital guarantee, excellent operation ability and controllable supply chain. From this point of view, it seems that its not suitable for a start-up team like dairou. Said Cui Lili.

Under the current situation, daidairou can only get a little bit of life if it puts down its steps.

In Li Yangs plan, if dairou can survive the storm by breaking its arm, it will pay more attention to single store growth, rather than overall Gmv growth.

What a start-up may have is that it has something special in its business model, or it takes a differentiated route with a large platform, such as positioning in a specific region or a specific customer group, a specific category, etc. Said Cui Lili.

But before the break of the capital chain, staying on the whole fresh e-commerce runway cant be regarded as anonymous, which is also the unexpected part of the crisis.

In September this year, Hurun Research Institute released the second quarter of 2019 Huruns potential unicorn in China, among which dairou was listed.

According to the report 2019 fresh e-commerce industry insight released by mob Research Institute in August 2019, dairou once beat HEMA and daily Youxian with 95% app opening rate and 60% next month retention rate, leading the industry.

On November 9, China Chain Store Association and the third eye to see retail jointly released the 2019 community fresh food research report. According to the report, only 3% of the communitys fresh food stores have more than 300 stores. From this dimension, in 2016, the fresh daidzu in the community has become the first enterprise in the community.

The instant failure of dairadish may be the concentrated outbreak of the common problems faced by the whole fresh e-commerce industry.

Insight into 2019 fresh e-commerce industry said that in the current fresh e-commerce industry, even the giants have not achieved stable profits, and predicted that the industry will usher in a new round of reshuffle in the next few years.

Fresh e-commerce will die in the Jianghu. Will dairou become one of the dominoes?

Source: responsible editor of time weekly: Qiao JunJing, nbj11279