On the evening of May 13th, Dingdong Maicai released its performance report for the first quarter of 2024. The total revenue of Dingdong Maicai in the first quarter was 5.02 billion yuan, a year-on-year increase of 0.5%; The net profit for the first quarter was 12.3 million yuan, compared to a loss of 52.4 million yuan in the same quarter of the previous year. The net loss for the previous quarter was 4.4 million yuan, achieving a turnaround.
Dingdong Maicai achieved a GMV of 5.53 billion yuan in the quarter, a year-on-year increase of 1.4%. Overall, Dingdong Maicai's growth in the first quarter was very small, but both net profit margin and net profit attributable to shareholders have turned losses and shown a growth trend. In a conference call after the financial report, Liang Changlin, founder and CEO of Dingdong Maicai, believed that the traditional approach of reducing procurement prices and operating costs through scale in the fresh food industry has become ineffective. Strengthening end-to-end supply chain capabilities is the key to winning competition.
Total revenue growth remained almost unchanged, with GMV leading the way in the Jiangsu, Zhejiang, and Shanghai regions
The total number of Dingdong grocery orders in this quarter increased by 3.5% year-on-year, which is a significant increase in a series of performance data, and has also made a certain contribution to revenue growth. The financial report mentions that the main reason for the revenue growth is due to an increase in order quantity and further growth in Shanghai, Jiangsu, and Zhejiang. In addition, the density and market penetration of newly opened first tier distribution stations in East China have increased, but this has been offset by strategic shutdowns in multiple cities and stations, an increase in the number of outbound residents from Jiangsu, Zhejiang, and Shanghai during the Spring Festival, and a continuous decline in food CPI prices in the first quarter of 2024.
Looking back at the total revenue situation of the past few quarters, it can be seen that since the first quarter of 2022, Dingdong Maicai's revenue and revenue growth rate have experienced significant fluctuations. Last year's first quarter fell to the bottom of nearly four years, and there have been slight signs of recovery since the first quarter of 2024.
In addition, the regional characteristics of GMV growth are more obvious. The GMV of Jiangsu and Zhejiang regions achieved year-on-year growth of 16.6% and 14.8%, respectively, and continued to maintain comprehensive profitability. Shanghai GMV also achieved year-on-year growth of 2.7% in this quarter.
From the perspective of revenue structure, the product revenue for this quarter was 4.944 billion yuan, compared to 4.938 billion yuan in the same quarter of 2023. In terms of revenue, whether it was the same quarter of 2023 or the previous quarter's 4.922 billion yuan, there was almost no significant growth. The service revenue was 79.8 million yuan, which was 59.7 million yuan in the same period of 2023, a year-on-year increase of 33.7%. This significant growth is mainly due to an increase in the number of customers who have subscribed to the Dingdong membership program, as well as an increase in delivery fees charged as the order volume increases.
The sales cost for this quarter was 3.489 billion yuan, an increase of only 0.8% compared to the same period in 2023. Compared to the previous quarter, the gross profit margin for this quarter also remained stable at 30.6%. The performance fee is still showing a downward trend, reaching 1.147 billion yuan in this quarter, a year-on-year decrease of 3.9%. However, the decline rate has slowed down compared to the same period last year, and the percentage of performance fee to total revenue has decreased from 23.9% to 22.8%. The reasons for the decrease in performance fees include an increase in order volume, which has improved operational efficiency, and Dingdong Maicai's optimization of the layout of regional processing centers in the second half of 2023.
It is worth noting that the sales and marketing expenses for the quarter increased from 89.8 million yuan in the same period last year to 111 million yuan, a year-on-year increase of 23.7%, which is the largest increase among all operating costs.
Liang Changlin: The principle of exchanging economies of scale for low prices and costs has expired
During the conference call after the financial report, Liang Changlin, founder and CEO of Dingdong Maicai, mentioned the previously established offline Olay store. The Southern Metropolis Daily reporter previously learned that Dingdong Maicai's offline stores are more positioned like community supermarkets, without delivery services, and focus on price comparison. There are many hard discount products, but they are not closing the discount stores on time.
The management of Dingdong Maicai stated that they have found that China is entering an aging society, where elderly people rely more on offline shopping and place greater emphasis on cost-effectiveness. In order to meet the shopping needs of the elderly and provide them with accessible, healthy, and beautiful fresh food, Dingdong Maicai has opened a fresh Aolai store. At present, Dingdong Maicai has opened four Olay stores, each covering an area of approximately 350 square meters, with daily sales of over 40000 yuan per store, and its performance is on the rise. He believes that fresh Aolai stores have expanded their consumer base and met the needs of more consumers for a better life. On the other hand, it is also a reflection of our supply chain capabilities. As long as our supply chain capabilities are strong enough, we can serve more consumer groups, more channels, and have greater growth potential.
In addition, Liang Changlin also stated that for the fresh food industry, the principle of obtaining scale through low prices and then reducing procurement prices and operating costs through scale in traditional links has now become ineffective. Dingdong Maicai is constantly improving end-to-end efficiency, enhancing supply chain capabilities, and seeking profits and competitiveness from the supply chain. The reporter from Nandu learned that Dingdong Maicai is improving its supply chain capabilities through a comprehensive chain of "source procurement production processing warehousing delivery", combined with strict quality control standards and independently developed management systems for various platforms.
Liang Changlin stated that it is expected that there will be significant year-on-year growth in net profit and scale for this year and the second quarter, and both the second quarter and the whole year will achieve non GAAP and GAAP profitability.