On February 27th, Dingdong Maicai was reported to have closed 38 sites in Guangzhou and Shenzhen. In response to this, Dingdong Maicai responded to a reporter from First Financial that recently, in order to improve operational efficiency, the company has temporarily merged or closed a small number of sites in Guangzhou and Shenzhen.
Dingdong Maicai stated that in this adjustment, nearly 90% of the overall service scope in South China has not been affected. At the same time, the overall business of the company is steadily developing, and there are regular plans to expand the service scope and add new sites in South China and other regions this year. The company will continue to refine and deepen its business coverage areas, and site adjustments and upgrades will be ongoing actions.
A person close to Dingdong Maicai told reporters that some of the sites in Guangzhou and Shenzhen actually have expired leases without renewal, and there are also cases where they merge with other nearby sites to form large ones. The service scope of most sites is undertaken by other sites
Dingdong Maicai has adjusted its service areas more frequently in recent years.
In May 2023, the company adjusted its business in Chongqing and Chengdu based on cost reduction and efficiency improvement considerations, and suspended services in relevant regions.
As early as 2022, Dingdong Maicai had already withdrawn from some markets. In May and June 2022, Dingdong Maicai withdrew from multiple cities including Tianjin, Zhongshan and Zhuhai in Guangdong, Xuancheng and Chuzhou in Anhui, and Tangshan in Hebei, and concentrated in the layout of first tier cities. But there are still some reservations in second - and third tier cities, such as Foshan, Huzhou, Jiaxing, Wuxi, Ma'anshan, etc.
In 2022, Dingdong Maicai became a beneficiary of the epidemic. But with the optimization of epidemic prevention policies, some consumers are gradually returning to purchasing fresh products through offline channels, which also poses new challenges to the development of Dingdong Maicai to a certain extent.
Hong Tao, Director of the Institute of Business Economics at Beijing Business University and Dean of the China Food (Agricultural Products) Safety E-commerce Research Institute, believes that as China enters the "post pandemic period", people's dependence on community group buying formats will relatively weaken. Therefore, the Dingdong Maicai model is indeed facing a test, and how to better increase the format of the business model is an important factor to consider.
Moreover, the competition among domestic fresh food platforms has always been fierce. In the South China market, Meituan Xiaoxiang Supermarket, Park Park and others are accelerating their layout, and Hema and JD.com have already established their presence.
What is the current profit situation of Dingdong Maicai?
According to the financial report, the cumulative revenue for the first three quarters of fiscal year 2023 was 14.978 billion yuan, compared to 18.021 billion yuan in the same period of 2022, a year-on-year decrease of 16.89%. In the first three quarters of fiscal year 2023, the cumulative net loss was 86.8910 million yuan, and in the same period of 2022, the cumulative net loss was 857 million yuan, a year-on-year decrease of 89.86%. However, in the third quarter of fiscal year 2023, a net profit of 2.1 million yuan was achieved, while in the same period of 2022, a net loss of 340 million yuan was achieved. As of the third quarter of 2023, the company achieved four consecutive quarters of profitability under the Non GAAP standard.
Due to the news, as of February 26th local time, the stock price of Dingdong Maicai was reported at $1.10 per share, a decrease of 2.65%.