MissFresh, a specialist in the online retail of fresh food, is tightening its alliance with leading tech and gaming company Tencent Holdings to improve the marketing and delivery of seafood and other perishables to China’s doorsteps.
MissFresh operates its own warehouses in urban residential areas, selling goods like salmon and vegetables via delivery – and claims it can “accurately predict and capture consumer’s demands” in China’s larger cities. The firm is now partnering with Tencent Smart Retail, which offers B2B assistance in improving customer engagement through digital services.
Tencent owns a 7 percent stake in Guangzhou-based MissFresh and operates the WeChat messaging and payments app. MissFresh also supplies traditional retailers, especially small- and medium-sized supermarkets, with digital services like online promotion, merchandising, and last-mile delivery.
China’s COVID-19 lockdowns in 2020 increased the focus on China’s online grocery market. MissFresh said what it calls China’s “neighborhood retail market” was valued at RMB 11.9 trillion (USD 1.86 trillion, EUR 1.54 trillion) in 2020.
“The neighborhood retail cloud market for supermarkets has huge growth potential,” the company said, citing a report from iResearch, which projects it will grow from CNY 190.7 billion (USD 29.5 billion, EUR 24.7 billion) in 2020 to CNY 1.89 trillion (USD 292.8 billion, EUR 245 billion) in 2025 in terms of gross merchandise value at a compound annual growth rate of 58.3 percent.
But MissFresh faces intense competition for that market from Alibaba and JD.com, among others. MissFresh needs to grab market share quickly; the company lost USD 93 million (EUR 78.1 million) in the first quarter of 2021, and it had a disappointing debut on the Nasdaq Stock Exchange in June, with its share price sitting at USD 5.42 (EUR 4.57) on Monday, 2 August, down more than 50 percent on its USD 13.00 (EUR 10.90) offering price for its IPO, which took place on Friday, 25 June. The stock listing was aimed at raising cash for upscaling its logistics network in China's regional cities.
MissFresh Founder, Chairman, and CEO Zheng Xu previously worked in the Joyvio unit of the Legend conglomerate, which distributes salmon from its Chilean subsidiary, Australis Seafoods.
Photo courtesy of MissFresh
