Ding Dong Mai Cai: The Survivor of Pandemic

Backstory

We did not see it was coming. It was just a regular day of 2020.

Though a rumor says a severe SARS-like flu had been spreading, we just put on a mask, pretending nothing happened. No one could ever predict what was coming. People whispered the news and spread it on social media. The whole nation was clouded in a mysterious fear. An invisible hand choked our whistle man and put him to death.

We couldn’t hear.

Until the day came, on January 5th, 2020, the Chinese government announced the existence of this mysterious pneumonia and set the urgent public health emergencies to level II. The wound had been ripped open, and it had festered inside. A few days before Chinese New Year, on January 15th, 2020, the Chinese Center for Disease Control and Prevention and the Chinese government announced to activate first-level public health emergency response to a novel coronavirus-infected pneumonia, Covid-19. In an effort to contain the outbreak, the government put some major cities on lockdown and urged people to stay at homes during the Chinese New Year holiday. This Pandemic had brought these cities to a virtual standstill. Every day got reports of more cities sealed off, public events and gatherings all canceled through February. Major chains had shut down hundreds of stores, along with street vendors. Food supply had become the central issue at this time. Even though my family had forecasted this shortage and prepared most supplies, they could not support this 6-people family for too long. Community service works had secured the entrance of our neighborhood, no delivery allowed, every passenger needed to be investigated. What should we do? To survive?

Ding Dong Mai Cai, at that moment, emerged as a dark horse, claiming its success, as the first spot, in mobile top 10 shopping apps.

The business model of Ding Dong Mai Cai

Ding Dong Mai Cai is a Shanghai-based fresh produce and grocery e-commerce platform where users are able to order online and have their groceries delivered to their doorstep. Unlike another grocery shopping platform, Hema of Alibaba, building its offline supermarket to support its own brand of fresh goods and offering online and offline shopping experiences, Ding Dong Mai Cai has another strategy that eventually conquered Hema during the quarantine period. Ding Dong Mai Cai is one of the headers of the asset-heavy self-operated economic system, in which the company has hundreds of self-built front warehouses and its own logistics.

By adopting big data-driven technology support, Ding Dong Mai Cai can predict future orders through self-developed data models and multi-dimensional predictions based on historical data to reduce the loss rate.

Winning point in Pandemic

In 2020, Ding Dong Mai Cai faced severe competition from its plutocrat rivals, like Alibaba-backed Hema Fresh, Tencent-back Missfresh, Jing Dong Dao Jia, and Mei Tuan Mai Cai. Fresh produce delivery service is considered challenging for its high attrition rate of perishable goods and essential logistics requirements. Ding Dong Mai Cai has its own front warehouse that stores daily fresh supplies from local farms. At the time of lockdown, Ding Dong Mai Cai had rapidly responded to the public health emergency. On January 23rd, the CEO and founder of this company, Liang Changlin, who has 12 years of serving experience in the People’s Liberation Army, organized an emergency meeting, addressing the strategies of surviving through this trying time. Liang conducted three special teams. One team focused on security, supporting employers’ mental health, and pandemic prevention and control; one for supplies, dispatching over 100 buyers to local farms, and purchasing all those fresh goods that had been held and faced dull sale because of lockdown; another one for delivery system, using big-data analysis adjusting strategy of delivery routine, intensifying connections of each front warehouses and couriers.

However, there was still one problem waiting for Ding Dong Mai Cai to solve. Courier was not allowed to deliver the order to the customer’s doorstep. How can they successfully deliver orders to the customers? Each front warehouse manager had contacted the community head and set up a pick-up spot in front of each neighborhood entrance gate. Later, this spot became a trading spot or a distribution spot for food, package, or grocery delivery and a testing checkpoint.

While Ding Dong Mai Cai was changing its strategies and improving data implementation to accommodate the pandemic moment, Hema Fresh was struggling with its offline store got shut down, and many employers detained and tested positive for Covid-19. Moreover, seafood sold in Hema tested with virus contained. Ding Dong Mai Cai’s strategies allow the platform to lower delivery costs, thus offering more competitive prices for customers with higher delivery efficiency. Beyond that, Ding Dong Mai Cai executed two sides of issues that allowed technology to adjust and optimize supply chain and dispatch chain and learned to improvise with changing environment and provide practical solutions.

Update

After the spike caused by the Pandemic, Ding Dong Mai Cai successfully nearly doubled its daily active users during the Chinese New Year holiday in 2020. In the January of 2020, the platform gained over 40,000 new customers every day. The platform had processed 500,000 orders every day, suggesting around 1,000 orders per day per the front warehouse. The front warehouse system is heavily dependent on the delivery model scale. It cannot be 100% efficient unless the warehouse can be thoroughly used, but it costs an extremely high price to maintain.

At this post-pandemic period, Ding Dong Mai Cai released its 2021 consumption report, indicating that customers now have a higher demand for safe and traceable foods, which became the principle of the company’s development for diversified and differentiated products to adapt to the trend of 3R (ready to cook, ready to heat, ready to eat) foods. The sales volume of 3R products has increased by 300% by 2020. And not just that, Ding Dong Mai Cai has expanded its product categories to a special selection for babies, and baby’s parents, flowers, and other house supplies.

References:

[1] “Grocery App Dingdong Maicai: Sky-high GMV, High Costs amid Increasing Industry Competition” https://equalocean.com/analysis/2021072516481#:~:text=Dingdong%20is%20implementing%20a%20frontline,production%2C%20meeting%20the%20market%20demand. (Accessed Feb. 11 2020 )

[2] “破土而出并飞速成长的小萝卜” http://www.woshipm.com/evaluating/5244124.html (Accessed Feb. 11 2020 )

[3] “The Chinese startup leading the pack in grocery delivery” https://technode.com/2020/04/02/the-chinese-startup-leading-the-pack-in-grocery-delivery/ (Accessed Feb. 11 2020 )

[4] “叮咚买菜的拉新技巧是什么？” https://www.tiankeseo.com/740 (Accessed Feb. 11 2020 )