Home Sea food China’s online grocery industry suffers financial setbacks following disappointing IPOs

China’s online grocery industry suffers financial setbacks following disappointing IPOs


Market skepticism appears to be emerging towards China’s online grocery industry after a leading player curtailed targeted fundraising due to weaker-than-expected demand.

Shanghai, China-based Dingdong Maicai fresh produce platform raised $ 95.7 million (€ 80.4 million), a quarter of its original target for its IPO. The company reduced its expected fundraising sum a day before its IPO.

Another Chinese fresh food delivery service, Guangzhou-based MissFresh, made a disappointing debut on the Nasdaq stock exchange. Its share price fell to 8.65 USD (7.26 EUR) on Wednesday, down 30% from its offer price of 13.00 USD (10.90 EUR) for its IPO, which took place on Friday June 25. The stock quotes were aimed at raising funds for building logistics networks of companies in regional cities of China.

The huge investment required to develop the distribution network in a low-margin company seems to have scared investors looking at Dingdong and Maicai. Price wars between the two, as well as rising logistics costs – in part linked to a shortage of delivery staff – have put margins under pressure, while the biggest online players have also sought to penetrate the retail sector. perishables online.

In its IPO prospectus, Dingdong described itself as “the fastest growing on-demand e-commerce company in China, providing users with fresh produce, meat and seafood” and underlined its “autonomous and extended first-line treatment grid”.

Dingdong also said that he “was working to modernize China’s traditional agricultural supply chain through standardization and digitalization, enabling farms and upstream suppliers to make their production more efficient and responsive to actual demand “.

Last month, DingDong announced a collaboration with Shanghai Ocean University to develop Ding Dong Seafood GAP standards, developed to ensure traceability for its seafood customers.

Source link


Please enter your comment!
Please enter your name here