As the business world echoes with calls to "focus on reality, not stories," the once capital-fueled battlefield of fresh food retail is finally returning to commercial fundamentals. The dramatic exit of Yiguo, the chaotic battles in community group buying, and the liquidity crisis of MissFresh have all sounded alarm bells for the front-warehouse model—once hailed as the future star of fresh food retail—now standing at a crossroads fraught with uncertainty.
"Food as Heaven": Cultural Roots of Consumption Habits
The ancient adage "food is heaven" reveals the profound importance of eating in Chinese life. Grocery shopping is not merely a utilitarian activity but a cultural practice ingrained in the national psyche. From bustling morning wet markets to brightly lit supermarkets at dusk, the ritual of food procurement remains omnipresent.
Chinese consumers maintain near-obsessive standards for freshness—whether judging produce by its sheen or seafood by its aroma. This demand directly shapes the industry's evolution. Yet generational divides have emerged: younger consumers embrace digital "fingertip shopping" through apps, while older generations prefer tactile market experiences where they can personally inspect goods. This behavioral schism presents both challenges and opportunities for retailers.
The "Combo Strategy": Meeting Diversified Demand
Research shows over 70% of consumers employ a hybrid approach, flexibly switching between online and offline channels based on needs. This reflects rational decision-making across three key factors:
- Value: Consumers seek quality ingredients at fair prices, comparing options across platforms.
- Convenience: Proximity and delivery speed significantly influence channel selection.
- Trust: Reputable sources with food safety assurances win long-term loyalty.
This multifaceted demand has spawned diverse business models, each targeting specific consumption scenarios.
The Rise and Challenge of "Fresh-to-Door" Models
While integrated platforms like Hema, Yonghui, and 7FRESH flourish, delivery giants like Ele.me, Meituan, and JD.com have also partnered with local supermarkets, making app-based ordering mainstream. Among these, front-warehouse models distinguished themselves through speed—30-minute deliveries within 3-5 km radiuses became urban professionals' salvation for last-minute dinner ingredients.
Yet consistency issues plague some operators, as consumers report quality fluctuations at Dingdong Maicai while favoring Pinduoduo's membership incentives. Meanwhile, new physical stores continue drawing customers back offline, demonstrating the fluid nature of consumer preferences.
The "Three Kingdoms" Battlefront
With MissFresh's decline, the front-warehouse arena has narrowed to three major players:
- Dingdong Maicai: The former expansionist now prioritizes profitability through strategic contraction.
- Pupu Supermarket: Advocates measured growth with fanatical focus on user experience.
- Meituan: Leverages existing logistics to expand into fresh groceries.
Industry analysts suggest this tripartite standoff will persist absent intervention from tech titans, forcing contenders to hone operational efficiencies.
The Expansion-Contraction Paradox
While speed defines front-warehouse advantages, exorbitant fulfillment costs—from real estate to labor to spoilage—create unsustainable economics. Experts argue MissFresh's failure resulted not from model flaws but strategic missteps: employing internet-style blitzscaling in an industry requiring surgical precision.
Dingdong's recent pivot—shuttering unprofitable locations—yielded its first quarterly profit, proving contraction can work. However, analysts warn post-pandemic retention rates and order values will determine long-term viability. Meanwhile, Pupu's disciplined approach—under 400 stores after six years—demonstrates the virtue of patience.
The Endgame Conundrum
Front-warehouses' future hinges not on blanket expansion but hyperlocal optimization—analyzing neighborhood demographics, consumption patterns, and competitive landscapes. The industry's low margins make "growth at all costs" suicidal, as MissFresh's collapse demonstrated.
Survivors must master two imperatives: developing proprietary high-margin products through supply chain partnerships, and precision-targeting merchandise to local preferences. As models continue evolving—potentially blending warehouses with physical stores—the ultimate solution may lie in hybrid formats rather than pure front-warehouse archetypes.
The Survival Code
Why do so many ventures fail in this seemingly straightforward sector? Industry veterans cite a fundamental lack of reverence for fresh retail's complexities. The path forward demands:
- Obsessive customer-centrism
- Surgical operational efficiency
- Bulletproof supply chains
- Continuous innovation
- Respect for unit economics
In fresh retail's final reckoning, victory will belong to those who honor both consumer needs and commercial realities—proving that in the grocery wars, substance ultimately triumphs over spectacle.