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Why did the king of the front warehouse come to this point?
Author丨Baiji Yuejian Editor丨Yuejian
Source: New Entropy
Up to now, Daily Youxian may have lied to everyone.
At 2:00 p.m. on July 29, the lobby of Chaoyang District Labor and Personnel Dispute Arbitration Institute was crowded with employees of the Daily Youxian who came to defend their rights. Due to the large number of people, a special service was opened for the Daily Youxian employees who asked for their salaries. rights protection channel. Xin Entropy saw it at the scene, and the staff shouted to the team while maintaining order: “We started handling it in the morning, and don’t complain if we can’t finish it today.”
At the same time, the People’s Government of Chaoyang District, ten kilometers away, gathered dozens of suppliers from all over the country. Since there is no way to collect debts, they will seek advice from Daily Fresh on behalf of suppliers across the country. According to incomplete statistics from New Entropy, as of 14:39 p.m., the total arrears of suppliers who have disclosed data have reached 98 million yuan.
The employees were also confused. An employee of Daily Youxian reported to New Entropy that Daily Youxian had three days off on the grounds of removing formaldehyde, but during these three days, all the company’s computers were transferred, and the account of the purchasing employee was cancelled. I couldn’t get on the board. After a 20-minute conference call on July 28, it was announced that it was disbanded on the spot. At the same time, the employees did not receive severance compensation and wages.
Externally, Daily Youxian announced to the media that it has not been “disbanded”, and only closed the 30-minute express delivery business, and the next-day delivery, smart vegetable market, retail cloud and other businesses will not be affected. However, as of the time of publication, all businesses of the Daily Youxian APP show that services have been suspended, the daily Youxian headquarters has been empty, and office supplies such as computers have also been removed from the office. The purchasing staff told the supplier that the system The original account in the background has also been unable to log in.
If it is only part of the business adjustment, is it necessary for Daily Youxian to come here?
The mountain on the head of 376 people
376 people, the number of people in the “Daily Youxian Debt Collection Group”.
Jiang Yue is a native of Fujian. His rural cooperative has provided Yuxian with grapefruit for 3 years. Until September last year, he found out that there was a problem with the payment of the platform. In March this year, he went to Beijing with the suppliers to every Riyou Fresh headquarters collects payment for goods, and as of now, there are still more than 1.2 million accounts that have not been recovered.
The “Daily Youxian Debt Collection” WeChat group was a contact group established by Jiangyue when they went to ask for debts together in March this year. Unexpectedly, after July 28, it became a rights protection group for all suppliers. Vivian is a food supplier of Daily Youxian for many years. She said that Daily Youxian will experience payment delays from the end of 2021. Because there are not many arrears, she has been trying to solve it through communication. Purchasing Exchange.
Vivian said that the abnormality was in December last year, when the platform suddenly stopped paying, so it asked for a refund on the grounds that it was out of stock.
“Every time we ask for money, the platform will give us 20,000 or 30,000 yuan in symbolic money back to trick us into continuing to supply, so our goods have been supplied until July this year.” Vivian said.
The platform procurement docking with Vivian also assured her repeatedly that the next round of financing has been confirmed, and funding is not a problem. But when I communicated with the purchaser yesterday, she suddenly cried, and was suddenly notified by the company to be laid off. All employees were dismissed without any explanation. The employee knew the news at the same time as the suppliers. On the afternoon of July 28th Click, after the meeting, all members will be disbanded.
“I used to be able to find people, but now I can’t find anyone. We are farmers. More than 1 million yuan is very stressful for me. My own factory is still mortgaged in the bank.” Jiang Yue said that he was about to collapse, and the processing of the factory was also facing Work is suspended, and on Monday he will rush to Beijing from Fujian to defend his rights.
On the morning of the 29th, suppliers from all over the country gathered at the daily excellent fresh headquarters to ask for the arrears. Liu Qi went to the scene with her two children. As an employee lunch supplier of Daily Youxian, she was owed 300,000 yuan by the platform, and there were patients at home who were waiting for the money.
At the scene, Xin Entropy saw that because the security guards were forbidden to enter the park, the on-site supplier chose to call the police. In the face of the daily excellent fresh employees who came forward to mediate, some suppliers collapsed and said: “I can’t eat anymore.”
According to the third quarterly report of 2021, the net arrears of daily outstanding suppliers that have not been paid are 1.652 billion yuan, an increase of 34% from the 1.088 billion yuan at the end of the third quarter of 2020. These accounts payable include three major categories of supplier payments: outsourced delivery company freight, and service fees from marketing service providers.
According to the disclosure documents submitted to Nasdaq by the founder of Daily Youxian, Xu Zheng has already planned ahead and became a Hong Kong citizen. Xu Zheng’s shares are all placed in overseas offshore trusts. As of the first quarter of 2022, among the shareholders of Daily Fresh, founder Xu Zheng holds 86.38 million ordinary shares of Daily Fresh through overseas offshore trusts, with a shareholding ratio of 86.38 million. Among them, Xu Zheng holds 17.49 million ordinary shares on behalf of co-founder Zeng Bin, Tiger Fund holds 77.99 million ordinary shares, and Tencent holds 55.88 million ordinary shares, with a shareholding ratio of 9%.
However, the biggest impact of the collapse of Daily Fresh is the local state-owned assets that had invested before the listing. In 2020, Qingdao State-owned Assets, Sunshine Ventures, and the Qingdao Municipal Government Guidance Fund will form a joint investment entity, and will invest 2 billion yuan (approximately approx. $306 million) valuing Daily Fresh at around $3 billion.
Did Xu Zheng really run away?
Many suspect it was a premeditated retreat.
“First go north to Tianjin to close the warehouse to stop the bleeding, release Donghui on July 14, announce the closure of the front warehouse on July 28, and then announce the dissolution of the company at night.”
Now the food supplier Xu Chun is only willing to believe that all this is planned.
Since March this year, Daily Excellent Fresh began to delay Xu Chun’s payment for goods, and the accumulated arrears amounted to more than 2 million yuan. At the end of May, Xu Chun and dozens of suppliers once reached a settlement with Daily Youxian through the court. The two parties agreed that Daily Youxian would pay the first payment on July 28 and another payment at the end of September.
“What the platform means is that we suspend the purchase of goods, return the funds, and pay them off gradually later.” Xu Chun said. But it was on July 28 that Daily Youxian announced the closure of the platform, which made Xu Chun think that the platform did it on purpose: “Otherwise, how could the payment date and the closure be on the same day?”
The platform once gave suppliers hope. On July 14, Daily Youxian announced that it has reached an equity strategic investment cooperation agreement with Shanxi Donghui Group, and Donghui Group plans to make an equity investment worth 200 million yuan in Daily Youxian.
This money is almost equivalent to “life-saving money” for Daily Youxian, but since Daily Youxian is a US-listed company, this investment is an overseas investment (ODI: Overseas Direct Investment), and the funds need to be exchanged into US dollars first. One investor said that under normal circumstances, it would take 3 to 6 months for the account to arrive.
On July 18, the industrial and commercial registration information showed that many senior executives of Daily Youxian, such as Xu Zheng, Zeng Bin, Li Yang, and Sun Yuan, quit one after another, and the legal representative was changed from Zeng Bin to Sun Yuying. The new supervisor is Song Wenjing. According to the law, the legal representative is responsible for the bankruptcy of the company.
Some people have already heard the news. On June 1, an old shareholder of Daily Youxian sold 14.73 million ordinary shares at a time of 10% off the market price and left the market.
In 2014, Xu Zheng, who had just passed his thirties, officially started his business with his old subordinate Zeng Bin. CEO Xu is a Lenovo veteran who has worked for more than ten years. He was once called “Lenovo’s youngest general manager of the business unit”. He also served as a senior executive of Lenovo Joyvio Group for two years, in charge of the fruit business department. Fresh business foundation; logistics management is the former head of Lenovo Asia Pacific, online operation is the COO of a well-known start-up company, and purchasing is the original Joyvio global product manager.
Such first-class team genes have naturally attracted the attention of a lot of capital. It is said that Xu Zheng has successfully received an angel investment of US$5 million from Guangxin Capital without even thinking about the company name and LOGO. From its establishment to December 2020, it has completed 11 rounds of financing in 6 years, with a cumulative financing amount of more than 11 billion yuan. In June 2021, Daily Excellent Fresh was listed on Nasdaq in the United States at US$13 per share, becoming the “first fresh food e-commerce stock”. Unexpectedly, the listing was the peak, and the stock price has fallen all the way since April 20 this year, falling below $1 since April 20, and there is still no sign of improvement until now.
On the afternoon of the 29th, China Entrepreneur Magazine reported that Xu Zheng did not run abroad, and the company’s executives were all in Beijing, and the executives were still contacting investors and buyers.
However, many suppliers did not agree with this statement. Xu Chun said to New Entropy: “Our goods are now in the daily excellent fresh warehouse, why don’t we take them out and let us deal with them?” Some suppliers said that Xu Zheng To be convincing should be a public appearance and a reasonable solution.
Fresh every day, still not fresh
Many people close to the daily excellent fresh have said to the new entropy that this tragedy is rooted in the deformed business model of the front-end warehouse e-commerce.
“We are different from Yonghui’s low-margin and high-margin model.” Li Min, an employee of Daily Youxian, told New Entropy that Daily Youxian mainly sells fresh products with high loss rate and low gross profit margin, plus The high labor cost has caused the platform to slide into today’s predicament step by step.
“In the end, it still can’t sell the goods.” Zhang Hua, another Daily Youxian employee, told New Entropy that the gross profit margin of Daily Youxian has never been corrected, and sales have never been smooth.
Zhang Hua revealed that during the previous epidemic in Shanghai, due to the blocking of offline consumption channels, the market demand for fresh products surged. As a fresh food supplier, Daily Youxian has soared from thousands of orders to more than 50,000 orders per month in Shanghai. However, these users have not become the “iron fans” of Daily Youxian. Once the epidemic is over, the daily monthly order volume in Shanghai Yuxian quickly shrank to the pre-epidemic level, that is, about 5,000 orders.
Since its establishment, Daily Youxian has been burdened with heavy traffic anxiety. The natural feature of the fresh food model in the front warehouse is the lack of natural traffic. According to a late Latepost report, in the first half of this year, Xu Zheng was in charge of anti-corruption and cost reduction work internally, and some non-essential functional personnel were laid off.
For a long time, Daily Youxian has acquired offline users through local push, but in Xu Zheng’s reform of reducing costs and increasing efficiency, the local push team has become the focus of Daily Youxian’s reform.
“The marketing cost of the ground push is very high. If you don’t send a basket of eggs, why do people look for you? And the people who accept the ground push are all aunts and aunts who are going to pick up the wool, but they leave after they are finished, and there is no repurchase.” Zhang Hua said , In this reform, the company’s ground push personnel have been cut from more than 1,300 to only a few dozen. On the other hand, Daily Youxian used to be generous to the ground pushers, and the average monthly salary could reach 15,000 yuan. This means that the monthly expenditure of tens of millions has been reduced to nearly one million.
Instead of the push strategy is the “small B strategy.” Daily Youxian is no longer rudely pursuing C-side growth, but transitioning to the role of a supplier. Zhang Hua told New Entropy that Daily Youxian has successively tried to supply companies such as Longfor Real Estate, as well as cooperate with Jingdong Supermarket.
Taking the Jingdong supermarket channel as an example, the products sold will no longer have the “Daily Fresh” LOGO, which means that the brand will further reduce its marketing investment in the C-end market. Zhang Hua commented: “In fact, JD.com’s ability to sell goods is strong, and we are too weak.”
Although the order volume of the B-side strategy cannot be compared with that of the ground push era, it at least allows Daily Youxian to gain respite from the endless huge losses.
The problem is that there is not much time left for this front-end fresh food veteran. As of July 29, the pre-market quotation of Daily Youxian in the US stock market has been lower than 1 cent. If a new investor cannot be found as soon as possible, according to the rules of the US stock market, Daily Youxian will lose its status as a listed company.
But in the context of the current e-commerce ebb tide, Xu Zheng can only seek more happiness for himself. According to the supplier, aside from the brand name, Daily Youxian has no valuable assets, and its office computers are all rented. For other e-commerce giants, it may not be difficult to save a collapsed fresh food platform, but how to regroup in the sluggish market is the key to the problem.
(All respondents in this article are pseudonyms)
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