But things started going downhill last year. Despite the hype and big money, these companies are still struggling to turn a profit as lockdowns ease and people simply return to in-person shopping. Worse, they have been caught up in a battle against China’s new antitrust behavior. The Chinese government was quick monetary fine and pen editorials question the value of the industry.
As a result, the once-promising startups and big tech companies have decided to cut back on expansion plans, implement mass layoffs, or file for bankruptcy altogether. DiDi and Ele.me, two successful tech companies that have bet on online grocery as their new growth engine, have decided to shut down those services. At least two online grocery startups have closed their businesses in the last year.
The latest batches of lockdowns are giving the industry a second chance. With other Chinese cities like Beijing and Hangzhou also facing impending lockdowns, millions of people are once again downloading these apps and using them on a daily basis. In fact, Dingdong’s app rose to third place in the App Store’s free apps chart in China in early April.
Daily Battle
While the luckier Shanghai residents can get a one-time free grocery package from their owner or local government, most people, like Song, need to figure out a way to buy their groceries. their own. Some residents Formation of residential groups through messaging appsCollect people’s orders and buy in bulk directly from nearby farms or food factories.
But Song soon realizes that buying groceries with all her neighbors means she’s not making her own choices. She lives in an old residential area where more than three-quarters of the population are seniors or families with children. While her neighbors are placing family-sized orders for things like 5 pounds of pork, such purchases will take her forever to consume.
Then the only other option for her is grocery apps. She frantically renews Dingdong, Hema, and Meituan Maicai every day to make room.
But with lockdowns disrupting the supply chains of many goods, including groceries, even ordering on those apps takes luck and dedication. Just like Black Friday shoppers waiting to bust open stores, Shanghai residents are flooding into apps at designated times to try to buy as much as they can before they run out of stock. a few seconds. It can be stressful and frustrating.
Li, a consultant in Shanghai who only uses her last name because she wants to remain anonymous, also gets up early every morning for a week to try her luck with half a dozen different apps. But during the lockdown, she failed to secure a single successful order, while her mother, who lives under the same roof, earned three orders. On one occasion Li put hundreds of RMB of groceries in her cart – but when it came to checkout, the only thing left in stock was a bag of candy.
