Fresh food e-commerce company Dingdong Maicai announced its withdrawal from Chongqing and Chengdu, leaving only 26 cities left to operate.

Dingdong Maicai, a fresh food e-commerce giant, recently announced that it will suspend its services in Chongqing and Chengdu starting from 6 pm on the 29th of this month. This adjustment is seen as one of the effective ways for Dingdong Grocery to reduce costs and increase efficiency. It is understood that Dingdong Maicai has closed its services in cities such as Xuancheng, Chuzhou, Tangshan, Zhuhai, Tianjin and Xiamen in the past year. Today, only 26 cities across the country are still operating.

Dingdong Maicai made it clear that this adjustment will not affect the company’s normal operations in other regions. In the future, Dingdong Maicai will increase investment in supply chain, food research and development and processing, and maintain in-depth cooperation with Sichuan and Chongqing regions and other outstanding food companies.

Dingdong Maicai was established in 2017 and is headquartered in East China. In the past six years, Dingdong Maicai has gone through a period of rapid expansion and using subsidies to attract users to promote growth. Daily Youxian, Meituan Maicai, Hema Xiansheng, Taocai, and Duoduomaicai are all fresh food e-commerce competitors at the same time.

Dingdong Maicai adjusted its operating strategy in August 2021, from the original "prioritizing scale while focusing on efficiency" to "prioritizing efficiency while taking into account scale." This contraction strategy has made Dingdong Maicai one of the few surviving companies in the field of fresh food e-commerce, and it achieved profitability for the first time in the fourth quarter of 2022.

Due to the impact of declining demand in the first quarter of this year, Dingdong Maicai’s revenue also declined. Data show that Dingdong Maicai’s revenue in the first quarter fell by 8.2% year-on-year to 4.997 billion yuan, while GMV fell by 6.8% year-on-year to 5.451 billion yuan. Although the net loss narrowed significantly year-on-year, it was still as high as 52.391 million yuan.

In addition to improving efficiency and reducing costs, Dingdong Maicai is also focusing on exploring the potential in the field of prepared dishes to achieve the second stage of growth. However, in the fierce competition in the prepared vegetable market, many listed food supply chain companies and star fresh food e-commerce companies such as Hema have emerged. There is still uncertainty about whether Dingdong Maicai can find growth in this field.

To sum up, Dingdong Maicai, as a leader in the fresh food e-commerce industry, is facing the challenge of market competition while adjusting its strategy and reducing costs and increasing efficiency. The problem that Dingdong Maicai needs to think about and solve is how to find new growth opportunities under difficult circumstances.

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