MissFresh acquires unmanned retail company Zailouxia
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Missfresh took control of Zailouxia, a chain of unmanned convenience stores on January 7 and now has over 10,000 vending machines in nine cities in China.
Zailouxia, which means “on your doorstep,” was founded in 2017 by ZHANG Ying, who also founded a grocery app Bee Quick in 2014. Zailouxia had four rounds of financing in its first year, but its business soon deteriorated due to high maintenance costs.
Vending machines have become popular again because of the pandemic as people opt for contactless retail. In 2020, Zailouxia added 200 new locations and the revenue of each location doubled. The company now has 600 unmanned stores and 1,800 vending machines.
Missfresh is also no stranger to vending machines, first installed in office buildings in 2017. In its Q2 fiscal report last year, Missfresh said the revenue from vending machines grew 23 percent year-on-year to 40 million yuan (US$6.3 million).
Unmanned retail can be quite risky. Meat, vegetables, and fruit can go off within a day or two. As the pandemic abates, many prefer to shop in markets where they have more choice and have human contact.
Missfresh lost 7.6 billion yuan over the past two years. Whether acquiring Zailouxia is a blessing or a burden, only time will tell.
Questions & Answers
Q.What kind of business does Zailouxia operate?
What kind of business does Zailouxia operate?
Zailouxia runs a chain of unmanned convenience stores and vending machines. It offers contactless retail options, which became popular during the pandemic as people sought safer shopping methods.
Q.Why did Zailouxia experience difficulties earlier in its operation?
Why did Zailouxia experience difficulties earlier in its operation?
Despite initially securing four rounds of financing in its first year, Zailouxia's business declined due to high maintenance costs. This suggests operational challenges impacted profitability.
Q.How has the pandemic impacted the unmanned retail sector for Zailouxia?
How has the pandemic impacted the unmanned retail sector for Zailouxia?
The pandemic led to a resurgence in popularity for vending machines and unmanned retail. Zailouxia added 200 new locations in 2020, and the revenue for each existing location doubled.
Q.What financial concerns might Missfresh face after this acquisition?
What financial concerns might Missfresh face after this acquisition?
Missfresh has incurred significant losses of 7.6 billion yuan over the past two years. Unmanned retail, particularly with perishable goods, also carries risks if consumer preferences shift post-pandemic.
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