Missfresh Ltd. (Nasdaq: MF) celebrated its public on Friday after raising $273 million in its IPO.
Missfresh's chief financial officer Jun Wang highlighted some of the company's fundamentals and laid out what's next post-IPO.
CW: Now that the company has completed its IPO, how do you feel? Did it go as expected?
Wang: Yes, definitely. I think this is a great start to the company's next phase. Our whole team wants to deliver long-term value to our shareholders. This is a big milestone for us.
CW: As Missfresh noted in its prospectus, revenue dropped in the first quarter with consumers changing their buying habits. How does the Company see this developing in both the short and long term?
Wang: Most recently, we have already shown double-digit year-over-year growth in April and May as disclosed in our prospectus. In the long-term, I think there will be structural changes to customer behavior from what we have seen. Not only has there been a shift from offline to online channels, but there has been a major shift in grocery purchasing channels as well. What surprised us is the structural change in the behaviors of the business owners or operators, as of how they are starting to embrace digitization after Covid-19. Our technological capabilities are really robust following years of continued investment in research and development and data accumulation. And therefore, we are able to help offline participants upgrade digitally. This is also the reason why we started our third-party intelligent fresh market and retail cloud business as a platformization strategy.
CW: What has been the biggest challenge and biggest success for the company in the past year?
Wang: When the pandemic hit, it was about maintaining business operations by improving customer service to further optimize customer satisfaction. I think we did okay with that. We experienced growth with our customers. Most importantly, the structure of the whole industry accelerated toward online digitization. Since the participant is going online and embracing digitization at their own end, the industry can grow through a third-party model rather than just through a first-party model.
Seven years ago (when we started this business), online penetration was very low. So, we have been pioneers in cultivating customers' online grocery shopping behavior. Now customers and partners that adopted online shopping are pushing us to provide more services.
I think the structural change made a way for us to fulfill our vision of serving hundreds of millions of families with quality groceries at their fingertips. This can be done through a third-party business and has propelled us to fully upgrade our vision at the Company for the next five years to boost the digitalization of China's neighborhood retail, rather than just become the largest online supermarket.
I think using this type of open platform strategy rather than a closed-cycle strategy is a winning philosophy for business. This lays a great opportunity for us and we have been investing in R&D heavily over the past years. In turn, our proprietary Retail AI Network (RAIN) is contributing to the platform and has brought us to the two new business initiatives.
CW: What do you think makes Missfresh unique from its industry peers?
Wang: The most unique thing is our three-building blocks business model. Our two vertical businesses, on-demand DMW retail, and intelligent fresh market are serving customer's demands on product quality and variety respectively. And the platformization strategy through our third-party business – retail cloud service, can enable offline supermarkets to jump-start their online business. I think the final landscape of this industry will be visible in 5-10 years. We have the capability to target the final landscape because we have invested heavily in technology. Our unique infrastructure in the industry could be the future backbone that supports both online and offline markets.
CW: Tell us about Missfresh's intelligent fresh market business and retail cloud business, which both launched after the pandemic began? What does the company hope to see from these new units?
Wang: I think the fresh market complements our DMW business, which mainly targets large city customers. The fresh market business is designed for customers in lower-tier cities, who have more time on hand to do more extensive shopping offline with fresh groceries. That fulfills a different customer base, with our existing capabilities in retail management, as our products are friendly to customers or partners.
Definitely, with the retail cloud business, it carries our vision to fortify the whole retail industry by providing SAAS+AI platform to offline supermarkets We offer a comprehensive platform to third-party supermarkets, thus further enable them to operate on-demand services and use AI to upgrade their operational efficiency.
CW: What is Missfresh planning next?
Wang: The next step is creating more value for customers with innovation and technology. This is our long-term goal and we will keep going for that. That's why we conducted our IPO and adopted "always day one" as our slogan. We think this is a great starting point for us, rather than the final point. We hope to gain more customers and partners.
CW: Who are your competitors?
Wang: We always focus on value creation for customers in the industry, rather than placing our eyes on competitors. Healthy competition could bring benefits to customers, and push the industry forward. Therefore, we don't consider them competitors, we like to view them as companies that also bring value to customers within the industry,