Chinese online grocery start-up closes on-demand distributed mini warehouse service amid financial trouble
Missfresh has announced significant adjustments to its business strategy and a shutdown of services following financial difficulties.
On 14 July the Chinese online grocery start-up announced a strategic investment of Rmb200m (US$29.5m) from Shanxi Donghui Group a multinational conglomerate with diversified businesses including energy, nonferrous metals, cultural tourism and modern agriculture.
On 28 July Missfresh released a statement that said the transaction had not been closed and Missfresh had not received any funding from Shanxi Donghui.
As a result, Missfresh said it has had to adopt significant adjustments to its business strategy for sustainability, including a temporary shutdown of its on-demand distributed mini warehouse (DMW) service and staff optimisation.
“It is expected that these significant adjustments will have a material and adverse impact on the company’s financial performance. The on-demand DMW business contributed approximately 85 per cent of the company’s total net revenue for the nine months ended 30 September, 2021,” said Missfresh.
“The company will decide if and when it will re-open the on-demand DMW business depending on the development of its financings and business operations. The company will make every effort to maintain normal operations in its next-day delivery business, intelligent fresh market business and retail cloud business.”