(CapitalWatch, Jan. 25, New York) Customers of the online retail delivery service Missfresh (Nasdaq: MF) can now choose from more than 800 ready-made meals with pre-prepped ingredients including the Missfresh Premium Dishes brand.
China's Missfresh specializes in quick delivery of fresh foods and groceries to customers' doors. Now, it's expanded its offerings of ready-to-cook, ready-to-heat, and ready-to-eat meals to include more than 800 "3R" products with pre-prepped ingredients. In general, pre-made dishes' gross profit margin is 15% higher than that of general grocery delivery. Missfresh has launched its self-branded ready meals using its own supply chain to further optimize costs.
In 2021, sales of 3R products on Missfresh's platform increased by more than 300% compared with 2020. By the year-end, more than 40% of Missfresh customers have purchased 3R products, and the repurchase rate for paid membership users was close to 70%.
The prepared meals market in China is growing rapidly. The China Business Industry Research Institute has estimated the industry will continue to grow 20% annually over the next few years. China's ready-meal industry will exceed $157.7 billion in the next 6 to 7 years, and up to $473.2 billion in the long term.
The surge in popularity has attracted many new and existing retailers into this section of the market, and Missfresh said that - thanks to its strong R&D, supply chain, and marketing promotion capabilities, it aims to develop and roll out more of its self-branded pre-made options.
The Missfresh Premium Dish brand goes in line with the company's plans to further expand its gross profit margin with high-value, quality conscious consumers. Missfresh focuses on customers who are willing to pay for fresh, healthy food and a better shopping experience.
The performance of the company's membership program, which saw an 800% year-on-year increase in revenue in 2021, demonstrates the sustainable growth achieved by focusing on users that value quality just as much as convenience. Missfresh's debut batch of ready meals immediately became popular among users and flew off the "digital shelves,'' as the company said.
Among the meals, Missfresh is offering Beijing-style lamb spine soup and beef bone broth flavors that provide customers with easy, ready-to-heat hot pot dishes that taste similar to dining in restaurants with minimal preparation.
Missfresh is committed to bringing its customers the quality expected of restaurants into their homes. In addition to the ready meals, Missfresh offers the "Famous Dishes From Famous Restaurants'' shopping category since 2020 and began expanding its range of 3R products. Well-known regional and nationwide restaurant chains in China such as Xibei and Meizhou Dongpo were invited to offer their own ready meal products on the Missfresh platforms, bringing widely popular restaurant dishes directly to customers' homes.
Meal kits and ready-made meal delivery has grown in popularity worldwide among those staying home due to Covid-19, young professionals and busy families who need to quickly prepare a healthy hot meal in as little time as possible, and those who hope to use such services to avoid excessive food waste in shopping. In China, one of the driving factors for this rise is the evolution of family structures and consumer habits in first- and second-tier cities in the country. These changes are enabling more people to access the services they want, and Missfresh is there to provide them. 70% of the company's consumer base for its prepared dishes is made up of 25- to 40-year-old female consumers
In the U.S., the German meal kit delivery service HelloFresh has obtained massive popularity, offering a variety of weekly menu options with locally sourced fresh ingredients across the country, similar to this prong of Missfresh's service in China. According to HelloFresh, revenue for the third quarter climbed to $1.65 billion in the third quarter of 2021.
Missfresh sells most of its pre-made dishes at 20 to 50 yuan, while the average unit price of premium pre-made dishes can reach 80 yuan. Missfresh plans to continue to grow its expansive range of ready meals and expects the sales growth rate in 2022 to exceed that of 2021.
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