Missfresh Expires

Missfresh, a Chinese instant delivery business, went belly up a few days ago. Because it was public, it offers a glimpse into what financials at unicorns like Getir and GoPuff might look like. It’s not pretty.

Missfresh 101

While up close and personal, every business has its own nuance and warts, from a distance the color of driver’s uniforms seems to be the primary differentiator of instant grocery delivery businesses. Missfresh’s color is hot pink. The Chinese instant grocery delivery business looks a lot like Getir, GoPuff, Jokr, and a cadre of Western instant delivery businesses.

Missfresh builds and operates distributed mini-warehouses peppered around residential neighborhoods in large Chinese cities. The first opened in May 2015. Each mini-warehouse holds about 4,300 SKUs and provides delivery to a tight radius. Merchandising focuses on fresh produce and fast-moving consumer goods like toilet paper and toothpaste. The hope is that speedy delivery — average delivery times are approximately 35–40 minutes — and a focus on high purchase frequency categories translates into repeat purchase behavior. To date, the industry has struggled to pull this off without the liberal use of profit-sapping promotions.

Missfresh serves a relatively young, urban customer. Its over 620 mini-warehouses are scattered across 17 first- and second-tier cities. These cities like Beijing, Shanghai, and Shenzhen are affluent and sport high population densities, an important precondition for building route density…