It’s not often we end up as participants in the disintegration of a billion-dollar tech company. My wife was a fan of Missfresh’s speedy grocery delivery. Its riders, always in hot-pink uniforms and always in a hurry, zipped items to our Beijing apartment in 30 minutes. “Fish, vegetables, fruit, nowhere else delivers so fast,” she says. “Where will I order from now?”
When I broke the news that Missfresh, which pioneered rapid delivery in China and was once valued at $3bn, was going bust last month, she flicked open the app and clicked on passion fruit and chicken feet, adding them to her cart. “It’s still usable,” she said with hope in her voice. Indeed, Missfresh’s digital presence still gives little indication of its troubles. The app’s live chat window apologizes for a wait due to “heavy usage”. But placing an order proves impossible.
On a recent visit to our local fulfillment center, bags of rice were strewn about. The tanks for live fish had been drained. A lone worker said he checked on things once a day but was unsure if he would ever be paid. The company laid off most of its workforce last month and still owes them two months’ wages. Missfresh’s Beijing headquarters, meanwhile, has become the focal point for protests by unpaid suppliers.
The ubiquity of the pink-clad delivery drivers made many Beijing residents believe the company must be wildly successful. But, in reality, Missfresh and its customers were for years the beneficiaries of venture capital funds’ largesse. As with so many urban convenience services of the past two decades, from ride-hailing to bike-sharing, investor money subsidized prices to gain market dominance. For Missfresh, groups including Tiger Global and Goldman Sachs financed its unending losses. Just last year it raised $300mn in a Nasdaq initial public offering. I can’t help but think this may have made possible our final order.
Perhaps US investors should have remembered the fate of another grocery delivery group, Webvan. It listed in New York during the dotcom boom and outdid Missfresh on two metrics: its market cap hit $8bn and it lasted more than a year and a half as a public company before going bankrupt.
In China, the pace of Missfresh’s unwinding has been met with shock but seemingly little remorse. President Xi Jinping’s crackdown on the country’s high-flying tech sector has reshaped public perception of what constitutes innovation. A state media outlet’s praise for Missfresh as “a symbol of a new type of retail” feels like it’s from another era, even though it was only three years ago.
As China’s tech race with the US has heated up, consumer internet companies have lost status. Groups such as Alibaba, Tencent and Missfresh, once seen as leading the country into a new digital world, have dropped well below semiconductors and robotics on the Communist party’s totem pole of priorities.
I was reminded of this last week as a police officer, red party pin stuck to his uniform, processed my journalist visa renewal. He questioned why Missfresh’s downfall was even worth spilling ink over. “They are just doing a new type of delivery and supply chain. That is an age-old business,” he said. “Where is the core technology?” He had a point and all I could think of was, “They have an app.” Real technology companies are making semiconductors, he said.
Investment dollars have already begun repositioning towards “hard tech”. With Xi’s message clearly filtering down to the bottom rung of the party, we may have enjoyed our last venture capital handout.
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