Chinese grocery app Dingdong Maicai is considering an initial public offering (IPO) in the U.S. to advance expansion in the fresh food delivery market, Bloomberg reported, citing sources.
Backed by Sequoia Capital, Dingdong Maicai is collaborating with advisers on the offering, which could bring in an estimated $300 million, the sources told Bloomberg.
Dingdong Maicai, which translates to “Dingdong buy vegetables” in Chinese, operates in China’s competitive fresh food distribution sector, which is anticipated to hit 1.27 trillion yuan ($197 billion) by 2025.
Founded in 2017, the platform delivers fresh vegetables, soy products, fruits and meat, and is backed by General Atlantic, Bertelsmann Asia Investments, Qiming Venture Partners and Gaorong Capital.
The company has expanded to 27 cities including Beijing, Nanjing and Guangzhou, processes more than 850,000 orders daily. Monthly revenue has topped 1.5 billion yuan, per the report. Its competitors include MissFresh and platforms operated by Alibaba and JD.com.
With over 500,000 daily active users, the pandemic spurred Dingdong’s popularity, making Quest Mobile’s top-10 list of the fastest growing shopping apps, TechNode reported. Dingdong Maicai lets users shop online and get groceries delivered to their doorstep.
Dingdong Maicai started as a neighbor social networking platform called Dingdong Community, which was similar to Nextdoor, TechNode reported. After the company’s social platform foundered, its team explored offering numerous services, from laundry and breakfast delivery to house cleaning and flowers.
The company’s CEO and founder, Liang Changlin, has launched several companies, including a video editing tool startup in 2002 and a year later, a pregnancy and parenting platform called Mmbang.
Fresh produce eCommerce is said to be a challenging landscape to maneuver due to the short shelf life of perishable goods and the logistics of delivering fresh food. The vertical has seen the demise of Amazon-backed Yummy 77, Xianpinhui and more recently, Dailuobo.
The digital shift spurred by the worldwide COVID-19 pandemic has accelerated grocery store loyalty among consumers. Competition from Walmart and other merchants has prompted supermarket chains to link offline programs to digital accounts. Verizon, for instance, has teamed up with Walmart to promote online grocery buying.
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