In-Depth Research Report on Valuation Methods for the Community Fresh Grocery Industry

Now I will provide you with a detailed analysis report on valuation methods for the community fresh grocery industry.

---

China’s community fresh grocery retail market is in a stage of rapid integration and model evolution. According to data from CIC Consulting, the scale of China’s community fresh grocery retail market has grown from RMB 982.3 billion in 2019 to RMB 1.7 trillion in 2024, and is expected to further grow to RMB 2.9 trillion by 2029[1][2]. However, the industry exhibits significant market fragmentation characteristics — the combined market share of the top five players in 2024 was only 7.3%, and the market share of the industry leading enterprise Qian Dama is only 2.2%[1].

From the perspective of business model evolution, the community fresh grocery industry mainly has the following formats:

Business Model	Representative Enterprise	Core Characteristics	Valuation Features
Community Fresh Grocery Chain	Qian Dama	Discount daily clearance, franchise expansion	Low gross margin (8-15%), high turnover
Dark Store Model	Dingdong Maicai, Pupu Supermarket	29-minute instant delivery, heavy assets	High operating costs, high user stickiness
Store-Warehouse Integration	Hema Fresh	Offline experience + online delivery	High customer unit price, high per-square-meter efficiency
Community Group Buying	Duoduo Maicai, Meituan Youxuan	Pre-order + next-day self-pickup, light assets	Low customer unit price, high GMV, low gross margin

The community fresh grocery industry has unique financial characteristics that directly affect the choice of valuation methods:

• The average gross margin of the community fresh grocery industry is only 8%-15%, far lower than that of general retail formats[1][2]
• The average loss rate of fresh products in the industry is 5%-15%, and Qian Dama can control the loss rate at around 5% through its “daily clearance model”[1]
• High turnover is a core competitive factor in the industry; the warehouse turnover time for most fresh products does not exceed 12 hours, far lower than the industry average of 2-4 days[2]

• The dark store model requires the establishment of multi-temperature zone cold chains, with large initial capital investment
• The cost of supply chain construction is high, and warehousing and logistics facilities are difficult to reuse across regions
• The scale effect only emerges after reaching a certain density, and there is a “diseconomies of scale” trap[3]

• Dingdong Maicai achieved full-year profitability under GAAP standards for the first time in 2024, with a net profit margin of 1.6%[4]
• Qian Dama’s net profits in 2023-2024 were RMB 169 million and RMB 288 million respectively, but it recorded a loss of RMB 288 million in the first three quarters of 2025[1][2]

---

The DCF method is a core tool for evaluating the long-term intrinsic value of community fresh grocery enterprises, and is particularly suitable for:

• Enterprises in strategic transformation (such as Yonghui Supermarket’s transformation of “store renovation + supply chain integration”)
• Cases requiring evaluation of supply chain asset value and format restructuring potential
• Considering future free cash flow creation capacity

Parameter	Industry Recommended Value	Adjustment Logic
Weighted Average Cost of Capital (WACC)	8%-12%	Need to superimpose risks of transformation investment and industry volatility
Perpetual Growth Rate (g)	2%-3%	Considering the trend of slowing industry growth
Forecast Period	5-10 years	Covers model validation period and stable growth period

1. Free Cash Flow Restructuring
   : Need to eliminate the impact of financial expenses (considering the impact of new lease standards on liabilities)

2. Two-Phase Model
   :
   • First Phase (1-3 years): Cash flow recovery based on current operational improvement measures
   • Second Phase (4-10 years): Cash flow realization during stable growth period

3. Sensitivity Analysis
   : A 1% increase in WACC will lead to a approximately 15.5% decrease in valuation[5]

Comparable Company Analysis is an important tool for rapid valuation, and is applicable to the community fresh grocery industry due to the strong comparability of business models:

Multiplier Type	Applicable Scenario	Industry Reference Value
EV/EBITDA	Heavy-asset retail enterprises, excluding financial leverage	8-15x
P/S (Price-to-Sales Ratio)	Revenue-growth oriented, unstable profitability	0.5-2.5x
P/B (Price-to-Book Ratio)	Asset-intensive, stable book value	1-3x
GMV Multiplier	Community group buying platforms	GMV × (0.5%-2%)

• Similar business models (dark store vs dark store, community fresh grocery vs community fresh grocery)
• Similar development stage
• Exclude outliers (such as invalid PE for continuously loss-making enterprises)

For heavy-asset community fresh grocery enterprises, EV/EBITDA is a better choice than P/E:

• Eliminates the impact of differences in financial leverage
• Excludes interference from non-recurring gains and losses
• Suitable for enterprises in the period of continuous investment and expansion

Assume a community fresh grocery enterprise:

• Enterprise Value (EV) = RMB 5 billion
• EBITDA = RMB 500 million
• EV/EBITDA = 10x

If the industry average EV/EBITDA is 12x, the enterprise may be undervalued by 20%.

The GMV valuation method is mainly applicable to community group buying enterprises with a platform-based model:

Enterprise Valuation = GMV × Monetization Rate × Price-to-Sales Multiple

• GMV (Gross Merchandise Volume)
  : For example, Qian Dama’s GMV reached RMB 14.8 billion in 2024[1]
• Monetization Rate
  : Industry average 1%-3%
• Number of Users and Repurchase Rate
  : User retention determines long-term value

• Duoduo Maicai’s GMV approached RMB 300 billion in 2025, becoming the leader in the community group buying industry[6]
• Dingdong Maicai’s GMV reached RMB 25.56 billion in 2024, a year-on-year increase of 16.3%[4]

---

Supply chain capability is the core competitive barrier for community fresh grocery enterprises:

Supply Chain Element	Valuation Weight	Evaluation Indicator
Cold Chain Logistics Network	25%	Warehouse area, cold chain coverage rate, delivery timeliness
Direct Sourcing Capability	15%	Proportion of direct sourcing from origin, supplier bargaining power
Loss Control	15%	Loss rate, turnover days
Digital System	10%	ERP system coverage, intelligent level

• Qian Dama has deployed 16 comprehensive warehousing centers nationwide, achieving 100% cold chain coverage[1]
• Dingdong Maicai adopts the “urban wholesale market procurement + community dark store” model, with high fulfillment efficiency[7]

For community fresh grocery enterprises mainly adopting the franchise model, the store network is a key asset:

• Number and Density of Stores
  : As of September 2025, Qian Dama has a total of 2,938 stores, 99% of which are franchise stores[1]
• Single-Store GMV and Per-Square-Meter Efficiency
  : Industry per-square-meter efficiency is RMB 20,000-50,000 per square meter per year
• Franchisee Stability
  : In 2023-2024, the number of franchisees with terminated cooperation with Qian Dama was 572 and 376 respectively[2]

• Monthly Active Users (MAU)
• Repurchase Rate
• Customer Unit Price
• Customer Acquisition Cost (CAC) and Lifetime Value (LTV)

• Community group buying users are highly price-sensitive and have low brand loyalty[3]
• Users of the dark store model have higher stickiness, and Dingdong Maicai has good performance in repurchase rate[7]

---

Valuation of Community Fresh Grocery Enterprises
    │
    ├─► Stable profitability and positive cash flow?
    │       │
    │       ├─ Yes ──► DCF + EV/EBITDA
    │       │
    │       └─ No ──► Proceed to next step
    │
    ├─► Heavy-asset enterprise?
    │       │
    │       ├─ Yes ──► EV/EBITDA + Comparable Company Analysis
    │       │
    │       └─ No ──► Proceed to next step
    │
    └─► Platform-based (GMV-oriented)?
            │
            ├─ Yes ──► GMV Valuation Method + Comparable Company Analysis (P/S)
            │
            └─ No ──► Cross-validation with multiple methods

Business Model	Preferred Method	Auxiliary Method	Key Multiplier
Community Fresh Grocery Chain (Qian Dama)	DCF + CCA	EV/EBITDA	P/S: 0.5-1.5x
Dark Store (Dingdong Maicai)	DCF	GMV Method	EV/EBITDA: 10-15x
Store-Warehouse Integration (Hema)	DCF + CCA	EV/EBITDA	P/S: 2-3x
Community Group Buying (Duoduo)	GMV Method	Comparable Company Analysis	GMV × 1-2%

---

• Exchange
  : NYSE
• Ticker
  : DDL
• Market Capitalization
  : US$586 million (as of January 20, 2026)
• Current Stock Price
  : $2.71

Indicator	Value	Industry Position
P/E	14.58x	Moderately low
P/B	3.98x	Moderate
ROE	31.18%	Excellent
Net Profit Margin	1.16%	Just achieved profitability
2024 Revenue	RMB 23.07 billion	No. 1 in dark store model
2024 GMV	RMB 25.56 billion	16.3% year-on-year growth

• Dingdong Maicai has achieved GAAP profitability, with improved cash flow (2024 operating cash flow of RMB 929 million)
• Points of concern: Store expansion investment, changes in customer acquisition cost

• Compared with Hema Fresh (P/S of about 2-3x), Dingdong Maicai’s P/S is only 0.5-1x
• This may reflect the market’s concern about the sustainability of profitability of the dark store model

• Based on 2024 GMV of RMB 25.56 billion, assuming a monetization rate of 2%
• The platform service revenue is approximately RMB 510 million, which is a gap compared with the current market capitalization of US$586 million (RMB 4.1 billion)

---

Risk Type	Specific Performance	Impact on Valuation
Competition Risk	Impact from instant retail (Meituan Flash Purchase, JD Daojia)	Erosion of market share
Model Risk	Controversy over “false demand” in community group buying[8]	Reassessment of valuation logic
Profitability Risk	Characteristics of low gross margin and high loss	Risk of continuous losses
Expansion Risk	“Acclimatization” in regional expansion (Qian Dama closing stores in Beijing)[1]	Slowdown in growth

• Improvement of supply chain efficiency (such as Qian Dama controlling loss rate to 5%)
• Increase in the proportion of private brands, improving gross margin
• Expansion of high-gross-margin categories such as 3R (Ready-to-Cook, Ready-to-Heat, Ready-to-Eat) products

• Substitution effect of “minute delivery” in instant retail on the “next-day delivery” model[6]
• Loss of group leaders (industry average retention rate is less than 40%)[3]
• Tightening of regulation (such as the new “nine prohibitions” rules)

---

1. Methodology Selection
   : Valuation of the community fresh grocery industry should adopt cross-validation with multiple methods; DCF and Comparable Company Analysis are the preferred methods, EV/EBITDA is suitable for heavy-asset enterprises, and the GMV method is suitable for platform-based enterprises.
2. Industry Specificity
   : The industry characteristics of low gross margin, high loss, and high turnover determine that valuation methods for general retail enterprises cannot be simply applied.
3. Model Differentiation
   : There are significant differences in valuation logics among different business models (community fresh grocery chain, dark store, store-warehouse integration, community group buying).
4. Key to Transformation
   : Supply chain efficiency, loss control, and user stickiness are the core factors determining the long-term value of enterprises.

• Long-Term Investors
  : Focus on enterprises with supply chain advantages and positive cash flow (such as Dingdong Maicai, Hema)
• Short-Term Traders
  : Focus on leading indicators such as store expansion data, changes in single-store GMV, and franchisee stability
• Risk Warning
  : Need to be alert to the substitution effect of instant retail on traditional community fresh grocery models, as well as changes in regulatory policies

---

[1] China Fund News - “Qian Dama, a leading community fresh grocery chain, seeks Hong Kong IPO” (https://www.chnfund.com/article/ARa2b98278-128e-d3f8-7b5a-3a1edca02c11)

[2] 21st Century Business Herald - “Qian Dama rushes for IPO: After high growth fades, how does community fresh grocery tell a new story?” (https://www.21jingji.com/article/20260116/herald/a80a10c753a70ffff2db1cbe309f9eac.html)

[3] Sina Finance - “Community group buying fails to achieve a winner-takes-all pattern” (https://finance.sina.com.cn/stock/wbstock/2025-05-07/doc-inevtceh1412768.shtml)

[4] 100EC.cn - “2024 China Fresh E-Commerce Market Data Report” (http://www.100ec.cn/detail--6648767.html)

[5] Hans Publishers - “Research on Enterprise Value Evaluation of Yonghui Supermarket During Digital Transformation” (https://pdf.hanspub.org/fia_2430616.pdf)

[6] NetEase Technology - “The final battle of community group buying: Duoduo Maicai ‘quietly’ captures a RMB 300 billion market” (https://www.163.com/tech/article/KHMUCV5700098IEO.html)

[7] Hans Publishers - “Research on Business Model Optimization of Fresh E-Commerce Under the Background of New Retail” (https://pdf.hanspub.org/ecl2025141_3462312939.pdf)

[8] Sina Finance - “The great retreat of community group buying with ‘false demand’, the booming instant retail” (https://finance.sina.com.cn/stock/t/2025-06-30/doc-infcvpnq7759863.shtml)

---

The figure above shows the core framework for valuation analysis of the community fresh grocery industry, including:

1. Top Left
   : Comparison of applicability scores of five main valuation methods
2. Top Right
   : Comparison of characteristics between community fresh grocery and general retail industries
3. Bottom Left
   : Weights of six key driving factors affecting valuation
4. Bottom Right
   : Examples of P/S valuation multiples for different business models

For further in-depth analysis (such as DCF model construction for specific companies, sensitivity analysis, etc.), you can enable the

to obtain more detailed data and professional valuation modeling services.