Chinese operators of grocery apps Missfresh, Dingdong target US$500 million each via US IPOs, say sources

Chinese grocery platforms Missfresh and Dingdong Maicai are said to be targeting about US$500 million each in US stock offerings to fund growth

While the grocery delivery space in China remains crowded, the market is expected to grow 32 per cent to US$2.46 trillion by 2025 from last year

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Competition in China’s fresh food delivery segment has intensified with the entry of Meituan Dianping. Photo: Bloomberg

Published: 4:13pm, 10 Jun 2021

Two Chinese online grocery platforms – Missfresh and Dingdong Maicai – are seeking to raise about US$500 million each through initial public offerings on US stock exchanges to fund their growth plans, according to people familiar with these transactions.

Missfresh, in which social media giant Tencent Holdings owns an 8.1 per cent stake, is seeking to sell American depositary receipts on Nasdaq. Dingdong Maicai, backed by Sequoia Capital and Tiger Global Management, is targeting a similar amount through a share sale on the New York Stock Exchange.

Both companies are keen to launch their stock offerings and list by the end of June at the earliest, these people said, declining to be named because they were not authorised to discuss the matter publicly.

The on-demand grocery e-commerce market is extremely competitive in China, with many players finding it hard to turn a profit. The grocery app operators are pinning their hopes that consumers will continue to order fresh produce online after getting used to the convenience and safety during the Covid-19 pandemic.

The on-demand grocery e-commerce space is extremely competitive in China. Photo: Shutterstock

They are all looking to grab a slice of China’s growing neighbourhood retail market, which is expected to reach 15.7 trillion yuan (US$2.46 trillion) by 2025, from 11.9 billion yuan in 2020, according to data published by iResearch.