By LIN Beichen

Chinese grocery app Dingdong Maicai has completed US$700 million (1.1 billion yuan) Series D financing, led by DST Global and Coatue. The money will be used to open new markets and supply chains.

Dingdong Maicai’s asset-heavy "front warehouse" model has prospered since 2018. Proprietary warehouses and logistics teams mean quicker deliveries. The company has over 1000 warehouses and 30,000 employees. During Spring Festival this year, the app received 900,000 orders a day.

But the model is widely criticized for its cash-hungry nature and CEO Liang Changlin admitted the company needs long-term heavy investment, as community grocery platforms begin to eat away at Dingdong's pie. Xingsheng Youxuan, a group buying app based in Hunan Province, raised an astonishing US$3 billion in February. And the usual e-commerce giants - Alibaba, Pingduoduo, Meituan, and Didi - are already pushing forward with their own community businesses.

Semi-finished dishes have so far been the most profitable sector of Dingdong. Orders quadrupled at the Spring Festival holiday this year. Dingdong expects the business to cover about 10 percent of revenue by the end of the year.