By YU Hao

Since December last year, online grocer Missfresh has faced warnings from Nasdaq as its stock has fallen below standards. Financial report submissions have been erratic. The online grocer has only now released its 2022 annual report on August 4.

Total revenue for 2022 dropped 60.3 percent to 2.8 billion yuan (US$380 million) from the previous year. Product sales, fell 61 percent. Cash flow is unequivocally negative, with enormous losses and vast liabilities.

Missfresh’s core business was largely shut down by boss XU Zheng last year as an accounting scandal raged, and additional closures have followed in this. The company’s focus has shifted to its own brand products and digital marketing solutions. 

Founded in 2014, Missfresh more or less invented the pre-warehouse operation mode and was listed on the Nasdaq in June 2021. Its main business was delivering fresh food and daily necessities within 30 minutes. 

Hundreds of Missfresh employees have been forced into labor arbitration courts in Beijing and Shanghai over unpaid salaries and lost severance pay, both protected by law. Since May, the company has failed to make health insurance and other social benefit payments and owes salaries from June and July.

Despite being unable to cope with the employees it already has, Missfresh has plans to hire even more. Feeling the need for more delivery guys and new initiatives, the company also owes money on many rental agreements entered into in the last few years. 

The company has been drowning in a sea of losses for a long time now. From 2018 to 2020 and the first three quarters of 2021, the company had a total net loss of 9.8 billion yuan (US$1.4 billion).

Unable to go to the market to raise what it needs, Missfresh has gone cap in hand to its previous investors who will collectively purchase 5.4 billion shares for US$27 million, if certain delivery conditions are met.

Xu, widely considered responsible for the company's near demise, described a rescue deal with Mejoy Infinite, a digital-marketing outfit based in Hong Kong, as an "acquisition could take full advantage of our extensive market know-how in the online marketing and e-commerce industry.”

Shares of Missfresh have lost 97 percent of their value since its IPO in June 2021, and in July last year diluted ailing shareholders further by issuing 300 million shares to a coal mining group, Shanxi Donghui Group.