Delivery firm Missfresh collapses as another Nasdaq-listed Chinese firm falls prey to weakening economy

The Tencent-backed on-demand delivery firm abruptly announced on Thursday that it had run out of cash, dismissing workers and leaving suppliers unpaid

Missfresh blamed a coal miner for failing to come through on a promised investment, but China’s Covid-19 restrictions have hurt delivery operations and consumer spending

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A Missfresh shop seen in Shanghai on June 10, 2021. Photo: Reuters

Published: 3:00pm, 29 Jul 2022Updated: 5:50pm, 29 Jul 2022

Nasdaq-listed retailer Missfresh, one of the new faces of China’s e-commerce sector, collapsed on Thursday with a dramatic announcement that it was dismissing most of its employees and leaving hundreds of suppliers unpaid.

The meltdown of Missfresh, which has raised at least US$2 billion from big-name investors including Tencent Holdings and Tiger Global, is another cautionary tale for investing in China-focused internet services, as the world’s No 2 economy quickly loses momentum with Beijing’s “dynamic zero” Covid-19 policy contributing to lower consumer spending.

Missfresh’s stock price on the Nasdaq had fallen to just 14 US cents on Thursday, about 1 per cent of its initial public offering price of US$13 last June, as its key business of delivering fruit and vegetables had largely ceased operation. The company said in a statement that services were facing a “temporary shutdown” amid “staff optimisation”.

For its suppliers, employees and consumers, however, the Beijing-based firm’s story is over.

Missfresh employees were told to stay at home on Thursday. In the afternoon, they were called into an online meeting and told that it would be their last day on the job. The company said it was not sure when June and July salaries would be paid, according to an online meeting record shared with the South China Morning Post.