Author 丨Lius
Editor 丨 Kang Xiao
Produced by 丨Shenwang Tencent News Xiaoman Studio
Meituan, which is trapped in the lack of performance growth in community group buying, and Kuaishou, who is trapped in the bottleneck of daily life and eager to commercialize, have made an exchange of trading capacity and traffic.
On December 27, Kuaishou and Meituan announced that they have reached a strategic cooperation on connectivity, and Meituan will launch the Meituan Mini Program on the Kuaishou Open Platform, providing Meituan merchants with complete service capabilities such as packages, vouchers, reservations and other commodity displays, online transactions and after-sales service, and Kuaishou users will be able to directly access through the Meituan Mini Program. The pilot line of catering categories has been completed, and in the future, it will continue to launch a number of life service categories such as hotels, homestays, scenic spots, leisure and play, beauty salons, and script killing.
The cooperation between Meituan Kuaishou will enter the trial operation stage on New Year's Day 2022, which is the peak consumption season of the Spring Festival.
Every platform that starts with content will face the problem of traffic monetization. In addition to advertising, the most direct way is to extend the tentacles to the transaction matching, such as Kuaishou and Douyin, extending from e-commerce to local life. Having a large number of users and a huge distribution traffic, thereby pushing service products to users and completing transactions, is one of the direct ways for them to achieve revenue growth; for Meituan, a partner of Kuaishou, it can rely on its accumulated offline service capabilities for many years to obtain more online traffic from the super entrance and drive core business growth.
For Kuaishou and Meituan, they are eager to get out of the predicament they are facing.
Local life is difficult to chew, and Douyin has taken a detour for three years
The expansion of the localized life business of the short video platform is not smooth.
In response to the cooperation between Meituan and Kuaishou, some commentators believe that it is forced by the pressure of douyin expansion on the former, but this conclusion seems to lack sufficient argument support. In fact, Douyin has been in the local life business for nearly 3 years, but the outcome is not ideal.
The time point of Douyin's local life was in 2018, which was nearly 2 years earlier than Kuaishou. At that time, Douyin set up a POI team and launched a life service function based on LBS geographical location. According to the "Deep Web", at that time, after high-level deliberations, the local life strategy level was set as "P0", which is an internal saying, which means "high priority". To this end, ByteDance has specially allocated a group of elite soldiers from Beijing to Shanghai to support and benchmark meituan, hoping to leverage this new market.
However, the new business did not go as smoothly as expected.
"Deep Network" learned from informed sources that from the launch of the business in 2018 to the first half of 2019, Douyin has high expectations for local life and invested a lot of resources to support it, but various reasons have mixed up its transaction volume and consumption amount have not reached the expected target; after the second half of 2019, the top management has reorganized the business goals, and the focus of Douyin's local life has shifted from trading to content production in the terminal, through the improvement of technology and algorithms, Douyin began to recommend more local content in the same city to users. And pay more attention to the growth of local life in the entire Douyin content ecology.
Many of the actions of Douyin's later local life were also carried out after this demarcation point. For example, in March 2020, Douyin upgraded its enterprise account and launched the group purchase function; in November, it launched the celebrity store exploration activity and set up a local direct business focus to vigorously tap life services, cultural tourism and catering customers.
Douyin's efforts in local life are not small, but they basically rely on their own team to explore. You know, local life has a strong offline attribute, not the sooner it is done, the better it can be done.
The results are obvious. "Delay" previously reported that in February this year, Byte set a 2021 target for the local life business to achieve a total transaction volume of 20 billion yuan by the end of the year. However, according to Photon Planet, as of the end of November, the local life transaction volume of Douyin only reached 10 billion.
What is the gene of TikTok, or Byte? It's the algorithm, it's the traffic. And what is it necessary to live locally? Is the ground push, is the sales, is to go to the line and deal with thousands of large and small stores in different regions, this is a very large and complicated work, see the early Ali and Meituan, are relying on the strong push to get a firm foothold.
Douyin has taken public comments and small red books as important objects of investigation. "But genes and products are fundamentally different in logic, so they can't be completely pulled to the same level to compare." A Douyin employee once told The Deep Web.
Meituan's local life is based on lbS geographical location, connecting local merchants on the one hand and users on the other. Its logic is very simple, such as public reviews, what users want to eat, is to actively search for demand, and then you can see standardized information presentation on public reviews, including the location of the merchant before the store, the recommendation of dishes, the per capita price, the user review, the group purchase after the store, the payment function, this transaction conversion path is direct and effective.
But the logic of TikTok is not like this. Douyin's positioning is an entertainment short video platform, users come here for entertainment, its product design presentation is to put the information flow in the most conspicuous position, through the algorithm to recommend the video to the user. Local life content such as food recommendations can meet the needs of users for planting grass, but whether it can be converted into transactions and form a closed loop is unpredictable.
Without exploring the fundamentals of life services, it is difficult for Douyin, which is in the field of short video, to live in the new track of local life without taking a detour.
Douyin insiders analyzed the "Deep Net" that Douyin did not have the same push team as Meituan can penetrate into every capillary in most cities in China, but relied on the sales team to sell packaging resources to merchants. But the problem is that many merchants do not know enough about this new promotion method and their willingness to use it is not high. In addition, the main users of Douyin in the early days were concentrated in low-tier cities, and the consumption level was not as good as that of the first-tier cities where Meituan was singing and.
But for Meituan, it sees the possibility and opportunity of short video content drainage.
Wang Xing's vigilance and sense of crisis are very strong, he believes that "Rome was not built in a day, but it may be destroyed", and it is not necessarily his peers who kill himself. When he saw Cheng Wei doing takeaway, Wang Xing had to do a taxi, and in turn explored the core business area of the other party; now Douyin has entered the local life and tested the heartbeat takeaway, which is the root of the US group, and Wang Xing cannot be indifferent.
Traffic growth has peaked, can it break the spell of transaction conversion?
Kuaishou did not choose the same path as Douyin, but chose to "ally" with the MEITUAN to assist: Kuaishou converted from traffic to transaction, thus gaining more commercial space.
The fast hand in 2021 is not having a good time. Kuaishou's main income is in the three aspects of self-line marketing services, live broadcasting, and other services. In the third quarter of the financial report, online marketing service revenue increased by 76.5% from 6.2 billion yuan in the same period of 2020 to 10.9 billion yuan in the third quarter of 2021; the second largest source of revenue, live broadcasting, continued to decline to 7.7 billion yuan, compared with 8 billion yuan in the same period of 2020; in addition, although the revenue of other e-commerce-based businesses increased by 53% year-on-year to 1.9 billion yuan, it accounted for only 9.1% of the total revenue.
This year, cost reduction and efficiency increase have become the keywords of Kuaishou. Kuaishou executives said at the performance exchange meeting that in the next year, Kuaishou will not recruit new employees on a large scale.
Daily active users and traffic growth have peaked, and the refined operation of traffic has become the key. Cooperation with Meituan can open a new door for Kuaishou, after all, there is no need to build its own business, and it does not have to bear high costs.
The cooperation between Kuaishou and Meituan has traces to follow. As early as 2019, Kuaishou upgraded its business account to launch local life service functions, but at that time, the core business faced fierce competition with Douyin, and Kuaishou could not free up its hands to focus on it. However, from the development path of Kuaishou in recent years, it can be clearly seen that it attaches more and more importance to the transformation of local life transactions.
In July 2020, Kuaishou officially launched the local life entrance, jumping pages contain food, peripheral tours, shopping beauty, leisure and entertainment, as well as hui eating and playing, foodies must open, go out must experience the functional area; in May 2021, Kuaishou "same city" page online "special offer group purchase" and "list recommendation" section; in June, online "eat, drink and have fun in Kuaishou" WeChat Mini Program.
Kuaishou's every move is evidenced by it, and Kuaishou hopes to find more possibilities beyond live broadcasting and advertising in the new scene of local life. In the future, its e-commerce business is not only physical e-commerce, service e-commerce will also become an important sector.
Within Kuaishou, pan-life services are an important direction of the content ecosystem in 2021. Yan Qiang, senior vice president of Kuaishou, mentioned that the core of this strategy is to start around various services related to people, on the one hand, Kuaishou should expand the supply of platform services and content, on the other hand, it is to strengthen the matching of the above needs and improve efficiency. The most fundamental thing is to enter the transaction from the content and get real business feedback.
As for the success rate of traffic conversion transactions, Kuaishou also has the same problems as Douyin, and it is also a problem for the commercialization of almost all content platforms, such as Zhihu and Xiaohongshu.
An industry insider pointed out to the "Deep Net" that whether it is Vibrato or Kuaishou, try to do a transaction closed loop to verify whether this path of realization can really run through, but in fact, the transaction closed loop is very difficult to achieve, because the user stay under the same city label is very short.
As far as the short video platform is concerned, its advantage is to confirm the content planting before the service transaction, because the form of short video and live broadcast, the information density is high enough, and the grass planting effect is obvious. But will the user directly click on the purchase group purchase, or go to the store to consume, and how high is the transaction conversion brought by the short video platform?
At the beginning of the launch of Douyin's local life, it gave a negative answer. Now it remains to be seen whether Kuaishou will break this spell because of its cooperation with meituan and get more offline stable merchant blessings, so as to get better conversion results.
Community group buying is weak, what does meituan rely on for growth?
From meituan's point of view, Kuaishou's advantages in the sinking market and massive traffic have the opportunity to help Meituan drive core business growth.
In the past two years, Meituan has gambled on community group buying, invested a lot of manpower and financial resources in the hope of finding new business growth points through new retail businesses such as Meituan Preferred, Meituan Grocery Shopping, and Meituan Flash Purchase, and even adjusted the structure to upgrade the strategy from the past "Food + Platform" to the current "Retail + Technology".
But the reality is that the funds required for these operations are enormous. At a key juncture, Meituan continued to invest in community group buying, resulting in it turning from profit to loss in the fourth quarter of 2020.
In its third quarter 2021 financial report, the total revenue was 48.8 billion yuan, an increase of 37.9% over last year, but the growth rate slowed down significantly; the company's losses widened to 5.5 billion yuan due to the impact of new business investment. Looking at the revenue of the three core businesses of catering takeaway, hotel tourism and new business, the growth rate has also slowed down year-on-year. The loss of new business increased to 10.9 billion yuan, resulting in the company's overall loss also expanding, which looks like a "bottomless pit".
Since the beginning of this year, the State Administration for Market Regulation has repeatedly issued relevant guidance opinions for the community group buying industry.
According to the "Deep Net", the subsidies of the group purchase business in various communities have recently shrunk, and from blind expansion to refined operation, the US group is also more focused on profit targets, but the direct result is a decline in single volume.
In addition to business losses, Meituan has been affected by anti-monopoly investigations, rider social security and other factors in the past year, and its stock price has fallen all the way. In October, the State Administration for Market Regulation made an administrative penalty decision in accordance with the law, and Meituan fully refunded the exclusive cooperation deposit of 1.289 billion yuan and imposed a fine of 3.442 billion yuan; in addition, on the issue of social security for riders, Meituan had to bear the cost increase of no more than 5 cents per order.
In this cooperation, Meituan obtained a super traffic entrance, which is equivalent to pulling a fast hand into the sinking market against Ali, Pinduoduo and other e-commerce platforms: the saturation of traffic in first- and second-tier cities has made Meituan Ali enter the stock competition, and the mining of sinking low-tier cities has become a breakthrough target.
For example, In the past, Ali has vigorously invested in the Taobao special edition in order to go deep into the sinking market, with 1 billion global annual active users in fiscal 2021 and 811 million annual active users in the Chinese retail market, of which more than 70% of the new users come from the sinking market.
Although it has been labeled as "earthy", it is undeniable that the sinking market is the core of the fast start. Credit Suisse previously estimated that in 2021, Kuaishou's annual active purchase users will be 150 million, the total amount of commodity transactions will be 650 billion yuan, and the average annual consumption of people will reach 4300 yuan.
If it can achieve traffic transaction conversion through Kuaishou, it is undoubtedly "sending charcoal in the snow" for the US group in the scorching competition.
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