Introduction: The US group has encountered supervision, and the shadow of policy uncertainty is still above the head of Chinese stocks.
Text: lichengdong1984
Source: Dongge interprets e-commerce
Following a fine of 3.442 billion, Meituan was once again subject to supervision.
On February 18, 2022, the National Development and Reform Commission and 14 other departments issued the Notice on Several Policies on Promoting the Recovery and Development of Difficult Industries in the Service Industry (hereinafter referred to as the Notice). As soon as the policy came out, meituan's stock price began to fall, and by the close of the day, it fell 14.86%. Meituan is not alone, and the Chinese stocks on the day have fallen by different margins: Alibaba fell 4.37%, JD.com fell 3.61%, Pinduoduo fell 6.05%, B station fell 6.18%, Baidu fell 5.22%.
The "Notice" directly benefits Meituan is to guide Internet platform enterprises such as takeaway to further reduce the service fee standards of merchants in the catering industry; and to guide Internet platform enterprises to give preferential service fees to catering enterprises in county-level administrative regions where high-risk areas are located in the epidemic.
In October 2021, the State Administration for Market Regulation fined Meituan 3.442 billion yuan for implementing the "two alternatives" monopoly behavior. At that time, the market believed that the Ustuan policy was exhausted, which was a major positive for the business and market value, so the Ustuan stock price once stabilized.
Today, the state has issued a policy for catering takeaways. There is a view in the market that the regulator intends to guide the utility of takeaway platforms. This will make it difficult for Meituan's core business to make a profitable catering takeaway, which will directly affect meituan's entire valuation model.
"The market is full of uncertainty about policy expectations." Li Chengdong, founder of Dolphin Society, believes that after 2021, the market's policy has become a "bird of fright".
This policy itself is only for high-risk areas in the epidemic, and its impact on Meituan's business is minimal. However, the introduction of this policy is a signal that the Internet platform is still in the regulatory line of sight, and the value of the Chinese stock market may continue to be closely bound to this uncertainty.
Various "policy uncertainties" of the US group
Li Chengdong, founder of Dolphin Society, analyzed in his annual speech that regulation has four purposes - to protect small and medium-sized businesses, protect consumers, protect employees and protect information security. Carefully taking stock of 2021 so far, the US group has experienced multiple rounds of policy bearishness, which are within the four purposes of this.
The first round was about "either-or", abusing monopoly position and obstructing competition.
On April 10, 2021, the State Administration for Market Regulation (SAMR) issued an administrative penalty decision in accordance with the law, ordering Alibaba Group to stop its illegal acts and imposing a fine of 18.228 billion yuan. On April 13, the State Administration for Market Regulation, together with the Central Cyberspace Administration of China and the State Administration of Taxation, held an administrative guidance meeting for Internet platform enterprises, requiring 34 enterprises, including Alibaba, Tencent, Baidu, JD.com, and Meituan, to conduct a comprehensive self-examination and thorough rectification of the problem of forcing merchants to "choose one of the two".
This round of supervision temporarily ended with the 3.442 billion fines received by meituan on October 8.
The second round of subsidies for community group buying is explicitly prohibited.
On June 9, 2021, it was reported that the supervision continued to tighten the community group purchase subsidy, and meituan was required to remove the "second sale product" priced at 0.01 yuan. Marketers close to Meituan's preferred market said that employees were verbally notified of the removal of the above-mentioned spike products on May 27 and were required to complete rectification by June 1.
The third round is a policy aimed at the rights and interests of food delivery workers.
On July 26, 2021, the State Administration for Market Regulation, the Cyberspace Administration of China, the National Development and Reform Commission and other ministries and commissions jointly issued the Guiding Opinions on Implementing the Responsibility of Online Catering Platforms to Effectively Safeguard the Rights and Interests of Takeaway Delivery Workers, requiring online catering platforms to ensure labor income, labor safety, improve social security, etc.
Meituan's share price also fell from HK$294 on December 31, 2020 to HK$188 today.
The new round of policies facing Meituan is still within the four purposes of supervision - to protect small and medium-sized businesses and consumers.
Meituan collects less commission, can it save the catering industry?
Meituan has never had a blood-sucking catering industry, and now it has to stand up to help the catering industry and protect small and medium-sized businesses.
First of all, it should be clear that there is an essential difference between the commission of the US group and the commission of Ali, and the transaction commission charged by Ali is pure online rent. The Meituan takeaway collected money from catering merchants, and it was doing the fulfillment of the delivery service and making an errand fee. For example, a single 50 yuan takeaway, as of 2021Q3 Meituan take rate is 11.8%, commission 6 yuan, it is just covered meituan's performance costs, meituan's profit is not high, the so-called "meituan blood-sucking catering industry" has never been true.
The market has a view that this round of policy for the service fees of merchants in the catering industry is implicitly hidden behind the low prosperity of the catering industry, and the regulator intends to let the online takeaway platform "help" and alleviate the pressure on the catering industry.
The weakness in the growth of the catering industry in 2021 is obvious. Regardless of whether it is related to the catering industry, we who are eating and drinking every day will notice that Starbucks, Luckin, Tea Beauty, McDonald's... These food and beverage brands have recently raised prices. And the new catering brands that were once highly sought after by capital are also not living well: the new elements have collapsed, the tea face has been exploded to exploit employees, and the heytea has been exploded and laid off...
Listening to the scolding on the Internet after starbucks and Luckin price increases, it is conceivable that the direct consequence of the price increase is the loss of consumers. However, the price increase of catering enterprises also has to be done, and they cannot survive without increasing prices, and there are two motivations behind it:
The first motivation is that in 2021, the FMCG and food industries will rise in raw material costs. In the second half of 2021, dozens of companies will see their sales prices rise in the field of suppliers in the catering industry, from condiments to quick-frozen food.
The second motivation is the repeated resurgence of the epidemic, and the consumption of eating out has been greatly reduced. According to the "2021 China Chain Catering Industry Report" jointly released by the China Chain Store & Franchise Association (CCFA) and China Renaissance Capital, the scale of the catering industry in 2021 was the same as in 2019, and there was no year-on-year growth.
Source: 2021 China Chain Catering Industry Report
With weak revenue growth and accelerated costs, how can the entire catering industry not be difficult? As we all know, catering has important strategic value in solving employment, involving countless small and medium-sized businesses and ordinary workers. At the same time, if the price of food and beverage continues to rise, ordinary people will inevitably complain.
The decline in takeaway commissions can indeed reduce the operating pressure of catering enterprises in the short term, but in the long run, the catering industry will come out of the haze, and it will depend on how long the shadow of the epidemic will really dissipate, and how long it will take offline consumption to truly recover.
Write at the end
The policy allows large Internet platforms that have been listed and have relatively smooth financing channels to take responsibility, lower the service fee standards of merchants in the catering industry, help catering enterprises tide over difficulties, and stabilize the increase in catering prices, which is in line with the consistent logic of policy supervision.
Once it becomes a "public utility" of the national economy and people's livelihood, it means that the takeaway business, which accounts for more than 50% of Meituan's revenue, runs at a low profit, and the expected growth declines, and meituan's valuation model will be affected.
The pessimistic expectations of the market for internet platforms and the anxiety about policy uncertainty caused by this will lead to the collective decline of Chinese stocks, which has little to do with business fundamentals.