Wen 丨 Wang Xinxi
After the plunge in the stock price in February (which at one point fell by more than 15%), there are various voices in the market. Not long ago, Meituan released its 2021 performance announcement, and Meituan lost 23.536 billion yuan during the year, with an adjusted net loss of 15.57 billion yuan.
Therefore, Meituan is also changing, and its strategy has begun to shift - from "Food + Platform" to "retail + technology". Sword refers to the big retail cake.
To study the future of a company, we need to focus on the prospects of the main business and the moat, but also to see what it is doing now. In what direction to go.
Meituan's main takeaway business is very stable, but the problem is that the takeaway money is not so easy to earn, last year, meituan paid a cost of 68.2 billion yuan for platform riders, behind which is the sad fact that Meituan has a single takeaway net loss of one dollar.
Because the problem of superimposed rider well-being needs to be solved by Meituan, the imagination space of its main business has shrunk, and Meituan urgently needs to find a second growth curve. Judging from the exploration of the US group:
Meituan's new business line has three main directions:
The first is to continue to increase the community group purchase business, the core of which is meituan preferred. The second is the Meituan purchase of vegetables - the main front warehouse 1 hour to reach fresh e-commerce.
The third is Meituan e-commerce + flash sale, the former cut into the hinterland of Tmall Pinduoduo, and the latter focuses on consumers' immediate delivery needs for supermarket convenience, fresh fruits and vegetables, digital products and other categories.
These three new areas are all wars that need to continue to burn money and cannot see the end of profitability in the short term, and the US group must continue to spend money to explore, how the results of exploration, whether they can be profitable, and the variables are very large.
Meituan buys vegetables, how to go in the front warehouse mode?
Let's look at the front position first. The so-called front warehouse, as the name suggests, is to put the warehouse of the goods in front and choose a location close to the residential area to complete the "last kilometer" delivery. The central warehouse of the headquarters only needs to supply these "front warehouses" to reduce losses by cutting off intermediate links.
Some people have noticed that the daily excellent fresh and Dingdong grocery shopping mode, which mainly focuses on the front warehouse model, the story of "fast" has failed, and the social platform is full of the voice of "Shanghai is difficult to buy vegetables". Meituan's grocery shopping has been on the top of the hot search by Shanghai residents. Some netizens are also saying, "Thank you for saving me by buying vegetables and picking up leaks." ”
Despite this, the current story of the front warehouse of the US group is not easy to tell.
According to the "Late Post" report, in 2021, Meituan Bought Grocery has increased the number of front-end warehouses from 200 to more than 400. Meituan's business goal for the front warehouse has always been to pursue profitability, and some of the positions with poor data and UE (Unit Economics, unit economic model) that are not as expected will be optimized and adjusted. In 2020, most of the front-end warehouses in Wuhan have been closed and replaced by the community group buying business "Meituan Preferred".
In addition, the Meituan front-end warehouse has suspended the Suzhou Kaicheng plan. How to go next, a safe approach may be to suspend expansion, first look at the daily excellent fresh and Dingdong shopping in front of the exploration, whether you can explore a new profit path, meituan and then keep up with the optimization of their own business model.
As of December 31, 2021, Dingdong Buy Food has about 1,400 pre-warehouses with an area of about 500,000 square meters; it has leased about 60 urban sorting centers with an area of more than 400,000 square meters.
Not long ago, the front warehouse of the Beijing Sanyuan site of Dingdong Grocery Shopping was exposed to the existence of dead fish posing as live fish, replacing the production labels of expired food, and the existence of inadequate disinfection. This caused its stock price to plummet.
Due to the demand for fresh e-commerce platforms under the epidemic has been awakened again, the long-term downturn in Dingdong to buy vegetables and daily excellent fresh also ushered in a wave of stock prices rose sharply, on April 6, Dingdong buy vegetables stock prices rose by 46%; daily excellent fresh stock prices rose by 14%.
However, the rise in demand in the special period cannot cover up the capacity shortcomings and consumer experience problems of the two major head players under the epidemic, and in the long run, how to cross the hurdle of profitability is a headache for head front position players.
According to the data, in the three years from 2019 to 2021, the net loss of Dingdong Grocery Was 1.873 billion yuan, 3.177 billion yuan and 6.429 billion yuan respectively, and the cumulative total loss was as high as 11.5 billion yuan. Losses are widening.
From the current point of view, low gross profit, high loss of fresh categories, in the face of the need to spend money to buy time of emergency consumers or the special period of the epidemic consumer demand, in the past the front warehouse rely on subsidies, the introduction of cheap consumers. This makes the repurchase rate of consumers uncertain and unstable.
From the perspective of development, low gross profit and high loss of fresh categories are difficult to support high-cost strong competition of the front warehouse, in order to get more users and orders, the front warehouse also needs to increase the number of warehouses to complete the dense distribution, this heavy asset model, the higher the density, the greater the cost of warehousing rent, manpower wages and other aspects.
The distribution of the front warehouse in the same city requires a lot of manpower and material resources to be invested by one city after another, and the cities are different, the locations are different, the income level of consumers is different, and they are facing a variety of different revenue situations.
In today's situation where the cash-burning model is becoming more and more difficult to obtain the recognition of the capital market, the offline heavy asset model actually needs to consider reducing cost investment, in fact, a better way is to cooperate with the front-end merchants to reduce operating costs. However, judging from the current situation of investment in each family today, it is no longer realistic.
For the US group, the most worrying thing is not whether it will kill competitors, but players such as Dingdong buying vegetables are proving that the front position is a business model that cannot run through profitability.
Of course, there are also voices that Dingdong buys vegetables and daily excellent fresh may achieve profitability this year, and whether it can be profitable also determines whether it is worth it for the US group to continue to spend money with competitors in the front position.
At present, the US group is still continuing to invest heavily in community group buying, but community group buying also forms a competitive relationship with the front warehouse model.
Community group buying is difficult to ride the tiger
For Meituan, community group buying is already a Top 2 business, but as a money-burning business, Meituan faces two uncertainties:
One is that the community group buying from the fiery situation of the year to the current escape, scattered scatter, Jingdong's Jingxi fight, backed by Ali's Ten Hui Group, have been an important drop in the community group buying track of e-commerce giants, but with the shrinkage of the entire industry, they must not continue to arm self-protection.
From the perspective of revenue structure, in the past year, Meituan has not been soft on spending money on the community group purchase business. In the past year, Meituan Preferred has completed about 120 billion yuan of GMV in 2021, at the cost of expanding operating losses.
According to the data, in the whole of 2021, the revenue of new businesses and other segments, including community group buying, increased by 84.4% year-on-year to 50.3 billion yuan. The operating loss of the New Business and Other Segments widened from RMB10.9 billion in 2020 to RMB38.4 billion in 2021, with an operating loss ratio of 36.6% year-on-year.
The large loss of the new business directly led to the meituan's annual financial report of "increasing revenue without increasing profits".
Therefore, whether it is the US group Pinduoduo that costs and consumes the opponent, or the business logic of community group buying itself is not established, it is still inconclusive, but the possibility of the latter is becoming more and more likely.
Second, today, the large-scale subsidies for meituan's preferred and more grocery purchases have also been suspended. At present, the community group purchase is left with the two wrists of Meituan and Pinduoduo. The current problems faced by Meituan are:
Where is the upper limit of the community group purchase burning money, and how long is the expected time point for profitability? In the case that the unit cost comparison is no longer advantageous to Pinduoduoduo, does the US group still have enough ammunition?
After all, in today's market environment, capital market financing is more difficult than ever.
Community group buying is a huge market, and Meituan and Pinduoduo are likely to gamble heavily on this track.
However, relatively speaking, the low unit price of community group buying, cost-effective goods and Pinduoduo's user tone are similar, with the volume of Pinduoduo's users, meituan is a high probability that it cannot consume opponents.
Although the US group has now achieved the head level of community group buying, his price is almost double that of his opponents, and the price of its standard products is basically higher than that of its opponents.
According to brokerage data, the loss rate preferred by Meituan is much higher than that of many people with similar market share and similar orders. Duoduoduo suddenly stepped on the brakes last year due to policy guidance, so that last year, Pinduoduo lost relatively little money, and the profit reached 6.9 billion yuan.
This means that Pinduoduo is a difficult opponent for the US group, and Pinduoduo is more stable.
On the other hand, community group buying actually competes with the front-end warehouse model.
Community group buying can also be seen as a front-end warehouse at the doorstep - this kind of supermarket pick-up point at the doorstep can be both retail, but also the front-end warehouse pick-up and distribution functions, while developing a part of the quality requirements are not so high fresh, community group buying can also rob the price-sensitive users of the pre-warehouse subsidy, and then use this economy of scale to drain the flow.
Meituan's community group buying is in a difficult situation to ride the tiger, the competitors are very strong, the burning money can not be stopped, and the community group buying business and the front warehouse business also have a dilemma of left and right fighting.
How long can Meituan e-commerce burn money?
E-commerce retail business is an important direction of Meituan this year - "Tuanhao goods" was upgraded to "Meituan good goods" last year, and this year it was renamed "Meituan E-commerce". Meituan's strategy has been upgraded to "retail + technology", and the importance of retail priority is very obvious.
For a long time, many of Meituan's businesses have the shadow of e-commerce. Whether it is the "Meituan grocery shopping" delivered in 30 minutes, the "Meituan flash sale" delivered in about 1 hour, or the "Meituan Preferred" mentioned the next day, it can actually be regarded as an e-commerce business.
From the perspective of meituan's new layout, there are two aspects, on the one hand, Meituan flash purchase takes the road of instant physical e-commerce, including millet, Apple, Samsung and many digital brands have successively reached cooperation with Meituan flash sale. A large number of offline directly operated or dealer stores will be connected to meituan's distribution system.
On the one hand, Meituan online e-commerce is more like a comprehensive version of Pinduoduo + Tmall + JD.com, that is to say, Meituan online e-commerce is going to the home of the giant to use the road that the giant has already traveled to bloody e-commerce.
On the whole, Meituan should use the frequency of users' use of the Meituan APP to cultivate the habit of shopping at the entrance of Meituan.
Meituan flash purchase business has cut into the battlefield of offline physical objects - digital categories, the same city e-commerce market is very large, there is a certain imagination, but due to the large investment of manpower and distribution resources, this year's probability is still to continue to burn money.
In the Meituan online e-commerce business is the original giant to take the road, whether it is product category, price, quality, distribution has no advantages, consumers under the epidemic are shrewd, and price sensitive, therefore, Meituan online e-commerce is also a business that needs to continue to burn money but can not see the profit prospects.
Now the key question is, how much money can the US group burn?
Meituan's sales and marketing expenditure in 2021 reached 40.7 billion yuan, a sharp increase of 94.74% over 2020. Meituan's arrivals, hotels and travel business was a net profit of 14.1 billion yuan a year, which was almost diluted by the loss of Meituan's new business (38.4 billion yuan operating loss in 2021), including Meituan's preferred and flash purchase, etc.
In the current Internet has entered a cold winter, the new business direction of the US group is almost all the business of burning money, but this year the difficulty of capital market financing is getting more and more difficult, relying on its own blood transfusion, with the current way of playing the US group, the expected result of long-term income is obvious.
Once the grain and grass are not provided, the Meituan e-commerce business will probably fall into a chicken rib situation, and may even hit the stock price of the Meituan in turn, not to mention, in the main business, wine tourism and e-commerce business, the Meituan is also facing the impact of vibrato.
At present, it depends on whether its main takeaway business can release more profits after optimization, in 2021, Meituan will not only increase the number of users by 180 million, but also increase the number of annual transactions per transaction user by 27.2%, and add 2 million new merchants.
Because the anti-monopoly penalty and commission reduction policy has landed, the bearish has been almost out, but because the well-being problem of the takeaway brother is still the sword of Damocles hanging over the head of the US group, coupled with the continuous struggle between hungry mo in the takeaway business, it is not realistic to significantly increase revenue.
To sum up, now the DAU growth of Meituan is falling into a new bottleneck, and it is difficult for the takeaway business to open up overseas markets, and it can only dig deep into the commercial value of users to community group buying, e-commerce and other business lines.
But the problem is that many of the fronts that need to burn money in the US group are short-term inability to see the end and profit, and the pressure of the follow-up capital chain may continue to be transmitted between various business lines, and the profit pressure will become more and more large.
Therefore, from the current situation, the worst moment of the US group is far from coming, if the US group has to shrink its business and sharply cut off unprofitable projects because it has no money to burn, it may usher in a real bottom-reading opportunity at that time.
Author: Wang Xinxi Senior science and technology self-media person This article is not allowed to reprint without permission WeChat public number: hot micro-comment (redianweiping)