Retreat to the battlefield of superiority and clarify the offensive line
Author | Han Xing
Cover source | Meituan official website
Tmall supermarket arrives the next day, Jingdong arrives home in one hour, Meituan delivers in 30 minutes - in the matter of competing for delivery speed, the giants are rolling to the extreme.
They are targeting the same track that is believed to still have great potential: instant retail.
The business, which grew from food delivery, dates back to 2008. After 14 years of development, the boundary between instant retail and e-commerce has become more and more blurred, which has allowed Wang Xing, who is good at "crossing the line", to see the opportunity. Wang Puzhong, president of Meituan Daojia Business Group, predicted in 2021 that the real-time retail market will reach 1 trillion yuan in the next 5 years, and Meituan Flash Sale will take away 400 billion yuan of cake.
Recently, the Meituan App homepage added a new top section "Food Department Store, On-Call", integrating five major businesses: takeaway, Meituan grocery shopping, supermarket convenience, department stores and drug shopping. They have one thing in common: the statute of limitations is within one day.
The same city delivery capability is the core advantage of Meituan, and it is also the biggest confidence to bet on instant retail. In the second quarter of this year's financial report, Meituan adjusted the caliber of business disclosure and listed flash sales, takeaways, etc. in the "core local business" section. On the battlefield of instant retail, Meituan has provoked a local war with e-commerce giants.
After 12 years of groping for directions, the US group concentrated its firepower and attacked large retail. Will Wang Xing's dream of "all things coming home" come true this time?
Only fast is not broken
The Apple conference in early September has just ended, and Meituan announced that it has cooperated with more than 1,000 Apple authorized stores, and the iPhone 14 will be delivered as soon as half an hour.
Meituan, which "has been a retail company since its inception", has not hidden its ambitions.
In September 2021, Meituan upgraded its strategy from "Food + Platform" to "Retail + Technology". A year later, the homepage of the Meituan App changed its face greatly, and the five major business groups with "fast" as the core selling point ascended to the C position.
The new roofing module is called "Food Department Store, Available", which is simply everything at home. In addition to the four old faces of takeaway, grocery shopping, medicine shopping, and supermarket convenience, Meituan has added a "quality department store" to the top module. The original top payment function was integrated into the search bar, and the three major travel-related businesses of cycling, taxi, and train tickets were moved down together with "running errands".
Comparison before and after the revision of the homepage of the Meituan App
The products sold in the quality department store sector are divided into 7 categories: makeup and skin care, mobile phone digital, maternal and infant products, pet products, household daily necessities, personal washing, clothing, shoes and bags. Meituan cooperates with offline brand stores, and after consumers place orders on the platform, Meituan will deliver the order, and the performance time is 30 to 90 minutes. At present, the brands that have reached cooperation with Meituan's quality department store business include Xiaomi, Apple, Muji, China Mobile, Chenguang Stationery, etc.
From takeaway to grocery shopping to department stores, Meituan continues to expand the category coverage of instant retail. Compared with the takeaway business, the purchase frequency of quality department stores is lower, but the unit price of customers is higher, and the format is closer to e-commerce.
Snow Leopard Finance and Economics noted that on the eve of Teachers' Day and Mid-Autumn Festival on September 10, the entrance of the quality department store was once replaced with "romantic flowers", and the layout of the page basically did not change after clicking to enter, but the flower products and shops appeared in a more conspicuous position.
The adjustment of the layout of the App's homepage is not without traces.
In the Q2 financial report released last month, Meituan adjusted the business structure disclosure method, and the three major business segments of takeaway, in-store, wine and tourism, and new business in the past were adjusted to core local business and new business. Among them, flash sales are classified as core local businesses.
Flash sale is an expansion of Meituan's core takeaway business, from food delivery to delivery of everything, the two share the user group and instant delivery network, and the profit path is similar. Supermarket convenience, quality department stores and drug shopping in the rooftop business all fall under the business of flash sales.
The domestic e-commerce market is divided by the three giants of Taobao, JD.com and Pinduoduo, but Meituan's advantage is to connect goods and demand in the shortest possible time. With more than 5 million riders, can it get a piece of the huge e-commerce cake?
Meituan big retail "three brothers"
With the dream of big retail, Meituan has explored more than one path in the past few years, mainly including flash sales, community group buying and traditional e-commerce.
The first path is flash sale.
In 2018, Meituan took out the express purchase that was originally attributable to the takeaway business, launched the independent brand Meituan flash sale, and established a flash sale division in July of that year. Meituan Flash Sale is positioned to realize the LBS instant retail of everything at home within 30 minutes, and the traffic entrance is Meituan and Meituan Takeaway App.
At that time, Meituan had about 2.7 million riders and an average of 17 million takeaway transactions per day. The demand for takeaway delivery within a day has very obvious peaks and troughs, and the emergence of flash sales allows riders to be busy during non-peak dining periods.
The early Meituan flash sale mainly connected small offline stores, and then successively connected supermarkets, fresh fruit stores, convenience stores, and brand offline stores. And from 2019 to 2021, it has incubated the same-city instant delivery business such as buying vegetables, buying medicines, flowers, and drinks.
Instant delivery is Meituan's advantage, but the SKU that can deliver goods is limited, which means that the ceiling of the flash sale business is not high enough. Meituan's ambition is to further expand the category, from the small pond of near-field e-commerce to the ocean of far-field e-commerce.
In 2020, Meituan embarked on the second path and set its sights on community group buying, which was still a blue ocean at that time.
In July 2020, Meituan established the Meituan Preferred Business Department and officially entered the community group purchase. In September of that year, Meituan Preferred announced the launch of the "Thousand Cities Plan", which aims to achieve national coverage by the end of the year. According to 36Kr, Meituan Preferred's GMV target for 2021 is 200 billion yuan, which is 2.5 times that of Meituan's flash sale GMV that year.
At the end of the same year, Meituan also launched a good group of goods split from the flash sale division.
Tuan Hao goods is the predecessor of Meituan e-commerce, mainly adopting the operation mode of direct hair and group purchase of the place of origin, the goods cover all categories, the SKU richness is higher than the Meituan flash sale, and it was considered by the market to be a benchmark Pinduoduo business at the beginning of the launch. In November 2021, Tuanhaoshang changed its name to Meituan E-commerce and boarded the first-level entrance of the Meituan App in January this year.
This is also the third path for Meituan to test the waters of big retail.
If divided according to the performance timeliness, online retail can be divided into near-field e-commerce and far-field e-commerce. From the near field to the far field, the US group, which is unwilling to put its eggs in the same basket, has tasted some sweetness of category expansion, but the road of far-field e-commerce has not gone smoothly.
After spending a lot of money on community group buying, which Wang Xing called "a once-in-a-five, or even a once-in-a-decade opportunity", the money that Meituan preferred to burn did not grow in exchange. According to Analysys data, the number of monthly active users of Meituan's Preferred App has fallen all the way after reaching a high of 9.63 million in July 2021. According to the late LatePost report, Meituan Preferred achieved GMV 120 billion yuan in 2021, only about half of the original target.
Since April this year, Meituan has continuously shut down preferred services in Gansu, Qinghai, Ningxia and Xinjiang, gradually shrinking the front. On April 26, Meituan Preferred announced on the App that it would shut down the Beijing pick-up point service.
Meituan's e-commerce, which occupies the first-level traffic entrance, also performed with mediocre response. At present, the average daily order volume of Meituan e-commerce is about 200,000. The peak number of single-day orders of Tuan Hao goods two years ago has reached 160,000 orders.
Compared with the other "two brothers" whose performance was less than expected, the Meituan flash sale, which has 30 minutes as the main selling point, has performed remarkably. By the end of 2021, Meituan flash sale has covered more than 100,000 merchants, and the GMV has reached 81.4 billion yuan, a year-on-year growth rate of 66%. Zheshang Securities predicted in a research report that the GMV of Meituan Flash Sale will exceed 100 billion yuan by the end of 2022.
Part of the reason why community group buying and e-commerce businesses are in the awkward position they are today is that cross-regional logistics have greatly extended the average delivery time. The delivery time of community group buying is extended to the next day, and the performance time of Meituan e-commerce is usually 2 to 3 days. Meituan, which takes fast delivery speed as the moat, is losing its core competitiveness step by step.
Therefore, concentrating forces and choosing instant retail as a breakthrough in realizing the dream of "all things coming home" is not a difficult choice for the US group.
Return to the home court and attack on the defensive
The return of the focus from far-field e-commerce to instant retail does not mean that Meituan has given up a larger market. The potential instant retail market is a fertile land of abundant water and grass, and Meituan has the thickest walls and widest moats in this land.
iResearch data shows that the compound annual growth rate of the instant retail market in 2019-2023 is expected to reach 69.5%, and the market size will reach 900 billion yuan in 2024, which is 4.5 times that of 2020. According to the National Bureau of Statistics, the growth rate of online retail sales in 2021 is only 14.1%.
China Merchants Securities predicted in a research report that from 2020 to 2025, the annualized growth rate of near-field retail sales will be about 40%, far-field retail will be about 10%, and the growth rate of on-site offline transactions will be -2%.
In this era of stock competition, higher growth rates represent more opportunities.
Wang Puzhong, president of Meituan's home business group, said in 2021 that in the next 5 years, Meituan will win 400 billion yuan in the trillion-dollar instant retail market.
Similar to many emerging industries spawned by the Internet, instant retail has two models: self-operated and platform. Meituan is involved in both models, with supermarket convenience and quality department stores as platform models.
The self-operated model is still struggling on the brink of loss due to its heavy operating assets. Zheshang Securities Research Report shows that the platform model in the instant retail market is better than the self-operated model. It is estimated that by 2025, the market share of platform and self-operated will change from 64% and 36% in 2021 to 80% and 20% respectively.
In the platform mode of the instant retail market, Meituan has a large leading edge. In 2021, the market shares of Meituan, Ali and Jingdong will be 40%, 32% and 16% respectively.
The category cannot do more than Taobao, the price cannot be lower than Pinduoduo, and there is no JD.com's self-operated logistics system, and the Meituan group from the near field to the far field is struggling. But the US group, which returned to the real-time retail battlefield and clarified the offensive route, has become a sharp knife to the e-commerce giant.
In mid-June this year, shortly after Meituan announced that it would upgrade its strategy from "Food + Platform" to "Retail + Technology", Xin Lijun, CEO of JD Retail, said in an interview that JD had considered and studied the launch of on-demand takeaway services to kill the hinterland of Meituan.
The move is more for the sake of defense. When an iPhone 14 can be delivered to users within half an hour, JD.com's basic disk begins to be threatened.
Ali is also facing Meituan in the instant retail market. On August 19, Ele.me announced a cooperation with Douyin. Based on the Douyin open platform, Ele.me will provide users with local life services from content planting, online ordering to instant delivery together with Douyin.
In the face of the menacing counter-offensive, the US regiment, which retreated to the superior battlefield and attacked with defense, provoked a new local war, but how big a piece of territory it could lay remains to be tested by time.
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