Meituan Preferred opens a new round of adjustments
Meituan has never given up on the idea of community group buying.
Recently, Meituan Youxuan announced the launch of a new round of adjustment, the main direction of the adjustment is to replace the regional system with the provincial system, and give the provincial and regional leaders the right to make operational decisions and bear their own profits and losses.
Industry insiders revealed that the announcement of the adjustment will be announced as early as this week, and the specific situation may still change. As of press time, Meituan has not responded to this.
It is worth noting that Meituan's preferred business unit was established in July 2020, and the initial leader was Chen Liang, former senior vice president of Meituan and member of the S-team, the highest decision-making body.
At the beginning of 2022, Guo Wanhuai, vice president of Meituan, officially took over the preferred business in the hands of Chen Liang and made a series of adjustments.
In October 2022, Meituan Youxuan began to transform into a "Tomorrow Delivery Supermarket" and began to adopt the model of "online pre-order + offline pick-up" to meet consumers' differentiated consumption needs of "buy today, deliver tomorrow", and accelerate the integration of fresh food retail online and offline.
At the end of April this year, Meituan Youxuan made a major adjustment to the management and officially abolished the customer experience department. At the same time, the heads of the four departments directly related to regional management, logistics, commodity management, and business division have been adjusted.
(Source: LatePost)
In this adjustment, Meituan Preferred also split the northwest region of four provinces and regions of Gansu, Qinghai, Ningxia and Xinjiang, where the performance cost was too high and the business scale was small, further shrinking the front.
Today, Meituan Preferred directly replaces the regional system with a provincial system, trying to solve the problems of redundant personnel and unclear responsibilities between business departments in the past, further improving business flexibility and reducing the phenomenon of repeated consumption of resources.
Based on the above adjustments, Meituan Preferred is looking for new growth paths through resource integration and diversified market layout.
Having said that, the reason why Meituan carried out this series of adjustments is actually affected by many factors such as the slowdown in community group buying demand, the new business and branch performance of Meituan Preferred, and other factors.
According to the financial report, the cumulative loss of Meituan's new business in 2022 reached 28.4 billion yuan, which is its largest loss-making business segment.
Among them, Meituan Youxuan is a big loss-maker, losing 3 billion yuan in the fourth quarter of 2020 alone.
Not only that, in the "double competition" between Meituan Preferred and Duoduo to buy vegetables, Meituan Preferred does not have an advantage.
In 2022, Meituan Preferred and Duoduo Grocery set a GMV of 250 billion yuan, and finally Duoduo Grocery completed about 180 billion yuan of GMV, while Meituan Preferred only achieved half of the target.
It can be seen that the current development momentum of Duoduo Grocery is good, and Meituan Youxuan is facing greater performance pressure.
In order to take advantage of the victory, Duoduo Grocery launched targeted price reduction promotions specifically for specific categories selected by Meituan in the first quarter of 2023.
(Duoduo grocery shopping flash sale page)
At the same time, Duoduo also forced Meituan to follow up the subsidy by issuing subsidies, slowing down and reducing its profit rate and market share.
After this action, the market share of Duoduo Grocery in some provinces and cities began to surpass Meituan's preferred. The data shows that the market share of Duoduo Grocery in Chongqing was 70%-80% of Meituan's Preferred, and after the first quarter, Duoduo's market share in Chongqing exceeded that of Meituan Preferred.
At present, it seems that Meituan, which is "worried about internal and external troubles", still needs to accelerate the adjustment of its business structure and improve the hematopoietic ability and competitiveness of the platform.
In the second half of community group buying, the smoke of gunfire did not stop
In 2022, the tide of community group buying will recede, the Ten Clubs Group and Orange Heart Preferred will be closed one after another, Jingxi Pinpin will accelerate its contraction, and Taocai will lay off employees... The chill spreads throughout the industry.
As opponents fell, Meituan and Pinduoduo became the only two remaining super players on the track, and the competition between the two became more and more fierce.
In February last year, Duoduo Grocery launched Duoduo Station, and opened up its collection point service system with express delivery companies such as Zhongtong, Yunda, Yuantong, Shentong, Post, and Jitu to further improve its competitiveness and expand the capacity of community group buying business.
As of the end of April this year, the area where Duoduo Station has opened the function of receiving and sending personal bulk items has covered more than ten cities such as Zhengzhou, Wuhan, Changsha, Hefei, Shenyang, Nanjing and Shenzhen, and its business boundaries have continued to expand.
On the other hand, Meituan Youxuan has begun to look forward to the full category since its brand positioning was upgraded to "Tomorrow Delivery Supermarket". Up to now, "Tomorrow Supermarket" covers fresh food, fast-moving consumer goods, daily necessities, rice, flour, grain and oil, leisure food, paper products and other goods.
Not only that, "Tomorrowda Supermarket" has also opened up a sinking market for Meituan Preferred. By the end of last year, Meituan's preferred "order today, pick up the next day" service model covered more than 2,000 cities and counties across the country, of which more than half of the self-pickup points were located in townships.
In this way, Pinduoduo expands traffic acquisition channels by integrating community group buying and express delivery collection business, helping community group buying business achieve new breakthroughs; Meituan, on the other hand, improves Meituan's retail territory through various adjustments, and regards the sinking market as a new battlefield and competitive focus to help the community group buying business reduce losses.
Although the paths chosen by the two are obviously different, in essence, they are both to meet the needs of consumers for community group buying, improve the overall efficiency of the supply chain, and finally return to the commercial essence of retail.
It should be noted that in addition to Duoduo and Meituan Preferred, Ali's community group buying business, Taocaicai, is also actively seeking breakthroughs.
In 2021, Alibaba launched Taocai Cai Shop, and divided the small shop into self-pickup points, fruit and vegetable stores, department stores, express delivery stations, etc., which not only provided consumers with diversified services, but also improved the operational capabilities of small store managers.
(Taocai Cai "one store multi-functional" community new format)
In July 2022, Taocai began to promote the "free home delivery" function to all group leaders on the platform. In April this year, Taocai reported that it would be merged into Tmall and integrate with Tmall Supermarket and Taoxianda, which is expected to complement Tmall Supermarket's instant retail and near-field retail.
It can be seen that Taocai is exploring a new model of community group buying, further opening up online and offline channels, and putting more resources into industry competition.
Based on the situation of the three platforms, it is their inevitable choice to make efforts from the supply side and the demand side, and the competition around the supply and demand ends will continue to intensify in the future.
Differentiated competition is a sharp blade to surpass competitors
As a new round of competition kicks off, the market size of community group buying will continue to expand.
Data show that the scale of the mainland community group buying market will exceed 200 billion yuan in 2022, and in terms of service scale, the scale of community group buying users in 2021 will be 646 million, and it is expected that the user scale will increase to 876 million in 2022.
(Source: China Business Intelligence Network)
Compared with the market size of trillions such as offline physical retail and traditional e-commerce, the volume of community group buying is not large.
But this does not mean that community group buying does not have the need for development, on the contrary, the scale is not large, the greater the room for growth.
Based on this, forming a more differentiated community group buying competitiveness, enhancing consumer stickiness, and ultimately realizing the online transformation of offline retail has become a top priority.
To put it bluntly, even if the competition between community group buying platforms is fierce, differentiation is always the driving force for their value building.
Taking commodity categories as an example, the main product categories of community group buying are mainly daily necessities and fast-moving consumer goods, which are easy to homogenize.
In this case, as long as one platform launches new and interesting products, it will inevitably attract widespread attention and attract a group of mobile consumers.
If this differentiation advantage can be maintained for a long time, the platform will definitely gain stronger competitiveness and survivability.
From the perspective of the industry, in the past, community group buying platforms burned money to "race the ground", but now the community group buying industry is gradually returning to rationality and maturing.
Under such circumstances, the community group buying platform will inevitably move towards a new stage of development. Based on this, how to recognize its own form and tap its differentiated advantages has gradually become the key to the breakthrough of the platform.
All in all, differentiation has become a winning weapon for community group buying competition, and the platform will continue to stimulate market vitality around differentiated play in the future.
Author | Li Xiang