Meituan bids farewell to the food delivery platform: live short video against Douyin and transforms into retail e-commerce
Source: Visual China
Author|Zhang Rui
Edited by Kang Xiao
Produced by|Deep Web.Tencent Xiaoman Studio
Why did a dazzling third-quarter financial report shrink Meituan's market value by HK$78.4 billion in one day?
Many people are surprised that the performance of narrowing new business losses, 22.1% year-on-year revenue growth and 62.4% year-on-year net profit growth did not impress the capital market. In fact, the reason is very simple, for the capital market, the growth of Internet companies and the imaginary growth space that they can bring are more important than whether they lose money.
Compared to ByteDance and Pinduoduo, Meituan today lacks a new story.
Although Meituan has classified Meituan Preferred, Meituan Grocery (renamed as Little Elephant Supermarket), Kuaidun, online car-hailing, bike-sharing, and power bank into the new business category, it is still under the business framework of local life. In the third quarter of 2023, Meituan's above-mentioned new business revenue increased by 15.3% year-on-year, and its operating loss narrowed to 5.1 billion yuan.
Wang Xing, founder of Meituan, revealed at the 2023 Q3 results meeting, "If the new business does not have the opportunity to make a profit alone in the long run, the company will adjust its strategy and resource allocation accordingly." ”
The lack of new stories is only one of the reasons for the decline in Meituan's market value, and now Meituan is still facing a two-front battle with Pinduoduo and ByteDance.
However, Meituan's new story is also hidden in a crucial battle with Douyin. From a business perspective, live streaming and short video are considered by Meituan as a company-level strategic business in 2023, and from the company's perspective, it is accelerating the transformation from food delivery to technology retail.
"Be a tech company"
After 2022, Meituan CEO Wang Xing gradually disappeared from public view, rarely talking about topics unrelated to Meituan's business. It is difficult for the outside world to gain insight into Wang Xing's thinking and inner world through social platforms. Wang Xing's last circle of friends was rumored to be more than half a year ago, when he officially announced his participation in the A round of investment in Wang Huiwen's startup "Light Years Away".
At the same time, in addition to normal business publicity, Meituan rarely gets involved in hot social topics in the field of public opinion.
Meituan and Wang Xing, who have been silent for a year, what are their new thoughts on the future?
Within Meituan, Wang Xing is repeatedly emphasizing the value of technology. A person familiar with the matter told the "Deep Web".
In fact, Meituan's organizational structure and personnel adjustments this year are also leaning towards technology.
In terms of organizational structure, in March this year, Meituan set up a live broadcast technology center to provide tool support for Meituan Live, led by Li Shubin, senior vice president of Meituan and a member of the S-team, and participated in the operation of Meituan's live broadcast business in store and takeaway.
In the personnel reshuffle, five management personnel were promoted to vice presidents of the company in September this year. Among them, Mao Yinian, the head of the UAV business department, and Sun Zhizhao, the head of the Daojia R&D platform, have deep technical and product backgrounds.
In early December, Meituan announced the establishment of a technical governance preparatory group under the preparatory technical committee led by Mu Rongjun and Zhang Jinmao. Among them, Mu Rongjun is the co-founder of Meituan and a member of the S-team, and Zhang Jinmao was the head of the basic R&D platform, reporting directly to Wang Xing.
Technology-driven aligns with Meituan's own "retail + technology" strategy. As Douyin conquers the local life field, Meituan wants to implement the "retail + technology" strategy, and it has always been unable to bypass Douyin, which also has no borders.
Use "Tik Tok" to fight back against Tik Tok
In terms of new business, Duoduo is Meituan's preferred main competitor. From 2023 onwards, Meituan's preferred management will abandon the method of reducing costs and increasing efficiency a year ago, and return to the trend of pursuing growth and regaining market share.
In terms of core local business, at the beginning of this year, Douyin changed its previous defensive and conservative approach and began to fight back in an all-round way, extending from group buying and other home business to home delivery and instant retail.
Local life is Meituan's "back garden". Compared with Duoduo to compete for the community group buying market, Douyin has more weight within Meituan.
Meituan changed its previous attitude of "waiting and seeing" towards Meituan, and set up a defense team at the end of last year to study Douyin.
"There is no superfluous gameplay, it is to benchmark Douyin. Douyin has it, and Meituan must have it. An industry source close to Meituan told the "Deep Web".
"From 2023 to 2025, the showdown between Douyin and Meituan will be in two key battlefields, one is local life group buying, and the other is local e-commerce in the same city, so that consumers are no longer limited by geographical factors to buy cheap goods. "Industry analysts judge a good year.
Live streaming and short videos are seen internally by Meituan as a company-level strategic business for 2023.
Wang Xing set the tone for short videos and live broadcasts at Meituan's 2023Q2 results conference: "In addition to the store- and search-based business model, we have also piloted short videos and live broadcasts to provide merchants with more diversified marketing tools to reach consumers. The combination of live streaming and shelf models is our unique advantage and can bring new growth potential to F&B merchants. ”
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 in one fell swoop", and it is not necessarily his peers who kill him. Now in the face of Douyin's dominance in the local life market, Meituan is using "Douyin" to fight back against Douyin.
Since the beginning of this year, Meituan has significantly accelerated the speed of live broadcast and short video layout.
"Each department within Meituan has a CAP organization, which brings together employees from various departments such as legal, public relations, public opinion, and business, and it is necessary to discuss the necessity of promoting new business within the CAP organization before the business department can promote new business. Since 2023, the speed of adoption of new project demand has accelerated significantly, especially in the field of live streaming and short video. A Meituan employee told the Deep Web.
According to the "Deep Web", Meituan's live broadcast is divided into two categories, one is Meituan's official live broadcast, Meituan will invite brands to participate in Meituan Wine Tourism, Meituan Grocery Shopping, Meituan Fun, Meituan Takeaway Afternoon Tea and other official live broadcasts, and free pit fees;
In order to attract merchants to broadcast themselves, Meituan launched marketing activities such as "God Sought-after" and "God Coupon Festival" in the first half of this year.
In March, Meituan launched a "God in Demand" marketing campaign for merchants, which allows merchants to sell low-cost but high-quality dishes through live broadcasts and short videos. In April, Meituan upgraded its monthly marketing campaign, the "Divine Coupon Festival". In these marketing activities, merchants can provide deep discounts through limited-time flash sales, live broadcasts, short videos and other modes to create explosive products. In May, Meituan launched three official live streaming events for Mother's Day, Valentine's Day, and Shopping and Eating. In July, the homepage of the Meituan app set up a fixed entrance for live broadcasts.
Meituan's "combination punch" in live streaming quickly paid off. According to 36Kr report, "Meituan Live's GMV in July was about 5-600 million, and in October, the GMV exceeded 2 billion yuan in a single month." ”
However, due to the lack of high-quality short videos in Meituan in the early stage, Meituan's live broadcast mainly consumes the existing traffic on the site. In order to make up for its shortcomings in content traffic, Meituan adjusted the functional layout of the tab bar on the app's homepage last month, adjusting the middle position to the "video" tab.
According to the observation of "Deep Web", Meituan short video not only began to test the function of supporting some users to shoot and upload short videos, but also launched a reward for watching videos to receive cash, and new users can receive up to 28 yuan.
Placing short videos at the first-level traffic entrance means that in addition to live broadcasts, Meituan has made up the last piece of the puzzle to comprehensively fight back against Douyin.
"Compared with graphics and texts, short videos have a better effect on local life services such as food, wine and tourism, and Meituan's efforts to develop short videos can not only stimulate user interest, but also obtain users and traffic through high-quality video content, and solve the problem of Meituan's stock traffic. An industry source close to Meituan told the "Deep Web".
Compete for shop finders and merchants
Before making efforts in live streaming and short videos, Meituan's first battle against Douyin began with the competition for store explorers and merchants.
Visiting stores is a key part of Douyin's business, such as group buying. Unlike Meituan, which has been accumulating offline for more than ten years, Douyin, which lacks a local promotion team, mainly relied on influencers to visit stores in the early stage to help merchants achieve exposure, diversion and attract new users, and finally facilitated the completion of the transaction.
Douyin's in-store business of group buying is not just to earn merchants' commissions, but also to allow merchants to cast streams on Douyin and earn merchants' advertising revenue.
In response, at the beginning of this year, Meituan launched a WeChat mini-program "Meituan Circle Circle Store" to test the waters and explore stores. Due to the fact that the revenue of Meituan's circle of store exploration in the early stage was not advantageous compared with Douyin, Meituan did not go well in seizing store exploration talents.
There are monetization methods such as fixed price, live group purchase price difference and platform group purchase commission. An expert revealed, "The income of a talent with more than 10,000 fans for posting a store visit video on Douyin is 800 yuan, plus a commission of 5%-8%, and the commission income on the circle of store exploration is slightly lower than that of Douyin." ”
In addition, since the beginning of this year, Douyin has also gradually removed the threshold of 1,000 followers for store explorers, and it will be more and more difficult for Meituan to seize the "store explorers".
In order to compete with Douyin for the group buying market, Meituan also started with low-cost group buying, launched the "special group buying" section in February this year, and gave a fixed traffic entrance in the Tag bar on the homepage of the Meituan App.
However, compared with Douyin, Meituan's competitive advantage with a strong promotion team is not talent, but tens of millions of merchants and complete B-end marketing tools.
According to data, at the end of 2022, the number of stores cooperating with Douyin's local life business exceeded 2 million, while the number of active merchants in Meituan was 9.3 million, more than four times that of Douyin.
According to the "Deep Web", in order to increase the number of newly signed merchants, Meituan stipulates that the signing, group orders and authority maintenance of new customers are fully responsible for "direct sales".
For merchants, having traffic blessing is the icing on the cake, and deciding which platform to choose is also driven by profits.
In order to attract more merchants to settle in their own platforms to do short videos and live broadcasts, Meituan and Douyin have changed their commission ratios.
Some merchants gave feedback to "Deep Web", "Meituan's policy in the early stage is that if you can list a package with a larger discount on Meituan, you can get discounts such as a reduction in the commission ratio or even a reduction." Douyin's policy is that if a catering business uses Douyin as its main operating platform, the commission rate can be reduced to 2%. ”
A battlefield without borders
At the same time that Meituan is increasing short videos and live broadcasts in the way of "Douyin", Douyin is also using the "Hour" business to seize the instant retail market in categories such as fresh food, flowers, food, groceries, and 3C.
When Douyin invites merchants to open 'hourly delivery', it has clear regulations on the delivery timeliness, and merchants who can't guarantee the delivery timeliness can't open 'hourly delivery'.
The first point of Douyin is 3C products. "Douyin is organizing training for Apple authorized stores to do instant retail, and the cooperation with Xiaomi is also advancing. A person familiar with the matter told the "Deep Web".
The instant retail business of Apple's authorized stores was first partnered with Meituan Flash Sale. Since the launch of the iPhone 12 in 2020, Meituan Flash Sale has supported Apple's new pre-sale every year.
Now that Douyin has increased its real-time retail, it is bound to compete head-on with Meituan's "flash sale" business.
"Hourda has risen to the core business of Douyin, and now it is the bonus period of Hourda. Because instant retail is demand-first, Douyin's hourly delivery will intercept the demand and traffic of Meituan's instant retail. Feng Nian, the founder of the Golden Hand, judged the "Deep Web".
Retail is also a strategic priority for Meituan. In September 2021, Meituan raised retail and technology to a strategic level for the first time, upgrading the company's strategy from the original "Food+Platform" to "Retail+Technology".
Wang Xing has shared internally many times that Meituan has been doing retail, focusing on group buying, takeaway, and wine and tourism business in the past, and doing service retail, and now Meituan has to do more physical retail.
From the perspective of Douyin's "hourly delivery" business, Wang Xing's concept of "big retail" is also in line with Zhang Nan, CEO of Douyin Group, who has the ultimate imagination of Douyin to become a "universal entrance".
When Meituan, which has no borders, confronts Douyin, which wants to be a "universal entrance", it is destined that the local life field will not be a calm battlefield.