Source: New entropy
Meituan needs a market-breaking marketing campaign.
"I need a Meituan Speed. ”
On Xiaohongshu, one user commented on Meituan's app style. Compared with the page that directly displayed consumption information in the past, the interface of the Meituan app now has short videos, live broadcasts, and various subsidy activities, which is dazzling.
Behind the interface of "fattening" is Meituan, which has doubled the pressure on its market value. On January 8 and 9, Meituan's Hong Kong stock price fell sharply, with a cumulative decline of more than 9%, and its market value fell from nearly HK$3 trillion at its peak to about HK$440 billion. CEO Wang Xing bluntly said at the third quarter earnings conference last year that the current Meituan stock price is only "worthy" of a takeaway business.
These complex promotions are the product of Meituan's performance anxiety.
In fact, Meituan has had the genes of "low price" and "subsidy" since its inception, and in the face of the aggressive Douyin, Meituan's most urgent need may not be a lower-priced group buy, but its own "10 billion subsidy" to tell consumers the story of low prices.
01 besieged giants
Meituan's stock price performance has seriously deviated from its performance.
In February 2021, Meituan hit an all-time high in market capitalization, compared to 114.8 billion yuan in revenue and 4.71 billion yuan in net profit in the previous year, and in January 2024, Meituan's market value shrank to less than 500 billion Hong Kong dollars, compared with 220 billion yuan in revenue and 2.8 billion yuan in net profit in the previous year.
The reasons for Meituan's stock price fluctuations are complex, but the most critical one must be a change in market sentiment.
At the beginning of its listing, Meituan's labels ranged from high-frequency to low-frequency, borderless, and "Food+Platform". From 2015 to 2017, Meituan's operating income increased from 4 billion yuan to 33.9 billion yuan, a surge of more than 7 times.
Meituan, on the other hand, will gain offline service efficiency that surpasses that of all platforms under the huge user scale effect, and then penetrate into the daily life of each consumer, as well as into the marketing, financial and supply chain services of merchants. Among domestic Internet companies, Meituan has the widest business scope and the largest comprehensive advantages. Because of this, the market was generally optimistic about Meituan after its listing, and it quickly became the third largest Internet company in China, after Tencent and Alibaba.
And now, Meituan's expansion is getting tough.
On January 1, Douyin Life Service released the "2023 Data Report", in the past year, the total transaction volume of Douyin's local life business has increased by 256%, with more than 370 stores covering more than 370 cities, and the transaction volume of short videos on the platform has increased by 83%, and the transaction volume of live streaming has increased by 5.7 times. The number of searches for life service content on the entire platform reached 59.3 billion.
This is a formidable opponent that Meituan has never encountered during the "Hundred Regiments War". Douyin has the advantage of national-level user scale, strong algorithm distribution ability, and is good at stimulating user consumption demand, and its content ecology based on entertainment short videos is good at mining the highlight products of local life merchants, which is naturally suitable for in-store consumption guidance.
The most representative marketing event was the Moutai Luckin co-branding in September last year, and related topics appeared on the Douyin hot search list, "the first drop of Moutai for young people" became a hot topic on the Internet, and related products sold 1 million cups in 15 hours on Douyin. When local F&B brands release counter-intuitive and eye-catching products, Douyin has become the most powerful breakthrough field for brands.
Meituan's feedback was nervous.
At the beginning of the new year, Zhang Chuan, president of Meituan's in-store business group, issued an internal letter saying that Meituan's in-store business lacks the moat advantage of takeaway, and the entire department must go to the front line and go to the battlefield to compete with competitors with a low-price supply system every day.
Competition in the fundamental market has caused concern in the market. In the past, Meituan's business expansion logic was smooth from in-store visits to takeout, taxis, and grocery shopping. The current situation is that the recovery of the consumer market is slow overall, the local business of Meituan's basic market is under siege, and the disadvantages of Meituan's elongated front are beginning to appear, and Meituan's growth is not so logical.
02 The moat is still there
But that doesn't mean Meituan has lost its growth potential.
From the perspective of food delivery business, Meituan has an absolute advantage in market share. According to iiMedia Research, Meituan's market share in 2022 will be around 70%, and from the perspective of merchant data, QuestMobile data shows that as of October 2023, the daily active data of Meituan's Takeaway Merchant Edition is 1.87 times that of Ele.me. On the user side, Meituan's advantage is even more obvious, with QuestMobile data showing that as of October 2023, the Meituan app has 144 million daily active users, while Ele.me has 21.55 million.
In recent years, Ele.me has launched tens of billions of subsidies, red envelopes and other benefits to attract users, and Douyin has tried to launch a food delivery business, but it has failed to shake Meituan's absolute position. The maturity of market share, merchant volume, and user volume has made takeaway an absolute moat for Meituan.
In terms of in-store business, in the third quarter of last year, Meituan's in-store business transaction volume increased by more than 90% year-on-year, and the number of active buyers increased by more than 50% year-on-year in the same period.
Compared with the Douyin model, the biggest advantage of Meituan's store arrival is the shelves.
In Zhang Chuan's view, there are three moats for Meituan's in-store business, the user mentality of "low price + fast" and "comprehensive + high-quality", "the supply and coverage of merchants that change with time" and lower operating costs. In the past, Meituan's shelf system provided consumers with more in-store options, but due to a lack of competition, Meituan lacked price sensitivity. Now, Meituan is increasing the supply of low-cost group buying, and the financial report disclosed that Meituan's official live broadcast has covered more than 200 cities, and the platform is promoting popular group buying products through short videos and live broadcasts.
New Entropy believes that Douyin and Meituan have different focuses on the in-store business, and the two sides will form advantages in their respective fields.
The advantage of Douyin is to expose the ability to plant grass, and it is easier for Douyin to break through the minds of consumers during important planting periods such as new stores and new store openings, and it has certain advantages in the marketing of chain brands with sufficient budgets, such as the joint case of Luckin Moutai. Meituan focuses more on shelf display and search price comparison, which is more abundant in the supply of merchants and products, and has stronger guiding significance for consumers' daily consumption. One phenomenon is that many of Douyin's food review bloggers are still using Meituan's city must-eat list standards for evaluation. In the future, the dislocation of Meituan and Douyin may coexist for a long time, sharing the growth space of local in-store business.
In the new business field, Meituan has a good competitiveness.
In the third-quarter earnings conference, Meituan's new business was questioned the hardest hit, especially when the grocery business will break even and whether it will reduce investment. Meituan's reply to this is that the grocery shopping and preferred businesses are further increasing the frequency of user consumption, while improving losses, and will accelerate investment in the future.
At present, Meituan is implementing Meituan Grocery (renamed as Little Elephant Supermarket) in Beijing and other first-tier and new first-tier cities, and Meituan's preferred business in other cities under the community group buying model of Tomorrow Day. According to the third-quarter financial report, Meituan's new business revenue was 18.8 billion yuan, a year-on-year increase of 15.3%, and the loss was 5.1 billion yuan, a year-on-year decrease of 24.5%. As of the end of September last year, Meituan's cumulative trading users had reached 490 million.
In high-tier cities, Meituan has a good market advantage, and Meituan mentioned that many consumers choose Meituan as their first choice in life, which is consistent with the observation of new entropy. Some consumers have reported that after using Meituan, which has clearly marked the price, they can no longer accept offline grocery shopping. In lower-tier cities, Meituan Preferred faces competition from Duoduo to buy groceries. According to a report by Latepost, Duoduo and Meituan Preferred have dominated the community group buying market in 2022. The two sides are engaged in a competition called the efficiency war, who can reduce more operating costs, procurement costs, and who will win the grocery war.
03 It takes a miracle to work hard
In the face of the siege of external platforms, Meituan's reaction appeared impatient.
More than one user has reported that the Meituan app is turning into a discount field crammed with promotional content. Open the Meituan homepage, and what catches your eye is the special group purchase subsidy of 10 billion yuan and the Meituan live broadcast entrance, and the homepage feed stream is graphics, short videos, merchant or product information;
But if you put aside the complicated preferential methods, Meituan's price competitiveness is not inferior to that of any other platform.
Take the e-commerce business, for example. The merger of Meituan's preferred e-commerce business is a potential growth point. In terms of absolute volume, Meituan's e-commerce market share is not high, but it has a good price advantage. Meituan has carried out preferential policies such as time-limited flash sales and tens of billions of subsidies for e-commerce business, and many products have significant advantages in low prices.
For example, the original price of a 1,670-gram gift box of a certain big-brand nut sold by Meituan e-commerce is 218.9 yuan, and the price of a certain brand is 52.9 yuan after subsidies, and the original price of 40 pieces of laundry pods of a certain brand is 54.8 yuan, and the price after subsidies is 4.2 yuan.
New Entropy believes that after concentrating on building low-price supply, Meituan has a significant low-price advantage in various businesses such as takeaway, group buying, and grocery shopping, and the platform needs a strong and well-directed marketing circle breaking campaign to penetrate the minds of consumers.
On the evening of November 29 last year, Pinduoduo's market value surpassed Alibaba and became the new hegemon of China's e-commerce market. As the pioneer of the 10 billion subsidy model, the design of Pinduoduo's 10 billion subsidy strategy is clear product categories, clear price advantages, and clear after-sales service. Facts have proved that with the collective follow-up of Taobao and JD.com, Pinduoduo's marketing war has achieved unprecedented success.
Meituan's marketing campaign is complex, and despite its price advantage, it has not yet conveyed clear expectations to consumers. Taking the 10 billion subsidy promotion method as an example, Meituan has set up 10 billion subsidized products in the group purchase and e-commerce business, and the takeaway has the previous "10 billion rice subsidy".
As a result, like traditional shelf e-commerce, consumers have to go through a complex price comparison calculation process to find the best way to consume in activities such as God Sought-after, limited-time spikes, and tens of billions of subsidized group purchases. The high threshold for awareness has affected the dissemination of Meituan's marketing activities among consumers.
If you look at all of Meituan's businesses, you can find that Meituan's fundamentals have not been affected by the impact of external platforms, and no rival can beat Meituan Takeaway and Meituan Group Buy with the same business model. In the past year, in the environment of responding to shocks, Meituan has attached great importance to grassroots execution, and the advantage of strong combat has once again appeared, and on all battlefields, Meituan has quickly captured the direction of the opponent's attack and fought back.
In the final analysis, Meituan's local life market is characterized by "hard business", and the construction of both merchants and rider networks requires tedious and lengthy intensive cultivation. Douyin and Pinduoduo both used the huge number of users as a bargaining chip to attack Meituan, but the attackers will find that they are destined to fall into a protracted war.