Last week, it was rumored that Douyin was in talks with Alibaba to acquire Ele.me.
The news spread with noses and eyes, saying that the two have now reached the stage of negotiations, "if the negotiations go well, it is expected to be able to land after the spring";It is also reported that the acquisition** is about more than $7 billion.
Both Douyin and Ele.me subsequently denied the rumor. In response to the rumors that "Ele.me is seeking external acquisitions", an anonymous core executive within Alibaba also responded**, **Ele.me is a rumor.
Although on the surface, Ele.me, which has been spun off from the in-store business and needs wider traffic support at this stage, and Douyin, which is making efforts in local life but lacks experience in delivery services, is a very compatible pair, **Ele.me also meets some people's expectations for the market in a turbulent period, but if you combine it with a series of recent moves by Ele.me, you will find that it does not seem to have messed up the rhythm because of rumors.
It is obvious that the new ** city is being staged at Ele.me
Since November, Ele.me has increased subsidies for users. Users spend 9For 9 yuan, you can buy a "big coupon package" worth more than 1,000 yuan and covering multiple categories110,000 copies of goods that can be bought for only 1 cent are also onlineThe "5% off days" reserved program, which is distributed every Friday, returns with a 5% discount coupon;Following this summer's "guess the answer for free", the gameplay of the marketing IP of free order has once again met with users in the form of a "jump" mini-game.
On the merchant side, the "Double Hundred Plan", which is aimed at the immediate retail layout and plans to "deeply cooperate with 100 retail brands in the next two years to help them achieve more than 100% business growth in Ele.me", has just been announced for more than a month.
And in addition to these actions of Ele.me,Alibaba's attitude towards Ele.me is also difficult for people to associate it with ** rumors
Ele.me has always shouldered the responsibility of Alibaba's local life portal, and it is a business segment that Alibaba attaches great importance to, and the latter has been deploying troops and resources in the past few years, hoping to fully release the value of this sector. The analysis pointed out that the local life group is still one of the undoubted core businesses of Alibaba.
More importantly, Ele.me is driving the improvement of the financial data of Alibaba's local life service sector. According to the latest financial report, for the quarter ended September 30, 2023, Alibaba Local Life Group's revenue was 155RMB6.4 billion, of which Ele.me has improved its core indicators for eight consecutive quarters, and its operating loss continued to narrow year-on-year, and drove the adjusted EBITA operating profit and loss of Local Life Group to narrow to 25 in the quarter6.4 billion yuan.
*: Alibaba's financial report combined with Ele.me's previous two-year-long organizational changes, you will find that the company is accelerating.
If you only understand Ele.me as a food delivery platform, its imagination is obviously limited, and it is naturally easy to believe the rumors that it will be **. In fact, the company's definition of its business scope has long been not limited to the category of catering.
Some early signs are that back in 2017, Ele.me changed its mission to "make everything 30min";In 2020, it officially announced that it would upgrade from a food delivery platform to a "life service platform that solves all the immediate needs of users", focusing more on the "surrounding economy" of consumers and becoming an important strategic business of Alibaba's local life.
And at the instant e-commerce brand merchant conference held by Ele.me in November this year, it clearly stated for the first time, ".Instant e-commerce is an important strategic choice for Ele.me
As a new format that has been frequently mentioned in the past two years, the biggest advantage of instant e-commerce compared with traditional e-commerce is that it is "fast". In the case that there is not much gap with the e-commerce platform**, and even the activity price is cheaper, instant e-commerce can bring consumers an instant gratification experience.
According to data from the China Chain Store & Franchise Association, the market size of instant retail has been growing at a rate of 81% in the past five years, and continues to penetrate into lower-tier cities, and the market size is expected to exceed the trillion threshold by 2025. Ele.me also disclosed in its own "Local Instant E-commerce Development Report" that it is expected that by 2030, the scale of the instant e-commerce market will reach 118 trillion, the order scale of the instant delivery industry will also exceed the express business volume in 2030 with a scale of 201.9 billion pieces.
In an environment where the imagination of the entire Internet industry is being questioned, instant retail has obviously become one of the few tracks that still has growth potential.
And Ele.me made this strategic choice based on the smooth transition it has accumulated in the past
This company has long passed the stage of savage growth, and the growth logic is no longer relying on various coupons and local push "impulses". On the one hand, Ele.me needs to open up a new growth curve on the basis of efficient operation of its stockOn the other hand, the traffic pool, platform capabilities and fulfillment capabilities that it has built up around catering distribution along the way have become the premise and advantages for it to switch to other categories.
In the past 11.11, market data shows that Ele.me is also becoming a new position for retail brands to seek business breakthrough growth - the number of merchants participating in Ele.me Double 11 this year increased by 50% year-on-year, and on the single day of Double 11 alone, the transaction volume of more than 10 categories such as alcohol, 3C digital, clothing, shoes and bags, and household appliances doubled, and more than 90% of the transaction volume of cooperative brands exceeded the historical peak, and the turnover of nearly 100 brands doubled compared with last year.
These are all illustratedAttracting more and more users to buy more categories of products on the platform will be the logical basis for Ele.me's future growthThis is also an important basis for us to understand many of the current behaviors of this company
After the new strategic objectives are locked,Ele.me is returning to a state that has not been mentioned for a long timeRapid growth at scale
This is the task that Yu Yongfu, CEO of Ali Local Life Group, set for Ele.me this year. According to a previous report by LatePost, Yu Yongfu said in an internal speech this year, "The three things to do this year include continuing to build 'four vertical and four horizontal', returning to scale expansion, and starting cultural reform." ”
However, compared with a few years ago, the premise of Ele.me's scale growth has been fundamentally different.
The difference is thatA few years ago, Ele.me's growth pursued wasamountUntil 2020, Ele.me was still fully expanding into 100 lower-tier cities, and the digital growth was supported by various food delivery coupons, overwhelming pushes, and ubiquitous app adsBut now, the premise of Ele.me's scale growth has becomequality, that is, strong fulfillment capabilities, high-quality services, and abundant supply.
This is also the result of Ele.me's two years of cultivation of "internal strength".
In June 2021, Ele.me merged with AutoNavi into Alibaba's local life section, and Yu Yongfu took the helm of Ele.me, and immediately began an organizational change that continues to this day. The changes brought about by this reform of Ele.me are profound, it has shifted the priority of all work of Ele.me from expanding scale to improving efficiency, and under the strategy of "four verticals and four horizontals", it has comprehensively sorted out and optimized Ele.me's business assets and operational capabilities.
The most direct result of the reform is that Ele.me's operating data has continued to improve, and since the end of June 2022, the UE (unit economic benefit) has been positive for six consecutive quarters, which means that from the perspective of a single transaction, Ele.me has been able to do without losing money.
This time it is revisitedScale up, which means that Eleme is thereSteadyAfter two years, we are ready to find the pace of growth again
This also explains why Ele.me has all the actions mentioned at the beginning of the article, and compared to the previous onesEle.me's actions in this round of scale expansion are obviously more refined and steady
Take the "Jump a Hop" free order activity that has just been carried out, although the essence is still the issuance of coupons, the way is no longer as extensive as in the past, but more awareness of IP marketing, while increasing the interest through the means of games, it also allows more brands to have new opportunities in the activity - for example, there will be different brand sponsors for the "Jump a Hop" free order every day, and if users want to increase the opportunity of free games, they can also obtain it by browsing brand-related information and so on.
Taking the "1 Diandian" brand named on the first day as an example, in the case of cooling on Monday on December 18 and raining across the country, the national performance of the Ele.me platform on the day of 1 o'clock increased by more than 20% week-on-week. The new "free order" IP gameplay has brought more **, traffic and business opportunities to 1 Diandian, and the latter has also achieved the improvement of user reach and service value-added.
In terms of the "Double Hundred Plan" launched for the instant retail layout, Ele.me also proposed an "ecological" approach, that is, Ele.me does not want to have a channel relationship with brands that is just distribution, delivery, and price negotiation, but also hopes to work with players in the entire retail format to jointly establish a new business ecology that serves consumers well, and explore new incremental markets in new tracks with brands. Judging from the information released at the Instant E-commerce Brand Merchant Conference last month, Ele.me has established a systematic system of marketing tools, products and services for different types of retailers (such as large supermarkets, small and medium-sized chains and retail stores, etc.).
In the brand's chain channel operation scenario, Ele.me chooses to break the problem from "efficiency" and provide more professional business data tools, more efficient sales subsidy marketing tools, and a more aggregate joint marketing modelIn the traditional channel scenario, Ele.me breaks through a model similar to "cloud chain" to help brands achieve in-depth collaboration and unified operation offline, regional, and store operations. In addition, Ele.me continues to expand the penetration opportunities of food and beverage channels and new incremental channels (such as new business formats such as warehouse stores and convenience warehouses) for the brand, so as to find new incremental opportunities in addition to the existing business of instant retail.
After a self-transformation and the establishment of new strategic goals, Ele.me has obviously ushered in a new starting point for development.
However, although the scale of the instant retail market is promising, and Ele.me is well prepared, it still has a challenging future to face
At present, the instant retail track is one of the most competitive battlefields on the Internet, and new and old e-commerce and logistics companies such as JD.com, SF Express and Meituan are participating, and the entry of short-term platforms has also brought more uncertainties to the market. All kinds of half-day and hourly delivery activities emerge in an endless stream, and this year's 618 and other big promotion nodes, instant retail has become the main object of many platforms. According to the data of ** and JD.com, many categories of the two platforms have achieved a growth rate of more than 100% during the 618 period.
In fact, these also partly explain why Ele.me will take scale expansion as the theme of this year's development, and it is foreseeable that expansion will continue in the future, and a fight is inevitable.
We can sort out the cards in Ele.me's hand.
The first is the attributes of the Ele.me delivery platform. Takeaway itself is a highly scalable business, and to some extent, it is actually more in line with consumers' instant purchase habits, which can reduce consumers' education links. Merchants can reach more potential consumers outside the physical space through the platform, and various joint marketing and innovative channels with the platform can also help to seize the market more quickly.
The second is Ele.me's fulfillment and supply capacity, which is actually Ele.me's core competitiveness. According to the Blue Knight Report released by Ele.me in October last year, Ele.me has 1.14 million riders and tens of thousands of stations, and this number should be higher now, which together guarantee the fundamental speed advantage of Ele.me in instant retailAnd Ele.me is also constantly expanding new cooperative merchants - according to its released data, Ele.me has reached in-depth cooperation with nearly 500 brands in instant retail, many of which have achieved a monthly transaction volume of more than 100 million, and have also created more than 100 billion-level single products.
In addition, it seems that there is no shortage of traffic entrances for Ele.me at present. Last year's complementary cooperation with Douyin, Ele.me valued the huge traffic brought by Douyin, and the openness that Ele.me has now shown to the outside world, coupled with its perfect platform capabilities, is also conducive to bringing more potential cooperation opportunities and new traffic to Ele.me.
It is obvious that the category expansion of instant retail at this stage is far from reaching the ceiling, and the development of categories such as beauty, furniture, accessories and bags is still relatively low, and there is huge room for growth. When the impact of the epidemic on the local lifestyle industry gradually fades, it is expected that in the near future, it will become a daily routine for users to buy furniture and home appliances on food delivery platforms.
These are all opportunities for Ele.me, and it is time for Ele.me to be tested if you are ready.