New Entropy Original
Author丨Bai Qi Editor丨See you in the month
Need a Meituan Express Edition. ”
On Xiaohongshu, one user commented on Meituan's app style. Compared with the page that directly displayed consumption information in the past, today's Meituan app interface has short**, live broadcast, 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 activities 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, what Meituan urgently needs most may not be **lower**, but to take out its own "tens of billions of subsidies" and tell consumers the story of low prices.
Meituan's stock price performance has seriously deviated from its performance.
In February 2021, Meituan hit an all-time high in market capitalization, while the previous year's annual revenue was 114.8 billion yuan and net profit was 47100 million yuan;In January 2024, Meituan's market capitalization shrank below HK$500 billion, compared with a revenue of 220 billion yuan and a net profit of 2.8 billion yuan 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, finance and 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 the platform has increased by 83%, and the transaction volume of live broadcast 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.
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.
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 Consulting data, Meituan's takeaway market share will be around 70% in 2022;From the perspective of merchant data, Questmobile data shows that as of October 2023, the daily active data of Meituan Takeaway Merchant Edition is 187 times. On the user side, Meituan's advantage is more obvious, with QuestMobile data showing that as of October 2023, the Meituan app has 14.4 billion daily active users, compared to 21.55 million for Ele.me.
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 the lack of competition, Meituan lacked sensitivity to **. Now, Meituan is increasing the supply of low-price**, and the financial report discloses that Meituan's official live broadcast has covered more than 200 cities, and the platform is promoting popular products through short ** 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 the ability to plant grass, new stores, new stores and other important grass planting periods, Douyin is easier to break through the minds of consumers, and has certain advantages in chain brand marketing with sufficient budgets, such as Luckin Moutai's joint case of breaking the circle. 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 has launched Meituan Grocery (which has been renamed as Little Elephant Supermarket) in Beijing and other first-tier and new first-tier cities, and promoted Meituan's preferred business in other cities under the model of Tomorrowda Community**. According to the third-quarter financial report, Meituan's new business revenue was 18.8 billion yuan, a year-on-year increase of 153%, with a loss of 5.1 billion yuan, a year-on-year decrease of 24.5%. As of the end of September last year, the cumulative number of trading users of Meituan Preferred has reached 4900 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 latepost report, Duoduo Grocery and Meituan Preferred have dominated the community** 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.
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 full of ** content. When you open the Meituan homepage, you will see the *** 10 billion subsidy and the Meituan live broadcast entrance, and the home page feed stream is**, short**, merchant or product information;When opening the takeaway, the user sees a series of preferential activities such as God Rush, Carnival Day, and Tiantian God CouponsOn the ** page, users see various activities such as limited-time seckills, tens of billions of subsidies, online beauty expos, must-eats**, must-eat festivals, etc.
But if you put aside the complicated preferential methods, Meituan's 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 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 1670-gram gift box of a big-brand nut sold by Meituan e-commerce is 2189 yuan, after the subsidy**52$9;A brand of 40 laundry pods, the original price is 548 yuan, after the subsidy** is 4$2.
New Entropy believes that after concentrating on building low-price supply, Meituan has a significant low-price advantage in various businesses such as takeaway and grocery shopping, and the platform needs a strong and well-directed marketing circle breaking activity 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 advantages, and clear after-sales service. Facts have proved that with the collective follow-up of ** and JD.com, Pinduoduo's marketing war has achieved unprecedented success.
Meituan's marketing activities are complex, and although it has good advantages, it has not yet conveyed clear consumption expectations to consumers. Taking the 10 billion subsidy method as an example, Meituan has set up 10 billion subsidized products in its ** and e-commerce businesses, and takeaway has the previous "10 billion rice subsidy".
As a result, like traditional shelf e-commerce, consumers still 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 subsidies. 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** 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.