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Pinduoduo's sudden announcement of the suspension of Duoduo's local life in-store business must have taken many people by surprise. However, what is really puzzling is when did Pinduoduo enter the local lifestyle business?After careful investigation and research, we found that Pinduoduo not only imitated Meituan's local life business internally, but also started the investment promotion work of the in-store business. The plan was to be officially launched after the Spring Festival, but at this critical moment, Pinduoduo suddenly stopped its investment promotion work, which caused widespread speculation from the outside world. Does this mean that Pinduoduo has given up on the local life business?Or do you have a deeper plan?Things may not be as simple as they seem.
The local life business includes various aspects, such as takeaway, taxi, ** coupons, etc., which can be simply divided into two types: one is the home delivery business of online orders, such as takeaway and fresh food purchase;The other is the in-store business of going to the offline physical store to verify the experience after consumption, such as in-store dining coupons, in-store hotel coupons, attraction ticket coupons and movie tickets. Among these two types of business, the in-store business is the real basic market for Meituan. Meituan's 2021 financial report data shows that the annual revenue totaled 179.1 billion yuan, of which the food delivery business contributed the most 96.3 billion yuan, while the total revenue of the in-store business was only 32.5 billion yuan. However, the operating profit margin of the food delivery business is only 6%, while the profit margin of the in-store hospitality business is as high as more than 40%. Although the takeaway business has surpassed the in-store business in terms of total profit these days, the in-store business is still relatively easier to make money. As a result, Pinduoduo has become interested in Meituan's core business and hopes to hit Meituan's market share by entering the local lifestyle business, which in turn will force Meituan to adjust its business or abandon some areas to provide more advantages for Pinduoduo's Duoduo Grocery Shopping.
However, the local lifestyle market is not as easy to enter as imagined, and there are certain difficulties and challenges. According to some data, Meituan-Dianping only includes less than one-third of the country's local lifestyle businesses, and less than one-tenth of the merchants are willing to spend money on promotional activities. This means that between two-thirds and nine-tenths of the merchants are idle, like a treasure trove. Douyin, WeChat, Kuaishou and other platforms have also entered the local life market, hoping to use their own advantages to get a piece of the pie. For Pinduoduo, its cheap and affordable positioning and understanding of the sinking market are its advantages.
According to a later report, Pinduoduo has some caution when entering the local life market. They are ready to use the cost of three months of blood losses to hit Meituan's home base, that is, the local life business, so as to force Meituan to adjust its business and even give up some areas. In the end, buying more groceries can indirectly lie down and win. However, just before the official launch of the plan, Pinduoduo announced that it would stop attracting investment. This move has sparked a lot of speculation from the outside world, and the possible reasons are as follows:
1.Pinduoduo may face a range of challenges and difficulties. Entering the local lifestyle market is not easy, the competition is fierce, and it is difficult to compete for market share. Pinduoduo may realize that the current competition is unfavorable and decide to temporarily withdraw from the market and replan and adjust its strategy.
2.Pinduoduo may find itself unable to compete with established giants such as Meituan after a period of investment promotion. Pinduoduo's positioning and advantages may not be a good match for the needs of the local living market and cannot meet the expectations of users. Therefore, it was decided to temporarily abandon this business and concentrate on other areas.
3.Pinduoduo may still be realigning and improving its products and services for the local lifestyle business. The pause may be to redesign and optimize the relevant business model to provide a better user experience and attract more merchants to settle in.
Overall, Pinduoduo's move to suspend the local life business may be motivated by a number of considerations. They may face competitive pressures, reorient their strategies, and optimize their products and services. Whatever the reason, Pinduoduo needs to find its niche and edge in the highly competitive local lifestyle market to succeed in this space.
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