How much commission does Meituan take from merchants? That question now has an official answer.

On March 25, Meituan (03690.HK) released its fourth-quarter and full-year 2021 results. The data showed that Meituan's annual revenue in 2021 was 179.1 billion yuan, up 56.0 percent year-on-year, continuing to grow steadily. However, at the same time, due to the increase in the cost of riders, R & ampd investment and infrastructure construction investment in the retail business, the full-year net loss widened to 15.57 billion yuan. It can be described as a mixed bag.

As a pillar of Meituan's revenue, the food and beverage takeaway business also has a new change. 2021 Q4, Meituan for the first time separately disclosed the commission (technical service fee income) and delivery fees (delivery service income), which also allows the public to see the Meituan takeaway business does not seem to be "sexy". According to the financial report, in 2021, the turnover of Meituan takeaway is 702.1 billion yuan. At the same time, in 2021, Meituan takeaway through merchants commission income (technical service fees) is 28.5 billion yuan. Relative to the annual transaction volume, the takeout platform commission rate is about 4.1%.

In order for the platform to continue to operate, Meituan is also "backwards". Only in the rider side, Meituan's financial data show that in 2021, Meituan rider delivery costs for 68.2 billion yuan, but the same year Meituan from merchants and users to collect food delivery service revenue of 54.2 billion yuan, which means that the annual Meituan directly subsidize the cost of the rider to reach 14 billion yuan.In 2021, the average income of a rider for each takeaway is 7.07 yuan, and the Meituan is only 0.43 yuan.

The entire catering takeaway industry chain upstream and downstream covering merchants, riders, consumers, need to take into account the takeaway platform in the middle of the industry chain. In addition to being responsible for user diversion, business development, performance and distribution, the platform also has to control quality, service and price. The takeaway business is really not a good business where you can make money lying down.

In the short term, the epidemic is a core factor affecting restaurant performance. Shasha, a restaurant owner in Changsha, told Burning Finance on March 23, "The epidemic has been recurring lately, and I've been hanging up zero eggs in the store at noon for several days."

The merchants can not be separated from the platform, the platform can not be separated from the merchants. Only by clearing up doubts and confusion can we work together.

The average commission rate is 4.1%

Since Meituan's financial report before 2020, the disclosure of the revenue of the food and beverage takeaway business is mainly commission and network marketing services. Delivery fees paid for riders are not excluded, but rather both commissions (technical service fees for the Meituan takeout platform) and rider delivery fees (performance service fees) are categorized as commissions, creating the impression that Meituan takeout is as high as 20%.

Under the 1P model, although the platform collects 1P delivery service fees from both merchants and users, the platform also needs to subsidize the corresponding delivery-related fees and provide consumption incentives to stimulate consumption.

In May 2021, Meituan Takeout launched a transparent rate reform, completely separating the "technical service fee (commission)" and "performance service fee (delivery fee)". It is reported that the "technical service fee (commission)" mainly includes the cost of business information display services, transaction services, business services and customer service, IT operation and maintenance and other services, charged on a pro rata basis.

"Performance service fee (delivery fee)" refers to the payment of rider wages, subsidies, personnel training and management. Meanwhile, the performance service fee will only be incurred if the merchant chooses Meituan Takeaway. Merchants can choose multi-platform operations such as Meituan Takeout, other takeout platforms, small programs, and other private domain traffic, as well as a variety of delivery methods such as Meituan Takeout, self-delivery, and third-party takeout.

The immediate impact of transparent rate reform is that merchants can have a more intuitive and clearer understanding of the various fees.

Sha Xiangran Finance shows data on the service fee of the Meituan takeout platform, which is "Technical Service Fee = [Subtotal of Commodities - Expenditures on Operating Activities] * 5.80% (commission rate), minimum amount of $1.04" and "Performance Service Fee = charged from the fee charged from the price." In other words, the percentage of commercial commission

Meituan for the first time separately disclosed 1P model of takeaway delivery service fee income. For the public, there is also a clearer understanding of the Meituan takeaway business. Take the data from Meituan's 2020 financial report as an example.In 2020, before the separate disclosure of delivery service fee revenue, Meituan's commission revenue from takeout was 58.59 billion yuan, accounting for 88.42% of the revenue from the food and beverage takeout business. This was due to the calculation of delivery service fees from merchants. However, after separate disclosure, commission revenue for Meituan Takeout in 2020 was 18.5 billion yuan, accounting for only 27.9 percent of revenue from the food and beverage takeout business.

This means that the actual commission rate of Meituan Takeout is not high. Data from Meituan's 2021 financial report shows that the commission revenue (technical service fees) that Meituan Takeout earned through merchants in 2021 was 28.5 billion yuan. Relative to the annual transaction volume, the takeaway platform commission rate is about 4.1%.

The real 4.1% commission is much lower than the previously rumored 18% and 20% commission rates. Meanwhile, for the income of riders, Meituan also gave an answer in the earnings report. The earnings report shows that the delivery cost per single rider in 2021 is $7.07.

This is also supported by the riders.On March 27, a crowdsourcing rider of Meituan told Burning Finance, "The delivery fee for sending this ticket is around 6 yuan. Now the delivery fee of the rider is related to the price and distance of the goods. The delivery fee for a single ticket within one kilometer is usually four or five yuan. Overall you can achieve an average distribution revenue of about $7 per ticket."

In addition, Meituan has invested heavily in the distribution side. The data show that in 2021, the cost related to food and beverage takeout distribution of Meituan's takeout business was 68.2 billion yuan, while the food and beverage takeout distribution services charged during the same period was only 54.2 billion yuan, which means that Meituan's out-of-pocket distribution costs were subsidized by 14 billion yuan. Calculated on the basis of 14.4 billion takeout transactions, Meituan's subsidy for each transaction was 0.97 yuan.

In the end, Meituan made only $0.43 per takeout.

What do merchants get for paying commission?

What services does the platform offer merchants? In the eyes of most merchants, traffic diversion for sure.

Feiyang, who is located in a county in Ganzhou, Jiangxi Province, is very frustrated. 2021 started to do takeout at the end of the year. At first, the platform has a "newbie protection period" and traffic protection. Almost every day there are twenty or thirty single, but seven days after the flow of dividends, the store was immediately flooded by large merchants.

"Think about it, our county's Meituan average 6,000 a day, the Hungry Mou average 2,000. But an ordinary

fast food merchants can do two or three hundred a day, the traffic is basically divided up, the new merchants can not share the traffic, where do I get a single volume?"

So, Yang Fei can only find the platform business manager to help, "two days ago, the business manager of the United States group said to me, the best of my monthly sales of that dish to do the diversion, selling 9.9 yuan, the platform to make up four or five yuan."

"The problem is that that dish is a small fried meat, fried chili pepper fried to the hand soft to understand, and chili pepper is not cheap now, seven or eight yuan a catty."

But Yang Fei still decided to listen to the platform business manager's advice, sacrificing dividends to cultivate loyal customers. At the same time, through the staggered opening of the point of gold promotion as well as the platform marketing means, Yang Fei's store unit volume to gradually rebound. After two or three months, Yang Fei's store volume has risen to seventy or eighty a day.

According to Burning Finance, Meituan has laid thousands of BDs offline across the country to provide BD guidance services for merchants, centralize the staff of service merchants, help merchants go online on the takeaway platform, develop dishes, and help docking and installing the corresponding systems and equipment, and so on.

Fang Jun said in his book "The Age of Platforms" that platforms are connectors, matchmakers and market designers, and that platforms connect producers and consumers to match demand. At the same time, platforms have to design rules and policies to govern the platform market.

Taking the Meituan takeout business as an example, it connects takeout merchants with consumers, and it needs to design a system that matches the needs of both sides, while at the same time, it needs to let high-quality merchants emerge, safeguard their interests, and penalize unscrupulous merchants and consumers who intentionally undermine the market rules.

When it comes to takeout, what merchants are most worried about is bad reviews from consumers and bad reviews from those in the same industry. In order to prevent this from happening, the MMT platform has launched a "malicious bad evaluation blocking mechanism" and "kangaroo review" to balance the anxiety of merchants.

The so-called "kangaroo review" means that the platform will take the content of the merchant's complaint, such as the user's order, evaluation information, etc., as the basis for review, and then fulfill the requirements of "evaluation information does not match the user's order", "threatening the merchant with a bad review", and "using a bad review to obtain improper benefits". The platform will block the content of the evaluation and remove it from the calculation of the store rating," he said.

In a way, the Meituan platform is also a producer and provider of services to the marketplace, charging merchants a 4.1 percent fee for technical services, and then exporting services, such as the BD guidance service mentioned above, and providing basic transaction settlement services and business data services.

In addition, the huge demand for data processing and computing power also requires the platform to invest heavily in construction, i.e., the platform's basic capabilities.

Compared with physical e-commerce, local life service e-commerce is characterized by immediacy and volatility, and users ordering takeout during peak periods is similar to grabbing tickets during the Spring Festival every year, which requires very high requirements for server stability and technical capabilities, which requires takeout platforms to continuously invest in optimizing their technical capabilities and enhancing their service stability in order to satisfy the service needs of the parties related to the takeout ecosystem.

China's catering market is a complex market that is highly non-standardized, highly competitive and highly fragmented. According to a report, in 2018, China's restaurant closure rate was as high as 70%, the average life expectancy of only 508 days, monolithic operation is no longer difficult to adapt to the industry environment, and the competition has intensified to test the corporate brand and operation, and the rate of restaurant chaining in China is 20% in 2019, but the United States is 74% in the same period.

So, Meituan is facing a highly decentralized and inconsistent standards of supply of goods and services supply side, the platform needs to invest heavily in the construction and governance of the market. Wang Huiwen, the inventor of Meituan takeout, once said that at the beginning, the takeout business is a delivery service, the quality goods quickly to the hands of consumers, but later, not at all, to shift from transportation to road construction, "originally we thought that road construction will be gradually completed by the market, but the construction of this road progress is very slow, as a major participant in this industry, we have to promote road construction speed. "

Business is good, the platform will be better

Platform, merchants and consumers, is the platform market of the three sides of the body, who can not leave who, the more the number of merchants, the more types of goods and services provided, consumers are more willing to stay on the platform to spend, and vice versa. The more transactions there are, the higher commission income the platform can get.

Thus, platforms are not on the opposite side of merchants. This is evident in the fact that the restaurant industry is in trouble, and the platforms are giving up profits.

The report shows that after the epidemic, consumers non-essential time is also minimizing dining out. 2021, consumers dining out on weekends and holidays accounted for 32.8 percent, a large decline. Meanwhile, a research report by Western Securities also showed that consumer confidence index showed a marginal weakening trend in 2021.

The pressure of the market is reflected in the business, sip and eat in 2021 closed 230 stores. 2021, Haidilao has closed 276 stores. Large enterprises have been so, small and medium-sized businesses or even more difficult.

On top of the epidemic, rising rents, labor and raw materials are also making it difficult for some ordinary businesses. For example, in Ganzhou, Jiangxi Province, a businessman said the local fast-food chef has opened to 5500 yuan a month, if the "small bowl of vegetables" takeaway-based, you need to feed two chefs, "which is equivalent to supporting the chef, rather than making money. He said.

This shows that, as a platform service and commodity producers, the supply side of the pressure, there may be business withdrawal, the supply of quality goods and services is insufficient, at this time, the need for the platform relief, help, so that the platform's two wheels run down.

March 1, Meituan for the epidemic affected small and medium-sized merchants put forward commission halved and other measures to reduce the pressure on merchants, and further promote the scope of rate transparency. In terms of increasing revenue, Meituan Takeaway will provide free "takeaway housekeeper service" and takeaway order taking equipment such as cloud printers and meal out treasures to merchants in difficulty with insufficient online business capacity, and will hold 100 merchant forums to continuously improve services.

At present, the special support plan launched by Meituan Takeout in Shenzhen, Shanghai and other places will implement the preferential initiative of "halving the commission and capping it at $1" for merchants in high-risk areas in the epidemic (the average daily user paid transaction volume has dropped by more than 30%), and the reduced commission will be counted at the beginning of April this year according to the paid transaction volume of the catering merchants in March, and will be paid in cash. The reduced commission will be calculated in early April this year based on the restaurant merchants' paid transactions in March, and returned to the merchants' Meituan accounts in the form of cash.

The merchant relief, "two wheels" run up, the Mission also need to go back to solve their own problems. Data show that the United States Mission takeaway income of 96.312 billion yuan, but which 68.2 billion yuan are invested in the rider distribution, accounting for 71%, ate the vast majority of the income. To expand profitability, it is necessary to solve the problem of distribution logistics.

Unmanned distribution seems to be the direction of the United States Mission.

Burning Finance saw in the Meituan financial report, 2021, Meituan drone has provided drone instant delivery service for many areas in Shenzhen, so far it has covered more than 8,000 residents, and completed 30,000 orders for real users. In addition, Meituan will gradually establish a "3 kilometers and 15 minutes to reach" low-altitude intelligent logistics network based in Shanghai and covering East China. In terms of automatic delivery, as of December 2021, Meituan's automatic delivery vehicle service in Beijing Shunyi District has been expanded to 20 districts, delivering nearly 190,000 orders, and the mileage of automatic driving exceeded 700,000 kilometers.

But what are the prospects for this idea? A Beidou satellite system related personnel had said in a casual conversation with the burning financial, "any technology, let's say the air flying car, these technologies are very good to reach, but the difficult thing is to use, once the community to face the pressure of all aspects."

This is the same for the unmanned delivery of Meituan Takeout, the technology is not difficult, but if you want to actually put it into use, you have to face a variety of problems such as road conditions, regulation and so on. What's more, the research and development of unmanned delivery will have to be invested heavily. Meituan financial report shows that in 2021 Meituan annual R & D investment increased by about 53.1% year-on-year to 16.7 billion yuan.

At one end is the support of merchants, at the other end is the protection of riders, but also to take into account the balance of consumers, and to solve the problem of their own distribution of heavy investment, Meituan's "trouble" a lot of things. The "takeaway giant", in fact, is not as easy as it seems.

*Yang Fei and Sasa are pseudonyms in this article

*Disclaimer: Under no circumstances does the information in this article or the opinions expressed constitute investment advice to anyone.

This article was sourced from Combustion Subdivision

Meituan takeaway and hungry one is still considered to be a relatively large influence in the domestic food and beverage takeaway platform, many merchants will cooperate with the takeaway platform, merchants and takeaway platform cooperation before they will understand the takeaway platform is how to charge, takeaway platform how to draw points, the following cloud fast sell small editor will introduce you to the Meituan takeaway stationing cost standard is how, at the same time for you to recommend a takeaway ordering system.

Introduction of Meituan takeaway platform

Meituan takeaway categories are relatively rich, there are food, fruits, vegetables, supermarkets, flowers, cakes, etc., Chinese food, Western food, home-cooked food, snacks, fast food, seafood, hot pot, Sichuan cuisine, cakes, barbecue, fruits, beverages, desserts, etc.;

Meituan takeaway also provides a wide range of services, such as delivery of medicines to the door, Meituan Special Delivery and errand shopping; the cell phone APP, WeChat small program can be ordered.

How to charge the merchants stationed in the Meituan takeaway

According to the cloud fast food editorial, after stationed in the process of merchant operation is to be charged, and there will be a number of platform requirements, mainly related to the proportion of the draw as well as the issue of takeaway delivery fee.

1, the same commodity in different cities draw charges are not the same;

2, in the same city of different commodities draw charges are not the same;

3, different commodities in the takeaway platform commission is not the same, from 10% to 25%, is in accordance with the commission of the customer turnover;

4, distributor rider can be the merchant's own distributor. If you want the MMT takeout platform to distribute is required to pay the distribution fee.