Behind the two states of online growth and offline trauma ...... is a microcosm of the Chinese economy under the impact of the epidemic.

Meituan, because of its special Internet business, is one of the few companies that are fully feeling the two changes of one increase and one decrease. But overall, consumption is picking up, which is the message revealed by Meituan's earnings report - its second-quarter revenue of 24.7 billion yuan, year-on-year growth has turned from negative to positive; net profit amounted to 2.210 billion yuan, a year-on-year increase of 152.4%, far exceeding institutional expectations.

A deeper analysis of Meituan's earnings growth is essentially driven by business growth at both the supply and demand ends of takeaway delivery - strong demand for online sales at the merchant end, and rising demand for takeaways at the user end. Although the offline consumption represented by its store and wine travel has been affected, the strong demand for takeaway delivery has well bridged the gap.

And behind the Internet and digital ways to create more transactions for both supply and demand, showing that Meituan and the pulse of society *** with the beating, but also hidden about its new infrastructure figure. Through the "black swan" of the epidemic, the local life service network built by Meituan, centered on users, merchants, and delivery workers, has become the infrastructure that keeps urban life running.

| The New Infrastructure for Local Life

After the epidemic, some questions and answers are becoming clearer: What is the value of the Internet to society?

China's ability to survive and recover from the epidemic so quickly is due to the development of the Internet, in addition to the selfless dedication of strong local organizations and millions of medical workers. In addition to being used in areas directly related to the epidemic, such as whereabouts statistics, case tracing, and outbreak reporting, the Internet also played a role in maintaining the normal work and life of the country in the early days when everyone was out of their homes.

Life, "food" is a necessity for people's daily lives, and China's well-developed Internet and its distribution network have become the boat that saves people from their difficulties and transports them to the places they need to live. It can be said that MIT is one of the companies that have fully demonstrated their social value in this epidemic, and the secret behind it is its "new infrastructure for local life service e-commerce", a local life service ecosystem that includes users, merchants, and riders.

"This quarter, Meituan continued to play the unique advantage of the city's 'new infrastructure' to promote the recovery of the living services industry, providing more consumers and merchants with a digital lifestyle and business model, and driving steady growth in both supply and demand. ", through the words of Wang Xing, CEO of Meituan, thanks to the effective control of the domestic epidemic and the significant rebound of the consumer market, in the second quarter, Meituan's operating income growth has turned from negative to positive, an increase of 8.9% year-on-year to 24.7 billion yuan.

As a platform connecting users and merchants, Meituan can't be separated from the growth of both supply and demand behind this rebound. The financial report shows that during the epidemic, Meituan actively helped merchants' digital transformation and accelerated the recovery after the epidemic, driving the number of Meituan merchants to 6.3 million in the second quarter.

The abundance of the supply side also drove its user numbers to climb, with the number of annual transaction users on Meituan's platform increasing by 8.2% year-on-year to 460 million in the second quarter.

In an investor call after the earnings release, Wang Xing detailed the impact of the epidemic on the Meituan platform: the number of active merchants on Meituan rose 10 percent compared to before the epidemic, and the number of takeout orders at the end of June was up 5 percent compared to before the epidemic; in August of this year, its daily order volume exceeded 40 million, a new all-time high.

The growth of merchants on the supply side and the rise in user demand on the demand side, to achieve a match between the two, Meituan's own delivery network centered on takeout riders will inevitably need to be developed and upgraded.

"The operational capacity of the takeaway network has been strengthened this year, which means that we have optimized our order distribution system, which allows the mobility of riders in different regions to become more flexible, enabling them to take orders for delivery in a wider range of areas flexibly. This increased distribution efficiency throughout the second quarter." Wang Xing emphasized the increased efficiency of Meituan's delivery network.

And at the same time as the efficiency improvement, Meituan's own distribution network is also growing. This year, the impact of the epidemic employment pressure, and takeaway riders as one of the effective ways to absorb the social labor force, providing a large number of jobs. Data show that in the first half of 2020, the number of riders who received income from the Meituan platform reached 2,952,000, of which the number of new riders reached 1,386,000, accounting for more than half.

Users, merchants, and takeout riders, with the growth of these three core factors, Meituan's new infrastructure of local life service e-commerce has become more and more solid.

In Wang Xing's view, the takeaway business will become an important infrastructure in modern urban life, and there will be a lot of room for growth. And according to Meituan, it will continue to support merchants affected by the outbreak in the second half of this year, although this may have a negative impact on its realization rate.

Enhancing the efficiency of social functioning, creating more jobs, and helping merchants recover from consumption - the value that Meituan has been talking about has never been more clearly manifested than at this moment.

| Unique Service Sinking

At a time when the concept of "new infrastructure" is emerging all the time, what is the difference between Meituan's "new infrastructure for local life service e-commerce" and "new infrastructure for local life service"? The new infrastructure of local life service e-commerce is different from the new infrastructure of local life service. What is its uniqueness?

In the Internet field, the user is always the core, and for Meituan, its core advantage is not only the user, but also a huge team of riders to provide services for the user, and more importantly, the user, merchants, riders, the entire new infrastructure system of sinking.

Sinking into the local area on all fronts is the uniqueness of Meituan's new infrastructure.

From the original pure online, to now affect all aspects of daily life and work, from the early pure e-commerce to the O2O concept, to the current "new retail", "smart retail", China's Internet over the years the development of the kernel is in the The core of China's Internet development over the years has been in the sinking, which is why China's Internet has been so rapid and vital.

Many Internet companies have seen the value of sinking, such as the beginning of the network, seen as one of the "Amoy brand" three squirrels, has long begun to explore the offline stores; early in the revolution under the banner of the Ctrip, Century Jiayuan, and now also doing offline stores.

However, although all are "sinking", but there are differences.

In the process of Internet sinking, many companies are solving the commodity, including the circulation of the transaction, order digitization, such as SF, Taobao, Pinduoduo, Ctrip. The reason for this is not complicated, from online to offline, it is very simple to solve the problem of the circulation of goods and the digitization of orders, after all, they are inanimate, easier to data and transaction.

As early as 2011, just one year after the establishment of Meituan, half of its sales from the "north, Guangzhou and Shenzhen" and other first-tier cities, half from the second and third-tier cities. The reason behind this is that since its birth, it has quickly begun to do market sinking, building stations in second and third-tier cities to expand the market.

Since then, when turning to the field of takeout, Meituan has accumulated users in the sinking market, and the commercial team has helped it to rapidly expand the market. At the same time, since 2015, Meituan has invested heavily in building its own distribution team and background distribution system, making it a comprehensive market sinking in the field of users, merchants, and distribution.

Meituan human-machine cooperative scheduling system

The data show that the current instant delivery network it has built covers 3.99 million riders, more than 2,800 counties and cities, and more than 10,000 stations. Moreover, this earliest catering takeout-oriented network has been expanded to fresh home delivery, supermarket retail, medical delivery, clothing delivery, book delivery, errand services and other aspects of life.

This is of course inseparable from the sinking of the merchant side of Meituan. Even compared to the sinking of the distribution network, the sinking of the merchant side is more valuable.

Unlike Taobao and Pinduoduo, which are unified manufacturing and production merchants, Meituan's merchants, such as catering and takeout, and fresh food distribution, are more focused on local consumption, local feedback, and local efficiency, rather than radiating to the whole country. Although it is not easy for local merchants to sink, but once the sinking is completed, it will also precipitate more potential, such as the merchant side of the To B business.

Compared with the merchandise sinking network, the local sinking service network is undoubtedly more difficult to build, and requires a long period of time, which is also more valuable after the completion of the construction. And the more local reach and the more solid the sink, the more valuable the platform - after all, every market applies to scale and the cost reductions it brings.

Currently, after a long period of service network construction, Meituan is starting to enter the "harvest period", which is the reason for its performance growth and the capital market to give its high valuation.

| The Best Sample of a Public Enterprise

"In order to make everyone 'eat better and live better,' Meituan-Dianping will take on more social responsibility, drive the development of employment, and build a more open and cooperative social enterprise that is in harmony with the whole society. A social enterprise that develops in a coordinated manner with the whole society." Wang Xing has given the US group such a corporate mission.

What is a "social enterprise"? Social enterprise was originally a type of public interest enterprise, but its concept was later extended to include enterprises that have greater value to society than those that make a profit.

At one time, under the influence of Milton Friedman, the business community was called "social enterprises". Under the influence of Milton Friedman, the business world was dominated by the model of "financial capitalism", in which the only social responsibility of business was to maximize the benefits to shareholders.

With the expanding influence of corporations, the increasing call for environmental protection and resource conservation, and the reminder of negative cases such as the global economic crisis, another responsibility of corporations beyond maximizing shareholders' interests has been increasingly emphasized, and that is their social responsibility.

The more a company's ecosystem is integrated with social issues, the more social value it will have. From this perspective, Meituan, with its close ties to local jobs, restaurants, and other businesses, is a great example of a social enterprise.

A few days ago, Premier Li Keqiang said during an inspection of Chongqing Piggyback Networks Ltd. that "creating a multitude of businesses" is the least likely to fall - Piggyback has been treated as a representative of multiculturalism, creating jobs for more capable and creative people. creative people to create jobs.

Nowadays, employment is one of the most important social issues, and Meituan's nationwide distribution network undoubtedly plays an important role in employment everywhere. Moreover, unlike dripping and so on, the employment of Meituan is geared more towards all kinds of ordinary people, the working class and even poor laborers, rather than people with cars and white-collar workers, which makes it more valuable in solving the employment problem.

Another manifestation of Meituan's role as a social enterprise is its role in the recovery of local businesses everywhere, and in the digitization of local industries.

For example, in order to help store and wine merchants weather the storm, MIT continues to work with local governments, and in the first half of the year, the "Peace of Mind Consumption Festival" was held in more than 60 cities across the country. In the first half of the year, the "Safe Consumption Festival" was held in more than 60 cities across the country. Among them, the "May 5 Shopping Festival" launched in cooperation with the Shanghai government effectively drove the sales growth of nearly 10,000 local life service cooperative merchants.

More importantly, this social role of Meituan is highly replicable.

In every city, Meituan has a very large consumer base and high-frequency stickiness, and the conversion between individual local businesses is huge. And when Meituan is doing local, it still in turn brings a certain efficiency mechanism, such as the system of running riders, the standard of arriving at the restaurant, the standard of entering the Meituan takeaway merchants, to improve the efficiency of the industry in the local area.

Meituan into the local, there will be no geographical cost differences, this is a lot of other Internet companies to face. All of the distribution costs, distribution fees, and labor costs of Meituan are locally based, and all of the costing is completely locally related, which is undoubtedly a very huge advantage.

Each market is independently accounted for, independently derived from the evolution of the individual, and the individual refinement, the overall scale ensures that Meituan as a social enterprise is more flexible, but also more competitive, but also help it go more stable and farther.

| Conclusion

Although the same Internet enterprises, but Ali, Tencent, Baidu, Meituan and other enterprises have a big difference between some more "Internet", such as Tencent, Baidu, and some more biased "traditional", such as Ali, Baidu, and so on. The first one is the "traditional" one, such as Ali and Baidu.

The former has a shorter chain, the core of which is user-based Internet and data services, while the latter adds a combination of traditional industries and traditional business on this basis, which can drive more connections with industry and society on the basis of users and improve efficiency - this is exactly why enterprises such as MIT, Ali and others have a greater advantage in the development of the industrial Internet era. The reason for the development of a more advantageous.

Of course, there is also a big difference between Meituan and Ali, Meituan is oriented to "people", Ali is oriented to more "things", "things" is simpler and more direct, "people" is more direct.

As a result, Meituan's business model is much more unique than other companies in that it is a social enterprise and a public enterprise. After all, there are a lot of companies that generate revenue, but very few that can solve the problem of employing large numbers of surplus labor.

Solving problems for society and creating profits for shareholders is also a mutually transformative value cycle for Meituan, with more jobs, an expanded distribution network, a more solid new infrastructure for local life, and greater profitability from scale.