meituan dianping is the largest life service internet company in China. Founded in 21, the company started from the group purchase voucher business. At present, its business covers stores and wine tours, take-away, travel and catering supply chains, and it is embedded in almost every scene of life. In 21, the company set foot in the group buying business, started the take-away business in 213, launched the wine travel reservation on March 15th, set up the fast donkey to focus on the supply chain solution in 16 years, entered the online car rental and elephant fresh food in 17 years, acquired mobike in 18 years and launched the "non-catering take-away business".
focus on the strategy of Food+Platform, and dig deep into the value of the core industrial chain
in the early days of its establishment, Meituan focused on group buying business, and with the support of several rounds of financing from giants such as Ali, Sequoia and Tencent, it successfully stood out in the "Hundred Groups War" and became the only remaining fruit among more than 5, group buying websites in that year. Adequate financing not only helped Meituan survive its initial stage, but also contributed to the merger of the two mainstream players in the group buying market (Meituan and Dianping merged in 215), making Meituan the largest catering service platform in China. In the last three years, Meituan has accelerated the expansion of its business matrix, and based on the catering and wine travel business, it has piloted new businesses such as catering supply chain, fresh food delivery and travel to meet the increasingly diversified life service needs of consumers and expand the market space of Meituan's comment platform.
scale and high growth are the basis of the high market value of meituan. As of September 9, 219, Meituan had a market value of HK$ 42.1 billion, ranking among the top retail e-commerce enterprises in China. The fast-growing sales scale and high-frequency user groups are the foundation to support the high market value of Meituan. In the first half of 219, the transaction amount of Meituan platform reached 297.6 billion yuan, maintaining steady growth year-on-year; The number of trading users reached 423 million, and the user stickiness continued to increase.
As the core of the diversion, Meituan's outbound sales business needs to continuously invest in rider costs and user incentive expenses, but it has not yet achieved a positive profit for the whole year. On the other hand, in 218, Meituan's acquisition of mobike brought high asset depreciation and restructuring costs, coupled with non-recurring gains and losses such as changes in the fair value of convertible redeemable preferred shares, the losses in 218 increased significantly. In 218, the net operating cash flow of Meituan was-9.18 billion yuan, a significant year-on-year deterioration.
In view of the loss caused by new business, Meituan began to change its development thinking in 219, re-examining the competitive advantages of the platform, and the business with less synergy between strategic contraction and the main business and greater loss, such as building a taxi aggregation platform for Meituan with light assets and closing the store under the fresh elephant line, etc., superimposed on the impact of reduced bicycle depreciation. This greatly narrowed the losses in the first half of 219 and significantly increased the operating cash flow.
In the future, Meituan will continue to dig deep into the value chain of catering industry, deepen business collaboration among platforms and realize cross-selling. Although the core business sectors such as take-away and hotels are facing the competition from industry leaders, Meituan still has a great competitive advantage. The local life service market has enough space. After the industry structure is stable in the future, the market competition will tend to be flat, and the profitability of Meituan and its competitors will be gradually improved.
focus on "Food+Platform" and strategically narrow innovative business. In 218, Meituan carried out a new round of organizational restructuring, forming a model of "two platforms, two business groups and two business divisions", clarifying the service orientation based on LBS and the core position of Meituan's comment user platform, and assigning Chen Xu, Chen Liang and Chen Xudong, old people who have a deeper understanding of the company and are good at mobilizing resources, to manage independent business divisions, which are responsible for innovative business development, and at the same time handing over the business groups from store to home to new people for management to stimulate the innovative vitality of mature businesses.
on the basis of digging deep into the surplus value of the catering industry chain, the high-frequency consumption characteristics of the platform are used for traffic aggregation and cross-selling, and the high-speed development flywheel is turned. In various businesses, the wine travel business has achieved steady profit; The fast donkey catering supply chain has great growth potential, the scale benefit of take-away business continues to be prominent, and the profit can be expected; Non-meal take-out and travel/* * enjoy bicycle business is of great strategic significance for improving the high-frequency life service platform, and it is difficult to achieve scale profit in the short term.
Takeaway: the core traffic entrance, and the short-term competition intensifies
Takeaway itself is a service industry with a very large proportion of labor costs, so it is extremely sensitive to labor costs. Because the dynamic cost accounts for a large proportion and the fixed cost accounts for a very small proportion, there is little scale effect. Based on this view, many people are very pessimistic about the long-term profitability of the take-away business. Takeaway business is extremely sensitive to labor costs, even if it is large, it is difficult to obtain excess income.
the value of take-away business comes from two parts: the substitution value of "labor for rent" at the B end and the convenience provided to consumers by the takeaway brother at the C end. Merchants need "take-out" to increase sales channels and improve the efficiency, and consumers need the convenience of take-out, which is the basis for the establishment of take-out business model. The reason why restaurants use "take-out" is mainly because it provides more channels for tourists, and the cost of this channel is the commission paid. Comparing the channel cost of "dining in the hall" for individual customers horizontally, the biggest one is the rent. From this, we can draw a general conclusion: the proportion of rent in the revenue of food and beverage outlets is about the upper limit of the proportion of take-away commission. In addition, with the gradual expansion of the middle class, the number of people who pay the consideration for "convenience" will continue to increase, and there is still room for the future "convenience consideration" to continue to rise.
Takeaway is a high-frequency industry. With the growing barriers, the average profit will gradually become thicker. As the organizer of take-out, Meituan take-out charges both parties and deducts the salary of the takeaway brother, and the remaining surplus is profit. In the early stage of the industry, in order to ensure that there are no new entrants and the ecological stability, only a weak balance can be reached between extraction and cost, so it is a small-profit industry. With the stability of competition pattern, operational barriers and the formation of bilateral networks, the premium capacity of the platform will become stronger and stronger, and the average profit is expected to become thicker and thicker.
the greater the difference in growth rate between store rent and distribution labor, the more lucrative the business can retain. In the long run, because the scarcity of stores is greater than that of labor, the growth rate of rent will be significantly faster than that of labor. The longer the time period, the greater the gap between rent and labor increase, so take-out is a business that can be friends with time. Suppose that after years of operation, we have reached the limit for the restaurant, and the upper limit of the commission ratio will be the proportion of rent and waiter labor in the restaurant revenue. Then we can get a very simple formula: the profit margin of Meituan takeaway = the premium paid by consumers for convenience+the rent-distribution cost of merchants. Simplifying this formula further, in order to retain consumers and prevent new entrants from entering, we reduce consumers to zero. Then the profit margin of Meituan takeaway = store rent-delivery labor cost. If the long-term growth rate of store rent is faster than the growth rate of distribution labor cost, the takeaway business will get better and better.
Meituan's takeaway income is divided into three parts: platform commission, online marketing service fee and delivery fee. With the growth of scale and the improvement of service, the commission rate of Meituan increased, the marketing service income increased, the income offset generated by subsidies decreased, and the realization rate of take-out increased rapidly. In the first half of 219, the realization rate of food and beverage takeout was 14.%, up 1.% year-on-year.
A strong and down-to-earth team is the key to the success of Meituan in the "Thousand Regiments War". At the end of 211, Gan Javey, who was born in Ali's "China Iron Army", joined the Meituan under the opportunity of Ali's investment in Meituan, managed the tens of thousands of people's push team finely, promoted the cost and efficiency-leading play, cut in from the supply side, and quickly launched a large number of merchant resources. In one year, the market size of Meituan increased from 1% to 18%. The resources of restaurant merchants accumulated by the local push team in the early stage also helped the US Mission to catch the fast-developing train of the take-away industry, take a step ahead of the hungry, and build a local life service platform combining the store and the take-away business. According to the statistics of iResearch, there are 6.7 million online life service businesses in 218, and the penetration rate of active businesses of Meituan has reached 95%, which has a leading edge.
there are two main modes for the take-away platform to draw commission: platform delivery and merchants' own delivery. At present, the order volume delivered by Meituan platform accounts for about 7%. From the overall situation of the industry, Hungry and Meituan will set the commission rate according to the business category and delivery method. According to statistics, the commission rate of merchants who are responsible for delivery by Hungry Platform is about 15%-25%, and the commission rate of merchants who deliver by themselves is 5%-8%. The commission rate of merchants who are responsible for the distribution by Meituan is 15%-25% (merchants generally report about 22%), and the commission rate of merchants' own distribution is 5%-1%. In the first half of 218, Meituan GMV/ takeaway revenue/commission increased by 96.95%/9.89%/87.2% year-on-year. The sales scale increased rapidly while the commission rate remained stable, and merchants and platforms enjoyed a growth dividend. In the first half of 219, Meituan GMV/ takeaway revenue/commission increased by 37.49%/47.52%/42.13% year-on-year, and the increase in commission rate increased the business burden of merchants.
The revenue of take-away platforms is mainly based on commissions, and merchants are an important resource for competing among platforms. Hungry at the beginning of 19 th, it was announced that the rate of 2, small and medium-sized businesses would be lowered by 3%, and then the discount would be extended to more businesses; Meituan also released an 11 billion yuan merchant support plan. If all the commission concessions are invested, it is expected that the commission rate of platform merchants will be reduced by about 3%.
users' needs are diversified, and take-out has become the entrance of local life service platform
The accelerated pace of life and dense population distribution have promoted the development of take-out industry in China. According to iResearch, the online rate of China's food consumption market is expected to exceed 2% in 219, and the scale of food consumption e-commerce market is expected to reach 2,243 billion yuan. For consumers, take-out saves the time cost of traveling and cooking for three meals a day, so consumers are willing to pay the corresponding consideration for dishes and delivery services; With the diversification of users' needs, the importance of new retail services such as non-meal take-out has gradually become prominent. The competition in the take-out industry has entered the second half of the full digitalization of local life services from the flow bonus period, and it has become mainstream to create high-frequency traffic portals and promote the upgrading of local life service platforms through food and beverage take-out.
From the perspective of market structure, the take-away market is highly concentrated. In the first quarter of 219, the market share of Meituan take-away reached 63.4%, and its leading edge continued to expand. However, it was also challenged by the gradual efforts after the integration of Hungry and Word of Mouth. According to the data of Ai Media Consulting, the market share in first-and second-tier cities has rapidly increased to 47.4%. On the other hand, the new retail business has become a new engine for hungry growth. In the fourth quarter of 18, the new retail transaction volume increased by 32.2% from the previous month, which was 7.4% higher than that of Meituan. Hungry in 218, accelerate the sinking of 1 third-and fourth-tier cities, and achieve a market share of more than half in many cities including Dali and Shunde.
According to the statistics of Ai Media Consulting, in the third quarter of 218, 6.2%/35.3%/26.2%/24.1% of the users took delivery orders through portals such as take-away APP/ Alipay/WeChat applet/WeChat third-party service, and opening multi-channel portals became the key to the drainage of take-away business. Hungry, docking Taoxianda/Tmall Store/RT Mart and other businesses, under the collaborative drainage of Ali Ecology, users achieved rapid growth, and orders generated through Alipay and Taobao portals accounted for 3%. In addition to the independent APP, Meituan take-out is also diverted through the first-level entrance of Meituan APP/ WeChat, and the user retention rate and purchase frequency remain stable, and the user stickiness increases with the use time of the platform.
In order to cope with the impact of Ali 88VIP members and further tap the value of highly sticky users, Meituan launched paying members in the second half of 218, and the average purchase frequency of members is more than three times that of non-members; In June, Meituan and Tencent Video released joint members, which led to 4, new paid members for the platform. Attracted by the continuous enrichment of member benefits, it is expected that the purchase frequency and monthly consumption of Meituan members will further increase.
The rider's cost is greatly influenced by seasonal factors, and the investment will be increased under the competitive pressure.
Because both consumers and merchants need to pay the delivery fee to Meituan (generally 5-8 yuan per order varies from merchant to merchant), the realization rate of orders delivered by Meituan is higher, but at the same time, the platform needs to bear the rider's cost. The rider's cost can produce certain scale benefits with the increase of take-away orders and the stabilization of distribution peaks and valleys, but the take-away consumption pays attention to timeliness and quality, and it is expected that the labor cost of the take-away industry will remain at a high level. In the second quarter of 219, the rider's cost was 9.27 billion yuan, and the cost-expense ratio decreased by 6% year-on-year, mainly due to the increase in order density and the impact of AI order scheduling system on optimizing route algorithm and improving distribution efficiency; In the second quarter, the rider's cost rate decreased by 7% from the previous quarter, because the weather conditions in the second quarter were good, the rider's transportation capacity was sufficient, and the rider's subsidy was reduced accordingly.
In terms of seasonal factors, in the second quarter of 19th, the adjusted net profit of Meituan's take-out turned positive for the first time under the influence of the decrease of rider subsidies. In the second half of the year, due to the increasing demand for take-out in summer and the approaching cold weather in winter, it is necessary to provide riders with higher subsidies and incentives, and the distribution cost will increase accordingly. Judging from the market structure, the instant delivery market share of hummingbird delivery is higher. Under the competitive pressure of hungry, it is expected that Meituan will continue to improve the rider network construction. In the second quarter of 219, the gross profit margin of Meituan's catering take-out reached 22.3%, a record high. It is expected that in the future, Meituan take-out will achieve steady profit in the second quarter and the first quarter. With the improvement of scale efficiency, the annual profit can be expected.
relying on the offline operation ability accumulated by the original store-to-store business and the continuous deepening of technical and operational advantages, the market share of Meituan takeaway has been continuously improved in recent years, and it is obviously ahead of its competitors. In 216/17/18, the take-away market share of Meituan was 35.4%/46.1%/58.6%, respectively, increasing by 1.7/1.7/12.5pct. In the second quarter of 19, the market share of Meituan/Hungry (Hungry)/Other Takeaway was 65.1%/32.8%/2.1% respectively, and Meituan's market share was obviously ahead. From the perspective of revenue, the proportion of US delegations is higher, reaching 68.6%, while only 31.4% are hungry.
the competition pattern and market share show regional differentiation. Meituan take-out has obvious advantages in low-tier cities (economically underdeveloped areas), and the proportion of hungry in first-and second-tier cities is similar. The network effect of takeaway has a strong geographical attribute, and the proportion of each city is quite different. According to the grassroots survey, the proportion of US delegations in first-and second-tier cities is about 58.6%, and that in third-and fourth-tier cities is about 8%.
At present, the competition pattern is still fierce, and it is inevitable to ease the competition pattern from a long-term perspective. I think takeaway itself is a business with strong "bilateral network" effect, and the platform needs to collect enough C-end customers and B-end customers at the same time, so the competition pattern tends to be stable and it is difficult to make large-scale changes. In the future, with the gradual saturation of the market and the marginal decline in the efficiency of red envelopes (the amount of new orders brought by unit user incentives tends to decline), the scale of user incentives is expected to stabilize (no longer increase) until it declines. It is expected that after a full game, the competitive pattern will gradually ease and reach an oligopoly.