Focus on the food+platform strategy and dig deep into the value of the core industrial chain.
In the early days, Meituan mainly engaged in group buying business. With the support of several rounds of financing from giants such as Ali, Sequoia and Tencent, Meituan successfully stood out in the "Hundred Regiments War" and became the only remaining fruit among more than 5,000 group buying websites 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 (20 15 Meituan and Public Comment), making Meituan the largest catering service platform in China. In recent three years, Meituan has accelerated the expansion of its business matrix, and based on catering and wine travel business, it has piloted new businesses such as catering supply chain, fresh food distribution 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 high market value of Meituan. As of September 9, 20 19, the market value of Meituan was HK$ 420 1 100 million, 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 20 19, the transaction volume of Meituan platform reached 297.6 billion yuan, maintaining a steady growth year-on-year; The number of trading users reached 423 million, and the user stickiness continued to increase.
As the core of drainage, Meituan's overseas sales business needs to continue to invest in rider costs and user incentive fees, and has not yet achieved a positive profit for the whole year. On the other hand, Meituan 20 18' s acquisition of mobike brought high asset depreciation and restructuring costs, and with the influence of non-recurring gains and losses such as changes in the fair value of convertible redeemable preferred shares, the losses in 20 18 increased significantly. In 20 18, the net operating cash flow of meituan. com was-910.8 billion yuan, which was significantly worse than the same period of last year.
In view of the losses caused by new business, Meituan began to change its development ideas on 20 19, re-examining the competitive advantages of the platform, and businesses with less synergistic benefits and greater losses due to strategic contraction and main business, such as light assets to build Meituan taxi aggregation platform and closing stores under Xianxiang Line. , and overlap * * * enjoy the impact of bicycle depreciation reduction. This greatly reduced the loss in the first half of 20 19, and significantly increased the operating cash flow.
In the future, Meituan will continue to dig deep into the value chain of the catering industry, deepen business collaboration between platforms and achieve cross-selling. Although the core business sectors such as take-away and hotels are facing the competition of industry leaders, Meituan still has great competitive advantages. There is enough space in the local life service market. 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 gradually improve.
Focus on "food+platform" and strategically reduce innovative business. In 20 18, Meituan made a new round of organizational restructuring, and formed a model of "two platforms, two business groups and two business departments", which defined the service positioning based on LBS and the core position of Meituan's user platform, and pointed out that Chen Xu, Chen Liang and Chen Xudong, which have a deeper understanding of the company and are good at mobilizing resources, are responsible for innovative business development and hand over the business groups that arrive at the store and arrive at home to newcomers for management.
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 flywheel is developed at a high speed. In various businesses, the wine travel business has achieved stable profits; 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 has important strategic significance for improving the high-frequency life service platform, and it is difficult to achieve scale profit in the short term.
Takeaway: core traffic entrance, short-term competition intensified.
Takeaway itself is a service industry, which accounts for a large proportion of labor costs, so it is extremely sensitive to labor costs. Because the dynamic cost accounts for a large proportion, the fixed cost accounts for a small proportion, and the scale effect is not great. Based on this view, many people are very pessimistic about the long-term profitability of foreign sales business. Takeaway business is extremely sensitive to labor costs, and 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 "rent for work" at the B end and the convenience provided by the takeaway brother at the C end to consumers. Merchants need "take-out" to increase sales channels and improve 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. Compared with the channel cost of individual customers, the biggest one is 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 "convenience consideration" to continue to rise in the future.
Takeaway is an industry that needs high frequency. With the increasing barriers, the average profit will gradually become thicker. As the organizer of take-out, Meituan take-out charges both parties. After deducting the salary of the takeaway brother, the remaining surplus is profit. In the early stage of the industry, in order to ensure no new entrants and ecological stability, only a weak balance can be achieved between extraction and cost, so it is a low-profit industry. With the stability of the competition pattern, the formation of operational barriers and 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 bigger the difference between the growth rate of store rent and distribution labor, the richer the profit that this business can retain. In the long run, because the scarcity of shops is greater than the scarcity 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 we have reached the limit for the restaurant after years of operation, and the upper limit of the commission ratio will be the ratio of rent and waiter's labor in the restaurant's income. Then we can get a very simple formula: the profit rate of take-out of Meituan = the premium paid by consumers for convenience+the rent-distribution cost of merchants. To further simplify this formula, in order to retain consumers and prevent new entrants from entering, we reduce consumers to zero. Then the profit rate 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 income from marketing services increased, the income offset generated by subsidies decreased, and the realization rate of take-out increased rapidly. 20 19 The realization rate of food and beverage take-out in the first half of the year was 14.0%, up 1.0% year-on-year.
A strong and practical team is the key to the success of the US Mission in the "Thousand Regiments War". 20 1 1 At the end of the year, Gan, who was born in Ali's "Zhonggong Tiejun", joined the Meituan under the opportunity of Ali's investment in Meituan, managed the tens of thousands of people's push teams in a refined way, promoted the cost and efficiency-leading play, cut in from the supply side, and quickly launched a large number of business resources. In one year, the market size of Meituan increased from 18%. The restaurant merchant resources accumulated by the local push team in the early stage also helped Meituan catch the fast-developing train of the take-away industry, and took a step ahead of the hungry, and built a local life service platform combining stores and take-away business. According to the statistics of iResearch, there are 6.07 million online life service businesses on 20 18, and the penetration rate of active businesses of Meituan has reached 95%, which has a leading edge.
Takeaway platform can be divided into two modes: platform distribution and merchant-owned distribution. At present, the orders delivered by Meituan Platform account for about 70%. 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, if you are hungry, the commission rate of the merchants responsible for delivery on the platform is about 15%-25%, and the commission rate of the merchants who deliver their own goods is 5%-8%. The commission rate of the merchants responsible for delivery by Meituan is 15%-25% (generally, it is about 22%), and the commission rate of the merchants who deliver their own goods is 5%- 10%. In the first half of 20 18, the revenue/commission of GMV/ takeaway of Meituan increased by 96.95%/90.89%/87.02% year-on-year. The sales scale grows rapidly while the commission rate remains stable, and businesses and platforms enjoy growth dividends. In the first half of 20 19, the revenue/commission of Meituan GMV/ Takeaway increased by 37.49%/47.52%/42. 13% year-on-year, and the increase of commission rate increased the business burden of merchants.
The revenue of the take-away platform is mainly commission, and merchants are an important resource for competition among platforms. Hungry? At the beginning of 19, it was announced that the rate of 2,000 small and medium-sized businesses would be lowered by 3%, and then the discount would be extended to more businesses. Meituan also released a merchant support plan of 1 1 billion yuan. If all the commission concessions are invested, it is expected that the commission rate of platform merchants will be reduced by about 3%.
User 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 the take-away industry in China. According to the forecast of iResearch, the online rate of China food consumption market is expected to exceed 20% in 20 19, 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 take-out services; With the diversification of users' needs, the importance of new retail services such as non-meal takeout has gradually become prominent. The competition in the take-away industry has entered the second half of the full digitalization of local life services from the traffic bonus period, and high-frequency traffic portals have been created through food and beverage take-out to promote the upgrading of local life service platforms to become the mainstream.
From the perspective of market structure, the take-away market is highly concentrated. The market share of Meituan Takeaway 20 19 reached 63.4% in the first quarter, and its leading edge continued to expand, but at the same time it was challenged by being hungry and gradually exerting strength after word-of-mouth integration. According to the data of Ai Media Consulting, the market share of 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. 18 in the fourth quarter, the volume of new retail transactions increased by 32.2% month-on-month, which was 7.4% higher than that of Meituan. Hungry 20 18 will accelerate the sinking 100 third-and fourth-tier cities, and the market share in many cities including Dali and Shunde will reach more than half.
According to the statistics of Ai Media Consulting, in the third quarter of 20 18, 60.2%/35.3%/26.2%/24. 1% users took orders through the portals such as take-away APP/ Alipay/WeChat applet/WeChat third-party service, and getting through 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 have achieved rapid growth, with orders generated through Alipay and Taobao portals accounting for 30%. 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 increase of platform usage time.
In order to cope with the impact of Ali 88VIP members and further tap the value of highly sticky users, Meituan launched paid members in the second half of 20 18, and the average purchase frequency of members was more than three times that of non-members. In June, Meituan and Tencent Video released joint members, bringing 400,000 new paid members to 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 cost of riders is greatly influenced by seasonal factors, and will still increase investment under competitive pressure.
Because both consumers and merchants need to pay the delivery fee to Meituan (different merchants generally pay 5-8 yuan per order), Meituan's order delivery rate is high, 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 stability 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 20 19, the rider's cost was 9.27 billion yuan, which was 6% lower than that of the same period of last year, mainly due to the increase of order density and the influence of AI order scheduling system on optimizing route algorithm and improving distribution efficiency. In the second quarter, the rider fee rate decreased by 7% month-on-month, because the weather in the second quarter was good and the rider's capacity was sufficient, and the rider's subsidy was reduced accordingly.
From the perspective of seasonal factors, under the influence of the reduction of rider subsidies in the second quarter of 19, the adjusted net profit of Meituan takeaway turned positive for the first time; In the second half of the year, due to the increasing demand for take-away food 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. From the perspective of market structure, the instant delivery market share of hummingbird delivery is higher. Under the competitive pressure of being hungry, it is expected that Meituan will continue to improve the rider network construction. 20 19 in the second quarter, 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 stable profit in the second quarter and the first quarter. With the improvement of economies of scale, the annual profit can be expected.
Relying on the offline operation ability accumulated by the original in-store business and the deepening of technical and operational advantages, the market share of Meituan Takeaway has been continuously improved in recent years, and it is now clearly ahead of its competitors. In 2016/17/18, the market share of Meituan's take-out was 35.4%/46. 1%/58.6% respectively, up1.7/10. 19 in the second quarter, 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 3 1.4% is hungry.
There are regional differences in competition pattern and market share. 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 take-out has a strong geographical attribute, and the proportion of each city varies greatly. Grassroots surveys show that 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 80%.
At present, the competitive pattern is still fierce, and it is inevitable to ease the competitive pattern in the long run. I think takeaway itself is a business with a strong "bilateral network" effect. 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, the marginal efficiency of red envelopes will decrease (the amount of new orders brought by unit user incentives tends to decrease), and the scale of user incentives is expected to stabilize (not increase) until it decreases. It is expected that after full game, the competition pattern will gradually ease and reach oligopoly.