The long-term strategy of meituan is to realize the ecological closed-loop of b-end and C-end From China CITIC

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The following is the The long-term strategy of meituan is to realize the ecological closed-loop of b-end and C-end From China CITICrecommended by recordtrend.com. And this article belongs to the classification: O2O, Brokerage Report.

Meituan takes “eating” as the core to build a super app in the field of local life. Meituan’s ecological closed loop has two dimensions: the user side and the business side. The biggest feature of C terminal is consumer reuse. The user end creates a closed loop of local life services around the complete local life needs of home, store, travel, wine and tourism, and realizes the high reuse of consumers by means of cross selling such as high-frequency, low-frequency, etc.; the b-end focuses on the business needs of customer acquisition marketing, distribution, financial payment, supply chain management, blue collar recruitment, and helps businesses to carry out digital transformation. In the future, meituan will form a complete closed loop in the field of local life at C end and B end respectively.

Discussion on several core problems of takeout

(1) Is there any competition barrier for takeout? The takeout market has entered the third stage of development, and has entered the stage of user, merchant and platform dependence. The number of users and the number of merchants depend on each other. The more merchants, the more users, the more customers, the more merchants. But they are more and more dependent on the platform. It is difficult to attract customers simply by means of subsidies, especially in the case of high penetration rate of takeout, the competitive advantage of head delivery platform is more stable.

(2) Is there any entry threshold for takeout? Will there be the possibility of a third-party distribution platform to make large takeout? In our opinion, to see whether there is a potential third-party rise in takeout, we should first judge whether the “potential competitors” have two conditions: ① whether the upstream and downstream of the whole industrial chain can form a complete closed loop. ② Whether the resource allocation efficiency is optimized to the greatest extent. Simple third-party distribution platform has the ability to participate in the takeout industry chain, but it does not directly have takeout users and businesses. Moreover, it does not have the ability to integrate the industrial chain and complete the ecological closed-loop. Meituan and other delivery platforms currently have the best intra city distribution capacity, and have achieved the optimal resource allocation efficiency in intra city instant distribution. The takeout market will be dominated by two major players, meituan and fami, for several years to come.

(3) Does takeout have scale effect? We believe that takeout market has scale effect, which can be divided into rider distribution scale effect and platform scale effect. In the aspect of scale effect of rider distribution: the increase of order quantity makes riders deliver more orders in unit time and produce more value. The improvement of riders’ distribution efficiency is a positive cycle effect, which has scale effect and continuously creates more commercial value.

Platform scale effect: the platform scale effect is mainly reflected in the two aspects of users and businesses. ——The larger the platform scale, the greater the single user value. For a single user, a larger scale means: 1) more abundant and accurate user evaluation information, saving trial and error costs; 2) lower distribution cost per order. For businesses, larger scale means: 1) more orders and user growth; 2) more consumer feedback.

(4) Where is the takeout ceiling? We separate them from macro and micro perspectives.

From a macro point of view, there are two kinds of substitution effects of takeout, one is the substitution of dining in the restaurant, the other is the substitution of family cooking. Starting from the per capita food expenditure, we calculate the substitution effect of dining in restaurants and the substitution effect of home cooking. It is estimated that by 2023, the take out GTV will reach about 1.5 trillion. From the micro point of view, take out GTV = number of takeout users * per capita takeout orders * customer unit price. We analyze the user ceiling and the customer unit price ceiling of takeout respectively. Finally, it is estimated that the mid-term ceiling of takeout industry in 6-7 years will be about 1.82 trillion.

“First, take out first, then build a balance of takeout groups in the United States. The profit growth of meituan’s takeout comes from the improvement of cash flow rate, the increase of gross profit rate and the reduction of subsidy. It is estimated that the sales revenue of meituan will reach 175.9 billion yuan in 2023, and the scale of net profit is expected to reach 30 billion yuan.

Meituan takeout has become the leader of takeout market by relying on the scale of merchants accumulated during the period of “hundred regiment wars”. Meituan has a huge advantage in distribution capacity due to its powerful data processing and calculation. Its internal flow at the user end is strong and the degree of user reuse is high. The advantages of the three sides form a positive cycle and form a solid moat. The profit growth of meituan’s takeout comes from the increase of cash flow rate, the increase of gross profit rate and the reduction of subsidy. It is estimated that the sales revenue of meituan will reach 175.9 billion yuan in 2023.

To store business relies on the scale to form the core competitiveness of accurate information services; wine and tourism business replicates the advantages of local service to catch up. It is predicted that the revenue will reach 52.3 billion yuan in 2023.

To store business competitiveness in the richness and accuracy of information. Relying on the huge database formed by the large scale of users and merchants, meituan provides high-precision information services to save trial and error costs for consumers and provide customized marketing for businesses, forming an absolute advantage in the field of local life to store, ranking first in terms of utilization rate and recognition, and significantly higher than that of competitors. 2) The core layout of the wine and tourism business is similar to the hotel reservation service to the hotel. It starts to check in at the local place immediately, and makes use of the advantages of the original local life to efficiently guide the flow and catch up with Ctrip in the number of rooms and nights. It is estimated that the cash flow rate will rise with the cooperation of Gaoxing Hotel and the increase of the proportion of advertising and marketing revenue. It is estimated that the revenue of the store and wine travel business will reach 52.3 billion yuan in 2023.

The construction of local travel enables meituan to complete a complete closed-loop of local life of home, travel and store; non meal home frees the idle transportation capacity, improves the order density and reduces the delivery cost of each order.

1) Meituan arranges the aggregation mode online car Hailing platform, transforms the asset light mode and cultivates the travel mentality of users; meanwhile, it acquires Moby and changes it into “meituan bicycle”. Inbound travel enables meituan to complete the last step of the local life loop. So far, consumers’ home demand, as well as the demand for going out to the store and travel can be completed on the meituan app. 2) When the single delivery cost is difficult to be reduced, the cost of each delivery can be reduced by increasing the order density and the distribution demand in the low peak period, so as to further enlarge the scale effect and realize the structural cost optimization.

The b-end business covers catering businesses, solves catering operation pain points and provides one-stop service.

China’s catering industry is dominated by small and medium-sized businesses, with high rent, low operating efficiency and high cost of raw materials as the pain points. Meituan makes use of the experience of the local promotion team and the data advantages of the core catering business to accurately interpret the business pain points and needs, and layout SaaS restaurant management system, kuaiju purchase, meituan finance, steamed bread recruitment, etc., to form a b-end business closed-loop, comprehensively solve the business operation problems, deeply penetrate the catering industry chain, provide one-stop value-added services, and let the scale effect continue.

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