Picture source: Oriental IC
In the near future, when you order takeout, in addition to Meituan , Ele.me , you may also be able to choose Jingdong .
Jingdong Retail CEO Xin Lijun recently said in an interview with the media that Jingdong is studying the possibility of entering takeout. "As for when to start doing it, it depends on our capabilities and when we can build a talent team." According to media reports, Jingdong Using the Jingdong Daojia App as a service carrier, the catering takeout business will be piloted in Zhengzhou and other cities, with subsidiary Dada responsible for distribution. On June 7, JD.com established a city-wide catering business department with a current team of only about 10 people.
" Jingdong has long exposed its ambition to enter the local life field. The 'hourly purchase' launched last year with a clear emphasis on instant retail has actually opened up a way for local life. " an investor told the "IT Times" reporter express.
However, JD.com faces considerable difficulties in entering the food delivery field because its opponents are quite powerful. According to statistics from the Qianzhan Industry Research Institute, in the first half of 2021, Meituan and Ele.me’s market share in the food delivery market was around 95%, of which Meituan’s market share was close to 75%. In such a market structure, how big a splash can JD Takeout make? Let’s wait and see.
01 "Local life" melee
Affected by the epidemic, life for Alibaba , Meituan, and JD.com has not been easy this year. Logistics has been hampered, e-commerce, takeout, instant retail and other industry scenarios have been restricted, and consumers' willingness to spend has declined. The negative impact is reflected in the financial reports of various giants.
In the first three months of 2022, Meituan’s revenue was 46.3 billion yuan, a year-on-year increase of 25%, and its adjusted net loss reached 3.58 billion yuan; JD.com’s total revenue was 239.7 billion yuan, a year-on-year increase of 18%, with a net loss of 3 billion yuan; Alibaba revenue was 204.05 billion yuan and net profit was 19.799 billion yuan, but a year-on-year decrease of 24%.
2022 Q1 JD Financial Report
“Under the pressure of the epidemic, platform companies are facing the challenge of slowing user growth. Expanding consumption scenarios based on existing advantages and high cost performance is a common choice for major platforms. The phenomenon of major platforms fighting each other’s hinterlands is unavoidable. "Liu Bin, a senior US stock researcher and consumer goods analyst, once told the media.
In fact, under the background of Internet traffic becoming saturated in 2021, Internet giants have already entered each other's "card table". For example, Ele.me launched the "Bangbao Tuan" group purchase, and ByteDance tested the waters of takeout and live broadcasting. Group buy. By 2022, competition among giants to enter each other’s hinterlands will become even more intense.
Meituan's real-time retail brand " Meituan Flash Sale ", which started by relying on local businesses such as in-store group buying and takeout, has 230 million transaction users in 2021, and the total transaction volume reached 12% of the takeout transaction volume. This year, “Meituan Flash Sale” has reached cooperation with 3C fast-moving consumer goods brands such as Xiaomi and Muji .
ByteDance, which came from the "cross-border" of live broadcast and short video, is "grasping it with both hands." Public reports show that Douyin has recently been experimenting with "DouChao door-to-door delivery" in Guangzhou, Shenzhen, Hangzhou and other places, similar to JD Supermarket's self-operated instant retail business. On June 1 this year, Douyin announced that it would start "charging commissions" from local lifestyle merchants. At the same time, Douyin's local lifestyle GMV target was also increased from 40 billion yuan set at the end of last year to 50 billion yuan.
In the "frontal battlefield" of food delivery, Ele.me has launched real-time retail services such as medicine delivery and flower delivery early, and it continues to compete for traffic. In the first quarter of this year, Alibaba’s local life service revenue reached 10.45 billion yuan, a year-on-year increase of 29%. According to analysts, an important reason for revenue growth lies in "the improvement of Ele.me's subsidy efficiency and the increase in average customer price." The recent popularity of Ele.me’s “one-minute free order” campaign may be a reflection of “improved subsidy efficiency.”
In contrast, JD.com was late to the game. Meituan and JD.com currently rank among the top two in terms of market share in the real-time retail field. However, in the local life field that their opponents are familiar with, JD.com still appears to be "empty-handed."
02 "Supporting" JD Daojia
As a platform that will soon carry food delivery services, JD Daojia will directly affect the direction of JD.com's food delivery.
In March this year, JD.com completed its organizational structure adjustment and established the intra-city shopping business department, which integrated some functions of the original JD.com retail omni-channel home business department and technology and data center omni-channel ecology department. Intra-city business and supply chain platforms, omni-channels, and search recommendations are regarded as JD.com’s “four must-win battles.” At the same time, JD.com's local life focus "JD.com City Shopping" was officially launched.
However, a reporter from "IT Times" found that "JD.com City Shopping" still does not have a conspicuous entrance several months after its opening. Users need to search for "JD.com City Shopping" in the JD.com App to enter the relevant page.
Obviously, JD.com has not set the "battlefield" for intra-city shopping on the JD.com platform, but has incubated it first. Looking back at the "hourly shopping" launched by JD.com in October 2021, it is not difficult to find that JD.com has the same calculation.
At that time, "Hourly Gou" claimed to "gather all the retail capabilities within the JD ecosystem that can provide hourly delivery services", with the goal of penetrating at least half of JD users. These orders would be delivered by Dada and synchronized on the JD Daojia App. After the function was released, the "Hourly Shopping" entrance was set up "nearby" at the top of the JD App homepage, which has a very high exposure. From the side of
, this is not only a "training exercise" to integrate instant delivery capabilities, but also a long-term means to divert traffic from JD App to JD Daojia. According to data from NetEase, the number of monthly active users of JD Daojia and JD.com in January 2021 was 5.72 million and 199 million respectively. Dada's latest financial report data shows that in the 12 months as of March 31, 2022, JD Daojia's annual active consumers reached 67.9 million.
Now, the same-city catering business that relies on the JD Daojia App will also enjoy the "dividends" of more than half a year of "hourly shopping". JD’s intra-city shopping, including catering business, may also be integrated on the JD Daojia App.
Dada’s express delivery capacity is one of the reasons for JD.com to enter the food delivery industry, but in turn, this is also an opportunity for Dada Group . In its financial report for the first quarter of this year, JD.com mentioned that its losses were mainly due to its continued investment in Dada Group.
As of now, Dada Group has not yet achieved profitability. The latest financial report shows that in the first quarter of this year, Dada Group's total revenue was 2 billion yuan, a year-on-year increase of 21%, with a net loss of 604 million yuan, compared with a net loss of 710 million yuan in the same period last year. In Meituan’s financial report, food delivery contributed more than half of its revenue of 24.157 billion yuan, with net profit of 1.577 billion yuan, a year-on-year increase of 41.3%. This business has been profitable for many consecutive quarters - food delivery is no longer a "losing money and making a profit" business.
"If I deliver JD.com's takeout in the future, I won't feel unfamiliar." A Shanghai Dada express rider told the "IT Times" reporter that since Dada was first established in 2014, he has been able to receive self-delivery orders from catering merchants. Nowadays, there are also many daily catering orders.
03 Laying out the "New First-tier"
"IT Times" reporters noticed that JD seems to be targeting "new first-tier" cities in terms of "JD intra-city shopping" and its newly launched food delivery business. The "2022 City Business Charm Ranking" released by
not long ago listed 15 cities including Zhengzhou, Nanjing, Tianjin, Changsha, Hangzhou, Qingdao as "new first-tier cities".
On the "JD.com City Shopping" page, it is almost difficult to find group buying coupons outside of Changsha. The introduction of the official Weibo account of "JD.com" already states: "Eat, drink, have fun, and take you to all the good restaurants in Changsha."
In Zhengzhou, according to media reports, the JD.com team is connecting with local catering merchants. Now Zhengzhou users can see the newly added "Gourmet Catering" section on the homepage of the JD Daojia App, which includes KFC , Pizza Hut , Xiabu Xiabu and other brand group buying coupons, but the takeaway service has not yet been launched.
This seems to indicate a change in JD.com’s thinking.
As early as April 2020, JD Digits’ App “Livor” was launched, which was once seen as JD’s attempt to enter campus local life services. This app, which includes functions such as local group buying, earning commissions by attracting people, and social matching, is more like a combination of Bilibili, Pinduoduo, and Dianping. However, nearly a year later, due to heavy losses, Liwo officially announced the suspension of services.
This time, JD.com, which has left the "ivory tower" on campus, still avoids the "frontal battlefield" in its regional selection.
Tianfeng Securities pointed out that food delivery users are mainly users in first- and second-tier cities, and the market has great potential. More than 70% of Meituan’s takeaway transactions come from first- and second-tier cities.
Looking back at JD.com’s choice, it may be worth pondering: as new first-tier cities, Changsha and Zhengzhou have great development potential, and there is still a lot of room for online takeout to penetrate.
Can JD.com find its own takeaway path? Everything remains to be determined.
author/IT Times reporter Cui Pengzhi
editor/Qian Lifu Kicking Girl
typesetting/Ji Jiaying
picture/JD.com Douyin Liwo Oriental IC Network
source/"IT Times" public account vittimes
