Meituan 's business-intensive characteristics determine that it is more difficult and more complicated than a pure online platform to go overseas.
text丨Ma Kexin
Edit丨Guan Yiwen
"LatePost" learned that Meituan is preparing for its international business, which is under the responsibility of Qiu Guangyu , Qiu reported to Wang Putong, senior vice president of Meituan and president of the Home Business Group. Meituan is drawing personnel from various departments to support international business, and the technical department has begun to develop multilingual platforms including English, Spanish and Arabic . At present, Meituan’s international business is still in the research stage. Before
officially entered the overseas market, Meituan chose to pilot the takeaway business in Hong Kong, China first. At present, it is still under discussion whether the region will pilot flash sale business, launch independent apps and adopt new names.
Entering the Hong Kong market in China is not the ultimate goal of Meituan. A Meituan person believes that Meituan wants to choose a relatively familiar place to prepare for the future international expansion. Which market will Meituan choose from its first stop from leaving the country to going overseas? It is still under discussion internally.
leader Qiu Guangyu is a newcomer to Meituan and a veteran in the overseas market. Qiu Guangyu joined Meituan mid-year and was temporarily assistant to Wang Xing, founder and CEO of Meituan. In the past four years, he served as the chief operating officer of Didi Internationalization Division and the head of Kuaishou Internationalization Division.
Qiu Guangyu entered an Internet company from an investment bank, from the head of the business line to the head of the business department. He is a key figure in the internationalization of Didi and Kuaishou. He once helped Didi taxi business start from scratch in Latin America, and eventually surpassed Uber's market share. He also managed the Brazilian taxi company acquired by Didi, 99 Taxi, and Brazil is one of the most familiar markets.
In August 2020, Qiu Guangyu joined Kuaishou to lead its international business and be responsible for building a business middle platform. On the international path, Kuaishou's management chose to build a unified middle platform and enter multiple markets at the same time, but encountered TikTok's tough strategy of "complete suppression without leaving any gaps". The business leader Qiu Guangyu also resigned two years later.
This is not the first time Meituan has decided to enter Hong Kong, China. In the first half of 2018, Meituan planned to expand the market, but the project was suspended before it entered the execution stage. A Meituan person said that during business research, it was found that electric vehicles are not allowed to be on the road in Hong Kong, China, and the takeaway capacity cannot be guaranteed.
In more than four years, Meituan completed its listing and grew into a large company with a market value of over HK$1 trillion. However, Meituan still has to face the same problem when entering the Hong Kong market in China again, and the difficulties have become more difficult - the macro economy is weak, and the epidemic has amplified uncertainty. From 2021 to the first quarter of 2022, Meituan took out revenue and transactions slowed down quarter by quarter. By the second quarter of this year, Meituan no longer discloses the revenue, cost and order data of takeout in its financial report.
In September this year, Wang Putong said at the strategic meeting of the home-based business group that he had imagined that the operating pressure this year was huge at the beginning of the year, but he did not expect that reality was more difficult than he thought. "I have heard similar words many times at this year's meeting." said a Meituan person.
Takeaway and in-store business were impacted by the epidemic, and new businesses continued to suffer losses. In 2018, internationalization was just one of Meituan's many new businesses. In the same year, Meituan launched online car-hailing, Xiaoxiang Fresh , which benchmarked Hema's (later incorporated into Meituan Maicai ), and launched the forward warehouse business Meituan Maicai in early 2019. In 2020, it invested heavily in community group buying business Meituan Preferred . So far, none of these new businesses have made profits and have achieved absolute victories.
Takeaway is Meituan’s most important and mature business. In 2021, catering takeaway brought Meituan more than half of its revenue (96.3 billion) and 6.17 billion profits. Globally, Meituan is currently the only company with its food delivery business that continues to make profits.
"LatePost" exclusively learned that on September 23, the peak daily order volume of Meituan takeout exceeded 60 million orders (including flash purchases and drug purchase business). Its peak daily orders have increased by 10 million per year in the past five years as if it had become a “convention”. Meituan Takeout is one step closer to the goal of an average daily order of 60 million orders by the end of 2022. To achieve the goal of 100 million orders per day in 2025, it means that the growth rate cannot slow down. Meituan Takeout has passed the period of rapid growth.
It is no easier to develop new markets than to grow in existing markets. Looking around the world, there is no more fertile takeaway market than China. This market has sufficient supply and demand, including a huge number of catering businesses, white-collar workers, and a group of takeaway riders with low costs. One thing that cannot be ignored is that the streets and alleys of this market allow electric vehicles to shuttle through it.
At the end of 2021, Uber Eats withdrew from the Hong Kong market in China, which had been operating for 5 years. According to Measurable AI data, Uber Eats only had 3% of the market share at that time. At present, the takeaway market in Hong Kong, China is mainly dominated by Foodpanda and Deliveroo (delivery for every household). In November 2021, the former had a market share of 51%, while the latter had a market share of 46%.
Foodpanda has the longest entry time. It was established in Southeast Asia in 2012 and was launched in Hong Kong, China in 2014. It is now headquartered in Germany. Its parent company Delivery Hero was listed in Germany in 2017. Deliveroo was founded in the UK in 2013 and entered Hong Kong, China in 2015.
Takeaway market in Hong Kong, China is very small. Here, restaurants and supermarkets are dense, citizens live a fast pace, and the dividends brought by the epidemic are fading. According to a 2021 survey by Rakuten Insight, about 46% of respondents in Hong Kong, China ordered takeout less frequently than once a month, and about 18% of respondents never ordered through the takeout app.
For users in Hong Kong, take-out order means you need to pay a delivery fee from HK$15-20, and a higher price for single items than dine-in. Foodpanda members can enjoy the benefit of 40 free delivery fees for HK$99 per month, but even if you buy a member, the order must reach HK$100-120 to be exempt from the delivery fee. The above survey shows that about 43% of respondents in Hong Kong, China usually spend between HK$100 and HK$200 per takeaway order. "Most people can't afford takeout," said a Hong Kong citizen in China. "The hottest catering industry in Hong Kong is now 'two-delivery', two-dish boxed lunches." The price of two-delivery meals is usually between 30 and 50 Hong Kong dollars. On the side of the capacity side of
, there are many takeaway deliverymen walking and taking public transportation in Hong Kong, China. They are called "infantry" and "cyclists" riding bicycles.
According to the Road Traffic Ordinance of Hong Kong, China, electric movable tools belong to the category of "cars" and require registration and licence to be used. The Hong Kong Regional Transportation Department of China believes that electric movable tools should not be used with ordinary cars on road surfaces, nor are they suitable for use on sidewalks or bicycle paths, so such cars are generally not registered and licensed. A deliveryman riding an electric bike and traveling through a traffic speed of 70km per hour is likely to bear legal and life risks.
Takeaway delivery staff in Hong Kong, China can earn an average of about HK$30 per order delivered. In November last year, Foodpanda deliverymen launched a strike because they were dissatisfied with the platform's disguised salary reduction. A secondary market analyst said he believed that Meituan's capabilities and methodology could crush other platforms, but Meituan still had to answer a core question, namely how to develop and manage transportation capacity. The deliverymen in Hong Kong, China include both locals and mainlanders, as well as foreigners from India, Nepal , Pakistan and other countries. It is very difficult to manage and ensure the quality of service.
Globally, the only Chinese Internet company that has certain successful experience in overseas takeaway business is Didi. In 2019, Didi Takeout entered Mexico , and the business operation leader reported to Qiu Guangyu. Then Didi entered Brazil, Japan, Costa Rica , Chile and Dominican Republic .Among them, Brazil and Japan have stopped services this year.
"LatePost" learned that Didi takeaway currently accounts for about one-third of the market share in Mexico, with an average daily order volume of only about 200,000. "It has been done quite well." A Didi person commented, "The Latin American takeaway market is much smaller than China, and it has never been a grand occasion."
A former Didi person said that it is difficult for Mexican takeaway merchants to manage, and Chinese people make takeaway "work hard" and "no delay every minute". When Mexican merchants burst orders, they will complain to the platform, "They can't understand this matter, and they will say that if they break orders, they won't cooperate with you." Consumers have no strong demand for takeaways, "The local style is that everyone is relatively leisurely and likes to eat in restaurants." In addition, Mexico's online payment is underdeveloped, and most transactions are completed through cash.
At the beginning of this year, Didi Takeout exited the Brazilian market, which has been online for more than two years. Brazil's largest food delivery platform, iFood, was founded in 2011 and accounts for more than 80% of the market. In 2020, Didi Takeout’s team had about 100 people explored in third- and fourth-tier cities in Brazil for half a year, with a market share of less than 5%. "The problem with the latecomers is that if there is no strong investment in resources in the early stage, it is difficult to see the dawn of victory." The above-mentioned Didi person summarized.
Meituan's business-intensive characteristics determine that it is more difficult and more complicated than a purely online platform to go overseas, but if it is successful, it will take Meituan to a new level.
Zhang Qin and Shen Fangwei also contributed to this article.
