Tik Tok cuts into Meituan’s cake

Driven by the wave of digitalization, the competitive landscape of local businesses is changing. The competition between Meituan and Douyin is not only a battle for traffic, but also a competition for business model innovation.

On the 2nd, Meituan CEO Wang Xing announced the integration of Meituan’s multiple local business operations.

In the past, many of Meituan’s local business groups were relatively independent and had not truly achieved integration. This had, to some extent, affected the competitive efficiency of Meituan’s local business, especially its inability to adapt to the needs of current competition.

This is true whether it is the home delivery business group or the store delivery business group.

Today, when the competition for traffic has become fierce, Wang Xing's integration of Meituan's local business is more like a challenge and attack against Douyin.

Relying on the huge traffic acquisition capabilities built through short videos, Douyin's tentacles have extended from the live streaming business that we have known in the past to new business areas represented by local commerce.

Previously, there were rumors that Douyin would join hands with Ele.me.

Whether it is merchant promotion based on short videos, or traffic acquisition and discount promotions based on short videos, it has begun to show stronger advantages than Meituan.

For a platform like Meituan that matches merchants based on geographic labs, the war with Douyin has undoubtedly burned directly to Meituan's doorstep.

When Douyin started to cut into Meituan's cake, especially at a time when the traffic dividend had already peaked, the competition between them became even more tit-for-tat.

Therefore, if we must find the internal logic behind Wang Xing's integration of Meituan's local business, coping with competition from TikTok is undoubtedly a major aspect.

It is foreseeable that as Meituan integrates local businesses, the battle for traffic between it and Douyin may usher in a new era.

01

As the development of live streaming e-commerce begins to enter a rational development period, especially when the traffic growth in this industry enters a bottleneck period, how to find new growth points to replace live streaming e-commerce has become an important issue that Douyin must consider.

The new business dominated by local business based on labs has naturally become the main breakthrough that Douyin must pay attention to.

With the customer acquisition ability of short videos, coupled with highly competitive discounts and promotions, Douyin has advantages in local business that Meituan cannot have.

For Meituan, the main focus of its local business is recommendations based on the user's geographic location.

This is actually not much different from its previous strategy in competition with Alibaba's local business in the Internet era.

It has to be said that in the absence of a medium such as short videos, Meituan’s labs-based recommendation model does have a certain effect.

However, when the era of short videos arrived, especially when the active customer acquisition ability of short videos began to show more and more advantages than the previous passive customer acquisition ability, Meituan’s once tried-and-tested competition model began to encounter difficulties.

How to change the traditional customer acquisition capabilities and how to focus Meituan’s local business more in order to cope with the aggressive offensive from Douyin has naturally become a topic that must be addressed with caution.

If we regard local business as a new business derived from Douyin, then for Meituan, local business is the core of its core.

If Meituan fails in local business, it will inevitably affect the growth of its core food delivery business.

Therefore, how to fight a tough battle with Douyin with local business as the main battlefield when Douyin has not yet established a firm foothold is naturally the key for Meituan to carry out the war outside its core business.

Wang Xing's integration of local businesses this time is actually more important in breaking the previous overly fragmented state of local businesses. By integrating different businesses to achieve synergy, different business lines are connected together to achieve the effect of 1+1>2.

Only in this way can Meituan avoid the embarrassment of losing focus and win the local business war that is about to begin.

02

If Meituan's integration of local businesses is more about achieving a convergence of power in a more focused manner, then its reconstruction and upgrading of the way it acquires and activates traffic is directly related to its success or failure in the competition with Douyin.

An in-depth analysis of TikTok's success in local business shows that it is actually more based on its customer acquisition method using short videos as the main medium and a more competitive discount promotion method.

For Meituan, the key to ensuring its success in the new stage is how to make up for its shortcomings in traditional customer acquisition and traffic conversion while improving its competitiveness through competitive discounts and promotions.

It is precisely because of this that we see that during this adjustment process, Wang Xing not only integrated the business lines, but also integrated the Meituan platform.

After all, Wang Xing's integration is actually more about finding a new strategy to compete with new rivals like Douyin through an all-round upgrade of Meituan's local business from the inside out.

Only by finding a new competitive strategy can Meituan truly break away from its previous competitive paradigm in the Internet era and truly find new ways and methods of competition.

In fact, for Meituan, it has simply bid farewell to the competition model dominated by burning money and subsidies in the Internet era, and has adopted a competition model dominated by "new types of burning money subsidies + new media".

If Meituan can achieve such a transformation and upgrade of its competitive model, it will not only break out of the development dilemma of the previous Internet era, but will also accumulate experience for its competition in other business lines.

This is not only about dealing with new competitors like Douyin, but also new competitors represented by Ele.me, especially the competition after Douyin and Ele.me join hands.

From this perspective, Wang Xing's integration and upgrading of Meituan's local business seems more like a precautionary measure.

03

On the surface, the current pattern of the takeout market has basically been determined, and Meituan’s position as the leader seems to be difficult to shake.

In fact, the takeout market is undergoing a new transformation, just like the e-commerce market is undergoing a new reshuffle.

For Meituan, how to continue to maintain its leading position in such a new reshuffle, especially how to maintain the huge advantages it has established in the Internet era, is the main issue that Wang Xing must consider.

Some time ago, news about the cooperation between Douyin and Ele.me emerged.

Although Ele.me denied the news, if Douyin and Ele.me really join hands, Meituan will inevitably face unprecedented challenges in the post-mobile Internet era.

Similarly, if Douyin and Ele.me join forces, the first point of focus will undoubtedly be local business.

For Wang Xing, how to win a battle in local business and find a new competitive strategy in the new takeout market may be an important issue that he must think about.

The significance of Wang Xing's integration and upgrading of local businesses this time is quite obvious.

After all, it is to cope with the direct impact on Meituan after the cooperation between Douyin and Ele.me.

We all know that in the e-commerce market, the pattern represented by Alibaba, JD.com, and Pinduoduo has basically undergone a reshuffle.

How Meituan can learn from the e-commerce market and avoid falling into the dilemma of Alibaba's market being divided by Pinduoduo, thereby maintaining its dominant position in the food delivery market, is the key to ensuring that Meituan can continue to achieve new development in the new stage.

Although Meituan has upgraded its strategy, if it loses its traditional competitive advantages, especially the huge advantages it has built up in the Internet era, then even if it has upgraded its strategy, such a strategic upgrade will still be meaningless if it loses its traditional advantages.

Therefore, for Meituan, the key lies in how to maintain its position in the food delivery market and how to avoid embarrassing situations similar to Alibaba.

Conclusion

Whether it is the ongoing merger rumors between Douyin and Ele.me, or its aggressive offensive in local business, we can see that it has already cut into Meituan's cake to some extent.

Obviously, such a phenomenon cannot be ignored by Meituan.

How to use local business as the main battlefield to resist the attack from Douyin at a time when Douyin is constantly cutting into Meituan's cake may be the key for Meituan to avoid falling into embarrassment in the e-commerce market.

It is precisely because of this that we see Wang Xing’s integration and upgrading of Meituan’s local business.

Through such an upgrade, the business line structure built by Meituan in the Internet era is more focused, and can better cope with the new competitive situation to avoid falling into the embarrassing situation where Alibaba's top spot in the e-commerce market is taken away by Pinduoduo.