Workers are addicted to Meituan’s “Pinhaofan”. Are they “taking advantage of the situation” or “being harvested”?

Workers are obsessed with Meituan's "Pinhaofan". Are they "taking advantage" or "being exploited"? This article will help you find out the reasons. This article is also recommended for people working in catering companies or self-employed operators.

"A cup of milk tea is 6.4 yuan," "A rice bowl is 12.6 yuan," "The price for new users is reduced to 5.9 yuan"...

“It’s not that I can’t afford takeout, but it’s more cost-effective to order takeout through Pinhaofan,” said Li Guang, a post-95s who works in Beijing and “makes a living by ordering takeout.” After seeing the prices of meals on Meituan’s “Pinhaofan,” he was instantly attracted. “It’s nearly half the price compared to ordering takeout on a regular basis.” Calculated this way, he can save at least a few hundred dollars every month.

Meituan screenshot

Like Li Guang, there are many workers who are attracted by the "cheapness".

Ideally, Pinhaofan would improve efficiency, reduce costs, and achieve a win-win situation for all parties through the model of "users placing orders in a centralized manner, merchants preparing meals in a centralized manner, and riders delivering meals in a centralized manner." However, the reality is not as satisfactory as expected.

Yidu Pro found through exchanges with many catering practitioners and feedback from social platforms that users, riders, and merchants all have complaints about Meituan Pinhaofan.

Although ordinary users can save a little money by using Pinhaofan, sometimes the quantity and quality of the food, and the timeliness and accuracy of the delivery by the riders, will be greatly discounted.

Many riders also dislike taking orders from Pinhaofan because the delivery amount of Pinhaofan is lower than normal orders. A rider in a small county estimated that he earns at least 500 yuan less a month because of Pinhaofan.

Some merchants feel that it is a thankless job. The low price of Pinhaofan has led to a very tight profit margin. Some merchants wanted to increase their store exposure through Pinhaofan, but it has affected their normal business.

The controversy that Pinduoduo once faced about “cheap products are not good” is now also happening to Meituan Pinhaofan.

The reason behind the cheapness of "Pinhaofan" is simple: many things have been "castrated". In this simple and crude low-price war, some workers, merchants, and riders who choose "Pinhaofan" are almost driven "crazy".

1. “Pinhaofan” has brought down the price of takeout?

After learning about Pinhaofan in March this year, Li Guang would open Pinhaofan to see if there were any cheaper options before ordering takeout almost every time.

Entering "Pinhaofan" from the Meituan homepage, ordering takeout is no longer like shopping on Taobao or JD.com. It is more like a continuation of Pinduoduo's extreme cost-effectiveness and social fission method. Users mainly complete ordering by joining a group order or initiating a group order.

The principle behind this is that users can increase the number of orders by ordering in groups with people nearby, which reduces the platform's operating costs and allows them to enjoy more discounts.

For example, a serving of Xiaoheng dumplings from the same restaurant costs 22.3 yuan after the discount. However, on the Pinhaofan platform, the price drops to 15.7 yuan.

Meituan page screenshot

In most cases, Pinhaofan has indeed attracted a wave of loyal users by virtue of its certain price advantages.

"It can be said that Pinhaofan has been with me through the darkest moments of my life," said Xiaowen, who has just entered the legal profession. She was in the early stages of her career and was in financial difficulty, and she was completely supported by the cost-effective Pinhaofan.

People who don’t have high expectations for Pinhaofan are relatively more tolerant, thinking, “Since we have decided to eat Pinhaofan, why do we need a bicycle?”

However, after workers switched from normal takeout to Pinhao Meals, there was always some gap and some experience was downgraded, which led to a lot of complaints.

Workers' complaints about merchants are mostly focused on the quantity and quality of the food . In Li Guang's experience with Pinhaofan over the past three months, he found that choosing Pinhaofan is only for the sake of being full. The food on this platform is mostly staple food, and there are many small shops, which greatly increases the chances of making mistakes.

Many users directly compared the difference between a regular meal and a meal package and found that the portion of the staple rice was not much smaller, but the portions of vegetables and meat were much smaller.

Screenshot of Xiaohongshu

Another user complained on Heimao that he spent 12.8 yuan to order a hamburger and chicken roll on Pinhaofan, but the food tasted terrible after he received it. It was not the chicken burger as advertised. He also complained that the takeaway recommended by Meituan was of poor quality and did not match the price.

Secondly, Pinhaofan is not necessarily the " lowest price " that can be purchased without a second thought . Sometimes the main website of the takeaway store may have stronger promotions . After a user ordered two drinks through Pinhaofan, he tried to go to the Meituan store to make up the order, and found that the unit price of Pinhaofan was higher.

In addition, another major complaint is the delivery speed of the rider and the accuracy of the delivery address. In Li Guang's experience, the delivery speed of Pinhaofan is often slower, 10-15 minutes slower on average.

But what bothers more users is that due to the relatively low unit price of Pinhaofan, many riders will not deliver to the exact location due to factors such as distance and time. On the Black Cat complaint platform, a user said that when he asked the rider to deliver to the door, the rider refused under the pretext that there was a rule that "delivery above the third floor is not allowed."

Screenshot of the Black Cat Complaint Platform

Most importantly, the processing speed and quality of Meituan Pinhaofan’s customer service needs to be improved. According to feedback from many users, it is difficult to get timely solutions to problems reported to customer service through Pinhaofan, and in many cases users cannot even contact customer service.

It is too difficult for workers to save money on "eating well".

2. Riders and merchants are going crazy

The riders and merchants are also being driven crazy. After all, users want to save money, so the platform can only take action against the merchants and riders.

Many riders dislike Pinhaofan because of the low price and the difficulty in delivering orders. Many riders from all over the country told Yidu Pro that the number of Pinhaofan orders they received has exceeded the normal number.

A Beijing rider told Yidu Pro that the normal delivery fee is 5-8 yuan, but the cost of Pinhaofan is often only more than 3 yuan. He picked up four Pinhaofans during the lunch rush, but the lunch rush lasted nearly two hours, and he only made 30 yuan for 7 orders.

Policies vary from place to place. Some places provide subsidies for riders, but in many cases, the unit price of delivering a meal is lower.

Another rider from a county in Hebei told Yidu Pro that the average price of a Pinhaofan order is about 1 yuan lower than a normal order. As the number of Pinhaofan orders increases, he earns at least 500 yuan less per month, which is not a small number for people living in a small county.

Many businesses have suffered greatly from this. In their view, Pinhaofan is like a vicious cycle.

On social media platforms, some merchants said that they originally opened Pinhaofan at a low price with the purpose of attracting customers, but after Pinhaofan was removed from the shelves, the store had even less business. Other merchants said, "If we don't open it, there will be no orders, and if we open it, we won't make money," and they are in a dilemma.

Screenshot of Xiaohongshu

"Pinhaofan is harmful to most businesses," Liu Boran, a senior food delivery practitioner, told Yidu Pro. This is a dilemma. If you join Pinhaofan, you will make almost no profit, and you may even lose money. But if you do not join and your competitors do, it will dilute customer flow and lead to fewer orders.

Under normal circumstances, merchants who do takeout have a high degree of autonomy in deciding the selling price, and the remaining amount is profit after deducting the cost of the food, the commission collected by Meituan, and the amount of red envelopes for activities. However, Pinhaofan adopts a fixed price model, that is, merchants determine a price after calculating the cost, and submit it to Meituan staff, who then decide the price after adding a markup, thus reducing costs through economies of scale.

Pinhaofan’s model is simpler than normal takeout, but since the average customer spending is mostly around 15 yuan, the profit margin is very limited.

Liu Boran mentioned that in the past, when merchants were doing takeout, the sales and reviews of Meituan’s main website and Pinhaofan were linked together. Merchants originally wanted to boost sales through Pinhaofan to increase the order rate of the main website, but Pinhaofan often brought more negative reviews to merchants. The increase in negative reviews, in turn, affected the store’s exposure and order volume.

Of course, Meituan has been optimizing Pinhaofan. In 2024, Meituan stipulated that after 90 days of a new takeaway store going online on Pinhaofan, Pinhaofan's order sales, reviews and other data will no longer be recorded in the takeaway store. In the early stage, new stores can increase their monthly sales through Pinhaofan, which is a positive to some extent. Meituan is also vigorously encouraging merchants to do Pinhaofan.

Liu Boran believes: "The low-price nature of Pinhaofan is difficult to change. Under this model, it is destined to rely on volume and take the route of small profits but quick turnover." According to him, some businesses in first-tier cities have already figured out a model that can make a difference by increasing volume, and will even take the initiative to find business managers to find resources.

However, not every merchant can do Pinhaofan. Only merchants who reduce costs to the lowest level and have competitive advantages in price can achieve this model . Otherwise, they will end up "working for the platform ."

"So far, I have never recommended the merchants I work with to go on Pinhaofan," Zou Wenping, who has been engaged in the food delivery operation industry for 7 years and currently provides operational guidance to dozens of food delivery stores, told Yidu Pro.

He gave an example, saying that in order to make Pinhaofan, the merchants increased the manpower, but the orders for Pinhaofan on that day may only cover the cost of the food, and may not even make back the labor costs. In order to make money, the merchants may have crooked ideas and use lower-cost goods in ingredients and packaging, which may lead to food safety risks.

Zou Wenping said: "Meituan Pinhaofan's business managers often have KPIs on their shoulders. In order to expand the scale, they will actively push merchants to go online on Pinhaofan and lower the prices of meals. If merchants are always led by the nose, they are likely to fall into the trap."

In general, the Meituan platform provides a new path of "Pinhaofan", but it is not easy to run this new path well. Ordinary merchants who blindly rush into the "Pinhaofan" pool will only fall into a vicious cycle.

3. Low prices, where will Meituan take you?

The other side of the crazy promotion of Pinhaofan is that Meituan is facing competition from all sides .

Facing the huge cake of local life, Meituan, which has been deeply engaged in this, can be said to be the biggest beneficiary as the strongest king. Taking the first quarter financial report as an example, 70% of Meituan’s revenue comes from core local business.

But in the past two years, big companies such as Douyin, Xiaohongshu, and Kuaishou have also set their sights on the local life pie, especially Douyin, which has been spending huge amounts of money on subsidies to grab the market, and the battle against Meituan has begun.

As the competition becomes increasingly fierce, Meituan must not only maintain its position and market share, but also tap into new growth. In this defensive battle, low prices are a powerful lever that Meituan has found.

You know, Pinduoduo, which started out by offering low prices, has carved out a path between Alibaba and JD.com, and its market value and profits have surpassed those of Alibaba and JD.com, so much so that in 2024, the top e-commerce platforms all use price as their biggest weapon, and are in full swing in the price-cutting race. In their view, low prices are still the most direct and effective way to grab the market.

In the field of local life, Meituan can greatly increase the number of orders by reducing the average order value through Pinhaofan, improve user stickiness and activity, and further expand the pie.

Moreover, Meituan has achieved surprising results in Pinhaofan.

According to LatePost, Pinhaofan's average daily order volume in the first quarter of this year was close to 5 million, equivalent to 10% of Meituan's average daily order volume of 57 million for catering takeaway in the fourth quarter of 2023.

Bocom International estimates that Pinhaofan’s total orders will reach 1.16 billion in 2023, accounting for 6% of Meituan’s food delivery orders. Some analysts say that Pinhaofan’s share of Meituan’s food delivery orders will reach 20% in the future.

In the view of Bocom International, the future growth of GTV (gross transaction volume) of Meituan’s food delivery platform will be mainly driven by the growth of order volume.

However, when Meituan relies on the model of exchanging price for volume to increase its penetration rate, it needs to consider the platform's responsibilities and balance the needs and interests of all parties.

The Meituan platform is becoming more and more prosperous, and countless people rely on it for their survival.

According to the data disclosed by Meituan, in 2023, the number of riders earning income on the Meituan platform will be about 7.45 million, with an annual transaction user growth of more than 30% and an annual active merchant growth of more than 60%, both of which are record highs. In Q1 2024, Meituan's annual active users increased to nearly 500 million.

Screenshot of Meituan’s 2023 Social Responsibility Report on Protecting the Rights and Interests of Riders

At the same time, the turnover rate of merchants and riders on the Meituan platform is high. Many riders are part-time, and the life cycle of small merchants is relatively short. Zou Wenping mentioned that on the Meituan platform, ordinary people running pure takeaway stores have a very short survival cycle, often 6-12 months, and will experience a wave of survival crisis.

"The platform is permanent, but the workers are transient." Riders come and go, and a group of small merchants fall, and a new group of merchants rises.

In the long run, the industry reshuffle is going on all the time. With strong external competitors surrounding and eyeing them, if Meituan cannot balance the interests of user experience, merchant profits, and riders’ earnings, it may slowly lose market share and lose its position.

"Low price" is often accompanied by "low quality". It is difficult to go long-term with a low price and low quality strategy. In the face of greater competition, Meituan needs to run and iterate, and balance all parties, otherwise it will only brew a greater crisis.

Author: Wan Ming; Editor: Xiaoying

Source: Yidu Pro (ID: yiducaijing2021)