Meituan Group Buying is available online for instant pick-up, and it is competing with Douyin and Kuaishou in the "in-store war"

The food delivery business of Douyin and Meituan has made new progress. Douyin's food delivery business is booming. Can Meituan maintain its business territory and occupy a favorable position in the market? Following this article, let's learn about this "in-store war" together. It is recommended for Internet friends to read.

The food delivery business of the two major short video platforms has made new progress. Douyin's group purchase and delivery business has been integrated into Douyin's e-commerce Doudian home delivery platform, and no new merchants are allowed to settle in. After July 15, traffic entrances such as shelves and searches will only retain products in the food delivery mini-program, and the products of the previous group purchase and delivery business will no longer be displayed.

Kuaishou’s group buying package has added new labels such as “delivery only” and “home delivery”. After users place an order for products with the labels, they can enjoy the food delivery service.

Faced with the rapid development of Douyin and Kuaishou in the food delivery business, Meituan gave an immediate and fierce counterattack.

On July 2, Meituan Group Buying officially launched the “Instant Pickup” function. Users who choose “Instant Pickup Store” to place an order for food group buying can click “Go to Order” on the order page, and pick up the food instantly with the pickup code after arriving at the store. This eliminates the need to jump to the brand mini-program or manually verify coupons, and can complete the store verification, ordering and back-end self-pickup in one stop online.

It is reported that the service first covers high-frequency consumer categories such as tea and coffee, and cooperates with more than 80,000 stores of nearly 40 chain brands, serving more than 20 million users. In the future, it will be replicated in more catering formats, forming a complementary service with takeaway and dine-in, and further improving the delivery efficiency of merchants.

Can Meituan, which is besieged by Douyin and Kuaishou, continue to outperform its latecomers by relying on its speed advantage?

1. Douyin and Kuaishou group purchases are delivered to your home, so you don’t have to be a “barbarian” at your doorstep

Douyin Takeout has been officially incorporated into the Doudian Home Delivery section, which means that Douyin Takeout has been officially separated from Douyin Local Life. The traffic distribution logic of takeout and existing group buying will undergo major changes.

In March this year, Douyin Takeout was adjusted from the local life business line to the Douyin e-commerce business line, and integrated with the hourly instant retail business. In order to focus more on doing a good job of takeout, Douyin’s internal local life department and e-commerce department are running side by side. Douyin Life Service will focus more on in-store business, while takeout will be developed by e-commerce, helping merchants to operate healthily in the Douyin e-commerce ecosystem.

Specifically, starting from June 15, the original Douyin life service "group purchase and delivery" business will no longer accept new merchants. At the same time, the Doudian·Daojia takeaway platform will be launched on July 3, 2024. Currently, the PC side only provides chain version merchants, while the mobile side provides single store version.

Image source: TikTok

Currently, there is no entry fee or deposit for invited merchants. Although there is no commission, a 0.6% service fee will be charged for each transaction initiated through WeChat Pay. This not only affects e-commerce, but also affects the current round of commission adjustments for Douyin's live service.

It is reported that Douyin's life service sales before write-offs exceeded 100 billion yuan in the first quarter of this year. In April, Douyin's life service sales were about 35 billion yuan, far from the 600 billion yuan sales target set by Douyin at the beginning of the year.

"At the end of May last year, people from Meituan and Douyin invited stores to participate in the 618 event and launched exclusive discount packages. However, we haven't received any notification this year. It seems that both parties are not very eager to take advantage of the discount anymore," said Wang Ke, a local retailer who was impressed by the change in attitude of the two platforms from being competitive to not being competitive.

It is not difficult to understand why Douyin gave up "takeout". Compared with the half-hour delivery time of Meituan Takeout and Ele.me, Douyin Takeout's one-hour delivery lacks competitiveness. Compared with Meituan, which has more than 7 million riders and a mature operating model, it is not easy for Douyin to catch up with Meituan in the short term. It is better to take advantage of traffic and serve merchants and users well.

The business logic behind Kuaishou and Douyin’s attempts at home group purchasing is basically the same.

At present, the Kuaishou APP does not have a separate entrance for takeout. To order takeout on Kuaishou, you need to place an order from the live broadcast room or store first, then fill in the address and contact information in the mini program, and then wait for the merchant to deliver the food to your door. There are also relatively few categories of merchants. Taking Wuhan as an example, there are basically only barbecue and crayfish.

Image source: Kuaishou

In terms of fulfillment, Kuaishou has no delivery team of its own and has to rely on third-party delivery. The construction logic of the platform infrastructure is centered around content rather than transaction services. This is contrary to the instant satisfaction and strong experience of food delivery. Compared with Meituan Waimai and Ele.me, there is still a lot of room for improvement in terms of product variety and price discounts.

It can be seen that both Douyin and Kuaishou are quite cautious in their attitude towards the food delivery business. Especially in the niche "home delivery" field, if they directly compete with Meituan, they may not be able to get certain "sweetness" and will also expose their own shortcomings in advance.

The fundamental reason for choosing to enter the market at a "misaligned" position is that in the local life business, the direct advantage of Douyin and Kuaishou is the basic user base established by traffic in a short period of time, which radiates to the "in-store" scene. After all, the competition in the "home delivery" scene is not just about traffic, but also about the rich local life supply and huge fulfillment and delivery resources.

The two major platforms have even cooperated with Meituan and Ele.me to open up traffic scenarios and part of the profits to potential competitors, in order to expand local life supply as soon as possible and increase the number of users and transaction frequency.

After all, the home delivery business is still a business with a low return on investment for Douyin and Kuaishou. Its main function is to penetrate into local life through high-frequency and rigid-demand scenarios, obtain more monetization channels, hedge against the high dependence on advertising business, and leverage delivery services and commission income.

At present, it seems that Douyin and Kuaishou will find it difficult to break through Meituan’s barriers for the time being. Whether Meituan can take advantage of the victory to maintain its territory obviously depends on demonstrating its unique ecological niche on the user side.

2. It’s too early for Meituan to become a giant

The entry of Douyin and Kuaishou has created a large amount of demand on the front end with their huge traffic pool, changed the previous "group buying" logic of in-store settlement, and added the "takeout delivery to home" format, which is undoubtedly a "point-to-point" blow to Meituan's two core businesses.

Meituan, which was late to the party, adopted a top-down defensive posture. After all, in terms of fulfillment and delivery, Meituan not only has a large number of merchants and riders, but also has established a mature resource allocation system. Data from 2023 shows that Meituan's daily peak orders for takeout have exceeded 80 million, but the delivery time is still stable at 30 minutes, and even during the promotion period, it can still maintain more than 99% of fulfillment satisfaction.

Therefore, as long as Meituan continues to strengthen the user consumption mindset of "low price", it will always have bargaining chips in its hands.

By reducing commissions and increasing riders' incomes, Meituan has successively launched the "Super Popular", "Special Group Buying" and "Pin Hao Fan" sections, providing subsidies to merchants and users to stimulate demand, and breaking the original presentation method that mainly relies on text and pictures, and starting "live streaming" to make up for the shortcomings in content.

Image source: Meituan APP

Meituan’s “Pinhaofan” aggregates resources to reduce costs for all three parties, allowing users to place orders in a centralized manner, merchants to prepare meals efficiently, and riders to deliver meals in a centralized manner, thereby achieving a surge in sales through profit sharing.

Meituan’s financial report shows that in the first quarter, “Pinhaofan” received nearly 5 million orders per day, and it is predicted that “Pinhaofan” will account for 20% of the total takeout orders in the future.

In April this year, Meituan launched the "Brand Satellite Store" 10,000-store commission rebate plan, which helped large chain brands become "small but fine" through six-month commission rebates, 100 million yuan in traffic support, free AI site selection and product selection, and precision marketing services. According to official sources, the satellite store of the fast food brand "Lao Xiang Ji" in Shenzhen achieved 18,000 orders in the first month, with a repurchase rate of 15% and an order conversion rate of over 35%.

It is reported that as of the end of May 2024, 45 brands have taken the lead in implementing the satellite store model in the country, and have opened more than 560 satellite stores in total.

When satellite stores become a new tool for catering brands to increase their online business, Meituan naturally needs to provide them with more additional services in order to strengthen the bond between them and merchants. For example, it connects stores and short video functions, adds store links to videos, and forms a diversified live broadcast ecosystem including self-broadcast, brand live broadcast, and Da broadcast. By continuously strengthening the content power, it not only increases user appeal, but also allows merchants to see more consumption dividends.

However, since Meituan itself is not a content platform, the traffic pool is relatively closed, and it does not have the conditions and background to keep users to spend fragmented time. In addition, the fulfillment range of stores is within a few kilometers of itself, and the core demand is to increase the repurchase rate of consumers. The role and significance of live broadcasting in this is still under discussion.

"We are not like those big brands that need to do brand marketing and attract new customers. Our own store is purely looking for new exhibition and customer acquisition channels. Meituan does not have a clear and visible traffic mechanism and lacks accurate traffic investment tools. It is not cost-effective to focus live streaming efforts on Meituan." Mei Ziyu, a health club owner, looks at Meituan's content layout in this way.

The adjustment of Meituan’s internal organizational structure also shows the importance it attaches to the “local life” sector.

Since February this year, Meituan has carried out four structural adjustments within three months, integrating the originally independently developed store and home delivery business groups into the "core local business" segment. In addition to the younger staff, the adjusted structure is flatter than before, which is conducive to timely capturing changes in user and merchant demand. The coordinated development of various business formats can make its own strengths even longer.

Although Douyin and Kuaishou have not yet started a war on the "home delivery side", their influence in third-tier and below cities is growing day by day. The infrastructure built by Meituan is mainly concentrated in first- and second-tier cities, and it has begun to face challenges in capacity reserves and merchant operations. If Meituan can seize the opportunity of Douyin and Kuaishou to take a breather and adjust, and occupy a favorable market position, it may be able to further deepen the platform's moat.

Whether the competition among Douyin, Kuaishou and Meiyi for the right to speak in lower-tier cities will lead the local life battle in a new direction will become increasingly clear as the three parties engage in fierce confrontation.

Author: Fan Wen

Source: WeChat public account: "Xinou (ID: linyiersan0123-)"