Membership is another step for Meituan to move towards systematic low prices

Meituan is about to launch a "super membership" that connects takeout and in-store services, as an upgraded version of the current "super membership" for Meituan takeout. The author analyzes that this is another move by Meituan to sort out and gather its core advantages and use them to cope with the still fierce local life.

Membership economy is one of the few remaining trump cards after comprehensive platforms have gradually been blurred in consumers' minds by new model platforms or vertical platforms.

This is the 12th issue of "Narrowcast Weekly". The business trend we focus on this issue is: Meituan becomes a member.

Meituan’s local core business is once again focusing on “focus” and will launch cross-business membership products.

According to 36Kr Future Consumption, Meituan is about to launch a membership that connects food delivery and in-store dining. As an upgraded version of the current Meituan food delivery "membership", it is currently recruiting in-store merchants, and it is said that the enthusiasm of the leading merchants is quite high. The project is led by Wang Puchong and is defined as an S-level project in Meituan. It hopes to benchmark Alibaba's 88VIP and become an integrated membership product covering multiple business lines inside and outside the site.

We mentioned last month that Meituan needs more systematic low-price capabilities.

Low price is the core competitiveness of local life. Meituan is no stranger to how to offer low prices through subsidies and group buying. Last year, it also began to try live streaming to offer low prices. This year, it is said to be exploring Pinduoduo-style low prices for the entire site, giving more traffic to merchants with the lowest prices on the entire network on the "Low Price Group Buying" page, and continuing to promote Meituan Circle through service providers.

But as we have analyzed before, these low prices are mostly independent, point-based, and local. In particular, the subsidies that take effect the fastest are phased and not sustainable.

To cope with the current local life market, Meituan needs to combine its core capabilities and provide a more systematic low-price solution. The new membership product may be a new step for Meituan to move towards systematic low prices.

Membership is a way to screen highly sticky users and stimulate users to repurchase. If the mechanism is clever, it can simultaneously meet the dual needs of core users in terms of low prices and services. Comprehensive membership across businesses provides users with more consumption scenarios and supply options, which is likely to generate joint consumption and increase the overall consumption scale.

Especially in a competitive environment where channels are fragmented, low prices and differentiation are emphasized, cross-business membership products are almost a unique capability of large comprehensive platforms.

Meituan is the most comprehensive platform in the local life market. It has multiple business forms such as food delivery, in-store delivery, SaaS, cycling, power banks, retail, etc. The core local business, which is the core of the group's business, has the potential to leverage other businesses to cooperate with the launch of membership products.

Therefore, launching cross-business membership products at this point is essentially another move by Meituan to sort out and concentrate its core advantages and use them to cope with the still fierce local life .

The local life market in 2024 has undergone many changes, and the competition between platforms is no longer limited to following suit, but has reached a more rational, more sophisticated, and even differentiated stage.

The core goal of Douyin's life service is to improve commercial efficiency. To this end, it has made major adjustments to its organizational structure, which has led to changes in the entire merchant ecosystem and service provider ecosystem.

First, we will continue to care about the acquisition of top merchants. However, even so, some service providers feel that the threshold for top merchants to get resource subsidies on Douyin Life Services is higher than last year, and the subsidies are basically based on the platform's sufficient traffic resources, including free broadcasts by celebrities and talents, and short drama implantation.

Secondly, higher requirements are placed on the comprehensive capabilities of service providers. The so-called comprehensive capabilities include short videos, live broadcasts, long-term operations, and even local relationships and cross-industry cooperation capabilities.

Driven by the asset-light model or open ecosystem, many of Douyin's life services are promoted by service providers. For activities such as creating festivals in cooperation with a certain place, the platform will not do it itself, but will hand it over to service providers. Douyin service providers often encounter people from other platforms when making proposals on such occasions.

At the same time, their requirements for service providers are becoming higher and higher.

Some service providers feel that the platform is "intentionally clearing out some small service providers with single capabilities." The service provider estimates that the total number of service providers for Douyin Life Services is about half of that at the beginning of last year, with only more than 5,000, and "maybe only 3,000 will be left by the end of the year."

It is said that some service providers and agents who previously had experience in e-commerce and commercialization are increasingly entering Douyin Life Service. This also shows that Douyin Life Service has reached the stage of competing in traffic efficiency. The service provider can also clearly feel that its "traffic cost is increasing" in Douyin Life Service.

Another specific manifestation is that in the expansion of the sinking market, Douyin Life Service will screen out the service providers that best meet the needs through a horse racing mechanism, expand its local share during the horse racing process, and share the local market voice with the winning service provider after the horse racing.

In addition to Douyin, Xiaohongshu and Video Account Local Life are also advancing in their own way. Although their progress is slightly slower than expected, the overall transaction share is still not high.

A few days ago, Xiaohongshu @土拔薯 released information about service providers seeking investment in cities such as Hangzhou, Nanjing, Changsha, and Wuhan. The forms of cooperation are vertical IP activities, market activities, shopping mall activities, leisure and entertainment activities, etc., which Xiaohongshu is more proficient in. Prior to this, Xiaohongshu Local Life had already launched group purchase cards for Shanghai Jing'an Joy City and held activities such as bread markets.

Video accounts allow local life businesses to settle in video account stores, which is equivalent to giving businesses public domain traffic and private domain traffic.

In other words, Meituan is facing a complex market with various possibilities. Its competition comes from current and potential sources, from traffic (and the strongest one in recommended traffic and social traffic), and content. Meituan can only participate in this comprehensive competition if it extracts its core advantages from its core capabilities.

Meituan's core advantage is the combination of merchant advantages, user advantages, consumer data advantages and comprehensive business formats. Cross-business membership is a product that can reflect these advantages at the same time. This is the logical basis for our understanding of Meituan's membership business.

Only when enough merchants from comprehensive industries participate in membership activities will membership benefits become attractive, and only when enough users and enough user consumption habits are accumulated can membership products that are mutually beneficial to consumers be launched. Super Members is another card played by Meituan's core local business under the "focus" strategy.

Of course, a full-site membership that can compete with 88VIP and span multiple business scenarios requires a comprehensive connection of organization, data, and products to be realized. Meituan’s God Membership also requires this as a prerequisite to be able to exert its strength.

88VIP has gradually become a trump card for Alibaba to cope with the current e-commerce competition and regain consumers' minds.

This year, Alibaba e-commerce mentioned 88VIP on many occasions and upgraded the rights of 88VIP several times, including unlimited returns with free shipping, and an increase in the pool of partner brands from 4,000 to 10,000. In the era of stock consumption, the long-term value of the membership economy, including members with high purchasing power, high stickiness, and high activity, has increasingly become the core user assets of the platform, and even the basic base. Therefore, retail channels such as Costco, Amazon, and Japan's Tsutaya all have their own very mature membership systems, which is why Alibaba will "do it even if it loses money."

In other words, membership economy is the last trump card left after comprehensive platforms are gradually blurred by new model platforms or vertical platforms. From this perspective, the path that Alibaba has taken can be the experience of Meituan.

This is why God Members are also worthy of attention for Meituan.

Author: Pang Mengyuan

WeChat public account: Narrowcast (ID: exact-interaction)