Meituan Live is expanding aggressively, upgrading its strategy to meet the challenge of Douyin's lifestyle services

Meituan has recently promoted more merchants to participate in live streaming, trying to resist the rise of Douyin's local life services through the expansion of live streaming business. This article will explore the development strategy of Meituan's live streaming and how Meituan will respond to the challenges under the pressure of Douyin's rise.

Meituan is trying to get more merchants to participate in live streaming.

The power plant noticed that in the live broadcast area on the homepage of the Meituan App, in addition to official live broadcast IPs such as "Shen Gaoshou", "Bao Tuantuan" and "Bao Dapai", the proportion of merchants' live broadcast rooms has begun to increase - not only large national or regional chain merchants, but also relatively independent small and medium-sized merchants and single merchants, covering areas such as takeaway, in-store dining, and in-store comprehensive services.

For Meituan employees in charge of business development, this is one of the results of their daily work. The "New Year's Day Campaign" has just ended, and the "Spring Festival Campaign" is coming soon. They must fill the group order shelves during the Spring Festival as much as possible and pull merchants into the live broadcast room in order to stockpile sufficient "ammunition" for the platform.

After all, the rise of Douyin's local life business is a direct threat to Meituan's base. The "2023 Douyin Life Service Annual Data Report" shows that in the past year, the total transaction volume of Douyin's life service platform increased by 256%, and more than 4.5 million stores gained business here - in 2022, the number of stores cooperating with it will exceed 1 million.

Pressure comes from top to bottom. On February 2, 2024, Meituan CEO Wang Xing announced the organizational structure adjustment via email, which mentioned that the home delivery business group, store delivery business group, Meituan platform, basic research and development, etc. will be integrated and report to Meituan Senior Vice President Wang Puchong, who will thus manage Meituan’s core store and home delivery businesses and expand his authority.

Wang Xing said: "There are many challenges both internally and externally, but at the same time, this is also an opportunity for the company to grow further." When Douyin launched an attack on Meituan's shelf position through search, live broadcasts that emphasize low prices became one of Meituan's weapons to fight back. However, will it really work in this round of attack and defense?

1. Meituan Live continues to expand

"We have to sign new orders every day." A Meituan store BD (Business Development) told the power plant that this was one of his assigned tasks. The so-called "new orders" refer to getting merchants to open Meituan live broadcasts, increase the occupancy rate, and achieve full coverage of merchants in hand as much as possible. As for the price of group orders sold in the live broadcast room, "the lower the better."

Live streaming is a business that Meituan is accelerating in 2023. In July 2023, the first-level entrance to Meituan Live Streaming was launched. At that time, when users entered the live streaming aggregation page, they mostly saw Meituan’s official live streaming rooms, such as the "God of Hot Hands" live streaming room that focuses on takeaway scenarios and can be used online after placing an order, the "Explosive Group" live streaming room for in-store group purchases, covering catering, hotel travel and comprehensive categories, as well as Meituan's live streaming rooms in various category sections. One user remembered that he accidentally clicked into the "God of Hot Hands" live streaming room and bought more than a dozen package redemption coupons in a row, generally at about 50% off the marked price.

The first to enter Meituan's live broadcast room were national or regional chain merchants. For Meituan, these merchants are easy to promote in a centralized manner on the one hand, and convenient to set benchmarks on the other hand. They are the best choice whether to expand influence or expand scale. Single small and medium-sized merchants followed closely. Since September 2023, live broadcasting has occupied a considerable part of the aforementioned Meituan BD work - live broadcasting in Meituan's official live broadcast room in the city where they are located, driving merchants to live broadcast themselves, or helping merchants to broadcast on their behalf.

At first, the effect was a bit crude. A green cloth tent, a few acrylic boards, a few wireless microphones, and the ultra-low-price group orders that had been negotiated with the merchants were all the configuration of the live broadcast room except for manpower. It is inevitable that there will be omissions in the operation. On social platforms, some users shared their experience of winning red envelopes without threshold in the official Meituan live broadcast room but not receiving them. "The online customer service was confused and didn't know about this activity."

Even so, under the "massive promotion", Meituan Live's data has been rising steadily, and the transaction volume of many consecutive live broadcasts has exceeded 100 million yuan. According to 36Kr, in July 2023, Meituan Live's monthly GMV was about 500-600 million yuan, with a month-on-month growth rate of 20%, and it quickly rose to 1-1.2 billion yuan in August. In October, the monthly GMV exceeded 2 billion yuan - the power plant asked Meituan for confirmation, and the other party confirmed this information.

Meituan said in its third quarter financial report for 2023 that promotional activities such as "Hot-selling" have cultivated consumers' habit of watching live broadcasts and placing orders on Meituan, helping merchants accumulate customers and enhance their brand image; live broadcast activities for in-store business have attracted nearby users with clear consumption needs, and the official live broadcast coverage has expanded to more than 200 cities. The substantial increase in live broadcasts has contributed to a larger share of transaction amounts.

This is also the premise for Meituan Live to continue to expand. At present, Meituan Live is mainly divided into official live broadcast, merchant self-broadcast and expert live broadcast. According to Yibang Power, in late December last year, the "Bao Tuantuan" live broadcast room expanded to a large area and recruited trial broadcast service providers in 21 cities including Guangzhou, Shenzhen, and Jinan. Recently, Meituan's store live broadcast has launched a new incentive policy to accelerate the introduction of merchant self-broadcast: service providers submit store broadcast activities (and merchants have consumed a certain amount of Meituan promotion), and Meituan will give merchants 7 days of free brand shows to promote them.

Now, the threshold for opening Meituan Live is relatively low. A merchant told the power plant that after the live broadcast is approved, the Meituan BD it is connected to will schedule it, "You don't have to spend money. As long as you have operated on the e-commerce platform, you can do Meituan Live." The power plant checked the Meituan Live Learning Center and found that Meituan recommends that merchants put at least 3 group orders on the shelves in the live broadcast room, "which is more conducive to obtaining traffic, and it is also one of the assessment items for the subsequent business score." In fact, live broadcasting has been included in the additional score assessment of Meituan's store business score, that is, opening live broadcasting will help improve the merchant's score.

2. Counterattack on TikTok, the war escalates

On February 2, 2024, Meituan CEO Wang Xing announced the organizational structure adjustment via email, which mentioned that the home delivery business group, store delivery business group, Meituan platform, basic research and development, etc. will be integrated and report to Meituan Senior Vice President Wang Puchong, and Dianping, SaaS, cycling, power bank and other businesses will be in charge of Meituan Senior Vice President Zhang Chuan. So far, Meituan’s core store and home delivery businesses are all managed by Wang Puchong.

Prior to the adjustment, Zhang Chuan sent an internal letter to store employees at the beginning of the new year. He said that in the past, Meituan's store was a shelf system with the characteristics of "more and better", but it did not capture enough users looking for low prices. Through new businesses such as special group buying and live broadcasting, Meituan has found new users, "This is an opportunity for the store to take off again."

Some "users looking for low prices" have flowed to Douyin. The "2023 Douyin Life Service Annual Data Report" shows that in the past year, the total transaction volume of Douyin's life service platform has increased by 256%; more than 4.5 million stores have gained business here-in 2022, the number of stores cooperating with it is more than 1 million. At the same time, short video transaction volume increased by 83%; live broadcast transaction volume increased by 5.7 times, and the coverage rate of merchants' self-broadcasting reached 59%; transaction volume brought by search increased by 2.6 times. Haitong International predicted in a research report that Douyin's total local life transaction volume will reach 200 billion yuan in 2023, about one-third of Meituan, with most of them in-store.

Short videos and live broadcasts are Douyin's strengths, while search corresponds to the shelf system that Meituan is more familiar with. The aforementioned Meituan store BD revealed to the power plant that since mid-last year, the internal vigilance against Douyin has increased, and they have been asked to "play D" and "chase lose." The "D" here stands for Douyin, and "lose" refers to merchants in the region whose sales volume on Meituan is lower than that on Douyin. "The passing line is what is on Douyin, and our content and prices must be consistent."

In his opinion, this is a way of playing according to the opponent's rhythm rather than one's own route. They have to take on more workload for this - visiting merchants, holding meetings, writing documents, and reviewing. There will be a "battle" to fight every holiday in 2024.

But Meituan and Douyin are at different stages of development. The former pursues new additions, while the latter is a stable operating position for merchants. Take live streaming as an example. At least for now, Meituan's live streaming is still based on the shelf logic of competing on price, and high-quality group orders must be low-priced. Reflected in the financial report, in the third quarter of 2023, Meituan's sales expenditure was 16.905 billion yuan, a year-on-year increase of 55.3%. The transaction amount of store and hotel and travel business increased by more than 90% year-on-year. However, the operating profit margin of core local business fell by 2.6 percentage points from the same period last year, mainly due to the year-on-year decline in operating profit of store and hotel and travel business.

Even with platform subsidies, merchants still need to make concessions. Compared with large-scale chain merchants with product promotion needs, some small and medium-sized merchants are often unable to do so. In addition to the fact that their operating conditions are difficult to cover the discount costs of live group orders, they do not have the ability and conditions to broadcast themselves. "Moreover, live streaming is of limited help for store verification. Users often place orders from the live broadcast room after being guided by ground promotion materials in the store. The average length of time users stay on the live broadcast page is very low, which is equivalent to just a cash register payment system." The Meituan in-store BD added. Regarding the problem of short user stay time on the live broadcast page, Meituan told the power plant that it will further explore content in the future to make the content beautiful and fun.

The aforementioned merchant recalled that the "traffic data of Meituan Live" was flat for several times, without peaks and troughs. The main reason is that Meituan Live has not yet built a complete traffic mechanism and lacks traffic tools for precise delivery, which is also a course that it should make up in the future. Meituan's official recruitment website shows that multiple live-streaming-related positions are being recruited, involving live-streaming product traffic strategy planning, design and management, live-streaming traffic distribution strategy formulation, and live-streaming traffic operation data monitoring system construction.

As for how Meituan’s in-store and home delivery businesses will change after the adjustment, it has not yet been transmitted to merchants. However, what is known is that in 2024, Meituan will still have to fight Douyin in close combat. In this regard, the aforementioned merchants are relatively optimistic: "Platforms are competing for the market and releasing favorable policies to merchants. If the market can continue to grow, it will be good for us."

Reporter: He Chang, Editor: Gao Yulei

Source: WeChat public account "Power Plant"