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just saw the blog park on the public account at noon
Author / Su Qi Jin Yuefan Editor / Wei Jia
Source: Ran Finance (ID: rancaijing)
"Indicting Meituan instead of going to hungry, we can see the trend of Meituan." A person in charge of a restaurant chain sighed.
Since mid-February, Meituan Takeaway has successively received 5 "Negotiation Letters" from various provincial catering associations, and the main points of the complaint are to reduce commissions and cancel exclusive cooperation. An industry source told Ranran that the commission level and monopoly are the contradictions that were magnified after dinning in the epidemic, but the reason behind it is not that simple.
Normally, in order to keep profits, most catering chain brands will control the proportion of take-out within 30%. However, under the epidemic situation, take-out has changed from a supporting role to a master.
Zhao Qing, a food and beverage practitioner in Wuhan, told Ran Finance that in the case of restricted dining, the meaning of takeout for the catering industry is very different from before. In the past, takeout was for advertising, and it could be done at a discount, but now depends on takeout To make money, peers are desperate to take out food, and the small food delivery market has become "more monks and less congee."
After two months of controversy in related catering units in Chongqing, Sichuan, Hebei, Yunnan, Guangdong and other regions, they finally exchanged a Meituan response on April 13: each profit was less than two cents, and commission income 80% of the cost is for riders.
It seems to be the posture of "the world is bitter and beautiful". In the eyes of an investor in the catering industry, many associations do not have the status of equal dialogue with Meituan. The voice is naturally ignored. Meituan is a commercial act. Associations are difficult to change.
Is the Meituan takeaway commission rate high? Does Meituan take out make money? With the obvious oligarch effect, how to limit the platform's right to speak? It's time to dig into its truth and lies.
01
Is the Meituan takeaway commission high?
According to the latest response from Meituan, the commission for more than 80% of Meituan ’s takeaway merchants will be 10% -20% in 2019.
According to several catering merchants, the commission ratio is related to the size of the merchant, whether the exclusive agreement is signed, and the location . The commission rate of Meituan is 3-5 points higher than that of the hungry, both before and after the epidemic. In addition, several merchants said that the commission rate on Meituan's takeaways exceeded 25%. Most of these merchants are small and medium-sized merchants, and they rely heavily on takeaway platforms. Some brand merchants with store traffic can have a certain bargaining power, and the commission is mostly less than 18%.
In Wuhan's "severely hit area", Zhao Qing's hot pot restaurant only has a profit of 5% -6% based on the local commission reduction policy for the takeaway platform in February and March. Starting from April 6, the commissions of Meituan and Hungry Meal have returned to their original levels. In Zhao Qing ’s store, the exclusive commission rate of the contracted Meituan is 18%, and the non-exclusive rate is 22% -26%. In this way, he only pays nothing.
Mr. Cai, the owner of the Shark Pie, a light food store in Guangzhou, told Ran Finance that the original commission rate of the store on Meituan was 21%, and the hungry is 18%. Since the end of last year, the commissions on both platforms have risen. So far, Meituan has risen by 5% and Hungry has risen by 3%, that is to say, to 26% and 21% respectively.
Ding Sheng, the owner of another fast-food restaurant in Guangzhou who has taken over Meituan, said that at the end of last year, the commission increased by 5%. According to him, according to different regions, Meituan ’s commissions are divided into running commissions and dish commissions, and can also be divided into receivable commissions and paid commissions. The methods of commissions are similar, and are multiplied by a fixed fee. rate.
Figure / Visual China
The western-style fast food restaurant "Paniniglia" in Yuhang District, Hangzhou, has launched Meituan and Hungry at the same time. The commission rate is the same 19%. At the same time, both platforms also provide a guaranteed minimum commission of 4.5 yuan per order. According to the owner Weiwei, for example, an order of 19 yuan, 19 yuan multiplied by 19% is 3.61 yuan, but this single charge is 4.5 yuan, and more than 4.5 yuan is settled at 19% of the total amount.
A Beijing-based catering chain brand is stationed in Meituan and hungry at the same time, both have a 16% commission rate. Among them, the actual commission for Meituan's takeaway is calculated based on the actual paid amount after discount, with a guaranteed minimum commission of 5 yuan.
Overall, Meituan ’s commission rate is increasing year by year.
From the initial zero commission, subsidies are given to merchants and customers, to 5%, 8%, rose to 16% around 2018, and up to 20% in some regions. The commercial monetization rate of Meituan's takeaway has increased from 12% in 2017 to 14% in 2019. This means that for every 100 yuan order, Meituan will take out 14 yuan.
Not only that, for merchants, in addition to the commission rate, if you want to get more traffic on Meituan takeaway, you also need to pay for other charged items. One catering person said that after calculating, the comprehensive operating cost on the takeaway platform exceeded 30%.
Due to the brand advantages of the aforementioned restaurant chain brands, the commission rate for takeaways from Meituan has not increased in the past year. However, from the end of last year, the local Meituan marketing manager began to recommend the "expand business circle" policy. The scope of distribution expanded, but additional charges were required, which meant that the distribution cost of single orders for merchants increased. The person in charge Liu Zheng recalled that the platform had narrowed the scope of distribution before bad weather occurred. He had applied to the platform to expand the business circle. The distribution fee did not rise, but now it needs to increase the payment.
In addition to the distribution service, Meituan firmly controls the flow entrance of the merchant's takeaway end, and is responsible for screening information and displaying information to C-end users. Advertising positions and rankings are another paid service provided by Meituan. Ding Sheng found that after buying the ranking, the order for a single day can sometimes double, and once the advertising budget drops, the order volume immediately shrinks.
In the final analysis, this is a voluntary service, but during the epidemic, in the context of limited dine-in and takeaways as the main source of merchants, traffic became a just-needed service. In Zhao Qing's words, all food companies are now desperate to take out food, and the already small food delivery market has become "more monks and less porridge." In other words, the flow of takeaway platforms is more valuable.
Zhou Zheng, a franchisee of James Cheese Spare Ribs in Wuhan, told Ran Finance that since the delivery platform was launched on April 7, the odds on the first day were zero. He had expected such a result long ago, "The commission rate of Meituan has always been rising, and it is really impossible to spend extra money to participate in the" bidding ranking "." He said.
A well-known restaurant chain in the country is a KA (key) customer of Meituan takeout. It did not participate in paid marketing activities before the epidemic, and now it has "compromised". Yuan Fang, the person in charge of takeout, revealed that in the most tragic February, the turnover dropped by 95%, almost to zero, but desperately began to invest in traffic to participate in the business activities of Meituan takeout.
Meituan has established a uniform commission rate for the brand's national chain stores, enjoying a relatively low commission rate for KA customers. As far as Yuan Fang understands, the head merchants' general commission is around 15%, and the average merchants are around 21%.
During the epidemic, the brand also enjoys rebate discounts. There are rebates for commissions, and there are rebates for marketing expenses, but they are all returned in the form of marketing expenses , that is, they can only be “consumed” on the Meituan takeaway platform.
"Now the vast majority of the gross profit of the entire catering industry is between 50 and 60 percent, Meituan ’s highest draw point is 26%, and the lowest is about 18%. With the promotion costs, the comprehensive operating cost of the takeaway platform is More than 30%. "Li Hong, an entrepreneur of Beijing-Tianjin-Hebei chain restaurant brand, said that in the case of 50-60% gross profit, 30% was cut off as a platform commission, leaving only 20% -30% of the profit. This profit is then used to flatten the rent and artificial water and electricity, and many businesses hardly make money or even lose money.
02
Does Meituan takeaway make money or not?
A number of catering merchants told Ran Finance that before and after the epidemic, Meituan ’s commission rates rose and fell, which was equivalent to no change; the platform argued: “In the fourth quarter of 2019, Meituan ’s takeaway average profit was less than 2 cents per order Accounted for 2% of revenue "; on the user side, the voices of takeaway price increase and decrease are everywhere ... The three parties are not satisfied, so does Meituan takeout make money?
Looking back on the whole of 2019, it was the highlight of Meituan.
As of December 31, 2019, the number of trading users on the Meituan platform reached 450 million, an increase of 12.5% year-on-year; the number of active merchants reached 6.2 million, an increase of 7.1% year-on-year; the average annual number of transactions per user rose to 27.4. A year-on-year increase of 15.4%. Throughout 2019, the number of take-out orders placed through Meituan amounted to 8.722 billion, an increase of 36.4% year-on-year.
As a result of the surge in orders, takeaways contributed more than half of GMV and revenue in 2019. In 2019, Meituan ’s total revenue was 97.5 billion yuan, catering and food delivery contributed 54.8 billion yuan (56% of total revenue), visits to restaurants and restaurants contributed 22.3 billion yuan (23% of total revenue), online car rental and other new Business contributed 20.4 billion yuan (21% of total revenue). From the perspective of the composition of GMV, the proportion of food delivery, restaurant and wine travel, and new business in 2019 will be 58%, 33%, and 10%, respectively.
However, the takeaway business has suffered a long-term loss. Since 2013, Meituan Takeaway has been losing money for five consecutive years. It was not until Q2 2019 that Meituan Takeaway turned into a profit for the first time.
At the same time, its commission income has increased significantly. In 2019, Meituan commission income was as high as 65.5 billion yuan, an increase of 39.4% from 2018's 47 billion yuan.
Meituan commission income substantial growth chart / financial report
Among them, the 3.99 million riders active on the Meituan takeaway platform are its biggest cost item. From the financial report, it can be seen that the cost of Meituan as a takeaway rider in 2019 reached 41 billion yuan, which was the top of all expenses. According to statistics, from 2015 to the present, Meituan has paid a total of 95.3 billion yuan for riders, which is almost equal to Meituan's income in 2019. During the epidemic, Meituan's takeaway delivery platform recruited 75,000 new riders.
This may also explain why Meituan has been raising its commission rate for higher income. From the initial 8%, to the listing in Hong Kong in 2018, many merchants have increased their rates from 15% to 20%. Around the end of 2019, the rates have risen again, and merchants are overwhelmed.
Li Hong calculated an account for Ranjing Finance. The Meituan platform has a commission of 23 points, with an average commission of 5-6 yuan per order. The platform charges a customer ’s delivery fee of 3 yuan, which is equivalent to each order. The income is 8 yuan, the rider's salary is 4 yuan per order, the platform can only leave half of it, and it must also be used to share various expenses such as server, research and development, and marketing. After deducting the remaining money, it is the profit that Meituan can get.
For the platform, they need to feed their marketing staff, agents, and the company ’s overall operations. "If each order really only has a dime profit, you can see from the inside how to optimize resources, reduce costs and increase efficiency. Just blindly raising the merchant's commission is undoubtedly killing chickens and getting eggs. "Li Hong said.
Gross profit margin of each business module of Meituan
Overall, takeaway is the basic business of Meituan, but the cost of riders is too high, and the profit model of blindly increasing commissions is not healthy.
At the same time, the gross profit margin of Meituan has basically been below 20% in the past, and the gross profit margin of stores and wine travel is as high as 88%, but its contribution to revenue is only 20%; although the new business has grown rapidly, the gross profit margin is more than takeaway Low, and most are still at a loss.
With the outbreak of the new crown epidemic, Meituan ’s main food and beverage delivery and restaurant and wine business were the first to be hit by the epidemic. Meituan pointed out in its 2019 financial report that revenue will grow negatively in the first quarter of 2020, and operating losses will occur again.
03
Is Meituan suspected of monopolizing the market?
Meituan's takeaway and catering merchants' "complaints", in addition to the commission, also lies in the platform's "choose one" operation.
Li Hong told Rancai that he was hungry and did not have this requirement for him, but Meituan would ask him to choose one of the two, and many stores have experienced similar situations, which is very common.
The strength behind Meituan is its market share. "As long as the merchant wants to take out, there is actually no choice. If you abandon Meituan takeaway, the takeaway business is almost impossible to do." Li Hong said.
According to the "Q3 China Takeaway Industry Development Analysis Report 2019" released by Trustdata, in the third quarter of 2019, Meituan's takeaway transaction volume accounted for 65.8%, far exceeding the opponent's hunger.
The aforementioned investors in the catering industry revealed that the market share of Hungry Me in Shanghai is higher than that of Meituan. In other regions, the share of Meituan is higher than that of Hungry. Li Hong also said that in addition to market share, Meituan ’s delivery capabilities are better than Me Hungry, and accordingly, Hung Me ’s commission is also lower.
What worries merchants more is, what should they do if they increase the commission after taking out the exclusive?
"Through calculations, the reasonable commission space for our brand should be between 15% and 20%. In this range, the store can achieve profitability or reach the level of expected profit. If it exceeds 20%, the store will be uncomfortable." Li Hong said. But in front of a strong platform, merchants do not have much say, as the continuous increase in platform commissions in recent years is proof.
Figure / Visual China
Sun Linjia, a US food delivery platform practitioner, told Ran Finance that if businesses want to enjoy the preferential policies provided by Meituan, it is understandable to sign some exclusive regulations. This is not a problem for Meituan and applies to all platforms and industries.
But he emphasized that the contract must be signed voluntarily by both parties, rather than using coercion. Both parties need to abide by the spirit of the contract: the platform can manage and supervise the merchants, because they provide added value, but the management methods should not be too extreme; the merchants should also abide by the agreement, and choose the exclusive and observe the rules.
The takeaway platform in the United States will also supervise the merchants, who can choose freely. Many merchants will use exclusive services because of too many platforms and troublesome management; some merchants want more orders and use multi-platform services.
The Guangdong Catering Association's negotiation letter to the Meituan mentioned two points about "monopoly": Meituan takeaway has a market share of up to 60-90% in Guangdong's catering takeout, which has reached the market dominance position stipulated by the Anti-Monopoly Law; In fact, Meituan is suspected of de facto monopoly pricing, setting various types of charges in an endless stream, continuously increasing the cost of businesses.
In this regard, Li Sheng, the director of Beijing Zhipu Law Firm, said that whether Meituan is suspected of monopolization requires a comprehensive judgment based on whether it has abused its dominant market position. But what is clear is that the "exclusive management" of the e-commerce platform is an act that excludes restrictive competition and an unreasonable restriction on the operators on the platform.
Some actions of Meituan are suspected of violating the relevant provisions of the Anti-Unfair Competition Law, the Anti-Monopoly Law, and the E-Commerce Law prohibiting the elimination of competition, as well as the Announcement on the Anti-monopoly Law Enforcement of Controlling and Resuming Production and Resuming Production "requirements.
He said that Meituan ’s market share of food delivery continued to grow during the epidemic. If Meituan ’s market share increases and commissions continue to increase, it will inevitably affect the input and output of operators within the platform, and the quality of service will not be guaranteed, which will ultimately affect the platform. Its own attractiveness is not a benign trend.
04
How to balance the voice of the takeaway giant?
The participants on the takeaway platform are mainly merchants, riders and users. In order to expand the market in the early days, the takeaway platform subsidized all three parties at the same time. After the market pattern was basically formed, the takeaway platform continued to increase commissions, and under the epidemic, the conflicts with the merchants were further intensified. In the long run, what kind of relationship is more conducive to the common development of the platform and merchants? The situation abroad may serve as a reference.
Unlike the domestic Meituan alone, the US food delivery has not yet reached the oligopoly market pattern.
In contrast, the United States charges relatively transparent, basically does not subsidize users, there are few merchant service fees, there is basically no platform entry fees, terminal equipment adopts a deposit model. Sun Linjia told Ran Finance that the American takeaway players mainly compete in model optimization, market cultivation, market share, and service efficiency. Different platforms will also adopt exclusive cooperation models, but the proportion is very small, and the US population structure is different from that in the country. It is difficult for any platform to achieve complete exclusivity, basically partial exclusivity.
Celtic Asia Ventures partner Chen Jie this same view, he believes there would have been listed abroad takeaway platform, Europe's Just Eat, United States Grubhub, are listed on the PC Internet era takeaway giants, these companies Until now, it is still competing with mobile Internet delivery platforms such as DoorDash, Postmates, and Uber Eats . The battle is not over yet, so it is impossible for the United States to have a single delivery platform.
Figure / Visual China
Not only that, it is illegal in the United States to threaten merchants to choose one of two alternatives, and it is easy to be accused. To sign an exclusive agreement, the platform must give the restaurant certain benefits, such as subsidies and reduced rates, but it requires extremely high operating costs.
The most significant difference between foreign countries and domestic countries is that foreign restaurants have a very strong voice . Chen Jie gave an example. Large chain restaurants such as In-N-Out Hamburg have their own delivery service, and insist on not taking out food and not taking out food. The platform cooperated, and also sued Doordash for providing their services without authorization.
DoorDash, the largest food delivery platform in the United States, has a valuation of only US $ 13 billion. The valuation of Yum China, a catering company that owns KFC and Pizza Hut, has already reached US $ 17.2 billion. Sometimes, several food delivery companies are courting a restaurant and working exclusively with it.
Returning to China, "Meituan can provide loans (free or low-interest) to catering companies in conjunction with financial institutions such as banks, and then repay in installments from monthly transactions; if the difficulties are caused by the epidemic, Meituan can now help merchants Reduce by 5%. After the epidemic has passed, make up for it from future transactions. "Sun Linjia suggested.
In fact, the Meituan platform provided some assistance to the big restaurant. Wu Wei, the person in charge of Rong Liji, told Ran Finance that the company received a low-interest loan from ICBC with the help of Meituan. However, some small and medium-sized businessmen reflect that the real helpers are large businessmen. For more than 90% of the small- and medium-sized businessmen, it is just hope that Meimei will quench their thirst.
When the bonus period for large-scale subsidies ceases to exist, accepting the appropriate profit margins and optimizing the cost structure will require businesses and platforms to work together.