On August 24, Meituan released its 2023 interim results and second quarter report. The financial report shows that its revenue in the second quarter was 68 billion yuan, a year-on-year increase of 33.4%; its net profit was 4.713 billion yuan, a year-on-year turnaround. the highest level in history. Among them, the core local business of Meituan, which is closely related to the trend of the consumer market, had revenue of 51.2 billion yuan, a year-on-year increase of 39.2%.
In the post-financial conference call, Meituan CEO Wang Xing described Meituan’s vision as follows: “(Meituan’s) ultimate goal is to become a smart assistant in consumers’ daily life and provide them with more solutions. , can provide merchants with diversified support to optimize their operations."
Judging from the performance of this quarter, whether it is instant retail or service retail, whether it is the increase in live broadcast or the launch of various seasonal operation activities, Meituan is moving towards this goal.
Instant retail continues to grow rapidly
In the second quarter of 2023, Meituan’s instant delivery orders increased by 31.6% year-on-year to 5.4 billion orders, and the peak daily order volume of flash sales once again exceeded 11 million orders. Instant retail, everything at home, has been firmly bound to the minds of consumers.
This is also related to the improvement of consumers' online consumption willingness and ability. The "2023 China Mobile Internet Semi-annual Report" released by Quest Mobile pointed out that from the perspective of consumer groups, the new power source of the mobile Internet is already the consumption of high-value groups. %, and groups with high consumption willingness accounted for more than 38.4%.
And it is reflected in the Meituan platform, which is the significant growth of user data. In June, the monthly activity scale of new middle-class users in local life and food delivery services increased by 13.7% and 29.4% year-on-year respectively, while the per capita usage time of Meituan’s food delivery app also increased by 15.7% year-on-year to 96.7 minutes – ranking in the monthly activity growth ranking Among the top ten Internet applications, Meituan grew the fastest that month.
It can be seen that when consumption enters the peak season, the peak season of Meituan will also come. High-frequency consumption such as food delivery has always had a strong user mentality. In this quarter, Meituan released its own operating capabilities to provide discounts and gameplay to help consumers quickly find consumption goals and help merchants quickly connect with consumers. Consumption links are more valuable.
For example, the upgraded version of the "Shen Coupon Festival" officially launched in April, through discounts + live broadcast + takeaway + multiple stimuli to the store on the 18th of each month, quickly helped consumers establish consumption awareness and played the mental advantage of live takeaway. The takeaway orders of the top KA merchants participating in the event increased by 50% year-on-year. The mental position of "order takeaway, go to Meituan".
In addition, more and more high-quality supplies on the Meituan platform allow consumers to get more choices, further increase the frequency of using Meituan, and the value of opening Meituan every time.
Regarding the supply, it was mentioned in the Meituan financial report conference call that the number of Meituan merchants supply is still increasing, and the annual active merchants of Meituan Flash Shopping have increased by more than 30% year-on-year. From the perspective of commodities, seasonal products such as ice cream and summer products, emergency products such as 7*24-hour smart pharmacies, and high-potential products such as home appliances, mother and baby, etc., have found more incremental opportunities on Meituan. It also enhanced the localization supply capacity of Meituan.
Obviously, users, Meituan, and merchants are actually connected into an organic consumer body, forming a positive cycle flywheel. The resilience of Meituan's instant retail business has been greatly improved in this process.
Service retail embodies core competitiveness
In addition to real-time retail with physical objects as the core, Meituan's service retail is ushering in important opportunities. The National Bureau of Statistics released service retail data for the first time in July this year. From January to July, the national service retail sales increased by 20.3% year-on-year, faster than the growth rate of commodity retail sales. This indicator will be released on a monthly basis from August, reflecting that service consumption has played a pivotal role in the composition of national consumption.
With the arrival of the summer peak season, Meituan’s in-store, hotel and travel services have begun to work hard. In the second quarter, the transaction volume of Meituan’s in-store, hotel and travel business increased by more than 120% compared with the same period last year, and the number of active merchants and transaction users reached new highs.
Chen Shaohui, CFO of Meituan, summed up "food, accommodation, travel, shopping and entertainment" as the core of services in the local life field in the financial report conference call, and this is precisely the intersection of users and businesses. For service consumption, the process is the most important. Meituan is where it builds bridges and finds opportunities.
In fact, the commercialization of services is precisely the foundation of Meituan, and it can be called the most "Meituan" part of its business. On March 4, 2010, in a three-bedroom apartment in Huaqing Jiayuan, Meituan.com launched its first group-buying product—Vinya Wine Tasting Package. It can be said that at the beginning of its establishment, what Meituan provided was not the sale of physical goods, but services. In addition to catering group purchases, Meituan's other services have a strong momentum of development. In 2012, group purchases of movie tickets and hotel purchases were launched.
It was also during this process that Meituan established its core competitiveness in service retail.
In rich consumption scenarios, in order to make service retail traceable from booking to consumption, it is necessary to standardize first. That is, suppliers know what they are "selling", and consumers know what they are "buying", and define service content, price setting, information display, transaction methods, service evaluation, etc. as modules to improve transaction consistency. For example, on the Meituan platform, new consumer services such as handcraft workshops, cat cafes, and game halls continue to emerge. For the staffing, hardware configuration, service items, charging standards, etc., only by pre-regulating the rules can avoid transactions. friction.
Secondly, in order to achieve this standardization, it is particularly important to record consumption links and feedback, and digital tools have become the starting point.
Meituan's digital influence is concentrated in two parts. On the one hand, it digitally captures demand-side keywords and traffic trends, and promotes the release of transaction demand. On the other hand, digitization is used as a business tool to gain insight into the market for the service industry and improve the efficiency of business decision-making, marketing customer acquisition, and commodity production.
Dianping must eat list is a case. As an important reference for consumers to decide what to eat every day, it is not only a way for merchants to obtain offline customer flow, but also a fulcrum for opening online takeaway operations. It has become an important window to meet consumer demand. According to data released by Meituan, a total of 2,062 merchants will be on the Dianping must-eat list in 2023, and the online traffic of the merchants on the list will increase by nearly 50% year-on-year.
Through the launch of "Must Eat Festival" and other operational activities, Meituan accurately diverted consumer demand to offline stores. Last week, the first offline "Must Eat Market Market" event in the country made Shanghai Xujiahui business district open on the night Orders for dine-in consumption increased by nearly 50% year-on-year in the same period last month, and orders for leisure and entertainment increased by nearly 40%. At the same time, many merchants use the data and information feedback from Meituan, such as must-eat list, to carry out daily management and dish improvement.
In fact, with the support of products such as Meituan Merchant Connect and cash register tools, service retailers can clearly obtain business feedback and daily operating data. Merchants can also make full use of the policies of the Meituan platform to improve the accuracy of online operations and reduce the burden of attracting customers offline. At present, industries such as automobiles and pets still have great potential for digitalization, and there are still many opportunities for Meituan and merchants to be discovered.
Finally, in the process of merchant service to user consumption, the fulfillment link of verification and fulfillment reflects the long-term advantages of Meituan.
At present, competitors who cut into local life often use consumers to shop for group buying as the entrance. However, the biggest difference between service consumption and physical consumption is that consumer perception is based on subjective experience. From purchase verification, to merchant service specifications, to rights and interests protection, consumers' perceptions of services are closely linked. Lack of digitization and standardization of the service industry in the early stage, direct access to service consumption through traffic operation means, it is difficult to ensure transaction consistency, and the probability of friction is higher.
In contrast, Meituan started with group buying and drives its business with service rather than traffic, which will truly build a good impression of consumers on the platform and merchants, which is more conducive to repurchase and long-term development. Service retailing and instant retailing have thus produced different values, and have become the two major weapons for Meituan to firmly occupy the home court advantage of local life, and continue to expand its business boundaries.
Live broadcast promotes two-way travel between Meituan and merchants
When Meituan's instant retail and service retail have achieved further results, an intersection has emerged - live broadcast.
After the first half of the year, Meituan’s live broadcasting has achieved success in the first half of the year, and has stepped up its efforts in the second half of the year: in early July, Meituan updated and launched the first-level live broadcasting entrance on the APP homepage of 50% of users; The amount exceeded 100 million, and the transaction volume of Meituan's leisure and entertainment live broadcast room also successfully exceeded 100 million. The write-off rate of the latter exceeded 20% on the same day, which greatly mobilized the willingness to consume.
The live broadcast development of Meituan can be called a highlight at the beginning. This is because the essence of live broadcasting serving consumption and business has been grasped.
Wang Puzhong, senior vice president of Meituan and president of Daojia business group, mentioned in March this year that this year, merchants will be provided with a "popular product market" with more product expressiveness, large flow, and timely demand and stocking demand. . Live broadcasting is such a field. Meituan does not simply use it as a traffic channel, but uses live broadcasting to enhance transaction value.
On the one hand, local life needs to revolve around the consumption link, while Meituan live broadcast is driven by the dual core of consumer demand and business supply, which plays a role in quickly matching demand and stimulating consumption willingness. From intuitive explanations to rights analysis, even if consumers do not write off immediately, they will have the motivation to stock up on discounts, which is equivalent to pre-empting consumer behavior and locking in the market for merchants.
On the other hand, Meituan itself has rich marketing resources, has different types of subsidies and promotional activities, and is highly coordinated with the daily operations of merchants. In the live broadcast, merchants can also freely distribute profits to attract more consumers.
In general, Meituan is not just a traffic platform, but has a deeper and more mature insight into the consumer market, merchants and consumers. Meituan can not only provide more valuable operation solutions, but also has a long-term strong contract performance advantage. The value of live broadcast is not limited to one marketing, but can be naturally integrated into the original business strategy of the merchant.
Through the success of the live broadcast, merchants also realized that rooted in Meituan, the long-term value of the people and goods market is guaranteed, and the tacit understanding between Meituan and merchants is actually deepening. Later data from Latepost and other media shows that TikTok is currently significantly lower than Meituan in both the write-off rate and the number of merchants.
epilogue
Today's local living consumption is undergoing changes in many aspects, but after a comprehensive review, we still see some unchanging core values in Meituan. For example, at the user level, Meituan is still an essential core platform for consumption. With the promotion of various operating methods, Meituan can still provide cost-effective and rich consumption content.
In the conference call, the management of Meituan mentioned an interesting statistic. On August 8th, the beginning of autumn, Meituan’s takeaway orders reached a record 78 million orders, and 21 million orders of milk tea alone were delivered. Therefore, unlike various time-killing needs, users always have stronger goals every time they open Meituan, such as looking for "the first cup of milk tea in autumn".
Users always hope to experience the joy of consumption through Meituan. As long as it revolves around this point and the imagination of local life is strong, the long-term competitiveness of Meituan will be strong.
Source: Hong Kong Stock Research Institute