The more merchants there are on the platform, the more choices consumers will have, and more consumers will be attracted to consume. At the same time, the more merchants on the platform, the more orders there will be on the platform, and the faster the order delivery response of the corresponding riders will be, which will attract more merchants to settle in. In this cycle, the "growth flywheel" effect among platforms, merchants, consumers and riders will eventually become more and more obvious.
This is the underlying business logic of takeout, and it is also the fundamental for the development of instant retail.
01. Ele.me’s “slow motion”
In April, after Xue Yan, deputy director of Ele.me’s New Service Research Center, said that it is expected that by 2026, the domestic instant delivery order volume will reach hundreds of billions, approaching the total number of orders in the express delivery industry, Ele.me has another As a new move, Ele.me recently announced that more than 500 Apple authorized stores in more than 80 cities across the country have settled in Ele.me. This is not the first time Ele.me has roped in a big brand to build momentum. There have been cooperations like Starbucks before, but overall it gives the outside world a feeling that it has no shortage of business. Businesses like it or not, and consumers like it or not.
In fact, before Ele.me, Meituan Waimai also adopted the method of cooperating with Apple authorized stores to increase its layout in instant retail. In September 2022, Meituan announced that based on the previous two years of cooperation, the cooperative stores would be expanded to more than 200 cities across the country, with a total of more than 1,000 stores.
In terms of the scale of cooperation with Apple authorized stores, there is more than a little gap between Ele.me and Meituan. Is there any shortage of merchants on Ele.me? Or are you not very interested in real-time retail? Why is it that compared to the high-profile and aggressive attitudes of Meituan and JD.com, Ele.me always chooses to take a slower approach? There is an appearance of holding back a big move.
As the only two remaining giants in the industry today, Ele.me and Meituan were founded in 2009 and 2013 respectively. Since their development, the two platforms have occupied more than half of my country's food delivery market. Data shows that as of 2018, Ele.me covers 676 cities and thousands of counties in my country, has 660,000 riders, and has connected and served 3.5 million active merchants. On the other hand, Meituan has more than 2.7 million riders, more than 300,000 active merchants connected to its restaurant management system, its food delivery business covers 2,800 counties, districts and cities, and its platform serves more than 5.8 million active merchants.
It can also be noted that in 2022, Meituan’s food delivery market share will be close to 70%, its revenue will be three times that of Ele.me, and its daily active life will be more than 800 million yuan higher than that of Ele.me.
Regardless of its own advantages or market share, it can be said that Ele.me, which was originally one of the two giants in the food delivery market, has completely lost its qualification to be on an equal footing with Meituan.
Backed by Alibaba’s large traffic ecosystem, it would be a pity if Ele.me has been reduced to a second-rate food delivery echelon. It also makes people wonder, what are Ele.me waiting for?
02. Ele.me is reaping the benefits
Waiting for other players to pay tuition to educate the market, complete the establishment of market consumption mentality, and then reap the profits. However, according to data disclosed by major companies, the number of annual active buyers of Meituan’s flash sales in 2021 was 230 million, JD Daojia’s active consumers in December of the same year were 62.3 million, and the average monthly transaction users of Dingdong Maicai in 2021 were 8.8 million people, and the remaining average number of monthly active users of Hema is 16.15 million.
By 2022, Meituan’s annual transaction users and annual active merchants have both increased by 30% year-on-year, and JD Daojia’s annual active users have increased to 78.6 million. In addition, Dingdong Maicai had nearly 45 million monthly active users in March 2022, a month-on-month increase of 28% and a year-on-year increase of 125%. Hema's active users have grown to more than 27 million in March 2022. It can be said that in recent years, due to the objective impact of staying at home due to the epidemic, the number of active users of major pan-delivery platforms has achieved significant growth.
At the same time, according to a report released by Soochow Securities, the number of real-time retail consumers in 2021 has reached about 300 million. And it is estimated that from 2020 to 2021, the year-on-year growth rate of domestic instant retail sales will remain at 80% to 100%. Industry insiders predict that the compound growth rate of instant retail sales will remain high in the next few years.
Whether we look at the user growth data of industry players or the incremental data of the industry, it can be proved that the logic of reaping profits is not valid.
As we all know, the rise of the e-commerce online shopping model in the past was because e-commerce platforms could provide more product choices, more cheap product choices, and door-to-door delivery, so everyone was more willing to accept the e-commerce online shopping consumption model. .
Compared with offline physical stores, which focus on "shopping", online e-commerce platforms' "more, better, and cheaper" has become the core weapon to attract everyone.
Then compare the differences between instant retail and traditional e-commerce platforms. Instant retail not only continues the characteristics of "more, better, and saves", but also adds the characteristics of "fast". In other words, instant retail has completely achieved the high matching of people, goods and places that the physical store model and traditional e-commerce model could not solve in the past.
So from this logic, there is no need to wait and reap the benefits.
After ruling out the first possibility, we are now looking at the second possibility, which is to wait for the two major platforms JD.com and Meituan to make mistakes, and finally take advantage of the situation and cut it off once and for all.
The market needs to be cultivated and consumers need education, so huge market education costs will inevitably occur. But what we can notice is that in the field of instant retail, Ele.me’s development potential is no worse than Meituan, let alone JD.com.
At present, the strategies of JD.com and Meituan in real-time retail are very clear. JD.com’s current main customer groups are supermarket giants such as Wal-Mart and China Resources Vanguard, while Meituan’s main cooperative customer groups are a large number of long-tail micro-commerce companies. Companies and mom-and-pop shops are completely different ideas. Although there is a certain degree of overlap in the customers that these two companies cooperate with, they will not compete head-on at all. Therefore, it is not an ordinary difficulty to wait for these two companies to make mistakes.
03. Meituan is not Meituan, but Ele.me is still the same Ele.me
In fact, we can also notice that in 2021, Meituan Flash Warehouse has incubated 10+ merchants with annual sales exceeding 100 million yuan. As of March 31, 2023, the number of Meituan’s annual active merchants has exceeded 11 million. The number of buyers reached 2.8 million.
It is worth noting that so far, Meituan’s flash sales have also successfully hatched a number of leading flash warehouse franchise brands, such as Shenzhen Dowhale Selection, Hangzhou Near Pear, Chengdu Dolphin Shopping, Beijing Kumamoto Convenience and Xiaokura Life, Brands such as Guangzhou Xinhui Department Store have achieved initial results in the region.
Among them, Shenzhen Duojixuan achieved store profitability in just 2 months, and currently, it has successfully opened more than 30 stores in Shenzhen, Huizhou, Changsha, Ningbo, Chaozhou, Zhengzhou and other cities.
In addition, Hangzhou Nearby Pear has been testing the waters for three months since the second half of 2022, and the order volume of a single store has directly exceeded 10,000 orders.
At present, JD.com focuses on leading companies in various retail sectors, while Meituan focuses on small, medium and micro companies with nearly 10 million in value. Referring to Meituan’s market strategy, Ele.me can consider directly copying it, but at a faster speed.
Although combined with the development trajectory of traditional e-commerce and food delivery, there is no possibility of a short-term outbreak of instant retail, but this does not mean that Ele.me will continue to sit on the mountain and watch the battle between tigers and tigers.
To put it another way, if Ele.me doesn’t like the real-time retail pie at all, then it will only be a matter of time before it becomes a second-rate food delivery echelon.