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Text / Zhou Yifei
Source: Wired Insight (ID: lxinsight)
There has been a new personnel change at the top of Meituan Select.
Wired Insight has learned from multiple independent sources that Liu Wei, the former head of the regional operations department of the Meituan Optimal Division, has completed the transfer process, and will no longer be in charge of the Meituan Optimisation-related business. personnel take over.
A Meituan source revealed that the new head of the regional operation department was named “Zhao Youcheng” in Meituan’s internal system.
A Meituan Select employee told Wired Insight: “At present, the new leader has not issued a new strategic order, and my work direction is the same as before.”
In addition, a number of Meituan internal employees confirmed to Wired Insight that Liu Wei has now been transferred to the Meituan in-store business group as the head of the platform product department.
As we all know, in-store is the business with the highest operating profit margin in Meituan, and it has always been called the “cash cow” of Meituan. Therefore, many Meituan employees commented that Liu Wei went to “Meituan’s most oily business”.
However, under the impact of the epidemic this year, the slowdown in the growth rate of the retail industry, and the impact of external competitors such as Douyin, the profit “engine” of Meituan to the store will be temporarily under pressure.
Looking back, Meituan chose this “new business”, but it also faced many challenges. Pinduoduo is a tough opponent for Meituan.
Meituan is currently facing several major problems, such as when will it be profitable? When the daily order volume and GMV have no obvious advantages over Pinduoduo, how should Meituan choose the next battle?
Regarding the latter issue, Meituan’s approach this year is to “reduce costs and increase efficiency”, such as continuously withdrawing cities and closing warehouses.
In this regard, the founder of “Liu Ge Research”, who has long been concerned about community e-commerce, believes that “this track requires a long-term battle, and in the macroeconomic sluggish environment, Meituan’s strategic contraction is correct. Meituan will no longer only pursue market share and daily orders as before.”
“Meituan’s senior management has not given up its community e-commerce business,” an insider close to Meituan revealed. “The reason for closing the city one after another is to adjust the cost model, which is conducive to Meituan’s protracted battle.”
One dramatic thing is that after more than two months of closing the central warehouse in Beijing, Meituan has recently restarted its Beijing business. Wired Insight found that at present, many self-pickup points in Fangshan District have been able to place orders normally.
Beijing reopens business, Tuyuan Meituan selects the applet
Meituan has changed the rules of the game from burning money for growth to the general direction of reducing costs and increasing efficiency, but it has not changed, but how to play chess for Meituan in the future is a key consideration for senior leaders. .
Meituan’s new changes:
Veteran Liu Wei was transferred and brought in Ali executives
According to Wired Insight’s information from multiple independent sources, Liu Wei has recently been transferred from the Meituan Preferred Business Unit to the Meituan to Store Business Group. The regional operations department she was previously responsible for was taken over by former Ali Gao P Zhao Youcheng. Zhao Youcheng reported directly to Guo Wanhuai, the vice president of Meituan.
Since last month, Liu Wei and Zhao Youcheng have started work handover. Or in order to get familiar with the business as soon as possible, shortly after Zhao Youcheng arrived at Meituan, he accompanied the senior leaders to the front-line market research.
For Liu Wei, since last year, there have been rumors within Meituan that she will leave Meituan Select. At that time, most of the internal staff’s speculation was that “Liu Wei may leave Meituan”.
At present, Liu Wei has not resigned, but has been transferred. Regarding the transfer, Meituan employees also believed that it was “not unexpected”. “She has worked in Meituan for many years and has stock in her hands, so she will not leave her job easily.”
Liu Wei is an old employee of Meituan, who has joined in the early days of Meituan, and is called “Sister Wei” internally.
In the second half of 2020, Liu Wei, who was originally in charge of Kuailu-related business, was transferred to the newly established Meituan Preferred Business Department to become the Business Development and User Service Department (ie “Sales and Transportation Department”, now renamed Regional Operations Department )principal. This department was mainly responsible for customer acquisition and last mile performance, including the management and operation of grid warehouse franchisees, and the management and operation of BD customer acquisition team and team leader.
Head Tuoke, Tuyuan Meituan preferred public accountThe department in charge of Liu Wei has played an important role in Meituan.
A Meituan employee recalled: “When Liu Wei took over the job, Meituan’s performance in community e-commerce was not good. At that time, the number of openings was small, the speed of progress was slow, and the correct strategic direction was not found, and it was delayed by one. The number of people who enter the market every month is overtaken by Duoduo.”
In the impressions of the above-mentioned employees, Liu Wei mainly did two things in the past, “one is to open the city strongly. While quickly expanding the market, while strengthening the shortcomings of the optimization; the second is to promote the battle of thousands of cities, so that the optimization covers nearly 2,000. county.”
In the eyes of some employees, Chen Liang, who was still the head of the optimization business department at that time, had a calm personality. Liu Wei’s powerful style of opening a city and opening a team just complemented the promotion of the business that was too stable, allowing the preferred market In the later stage of scale, it once became the first in the market. “Without the support of scale, Meituan really can’t compete with Duoduomaicai, which has huge users.”
However, in the early stage of opening a city, the sales and transportation department, which was known for its speed of expansion, began to show problems in the later stage of refined operation.
Since last year, the growth of Meituan’s daily order volume has stagnated. It stopped at 30 million for a long time. Later, when it came to the New Year’s Day, there was no hope of rushing to 40 million daily orders, but after that, the daily order volume Growth has stalled or even declined again.
An employee of Meituan explained that “sales are not good, and the sales department must be held responsible.” It also started from the gradual stagnation of the growth of Meituan’s daily order volume, and there were rumors about Liu Wei’s departure.
An insider close to Meituan used a vivid metaphor, “Optimization is like a car. When it starts sailing, only the horsepower of the engine (representing the expansion of the city and the opening of the group) is required to be strong enough, and there is no problem with the body breaking points. The speed is guaranteed to be fast; but when the speed needs to be slowed down in the later stage, the car does not need to have excessive horsepower, but needs to be replaced with other parts to work together.”
In the opinion of many Meituan employees, today’s regional operation department needs to have better “departmental coordination ability”, which is “not very good at” by Liu Wei.
Therefore, many Meituan employees who heard the news of Liu Wei’s departure from Meituan preferred that “this is a natural thing. The stage is different, community group buying is no longer a strong competitive business, and Meituan Preferred needs to operate more calmly.”
The timing of this personnel change is also somewhat intriguing.
In the optimization business department, Liu Wei’s direct report was Chen Liang (member of the highest decision-making body s-team, g-team member). Later, after Chen Liang left the business line of Meituan Optimization, he was transferred to the vice president of Meituan. Guo Wanhuai reports.
A few months after Guo Wanhuai succeeded Chen Liang and became the head of the Meituan Preferred Business Unit, Liu Wei was transferred from his post.
Now, the problems encountered by Liu Wei have been handed over to the former Ali Gao P Zhao Youcheng. The final result is unknown to the outside world. After all, the problem cannot be solved in the short term.
Meituan’s optimization pressure is still great
Meituan, which has always been at the forefront of community group buying, is no longer “holding high”.
At present, Meituan and Pinduoduo are both sitting firmly at the top of community group buying, and the two are wrestling with each other. However, the price of Meituan’s acquisition of this market position is that it has doubled the money invested in Duoduo.
According to the latest information from Wired Insight, as of June this year, Duoduomaicai has achieved breakeven in nearly 1/3 of the country’s provinces, such as the four northwestern provinces, Jiangxi, eastern Guangdong, southern Hunan, Guangxi and other places; northern Hunan is about to achieve profitability . Moreover, Duoduomaicai also plans to tie all provinces by the end of the year.
The “vigor” of Duoduo’s grocery shopping is also reflected in the annual goal. The GMV completed by the Meituan Preferred Plan this year is 50% higher than last year, and DuoduoCai is “150%”.
In fact, since entering the stage of refined operation last year, Meituan has been exploring ways to fight a protracted battle.
For example, in August last year, the headquarters finally delegated power to the regions, implemented the regional system, and set up the overall closed-loop management of the region.
Before the decentralization, there was actually a little-known interesting incident.
An Ali employee once told Wired Insight that at an internal Ali meeting in the second half of last year, Zhang Yong (flower name: Xiaoyaozi), chairman and CEO of Ali, commented on the organizational models of Meituan and Pinduoduo on the spot, to the effect that ” Pinduoduo belongs to the front line and has a strong degree of freedom and flexibility; Meituan is a center that thinks deeply and can accumulate strategies and methodology. Ali will also tend to learn this style of Meituan in the future.”
This is one of the few speeches that Xiaoyaozi named to learn from Meituan.
However, not long after the speech, as the outside world saw, Meituan delegated the decision-making power of headquarters procurement and logistics to regional independent decision-making.
This year, the new answer given by Meituan is “cost reduction and efficiency increase”.
At the external level, for example, after closing the business in the four northwestern provinces and Beijing, Best has successively closed central warehouses in third-tier cities such as Guangxi Yulin and Hebei Baoding, and is gradually approaching the goal of closing more than 20 central warehouses.
A dramatic scene is that Duoduo Maicai began to open positions (central warehouses) one after another in multiple third-tier cities.
The sixth brother, who has researched too many community group buying markets, has an opinion on the above phenomenon, “Although the growth rate of the daily order volume of Duoduo grocery is not obvious, it knows that it will increase the order volume in the future, so it has been opening the center this year. Warehouses and laying the groundwork for infrastructure.”
This gap has caused Meituan to select a group of young employees who were once enthusiastic, and lost some confidence in the future development of the business.
However, from the perspective of the broader market, it is still beneficial to reduce costs and increase efficiency. Thanks to the abolition of the low UE (unit economic model) area, Meituan’s first quarterly report showed that the loss of Meituan’s new business, including Meituan’s selection, was reduced to 9.025 billion yuan in the first quarter, and the operating loss rate also decreased month-on-month. Meanwhile, revenue rose 59% year-on-year to 14.5 billion yuan.
In addition, a community group purchase order volume data previously obtained by Wired Insight shows that after Meituan chose to close the four northwestern provinces, the number of orders in its core provinces is still growing. Moreover, the national total order volume has not declined significantly since then.
Regarding Meituan’s core “weapon” that can basically stabilize the order volume, a Meituan employee explained that it “increased the frequency of repurchase.”
At present, Meituan’s preferred repurchase frequency has surpassed the mainstream e-commerce platforms on the market, mainly due to its rich SKU. In some mature cities such as Guangzhou, Meituan’s central warehouse can accommodate up to 3,000 SKUs, and Duoduo’s about 1,200 SKUs.
Such a large number of SKUs also coincides with Meituan’s vision of “covering the family’s three meals a day and daily needs”.
It is not difficult to find that Meituan has been constantly reviewing this heavily invested community group buying business. However, most people standing on the battlefield cannot accurately predict the end of the group buying in the community where it is located.
In-store business has new rivals
According to multiple independent sources to Wired Insight, Liu Wei has been transferred to the store business group as the head of the platform product department. At present, Zhang Chuan is the president of Meituan’s in-store business group.
As we all know, the hotel and travel business is Meituan’s biggest “cash cow”.
It can be seen from Meituan’s financial reports over the years that although food delivery is Meituan’s largest business, it can contribute about 60% of the latter’s revenue. However, in terms of profit, limited by the high cost of delivery and delivery, hotel and travel are actually the most profitable business of Meituan.
This business segment includes the in-store catering business (corresponding to the early group buying business) on which Meituan started. Its in-store business, which is the starting point of Meituan’s entrepreneurship, has a mature business model and a high operating profit margin. In addition, it also includes hundreds of life service categories such as hotels and scenic spot tickets.
The light and highly profitable business model of in-hotel, hotel and travel also allows Meituan to invest enough funds to invest in new businesses represented by community group buying.
The latest financial report shows that in the first quarter, Meituan’s in-store, hotel and tourism revenue increased by 15.8% year-on-year to about 7.6 billion yuan; operating profit increased by 26.4% year-on-year to 3.5 billion yuan, a record high; operating profit margin increased from 41.7% to 45.6% %.
One is profitable and the other is still losing money; one is a mature business and the other is a new business. Regarding the personnel change of Liu Wei going to the store business group, many internal employees of Meituan thought that they “went to the department with the most oil and water in Meituan”.
However, Meituan’s in-store business is not worry-free.
ByteDance has been eager to try and increase its local life business in recent years, and now it has stepped into the core territory of Meituan.
Beginning in 2018, Byte has deployed in the fields of catering group purchases, wine travel and other fields, and distributed the main cakes of local life services in the in-store business.
However, this did not cause too much water. Until the end of 2020, ByteDance established a “local direct business center” dedicated to expanding local life business, and will 10,000 people in the abolished SMB (small and medium customer) business line. More sales, adjusted to the center, turned into a push for local life.
After that, Douyin’s “group purchases” successively appeared on the first entry of the same-city pages in first- and second-tier cities such as Beijing and Shanghai. Today, Douyin has been able to provide preferential group purchases in the five major sectors of food, leisure and entertainment, play, accommodation and beauty, just like the embryonic form of Meituan.
In addition, in June this year, Douyin newly released the “2022 Life Service Software Service Fee Standard Description” on the official website of Juliangxue. The 9 major industries listed in it are all popular businesses in the hotel and hotel sectors.
The intention of ByteDance to try to divide up Meituan’s basic profit base is becoming more and more obvious. To a certain extent, it can be regarded as a re-enactment of Meituan.
The various actions of ByteDance naturally aroused the vigilance and defense of Meituan.
A representative event is that on December 27, 2021, Zhang Chuan led a team to Haikou, Hainan to participate in the Kuaishou Ecological Conference. At this conference, Kuaishou and Meituan announced that they have reached a strategic cooperation in connectivity.
Therefore, regarding the significance of Liu Wei’s transfer to the store’s business group, a Meituan employee interpreted it as, “At present, the business of Douyin’s local life is not mature, if Liu Wei can press it down, it is very important to the store. contribute.”
In the past, there was a community group buying business that needed to continue to invest heavily. Later, cross-border players such as ByteDance were eyeing local life. Meituan is facing a “protracted offensive and defensive battle”.
However, at a time when investors are more concerned about the short-term certainty of companies, Meituan, which has always emphasized “long-term confidence”, also needs to demonstrate its certainty in the short term as soon as possible.
(The header image of this article comes from the official website of Meituan.)
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