Opinion | How big is the profit imagination of Meituan Takeaway?

Last week, Meituan announced its first-quarter financial report. Both revenue and profit exceeded expectations. However, as a basic food delivery business, losses continued to expand:

In the quarter, the 1P model (platform distribution) food delivery service revenue was 13.5 billion yuan, but its cost was as high as 17.18 billion yuan, and the loss was 3.68 billion yuan;

During the quarter, there were 2.185 billion catering takeaway transactions under the 1P model. It can be calculated that the loss per order exceeded 1.68 yuan, the loss per order in the same period last year exceeded 1.67 yuan, and the loss per order in the fourth quarter of last year was 1.5 yuan.

Is Meituan Takeaway’s End to Utilities? How big is the profit potential in the future? The team of Debon Securities analyst Zhao Weibo gave some calculations in its latest report.

If you want to improve the UE (unit economic model) of the food delivery business, there are three ways: 1) Rider cost optimization; 2) Increased monetization rate; 3) Increased customer unit price.

Rider distribution efficiency improvement brings 0.4-0.7 yuan / order cost optimization space

In terms of rider cost optimization, there are two influencing factors, 1) the improvement of distribution efficiency; 2) the optimization of platform subsidies.

The hourly delivery salary of riders is determined by the supply and demand in the labor market, so the platform mainly reduces the average delivery cost by optimizing the delivery time per order. The optimization of the delivery time per order includes three links: ① food pickup/waiting, ② road transportation, and ③ terminal delivery.

Debon Securities believes that the average cost of a real rider is 9.15 yuan per order.

Without considering the impact of road transportation, the average delivery time is expected to drop to 23.8 minutes per order in the medium and long term , corresponding to a CAGR of 2.8% in 5 years, that is, the cost optimization space in 5 years is 15.0%, based on the cost of 9.15 yuan per order in 2021 Calculation, the optimization space is 1.4 yuan/unit.

If considering the additional 2-3 minutes of delivery protection time for each order in road transportation, the corresponding cost will increase by 0.7-1.0 yuan per order. Therefore, the actual cost optimization space may be 0.4-0.7 yuan/unit without further consideration of the positive impact of drop-in orders on cost.

In addition, the subsidy of the platform can be regarded as an investment in potential core users. When the environment deteriorates, the medium and long-term ROI of the subsidy may decrease. When the precise subsidy is not feasible, the reduction of the subsidy plays a significant role in optimizing the UE, and there may be a large space for this part. .

It assumes that the proportion of Meituan takeaway 1P orders will be stable at 67% in 2017-21, and the average real cost of rider orders is basically 9.15 yuan / order, corresponding to the 2017-21 Meituan takeaway 1P orders The average subsidy is basically 2-2.5 yuan / single or so.

The current subsidy of 2-2.5 yuan per order gives Meituan additional buffer space in addition to cost optimization. Compared with cost optimization, the adjustment rhythm may be longer, and subsidies are a more flexible operation strategy.

A very important point is that if Meituan’s target of 1 yuan per order in 2025 is under external shocks, it may not be fully digested by cost optimization alone, or if it can only be fully digested after 2025, it can be fully digested through dynamic or precise measures. Subsidies are adjusted locally to ensure continuous optimization of the platform’s UE model.

Monetization rate optimization mainly comes from the improvement of advertising monetization rate

Debon Securities believes that the advertising revenue of Meituan Takeaway is the advertising expenditure of takeaway merchants, which generally increases with sales growth. Due to the certain scale effect of advertising, the willingness and ability of large catering brands to launch is higher. As the proportion of orders increases, the advertising monetization rate of Meituan Takeaway will also increase.

It estimates that the proportion of takeaway brand orders increased from 15.2% to 31.6% in 3Q18-4Q21, showing an upward trend in general, which has led to an increase in the platform’s advertising monetization rate. The further increase in the proportion of brand orders in the future is expected to continue to promote the platform’s advertising monetization rate and optimize takeaway. Overall UE.

If the online marketing expense ratio is increased to 6.5%, the corresponding Meituan takeaway advertising monetization rate is 2.0%.

It assumes that the marketing and advertising expenses of brand merchants account for 90% of the total, and the target expense rate of 6.5% is combined with the monetization rate calculated from orders and online marketing revenue in 2021, and the corresponding potential advertising monetization rate can reach 2.0%.

After the diversification of diets, there is room for improvement in the unit price of customers

In addition, the price per customer increases naturally with the category structure and meal prices, which is also conducive to increasing Meituan’s takeaway revenue.

According to channel tracking, the actual average revenue of merchants is around 20~30 yuan per order, and the actual average expenditure of users includes an additional delivery fee of 2~3 yuan per order (the user bears the part) . There is a certain gap with the customer unit price that is close to 50 yuan/order on the report side. The GTV on the report side includes delivery fees, commodity discounts, red envelopes, vouchers and tableware, packaging fees, and meal prices.

In terms of category structure, with the more frequent population movement, the national food tastes are also more diversified. This is reflected in the fact that the proportion of fast food and Chinese food in the category structure of takeaway platforms has decreased in recent years. Hot pot, dessert, global cuisine, etc. This change will lead to an increase in the overall customer unit price of the platform.

Taking 2020 as an example, the unit price of desserts, global cuisine, and hot pot will drive customers by 0.56 yuan/order, 0.18 yuan/order, and 0.35 yuan/order respectively. The unit price of takeaway customers can increase by 2.41%.

In addition, with the natural increase of residents’ income, the requirements for the quality of meals will also naturally increase. At the same time, catering merchants will naturally adjust their prices due to cost fluctuations. These factors lead to the fact that even if the category structure remains unchanged, the unit price of catering customers will also increase (increase Restricted by the fragmentation of the catering market).

On the whole, the unit price of takeaway customers has increased slightly every year, and the optimization of the monetization rate will lead to an increase in Meituan’s takeaway revenue.

In the medium and long term, the expected increase in the unit price per customer is about 0.5-0.6 yuan per unit per year, and the corresponding annualized year-on-year increase in the unit price of 50 yuan is about 1%. If calculated based on the technical service rate of 6% and the target advertising monetization rate of 2%, an increase in the unit price of 2.5 yuan in 5 years can contribute to an increase in revenue of 0.2 yuan per unit.

This article is reprinted from: https://news.futunn.com/post/16352204?src=3&report_type=market&report_id=207925&futusource=news_headline_list
This site is for inclusion only, and the copyright belongs to the original author.