Meituan selects Beijing business to shut down

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36氪 was informed that Meituan Select announced on April 25 that Beijing will suspend the service from today. As for the reason, Meituan stated that it was to ensure the provision of stable and reliable next-day delivery services. 36氪 asked Meituan for verification, but there was no response.

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Meituan Optimum Beijing Service Suspension Notice

36氪 inquired about the Meituan app and found that the “Meituan Select” entrance in Beijing has disappeared, and Meituan’s grocery shopping has been ranked higher. According to people familiar with the matter, discussions on the suspension of services in the Beijing area started as early as 3 or 4 weeks ago within the preferred company. “This time is just the beginning, and subsequent related integrations will continue.” The source also said, “The Beijing area is likely to be completely shut down this time, and the new business will only retain businesses such as Meituan grocery shopping and Kuaidong.”

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On the home page of the Meituan app in Beijing, the Meituan Preferred entrance has disappeared

According to 36 Krypton, the daily order volume of Meituan’s preferred Beijing market is less than one million. Although it is close to the saturation of large warehouses, the cost of contract performance remains high. Compared with core regions such as Guangdong and Lianghu, the gross profit margin is not obvious. The overall loss The rate is also relatively low in the major regions. “When the order volume is close to the upper limit and the UE model has not yet run through, it is necessary to consider a way out,” said an employee of Meituan Preferred .

In January this year, Meituan Vice President Guo Wanhuai succeeded Meituan Senior Vice President Chen Liang in charge of innovative businesses such as optimization, grocery shopping, and Kuailu. Since then, news about the integration of the three businesses has continued to spread. According to insiders, the preferred core KPIs this year are to reduce costs and increase efficiency, cut areas with poor data, and focus on advantageous areas.

At present, Meituan’s overall gross profit margin is around 11%, and the unit price is around 9 yuan. According to brokerages’ predictions, for Meituan to be profitable, it needs a gross profit of 18-20% and a unit price of 15 yuan, which is not small. gap.

In addition to Beijing, according to media reports, Meituan Select will also successively close four northwestern provinces including Gansu, Qinghai, Ningxia, and Xinjiang, while Shaanxi Province, the “base camp” of the Northwest Region, will be retained. In contrast, Duoduomaicai ushered in a phased victory in the northwest region. An industry source told 36氪 that Duoduomaicai has now achieved profitability in Xinjiang, and the entire Northwest, eastern Guangdong, Jiangxi, and southern Hunan are all flat.

Compared with Meituan Optimal, Duoduomaicai entered the northwest earlier, and the labor efficiency is higher. In addition, because Duoduomaicai relies more on the traffic of the main site, it does not need to pay more commissions to the head of the group, which makes its overall loss. The rate is better than Meituan.

At the beginning of April this year, Meituan was revealed to have started a multi-business line staff adjustment, involving Meituan Select, Meituan Shopping, Kuaidong, etc. The layoffs ranged from 10% to 20%.

Huge losses are one of the immediate triggers for layoffs. According to Meituan’s financial report, in Q4 last year, its new business revenue increased by 58.7% year-on-year to RMB 14.7 billion, but its operating loss expanded to RMB 10.2 billion year-on-year. For the whole year, the loss of new business reached RMB 38.4 billion, and the operating loss rate was year-on-year. Expanded by 36.6%.

Under the sluggish macro economy, group buying in the once-popular community has largely died out in the past year. In addition to the already defeated platforms such as Orange Heart Choice and Shihui Group, Jingxi Pinpin also ushered in a major retreat last month. Except for Shandong, Hubei, Henan, Beijing and other regions, almost all of them were cut off. This time, Meituan chose to close some areas one after another.

However, insiders said that Meituan will continue to invest in the three businesses including grocery shopping, Youyi, and Kuailu for a long time.

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