01 Meituan Youxuan Upgraded to Next-Day Arrival Supermarket Meituan Youxuan has changed. On October 11, Meituan Youxuan's official WeChat account published an article titled "Today, Let Me Reintroduce Myself." According to official sources, the Meituan Youxuan brand has been officially upgraded from a 'community group-buying' service to a 'Next-Day Arrival Supermarket', with a new brand slogan: 'Really, really saves money.' The long-silent community group-buying market finally heard some news. It is reported that, relying on Meituan's efficient fulfillment capabilities, orders placed on Meituan Youxuan today can be received tomorrow. The 'Next-Day Arrival' model reduces the uncertainty of waiting before receiving goods, fully meeting consumers' daily shopping and emergency stockpiling needs. Notably, the word 'supermarket' indicates that Meituan Youxuan is further expanding its product categories compared to the previous community group-buying model, which focused mainly on fresh produce. According to reports from LatePost, Meituan Youxuan has already achieved 1,500 SKUs in most regions nationwide, while the average for similar business formats is around 1,000. Meituan Youxuan is now attempting to increase the number of products to 3,000. Compared to its previous focus on fresh produce, after upgrading to a supermarket, Meituan Youxuan can cover more consumer groups through standardized products, attract different groups with different categories to drive traffic, and improve the efficiency of product circulation. The goal Meituan Youxuan aims to achieve is 'one-stop shopping', combined with the convenience of next-day delivery, further enhancing the shopping experience for users in lower-tier markets. From a brand perspective and in terms of specific operations, the 'Next-Day Arrival Supermarket' somewhat positions itself against Tmall Supermarket and JD Supermarket, and Meituan Youxuan is becoming increasingly e-commerce-oriented. Notably, in August this year, according to reports from Caijing's "Eleven People," Meituan's e-commerce business was merged with the Meituan Youxuan business unit. Some Meituan employees also confirmed that the original Tuanhaohuo business unit has been restructured into the Tuanhaohuo business department and placed under the Meituan Youxuan business unit. This means Meituan Youxuan and e-commerce are merging into one entity, and the full-category supply behind the 'Next-Day Arrival' supermarket likely comes in large part from Meituan's e-commerce business. From this perspective, Meituan Youxuan has not become a so-called 'abandoned child'; instead, the supermarket-oriented Meituan Youxuan is gradually becoming an important part of Meituan's broader retail system. Wang Xing's 'e-commerce dream' is being realized.
02 Meituan's Grand Retail Landscape Takes Shape Completely During the Q2 earnings call this year, Wang Xing envisioned the long-term goal of Meituan Flash Purchase: 'The instant retail business model will bring about tremendous changes to the retail industry', expressing confidence that they can achieve greater synergies in the future. Many believed Meituan Youxuan would be neglected. However, from this upgrade of Meituan Youxuan, we can see that Meituan has not abandoned the community group-buying business; instead, it continues to innovate. They are no longer just focusing on 'a few cents of cabbage money', but are integrating community group-buying into the e-commerce system and thoroughly connecting the supply chain system behind it. In fact, within Meituan, there has already been similar exploration experience with 'Next-Day Arrival Supermarket'. In April this year, Meituan internally tested 'same-city e-commerce' in the Beijing area, focusing on the 'buy today, arrive tomorrow' service. At the end of June, Meituan E-commerce's official Weibo announced that Meituan Same-City E-commerce Beijing Station was officially launched. At that time, we believed Meituan's same-city e-commerce was in a low-key trial phase, with the core purpose of testing the model and smoothing out processes. Now, Meituan Youxuan is starting to push the same type of business from pilot to more than 2,000 cities and counties nationwide. We have reason to believe that Meituan has taken a step up in integrating merchants and supply chain resources. In addition to internal innovation, Meituan Youxuan has also benefited in the competition within the community group-buying market. Because Duoduo Maicai, which had been closely chasing Meituan Youxuan, has slowed down. In May this year, Pinduoduo COO Gu Pingping, along with several first-level supervisors responsible for merchant recruitment for Duoduo Maicai and the main site, embarked on a research trip to European and American markets. According to public information, among the Duoduo Maicai business that helped Pinduoduo establish its community group-buying territory, several supervisors and leaders have been internally transferred to the cross-border e-commerce department. For Meituan, upgrading the Meituan Youxuan business to a 'supermarket' model at this time may give it a lead over competitors in the fierce competition. From the data, as of April 2022, Meituan Youxuan's market share reached 38%. By August, Meituan Youxuan's monthly active users reached 8.1033 million. According to LatePost, Meituan Youxuan achieved GMV of 120 billion yuan in 2021. In terms of market share alone, Meituan Youxuan has firmly established itself in the first tier of the market. After Meituan Youxuan decided to go 'supermarket', Meituan's grand e-commerce system is gradually streamlining from the previous 'three-pronged attack' to 'two parallel tracks'. Because besides Meituan Youxuan, Meituan Flash Purchase is also shining in the instant retail field. In 2021, Meituan Flash Purchase achieved 81.4 billion yuan in GMV. In September this year, Meituan Flash Purchase was also incorporated into Meituan's core business group. Wang Puzhong, president of Meituan's Home Delivery Business Group, predicted in 2021 that the instant retail market would reach 1 trillion yuan in the next five years, and Meituan Flash Purchase aims to capture 400 billion yuan of that. Currently, Meituan Flash Purchase and Meituan Youxuan have already achieved a combined GMV of 200 billion yuan, making Meituan a player that cannot be ignored in the e-commerce field. Overall, Meituan's e-commerce system currently focuses on 'supermarkets': one is the 'instant retail supermarket' with half-hour delivery, such as Meituan Flash Purchase and Meituan Maicai; the other is the 'Next-Day Arrival Supermarket' composed of Meituan Youxuan and Meituan E-commerce. Moreover, both business lines have been rolled out across 2,000 cities and counties nationwide, and Meituan's grand e-commerce system is now basically complete.
03 Wang Xing's E-commerce Dream Finally Finds Its Direction Within Meituan, the saying that Wang Xing has an 'e-commerce dream' has been around for a long time. As the boundary between food delivery and e-commerce becomes increasingly blurred, Wang Xing, who is adept at 'crossing boundaries', has not missed this opportunity. According to fulfillment time, online retail can be divided into near-field e-commerce and far-field e-commerce. Previously, Meituan, unwilling to put all its eggs in one basket, placed heavy bets in almost every market segment, but did not achieve great success. Starting in April this year, Meituan successively shut down Youxuan services in Gansu, Qinghai, Ningxia, and Xinjiang, gradually contracting its front lines. On April 26, Meituan Youxuan announced on its app that it would close its Beijing pickup point services. Meituan E-commerce, which occupies a prime traffic entry point, also performed mediocrely. Currently, Meituan E-commerce handles about 200,000 orders per day. As Meituan encountered difficulties in exploring community group-buying and traditional e-commerce routes, instant retail, where delivery delivers everything, was brought to center stage. But this does not mean Meituan has given up on the vast e-commerce market. Instead, through continuous trial and error, Wang Xing has gradually found the right direction for grand e-commerce. Looking at the current two routes, Meituan Flash Purchase has been integrated into the core business group, using speed to conquer the e-commerce market for Meituan. On September 16, Apple's iPhone 14 series went on sale as scheduled. This year, Meituan used drones to participate in the first launch delivery, with the first iPhone 14 order delivered in just 5 minutes and 56 seconds. Image source: Shenzhen Business Daily Meituan Flash Purchase's ultra-fast delivery is like a sharp knife piercing into the e-commerce market. More importantly, it has reshaped this generation of consumers' perception of Meituan and e-commerce: Meituan is not just about food, drinks, and entertainment; e-commerce can be this fast! This mindset transformation has opened a gap for Meituan's grand e-commerce system. With the merger of Meituan Youxuan and Meituan E-commerce, and the upgrade of community group-buying to a 'Next-Day Arrival' supermarket, on the traditional e-commerce route, Meituan Youxuan is moving towards a full-category, cost-effective approach. At the same time, the rich product supply, deep special supply chain, and mature logistics support behind Meituan Youxuan and the e-commerce business can be reused. For example, a clear direction in Meituan E-commerce is to cooperate with factories to produce private-label products, replacing some of Meituan Youxuan's high-selling items to improve the latter's product profit margins. In the past, we would define Meituan Youxuan as 'fresh e-commerce' or 'community e-commerce', but now it is a more convenient and cost-saving large supermarket, where rich product categories make one-stop shopping possible, helping users save time and money, increasing user stickiness, and promoting user retention and repurchase. Notably, according to Caijing's LatePost, Meituan Youxuan may replace Tuanhaohuo in the second position at the bottom of the Meituan app's homepage. The community group-buying business, which previously had huge losses, has significantly reduced its losses. In Q1 earnings call, Wang Xing said, "Meituan Youxuan's overall growth rate is not as expected" and "investment in new businesses will be more cautious." By Q2, new businesses including Meituan Youxuan had reduced losses by 2.3 billion yuan compared to Q1. Overall, the current state of Meituan's grand e-commerce system is that it has consolidated from multiple parallel routes into two core routes. Among them, Flash Purchase, which 'delivers fast', charges ahead, while Meituan Youxuan, which offers 'full categories and more savings', follows closely. The two complementary lines further push Meituan's e-commerce system to more users. And Wang Xing has finally found the right path for Meituan's e-commerce development. As he himself said, "Meituan was a retail company from its inception."
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