From local services to local retail, and then to online retail. "Retail is the new continent, and we are Columbus." In September 2020, at Meituan's annual strategy meeting for the Home Delivery Business Group in Changsha, Wang Puzhong, the group's president, could hardly contain his excitement when he said this. His general idea was that in early human history, civilizations developed in isolation. When the first navigator set foot on the American continent, he connected this barbaric land to modern civilization. Throughout human history, once technological capabilities break through geographical barriers, civilizations begin to merge. A higher-order civilization will bring a lower-order civilization up with it. The transformation of retail is the same. According to different fulfillment times, retail is currently divided into three modes: multi-day delivery, next-day delivery, and 30-minute delivery. Taobao and Pinduoduo provide a rich and massive selection of goods with multi-day delivery; JD.com achieves fast fulfillment with same-day and next-day delivery through its self-built warehouses and delivery teams; Meituan and Ele.me, with food delivery as their core, gradually expand outward, controlling delivery time to within tens of minutes. The companies represented by these three business forms have fought their own battles in the past, with different user mindsets, category choices, and supply chain forms, but essentially they all solve the need to "deliver things to users." A Meituan insider said that he had previously judged that "a war is inevitable among these companies, and the three tracks will become one battlefield." This has already happened. At the end of 2020, Meituan's Flash Purchase Business Department under the Home Delivery Business Group was split into three independent business units: Flash Purchase, Medicine, and Tuanhaohuo. Some Meituan insiders call them the "Three Brothers of Home Delivery." Through these three businesses, Meituan attempts to achieve two leaps in retail: from local services to local retail, and then to online retail. Meituan first leaps from food delivery to delivering everything, and then extends from near-field e-commerce to far-field e-commerce. Nine months later, the status of retail was elevated at the strategic level, as Meituan upgraded its group strategy from "Food + Platform" to "Retail + Technology." While Meituan explores retail step by step, Alibaba, JD.com, ByteDance, and Pinduoduo are all accelerating their pace in same-city business, penetrating deep into Meituan's territory. Alibaba has integrated all life-service-related businesses and handed them over to partner Yu Yongfu for unified management; since the second half of last year, JD.com Retail's most watched competitor has shifted from Alibaba to Meituan, and it has recently begun piloting food delivery; ByteDance has increased investment in local life and started piloting its self-operated supermarket business "Dou Super Delivery"; Pinduoduo's competition with Meituan is extending from community group buying to same-city business, and Pinduoduo also began testing same-city business in April this year. At the end of 2018, Meituan founder and CEO Wang Xing said on Fanfou: "Treating the ocean as a smooth road rather than a barrier is probably the biggest difference between maritime civilization and continental civilization. I often think of what a friend said: sailing is the most romantic and free means of transportation in the world. As long as you master the operation of a sailboat, theoretically you can depart from this port and go anywhere in the world." This is full of idealism. These companies have not failed to imagine the difficulty of sailing a boat, but reality is harder than they imagined. Flash Purchase: More Complex and Slower than Food Delivery In the first quarter of 2022, Flash Purchase's average daily orders exceeded 3.9 million (including medicine), about one-tenth of food delivery. Flash Purchase has been independent for four years. In July 2018, Meituan established the Flash Purchase Business Department and launched Flash Purchase as an independent brand. At that time, Flash Purchase was already a business with daily orders exceeding one million. Previously, this business existed within the food delivery business under the name "Speed Purchase." After independence, "Speed" was changed to "Flash," which sounds faster. Flash Purchase is an expansion of the food delivery business's categories, an extension of Meituan from food delivery to delivering everything. For riders trapped in the "tidal effect," Flash Purchase is also a good supplement, allowing their "electric donkeys" to speed through non-peak hours outside the lunch and dinner delivery peaks. Flash Purchase's daily order growth rate has remained above 50%, and Meituan management has repeatedly described this business as "growing strongly" in earnings calls, but a Meituan insider believes that Flash Purchase's base is low, and looking at growth rate alone is meaningless. "After years of development, Flash Purchase is still hovering at three to four million daily orders and six to seven million at peak, which is slow growth compared to early food delivery." Flash Purchase involves more complex offline formats and product categories than food delivery, which is both an opportunity and a constraint for Meituan. In 2019, Wang Puzhong regularly met with Flash Purchase employees in the conference room, spending a day discussing category by category, looking at opportunities and various models. "At that time, everyone agreed that Flash Purchase should be done, but didn't know where to start," a Meituan insider recalled. The focus of discussions went through several rounds of changes, from KA merchants (i.e., hypermarkets) to fresh produce, flowers, and then medicine. In another Meituan insider's memory, "The focus kept changing. Every time the research team shared some industry changes, we would start looking at whether this was an opportunity for Flash Purchase and then plan in detail." In August of that year, a project called "Caid aquan" was born out of such intensive discussions. Caid aquan was a vegetable market agency operation, setting up a counter in the vegetable market, sourcing goods from stall owners, conducting quality control and initial processing, adding a premium, and selling under the Caid aquan brand on Flash Purchase. At that time, the industry and Meituan were still in the heat of fresh e-commerce. Externally, the capital market was enthusiastically pouring money into Dingdong Maicai and Pupu Supermarket; internally, Meituan successively launched the fresh supermarket "Xiaoxiang Fresh" (May 2018), the B2B business "Kuailv" supplying catering merchants (October 2018), and Meituan Maicai with front warehouses (January 2019) — but these three projects were all in the exploration stage and had not achieved qualitative leaps. Caid aquan became Meituan's last fresh exploration project before heavily investing in community group buying, and also the first independent project of Meituan Flash Purchase in the fresh field. Caid aquan wanted to use a franchise model to bring vegetable market supply into Flash Purchase, but franchisees were not aligned with Meituan. To make money, franchisees increased the product premium rate by 100% to 200%, leading to poor user experience; the platform, to increase order volume, took back pricing power and limited the premium rate to 30% to 40%, causing franchisees to complain bitterly. The contradiction was unresolvable. In addition, the vegetable market's business hours and product SKUs were limited, and attempts to build warehouses in the market and establish store-warehouse integrated supermarkets were not rolled out after small-scale pilots. After more than a year, Caid aquan ended in failure. It gradually disappeared from the diamond position (core functional area) on Meituan's homepage. In May 2021, some Caid aquan employees were transferred to Huizhou, Guangdong, to support a new project — Waima Songjiu, led by Cheng Ming, who had previously led Caid aquan, and the team was almost the original Caid aquan team. It imitated the startup "Jiu Xiaoer," adopting a self-operated model with front warehouses and central warehouses to deliver alcohol. The alcohol delivery market is large enough, with a market space exceeding 100 billion yuan, and Meituan wants to make more money from it. Alcohol has high gross margins. A Waima Songjiu insider said: "After testing the UE model, we found that delivering 40 orders a day can cover daily operating costs." Waima Songjiu adopts private domain operations, with its positions in WeChat mini-programs, official accounts, and communities. When doing ground promotion, employees would grab a person and make them follow the official account, then give them two cans of beer. "At that time, we wanted to verify the feasibility of independent development without the platform, but without the platform's momentum, promotion was very difficult," the insider said. To date, Waima Songjiu is still in exploration, only launched in six cities: Huizhou, Shenzhen, Heyuan, Foshan, Dongguan, and Zhongshan, and its business territory has not expanded beyond Guangdong. Some categories are growing vigorously. For example, medicine (detailed in the next chapter) and flowers. Every Valentine's Day, Qixi Festival, and other festivals, you can always see Meituan riders in yellow uniforms holding large bouquets of flowers on the streets. Meituan employees use these festivals as coordinates to stock up, fight, and review. As soon as one battle is over, the next festival comes, in a cycle. The flowers in the riders' hands almost support all of Flash Purchase's peaks. On Qixi Festival in 2021, Flash Purchase's daily orders exceeded 6.5 million, and flowers have a high gross margin, exceeding 50%. Some Meituan insiders believe that the rapid growth of medicine and flowers stems from their fit with users' instant delivery needs in specific scenarios. This is also the ceiling Flash Purchase currently faces: it is still limited to emergency scenarios. At the end of 2020, with the Flash Purchase Business Department split into three, Flash Purchase was handed over to Xiao Kun. Xiao Kun has a technical background and worked at Baidu for 6 years. Before joining Meituan, he served as vice president at Haizhi Technology, responsible for the BDP (Business Data Platform) business. At Flash Purchase, Xiao Kun is a person who "charges forward." He personally visits merchants and conducts extensive research. "He quickly grew into a person who does business and understands business," a person close to him commented. Xiao Kun hit an important opportunity for Flash Purchase's development: the pandemic. Although the pandemic weakened supply in the short term, it amplified people's emergency needs. "Previously, people were too lazy to go out; now they can't go out." Over the past two years, users' consumption habits have changed accordingly. In other words, society has become more urgent — but this has not solved Flash Purchase's fundamental problem. Flash Purchase's essence is to provide delivery-to-home services between retailers and users. Users only think of Flash Purchase when they are not price-sensitive or are very urgent. A Meituan insider believes that the fundamental problem limiting Flash Purchase's growth is supply: users can't buy what they want, and the products available have too high a premium. This is related to Flash Purchase's business model. In the early days, Flash Purchase's merchants were mainly scattered stores. As of September 2021, Flash Purchase had over 500,000 scattered stores. Meituan's daily active users (DAU) of 70-80 million are spread thinly across each merchant. Some mom-and-pop stores sell only a dozen orders a day. These merchants not only pay Meituan a commission of 3 to 5 percentage points per order but also bear the full shipping costs. According to a third-party partner of Meituan, scattered store merchants buy traffic and run promotions, and they basically lose money in the first three months of being on Flash Purchase. To make money, scattered store merchants' response strategy is to raise prices, with online product prices usually higher than offline prices. KA merchants, which must have the same prices online and offline and have richer SKUs, are not heavily dependent on Flash Purchase. They have abundant offline traffic and their own brand effects. To bring hypermarkets online, Flash Purchase offers them lower commission rates and more subsidies. A Meituan insider summarized that Flash Purchase in the past "made profits from scattered stores and gained traffic from KA." Currently, the number of KA merchants on Flash Purchase has exceeded scattered stores. Flash Purchase internally proposed that a city's supply is like a pyramid, from hypermarkets to supermarkets, convenience stores, fresh fruit stores, and specialty stores, each layer should have quality supply. To this end, Flash Purchase has tried various operating methods, including dividing operations personnel by category, brand, honeycomb (dividing a city into different business areas according to equilateral hexagons), region, and user scale. Among them, the honeycomb operations team evolved into Flash Purchase's innovative project "Meituan Lightning Warehouse." Lightning Warehouse adopts a front warehouse model, requiring partner merchants to meet a certain number of SKUs and serve Flash Purchase 24 hours a day. Correspondingly, Flash Purchase provides traffic and subsidy support in the early stage. LatePost learned that Flash Purchase is currently the most watched competing business by JD.com. Since last year, Flash Purchase has increased investment in JD.com's advantageous categories of supermarkets and consumer electronics. For example, last year Flash Purchase cooperated with Xiaomi Home to try to help Xiaomi sell phones. In the same-city field, JD.com accepts long-term competition with Meituan in supermarkets; but it believes its basic market — consumer electronics — cannot be shaken. In 2021, the number of consumer electronics brands cooperating with Flash Purchase more than doubled compared to the previous year. Although Flash Purchase has not yet brought actual impact on the demand side, and users have not yet formed the mindset to buy consumer electronics on Flash Purchase, its actions on the supply side are enough to alert JD.com. "If Meituan can run this model and promote it, the market it covers will be very scary," a JD.com insider said. It is understood that in 2021, Flash Purchase achieved GTV (gross transaction value) of 60 to 70 billion yuan. That autumn, Xiao Kun said at the Meituan Flash Purchase Retail Conference that the market size of instant retail in five years will be 1 trillion yuan, and Meituan wants to capture 400 billion of it. Meituan CFO Chen Shaohui said at the Q4 2021 earnings call that Flash Purchase's medium-term goal is 10 million orders a day, compared to food delivery's 100 million orders a day, and Flash Purchase will grow faster. "Rich second generation," an industry insider described this business born out of food delivery. It enjoys the delivery network built by the food delivery business, can reuse food delivery's technology and basic capabilities, and users are basically diverted from food delivery. In the past, Flash Purchase couldn't even support its own BD (business development) team, but borrowed the BD of food delivery, with Flash Purchase's operations team also taking on some BD work. However, Flash Purchase's work was not written into the KPI of food delivery BD. This also led to weak supply growth for Flash Purchase for a long time. However, Flash Purchase is becoming increasingly independent. It is understood that Flash Purchase is piloting self-built BD teams in Changsha and Hefei. Medicine: Racing Forward While Worrying Medicine is the first and so far the only category to be spun off from Meituan Flash Purchase. At the end of 2021, Meituan Medicine's daily orders exceeded 1 million, nearly five times that of the end of 2019. The biggest uncertainty for Meituan Medicine comes from policy. In June 2022, the "Internet Diagnosis and Treatment Supervision Rules (Trial)" were officially released and implemented. The Rules strictly prohibit platforms from providing prescription drugs to patients before prescriptions are issued, and online initial diagnosis is prohibited, only allowing follow-up prescriptions. Prescription drugs account for 30-40% of Meituan Medicine's total orders. There is a window period of half a year to a year from policy promulgation to implementation. "Internally, we calculated that when the policy truly lands, prescription drug sales on the platform will be more than halved," a Meituan insider said. This year's budget and targets have been revised several times by Meituan Medicine. The aggressive version aims to reach 2 million orders by the end of the year, while the conservative version lowers this number to 1.5 million. The independence of Meituan Medicine also has its policy background. In August 2019, the new "Drug Administration Law" was reviewed and approved, allowing "prescription drugs to be sold online under certain conditions," and it was officially implemented on December 1 of that year. This broke the previous four-year ban on online sales of prescription drugs. At that time, Meituan Medicine had about 200,000 daily orders, on par with Ele.me, accounting for about 1/5 of Flash Purchase's total orders. Medicine is complex and special. It includes prescription drugs, over-the-counter drugs, and medical devices. It faces stronger regulation and involves strict qualifications. Whether it's the B-side product listing or the C-side shopping process, it is too different from other Flash Purchase categories and must be designed separately. At the end of 2019, the medicine category of Flash Purchase established an independent product team, still under Flash Purchase in the organizational structure. In the early days, only chain pharmacies could be listed on Meituan Medicine. "Medicine is a serious category and needs stronger endorsement," the Meituan insider said. The biggest convenience brought by chain pharmacies is that scale can grow rapidly because you can directly "talk to headquarters," and "one headquarters covers thousands of stores under it." But the tricky problem is that user demand is hard to stimulate. In the first half of 2020, food delivery could bring 1 million traffic to Medicine every day, but most users did not have the need to buy medicine and just clicked in to browse. In the early days, Meituan Medicine tried various recommendation mechanisms with poor results. Drug marketing must be restrained; the platform cannot encourage users to buy medicine. The product recommendation module is usually called "Guess You Like" in food delivery and Flash Purchase, "but how can medicine guess what you like?" A Meituan insider said that whether it's marketing methods or product design, they must focus on weakening the perception of recommendation. In May 2020, the growth lever was found. Meituan Medicine launched the "1-cent small medicine box" activity, where first-time users of Meituan Medicine could buy a customized Meituan medicine box for 1 cent. The medicine box was painted all over with "Meituan yellow," serving as an advertisement placed in users' homes, reminding them that Meituan can deliver medicine. This was a successful marketing campaign. Four months later, sales of Meituan's small medicine box exceeded 1.5 million units. In June of the same year, Li Jinfei joined Meituan, taking over this booming business from former head Zhao Pengfei. At that time, Meituan Medicine's orders exceeded 400,000. Operations and R&D became independent one after another, and the team was completely separated from Flash Purchase. Medicine was a completely new field for Li Jinfei. Li Jinfei comes from a product manager background. He was responsible for Baidu Knows, Wenku, Xin Zhi, and Car Selection at Baidu. After a failed startup, he joined Didi as the head of the public transportation business unit. The most common words employees use to describe Li Jinfei are "smart" and "diligent" — these are also the two most common words Meituan employees use when mentioning the head of a business. Being smart at Meituan means being good at absorbing, digesting, iterating, and then forming one's own logic. In the first few months after joining Meituan, Li Jinfei traveled frequently, frantically visiting industry "big shots" and poaching talent. "He absorbs knowledge very quickly, which is recognized internally," a Meituan insider said. During meetings, Li Jinfei often divides a whiteboard into three parts — what resources are available, how to do it, and what the final outcome should be. He grasps the two ends and leaves the middle to subordinates to fill in the gaps. After Li Jinfei joined, he continued the two core propositions of Meituan Medicine: supply and user mindset. The most severe problem is supply. "Meituan Medicine's supply coverage is severely insufficient. Users don't have pharmacies open nearby, and pharmacies don't have the drugs users want. The merchant honeycomb coverage is far lower than food delivery," a Meituan insider said. So Li Jinfei designed strategies around "time, space, and product." In terms of time, Meituan Medicine launched the "Little Yellow Light" project in 2021, supporting 24-hour pharmacies through traffic tilt and nighttime shipping subsidies; in terms of space, it expanded to lower-tier markets. Medicine is low-frequency and low-margin. Meituan wants to attract users through activities and festivals, but the consequence is that pharmacies' profit margins shrink, they can't make money, and they suspend listing drugs with gross margins below 10%. Offline pharmacies typically have 2,000 to 3,000 SKUs, but some online products have fewer than 1,000. A Meituan insider said that first-line brands' first-line drugs have the smallest profit margins, so for a period, 999 Ganmaoling was not available on Meituan Medicine. "Such drugs are called 'thunder price drugs,' and both drug manufacturers and pharmacies don't want to sell them online." So Meituan adjusted its operational strategy, supporting different shipping fees for different categories and some drugs not participating in full reduction promotions. At the same time, Meituan Medicine established a drug manufacturer group similar to Flash Purchase's brand operations. The drug manufacturer group's responsibility is to establish cooperative relationships directly with well-known domestic and foreign drug manufacturers. Drug manufacturers help Meituan ensure supply and no longer control prices for pharmacies; Meituan helps drug manufacturers with brand promotion, each taking what they need. Shortly after Li Jinfei joined, he extended B2C and internet hospitals beyond the O2O drug delivery business. Organizationally, the three businesses are parallel. If limited to O2O drug sales, Meituan Medicine can only cover emergency medication scenarios. This means users have low average order value and low repurchase frequency, which is uncontrollable. Meituan Medicine's average annual order repurchase in 2020 was less than 2 times. "The bigger market for medicine is definitely not emergency medication, but chronic disease medication and health products," a Meituan insider said. The internet hospital was initially established to provide consultation services for users purchasing prescription drugs. Its boundaries are also expanding. When users enter Meituan Medicine, they can see two sections in the middle: "Medication Consultation" on the left and "Ask a Doctor" on the right. Recently, Meituan is grayscale testing merging the two entrances into one, forming a unified internet hospital entrance. A Meituan insider said that in serious diagnosis and treatment scenarios (with the core goal of treating diseases and saving lives), only 30%-40% of users have the need to buy medicine, and 60% are pure consultations. The changes in business and organization declare the team's greater ambition. Its future path is to upgrade from Meituan Medicine to Meituan Health, just like JD Health and Alibaba Health, but this also means greater challenges. Tuanhaohuo: "Didn't Expect It to Be This Hard" In October 2020, over 100 employees of Meituan Tuanhaohuo came to Pujiang County, Chengdu, Sichuan Province, for a three-day launch ceremony. Pujiang County has a mild, humid climate with abundant rainfall all year round and is one of the main production areas for Aiyuan 38 jelly oranges. At this time, the team had just been formed, with members mainly from Flash Purchase. They had good performance, were not afraid of trouble, and had clear goals. "Hope to make it Meituan's flagship business." The leader was Zeng Wei, previously the operations head of Flash Purchase. "Full group support," "big project," and "new continent" were keywords frequently mentioned by this group. Within Meituan, employees often say Wang Xing has an "e-commerce dream." In the past, this dream has sparked sporadic sparks in several Meituan organizations. For these businesses, management likes to use the word "try." Most businesses are born out of "trying" and then disappear. Tuanhaohuo's predecessor, Xiaomei Orchard, was a project that started with "trying." Xiaomei Orchard is a mini-game in the Meituan app, organizationally under the Meituan platform. Users plant virtual fruit trees, and when the fruit matures, they can receive real fruit sent by the platform. The gameplay is similar to Pinduoduo's Duoduo Orchard. At the end of 2019, Xiaomei Orchard's DAU exceeded 10 million, completing its goal ahead of schedule. The team of over 20 people began to have spare capacity to do "imaginative things." They embedded fruit purchase links into the game interface to test e-commerce. Through a hit product strategy of giving millions of traffic to one merchant, Xiaomei Orchard achieved a daily order volume of 90,000 on a day in May 2020. Xiaomei Orchard also caught a good time. At that time, Pinduoduo was growing rapidly, and Taote was moving from the edge to a special zone at Alibaba. "We judged that there are still opportunities in the big e-commerce track," multiple Meituan insiders said. In June 2020, Xiaomei Orchard was assigned to the Flash Purchase Business Department under the Home Delivery Business Group. More than two months later, the business was renamed "Tuanhaohuo." "Pinduoduo occupies the user mindset of 'pin' (group), and Tuanhaohuo wants to occupy 'tuan' (group),". A Meituan insider said. At Tuanhaohuo's launch meeting in October of the same year, Zeng Wei said that Tuanhaohuo should benchmark against Pinduoduo and go down, hoping that it could be separately reflected in Meituan's financial reports in the future. Two days later, he led the team to climb a mountain. The mountain road was steep, and it had rained the day before, so the wooden path was wet, and people could only move forward step by step. They set off at 11 a.m., a 10-kilometer road, expected to take 4-5 hours, but it was still dark, and some people hadn't climbed down. The team was stretched long, some got lost, some had leg cramps, some fell and were covered in mud, and some cried. An employee thought he had good physical fitness and was confident he could climb down, "but didn't expect it to be this hard." The difficult climb seemed to foreshadow Tuanhaohuo's business development. In the early stage, the merchant recruitment team carried indicators of category coverage and merchant numbers to industrial belts for recruitment. A large number of merchants flooded in. "The entry threshold was very low, 0 commission, no deposit," an operations staff member said. In a few months, Tuanhaohuo's troubles grew faster than the business itself. According to the retail logic of "people, goods, and places," building the place requires system support, departmental coordination, mature tools, and clear rules. But Tuanhaohuo lacked effective constraints and management for merchants, and a series of fulfillment and after-sales problems followed. Although the slogan "Learn from Pinduoduo" was shouted, whether to learn or not was hesitant at the management level, and how to learn was vague from top to bottom. During the same period, internally, they were also studying the business models of membership-based warehouse club Costco and German chain supermarket ALDI. ALDI is known for low prices and strict control of operating costs. Tuanhaohuo once wanted to achieve "more" and "save" among the four dimensions of retail: "more, fast, good, and save." But during that period, Tuanhaohuo's exploration of goods was also wavering. When opening Tuanhaohuo, what caught Wang Puzhong's eye were all garbage bags, tissue paper, and toothbrushes and toothpaste costing a few yuan. He criticized these products as "too low-end" at a meeting, hoping that Tuanhaohuo's goods would be "better." Li Mingsheng, former product head of Flash Purchase, and his team joined Tuanhaohuo in December 2020. Continuing the division of labor with Zeng Wei at Flash Purchase, Li was responsible for products, Zeng for operations, and both reported to Wang Puzhong. The team expanded to about 200 people. In March of the following year, Tuanhaohuo held the "First Milestone Summary Conference." At that time, Tuanhaohuo's daily orders reached 300,000, and the tools needed for both B-side and C-side had been initially built. Wang Puzhong again emphasized at the meeting that Meituan must do e-commerce. Later, several Meituan insiders summarized that Meituan had oversimplified e-commerce. "Initially, we were so excited and confident, probably because no one at Meituan had deeply done this before." In the same month, Tuanhaohuo transformed to a selection model, tilting its focus toward "good." The team re-planned which categories to focus on and how many core merchants to retain for each category. Some long-tail categories were directly cut, such as books and musical instruments, and plans were made to increase the proportion of fresh produce and food. After switching to selection, the entry threshold for Tuanhaohuo merchants increased significantly. Some categories required merchants to use JD or SF logistics. "The logistics cost per order directly increased by five yuan, and merchants couldn't bear it." It wasn't until October that Tuanhaohuo allowed these merchants to use the cheaper "Four Tong and One Da" (Shentong, Zhongtong, Yuantong, Best Express, and Yunda). Under the selection model, Tuanhaohuo strictly selected manufacturers and products, relying on manual review and step-by-step approval through documents. An operations person said that just selecting products and merchants, organizing information, and approval took a long time and was very slow. He commented that after each report, it was over, and whether it was good or bad, feasible or not, there was no clear direction. "Leaders don't make decisions or express opinions." When subsidies and activities to boost order volume were run, Tuanhaohuo's order volume rose rapidly. In mid-2021, Tuanhaohuo's daily orders reached a peak of over 500,000. But once subsidies were withdrawn, order volume fell again. In September 2021, Liu Xiaogang, former CEO of NetEase Yanxuan, joined Meituan as the head of Tuanhaohuo. He proposed that Tuanhaohuo's next four development directions were "selection," "new domestic brands," "self-operated," and "own brands." At a meeting the following month, Liu Xiaogang promised Chen Shaohui that Tuanhaohuo would achieve breakeven, and he wanted to balance self-operated and costs. Liu Xiaogang believed that Tuanhaohuo was in its infancy, and many basic e-commerce capabilities were not yet complete. In the long-term red ocean competition, it was necessary to change the subsidy-driven development model, develop self-operated capabilities centered on factory brands, and improve the financial model. Self-operated has multiple models. NetEase uses small warehouses and mobile warehouses, JD uses self-operated warehouses, and Liu Xiaogang wanted to achieve direct factory shipping. He believed that the future focus is on factories, and self-operated has a stronger influence on the supply chain. Centralized warehousing can reduce costs after scaling. Some Meituan insiders believe that Tuanhaohuo has limited budget and self-operated is very difficult. A Meituan insider said that for Tuanhaohuo, the most important thing is to manage merchants well, sell goods, and let users know you. "Self-operated or not, it doesn't matter at all." An episode is that in November of that year, Tuanhaohuo was renamed "Meituan Haohuo" because the trademark "Tuanhaohuo" had already been registered by Pinduoduo in September 2015. Shortly after, Meituan Haohuo was renamed "Meituan E-commerce," and "Meituan Haohuo" was used as the brand name for its self-operated products. In March 2022, Wang Puzhong said at Meituan's strategy meeting that Tuanhaohuo's future core positioning is high-quality product services. But several employees believe that Tuanhaohuo's positioning is not clear. Zeng Wei recently focused his energy on the same-city project. The project is currently piloted in Beijing, with orders placed the same day and delivered the next day. Users in Beijing who click into Meituan E-commerce can see that the same-city page has replaced the original Tuanhaohuo page. Meituan places Tuanhaohuo in the second entrance of the bottom function bar on the app's homepage, showing its importance. Businesses in this position at various companies seem to have a bumpy fate, such as Taobao's "Guangguang" and Xiaohongshu's "Mall." They have high exposure but poor user mindset, are highly expected by the company, but are difficult to grow into core businesses. Tuanhaohuo's current daily orders are over 200,000, with weak growth. More than two years ago, when Xiaomei Orchard was just assigned to Flash Purchase, its daily orders were already 80,000, with a single-day peak exceeding 160,000. A Meituan insider reviewed that Taobao's user mindset is "more," Pinduoduo's is "save," JD's is "good and fast," and people shop on Douyin while watching short videos and live streams, but Tuanhaohuo has no characteristics and is always "not sharp enough." Meituan has been established for 12 years, and its competitors have not decreased but increased. JD and ByteDance are its new competitors. As long as Meituan continues to expand its business, this situation will continue. This company has never cared about the endgame, but about the expansion of the chessboard. The difference is that the problems it is good at have been solved, and the rest are all difficult problems.