the main points
- Meituan The function has been opened to allow group purchasing, meaning if a customer orders alone you may not get a discount. But if you share the link with your family, friends or acquaintances, they can also buy the product. You will get a special discount.
- To make customers spend more time on the app the company has therefore developedArtificial intelligence system To learn user behavior from time spent on screen and interactions for each post to determine what content to display in the feed
- Meituan Raising the level of transportation by delivering products, foods and drinks such as iced milk tea via “drones”, and the record for the fastest delivery speed with a drone that the company has ever achieved is 5 minutes and 7 seconds in food delivery.
When traveling or studying in China, one of the indispensable applications is “Meituan“(Mi seconds) Because it is an application that does not only provide food ordering services. But it also includes almost everything in Chinese people's daily life in one app.
For example, purchasing products online. Whether it is fresh food, fruits, clothes, medicines, electrical appliances, cosmetics, or even booking a car for travel, booking accommodation, doctor consultation, beauty services, massage, spa, hair cutting or phone recharge. Book movie tickets, etc. All of the above are included in the Meituan app.
When looking at the Chinese market, where price competition is fierce, especially business…Food delivery serviceIt can be seen that companies doing this business such as “Grab” and “Foodpanda” in Thailand have had to bear losses for many years, and Grab has just made a small profit in the third quarter of 2023 since the company was founded 11 years ago.
But for the Chinese market, the competition is more intense than in Thailand. “Meituan“applied”3 important strategies“Even being able to become No. 1 in the industry and owning nearly 70% of the food ordering app market share in China. According to ChinaIRN, a Chinese market research company, in 2022
- 1. Make this app everything in your customers' lives.
Things to learn from this work are: Meituan It's not just a food ordering app. But the expansion of services related to the Chinese way of life becomes bigger and bigger. This is like combining Major Cineplex / SF Cinema apps for booking movie tickets, Lazada / Shopee for online purchases, Agoda for booking accommodation, MorDee medical services, etc. into one app.
Therefore, customers feel very comfortable compared to other applications. It also helps to increase the traffic or number of users accessing the app's services continuously so that it holds the No. 1 share in China.
Moreover, Meituan's overall strength also makes it less likely that customers will use competitors' apps. Consider “travel to other provinces” which doesn’t just involve travel. But you still need to book accommodation, restaurants and beauty services in the area. They can be completed in one application without having to take the time to submit the application or reconnect in another application.
- 2. Look at market share before profit.
This may be the idea of Chinese businessmen, which is to look at growth.”market share” before “he won“ This can be seen from the many Chinese companies that have entered the Thai market, such as e-commerce platforms Lazada (Lazada) and Shopee (Shopee), which still continue to offer unlimited discounts, exchanges and gifts. Even after suffering losses for many years
Meituan Likewise, the company is full of promotions. And many discounts on products before Wang Xing (Wang Xing) Founder and CEO of Meituan said: The company focuses on offering deep discounts. and flash sale marketing (discounts for a specific period of time). To speed up requests) including live broadcasts and short videos. To accelerate the growth rate
Another thing is that this number one food delivery company has enabled this function.Buy the groupCan (Group purchasing) Means that If a customer orders alone you may not get a discount. But if you share the link with your family, friends or acquaintances, they can also buy the product. You will get a special discount. This stimulates Meituan's revenue and makes the app more popular. It is widely known. From such a post
Additionally, making the app #1 in engagement also makes it easier to raise money, as can be seen Tencent (Tencent) The Chinese technology giant that decided to “pick up” Meituan by investing 17% of the company’s shares.
Although Tencent is now reducing its stake in Meituan due to the Chinese government's reorganization of business groups, Tencent's previous investments gave the company the cash flow to expand to the size it is today.
That's the idea. If the company has enough market share it looks like a winner. It will help attract investors to invest money. Although at first there was no profit.
- 3. Develop technology and drones to deliver goods.
To make customers spend more time on the application, the company has developed a systemartificial intelligence (Amnesty International) to know user behavior from time spent on screen. and interactions for each post to determine what content will be displayed in the feed for customers to see Because when customers can easily find the products they are interested in and will increase the chance of coming back and using this application again.In the first quarter of 2023, the company invested 5,000 million yuan or about 25,000 million baht in research and development of transportation technology.
Not only that Meituan It has raised the level of transportation to keep food as fresh as possible by delivering produce, foods and drinks such as iced milk tea via “drones.” I started training in Shenzhen. The record for the fastest delivery drone ever set by Meituan is 5 minutes and 7 seconds for delivering snacks.
These three key factors have helped Meituan dominate the food delivery market with a share of more than 70% in China.
- Maintaining the number one position in the Chinese market is not easy.
despite of “Meituan“It will occupy approximately 70% of the food delivery market, but the next biggest competitor,”Ele.me“(Air le mer) from the e-commerce giant Ali Baba (Ali Baba) which owns nearly 30% of the shares is trying to squeeze promotions to get the pie.
Feifei Shen, director of financial advisory firm The Blueshirt Group and a user of food delivery services in China, said: “From my experience, Ele.me is more proactive than Meituan and offers more discount coupons. Which in the past I feel the order price from Ele.me is cheaper than Meituan.”
As for the operational results of “Meituan” Company during the 5 years between 2018-2022, they are as follows:
2022 revenue: HK$255,781 million, loss: HK$7,775 million.
In 2021, revenue was HK$215,887 million, loss was HK$28,369 million.
2020 revenues were HK$128,994 million, and net profit was HK$5,291 million.
In 2019, revenue was HK$110,589 million, and net profit was HK$2,539 million.
In 2018, revenue was HK$77,259 million, and loss was HK$136,777 million.
It can be seen that the “income” of Meituan There has been continued growth, but “net profits” are still mixed. In some years, there were losses as well. This comes due to pressure factors from the Chinese economy, which is slowing down. Intense business competition including the impact of government business regulation policy.
These things reflect the Red Ocean business model, although they are growing well and are services that Chinese people cannot live without. But price competition is also fierce.
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