Once, Ali was the Bole of Meituan, but today, Meituan has become a competitor of Ali.
Editor’s note: This article is from WeChat public account “ Hong Kong Stock Research Society ” ( ID: ganggushe), author Hong Kong Stock Research Institute.
In the past, Ali was the Bole of Meituan, but today, Meituan has become Ali’s competitor.
After the stock price of Meituan Review once again reached a record high of 112.4 Hong Kong dollars per share on the 7th of this month, its share price fell by more than 4% in the afternoon on the 8th, which is reflected in the news. According to the exclusive information of Late Post, Ant Gold Service CEO Hu Xiaoming will also serve as chairman of Ali’s local life services company.
In addition, an insider revealed that Hu Xiaoming will also take the lead in coordinating the various business layouts in Ali’s local life service field. The next step will be the further integration of Feizhu and Amoy Tickets to fully combat the US Mission. It can be seen that the reason for the stock price decline is inseparable from Ali’s move.
You know, Hu Xiaoming, a veteran of the Ali camp, was just appointed as the CEO of Ant Financial just this month. Just 20 days after this news, he is now appointed as the chairman of Ali local life service company. Such frequent personnel changes, in addition to showing Hu Xiaoming’s personal ability, also revealed Ali’s emphasis on the field of local life services.
It can be seen that the war between Ali and the US regiment in the field of local life services may begin in an all-round way. Can Ali take advantage of e-commerce to build a moat in the local life service field? How will the US team respond to Ali’s combined play? What is the future of the competitive landscape in local life services?
What is the logic behind Ali’s efforts to set up the local life service field?
Ali’s emphasis on the local life service field cannot be separated from the following two aspects.
In terms of external environment, Meituan, the largest competitor in the field of local life services, has surpassed JD.com, Pinduoduo and other Internet companies and has become the third largest Internet giant in China after Ali and Tencent. After Meituan achieved overall profit in the second quarter of this year, its net profit has continued to increase. With the blessing of performance, the stock price has soared along the way. Over the past year, Meituan’s stock price has risenIt reached 153.4%, exceeding Ali’s 55.88%, and even Pinduoduo, which was sinking in the market, rose 87.3% throughout the year. The Meituan Group can continue to hit new highs in market value within a year, and even Internet giant Alibaba has to be vigilant.
At the same time, various businesses continue to grow. As for the takeaway business, the data shows that as of September 2019, Meituan’s takeaway revenue reached more than 110 billion yuan, an increase of 40% compared to the same period last year. According to the “Digital Analysis of the Internet Catering and Takeaway Industry” released by Analysys in September 2019, the domestic and foreign sales of the domestic and foreign sales market accounted for 53% of the total. The hungry + hungry star selection was 43.9%. In contrast, Meituan has a lot of market share. The takeaway business is the main force of the US Mission’s revenue, and it is also the main position of Ali’s local life service. The war between the two in this field has never stopped since its birth. Today, after a series of market strategies, Ali still has not reached the 50% market share previously expected. How can Ali be reconciled?
From its own perspective, for Ali, as the last link to directly contact consumers, the business data of local life is the key link for Ali to realize intelligent data, and its importance is self-evident. At the same time, Ali’s efforts to create a local life area can also be used to prevent the expansion of Meituan’s business, thereby dispersing his energy to Ali’s core e-commerce business stores, which is also a key step in strengthening his ecological moat.
To sum up, no matter from the external environment or internal layout, paying attention to the local life service field will sooner or later be done by Ali. However, in the face of Ali’s coordination of various businesses in the local litigation service field, how should the most direct competitor Meituan comment? When the news came from Ali, what did Meituan Comment’s stock price fall by more than 4%? How does Meituan defend Ali’s combined offensive?
In the face of Ali’s ecology, how can the Meituan defend against it?
It is nothing new for domestic Internet giants to chase after me. After all, at the moment when the demographic dividend is at its peak, everybody is doing everything possible to dig traffic. Today, Ali’s overweight in the field of local life services also indicates that a comprehensive war with the US regiment is about to begin.
In the take-away business, I have to admit that the Mei Tuan, who later ranked first, did play better. Although Meituan was founded 7 years later than Hungry Mo, its market share quickly surpassed Hungry. In the first half of 2017, the takeaway market share was 41.7%, and the US group accounted for 41%. In August of the same year, Hungry Mody acquired Baidu Takeaway with a market share of 54%. However, the good times are not long. In 2018, Meituan’s takeaway market share reached 58.6%, which was significantly more than the hungry 38.1%. In the second quarter of 2019, the share of Meituan’s takeaway market further increased to 65.1%. Although the latest data shows that the current market share of Meituan is 53%, the competitive landscape is relatively stable and Meituan’s takeaway business is still leading.
Meanwhile,The sinking market still has advantages. At present, the competition of take-out platforms in first- and second-tier cities has entered a stage of fever. According to the Trustdata mobile big data monitoring platform, in third-tier cities and below, the overlap of platform merchants of the two is significantly less than that of first-tier and second-tier cities. The low-tier city Meituan’s first-mover advantage is more obvious.
Of course, Ali doesn’t give up. In November 2019, Hungry Word of Mouth proposed a “new service” strategy. To put it simply, this strategy is to improve the digital intelligence of the service system, product system, and hardware system, and help businesses reduce costs and increase efficiency. In order to attract more businesses and achieve the purpose of broadening users. Besides, Ali’s strong ecology will still be the strong support behind Hungry. Once Ali’s integration of platforms such as Amoy Tickets and Flying Pigs will inevitably increase its combat effectiveness in the local life service field.
However, at the same time that Ali ’s “new service” strategy was released, Meituan also made a “renovation of next-generation stores” action, “moving” offline food stores to the platform so that Able to provide services on takeaway platforms. The competition between the two is more direct.
Furthermore, the two are in conflict in the fresh produce field. After closing most of its stores in the first half of 2019, Meituan’s Baby Elephant Fresh was launched in Shenzhen in November of the same year, and the Meituan buying food was converted to a front warehouse + self-lifting model. Continuously spread out in first-tier cities across the country. Ali’s Hema Xiansheng has run through the middle and high-end routes in the first- and second-tier cities and continues to introduce new ones to sink. At present, the advantages are obvious. However, the US group’s model of buying vegetables has just begun. For the time being, no matter what kind of competition pattern will be formed in the fresh field in the future, the confrontation will become more intense as the local life service track becomes wider.
It is worth mentioning that Meituan is also targeting the field of mobile credit payment. The news shows that recently, the US group “pay” this product similar to Alipay Huayan has officially launched. In the financial field, Meituan has obtained several financial licenses. It has to be said that based on a large user group, active order transactions have natural Internet financial advantages. However, Ali’s Ant Financial has now become a giant of Internet finance. Based on the foundation of e-commerce business, it has a wide range of consumption scenarios.
To sum up, Ali and the US regiment have entered a full-scale war. Although, at present, Ali has not merged the flying pig business of wine travel into this business.Local life service platform, but also cannot avoid competition in this area. The two continue to go from takeaway to fresh, from wine travel to financial smoke, and in the future, with the continuous expansion of the local life service track, the competition field will continue to increase. What kind of pattern will they develop in the future?
Ali vs. Meituan is a short-term “fighting battle” and a protracted “protracted battle”
From the local lifestyle of Meituan and Ali, each has its own strengths. On the surface, it looks tit-for-tat, but it is actually using its strengths to make the business bigger.
1. The head effect of the Meituan takeaway empire Ali may be difficult to shake in the short term
From the perspective of Meituan’s ecology, its core is the business of takeaway and wine travel to the store. If we say the advantages of the local life service field, Meituan is undoubtedly very obvious. At present, Meituan has a high take-out penetration rate, and its industry position is relatively stable. At the stage where users, merchants, and takeaway platforms are interdependent and coexist, we have achieved a dynamic balance among the three parties, and a head-scale effect has been formed. Even if you are hungry, it is difficult to attract a large number of customers through some subsidies.
After all, for a single user, larger scale means more selectable merchants and categories; for merchants, larger scale means more orders and more consumer feedback. A large number of UGC saves the cost of information acquisition and can be operated efficiently and quickly.
Of course, Ali can’t be underestimated if he’s hungry. Backed by Ali’s ecology and possessing accurate data analysis technology, with Ali’s emphasis on the local life service field and the integration of the platform, as the main competitor of Meituan Takeaway, it is not entirely impossible to overturn.
2. Will Ali’s huge consumer traffic make the “local life service” handy?
From the perspective of Ali’s ecology, its core is e-commerce. After years of accumulation, the main advantage is that it has huge consumer traffic, which cannot be obtained overnight. At the same time, Ali’s 2B end-of-site resource scheduling capabilities and merchant digital operation capabilities are significant. The advantages that Ali Ecological can bring to its local life services are mainly the rapid replication experience of online operations and huge financial support, which is also one of the main factors that Ali can quickly enter in the emerging field and preemptive.
OverviewHere you can see one or two of his development experience in the field of local life. By hungry to build a local distribution system that is second only to Meituan, it has successfully won seats in the non-meal delivery and emerging fresh retail sectors; in areas that require huge amounts of capital for initial investment, Ali relies on the financial advantages of Stand out from the brutal competition, such as Hema Xiansheng and Harrow.
But it should be noted that, in fact, the ecology of Ali and Meituan is fundamentally different. What Ali does is a real “commodity” business, while Meituan does a “service” business. The service business also means it is difficult to copy and has the characteristics of personalized demand. For Ali, a giant with an e-commerce advantage, it cannot directly translate its advantage into a competitive advantage in the local life field.
To sum up, although the two are connected in the field of local life, it is difficult to achieve a result in the short term. At present, it is difficult to form a stable competition pattern in this field. In addition, although the two businesses are head-to-head, the advantages brought by Alibaba’s e-commerce business have not been directly and efficiently applied to the local life field. For the time being, it will not pose a fatal threat to the US Mission. Moreover, in the field of local life, Meituan has built quite high barriers, and it will not be easy for Ali to surpass it. However, in terms of space, the market for local life services is still quite broad, and the battle between the two will be a protracted battle. What kind of ending will be played, only time is left to reveal the answer.