Ele.me’s ＂host＂ battle story

Text |Photon Planet　Wu Xianzhi

Editing | Wang Pan

This year, the local life war has been more intense than ever.

Although Douyin takeaway once let go of 100 billion GMV satellites at the beginning of the year, no one will deny that holding the user session length can cut into any field, including the store and takeaway business.

Meituan is regarded as the side of the guard, and in the past few months, there have been new moves almost every month. After a little review, it is easy to find that Meituan takeaway has invested most of its resources in content construction in the past six months, including short videos and external channels to connect, and open up the live broadcast and performance system.

A few days ago, the second batch of city services of WeChat’s "store express delivery" business was launched, and the service was further expanded to 14 cities. Relying on the chain brand’s stores and third-party distribution system (SF Express), it provides a service experience similar to takeaway. It is reported that store express delivery is temporarily 0 commissions, forming the expansion logic of the Mini Program + service number.

No matter whether Douyin cuts into takeaway from content, Meituan goes from takeaway to content in reverse, or WeChat penetrates through private domains, each company not only learns from each other’s strengths in competition, but also experiences qualitative changes in the local lifestyle.

The most obvious change is home. Before Douyin intervened in local life, merchants had limited means of obtaining traffic and lacked online operation capabilities. After Douyin entered the market, the entertainment content of short videos and live broadcasts gave merchants new means of content acquisition.

Surprisingly, in the midst of the industry upheaval, Ele.me’s actions are much smaller. With Ali launching 1 + 6 + N adjustment, Hema and Cainiao launched IPOs one after another, Ele.me has become more subtle both internally and externally.

content challenge

The person in charge of a chain restaurant brand and A Kai, a catering investor in Shanghai, both believe that the home and the store are in a state of change.

"In the past three years, the top three big things in the catering industry are cash flow, cash flow, or cash flow, which has greatly promoted the development of group buying." The person in charge of the above-mentioned chain brand mentioned that the online drainage of the store business is the core reason why Douyin can occupy a place.

Meituan started from group buying, and the process of running through home is the same as the process of Douyin group buying cutting into takeout: providing merchants with online customer acquisition and conversion means. Therefore, Douyin adopted the strategy of "low commission + traffic support" to enter the group buying market.

Once considered an important means of besieging Meituan, low commissions now seem to be an illusion from the perspective of users. "The level of commissions does not affect merchants like us (chain brands)," said the head of a chain brand. For mature merchants, commissions will be covered by digital efficiency.

Reality also seems to offer some support.

In terms of going to the store, Dianping group coupons draw commissions of about 3% to 5%, Douyin draws commissions of only 2.5%, and comes with a traffic package, which still does not completely change the market. Even if Douyin frequently tests the water for takeaway, the commission rate that is a few points lower than Meituan is actually because the merchants deliver by themselves. In terms of home delivery, Ele.me commissions are lower than Meituan takeaway, and the market share has not increased significantly over the years.

"Many merchants complain about Meituan’s high commission, but they are unwilling to switch to other low-commission platforms. The core reason is that Meituan has opened up the order, supply chain, operation, and cashier system. In the cashier link alone, there are more than 200 POS machine manufacturers across the country, which takes a long time to open up." Superimposing the scale effect, Meituan’s cost efficiency will be higher.

Under the above conditions, there are two trends on the merchant side, chain brands and old merchants, Meituan takeaway and Ele.me face off, while new brands and small and micro merchants are waiting for Douyin to provide cheaper traffic and the same performance. When Douyin becomes big, sooner or later it will start the digitalization of merchants, and this cost will also make it the next Meituan.

In addition to low commissions, the factor that changes the local life pattern is traffic. In the past ten years, "group buying first, then home" has become the most basic methodology of the whole local life. With the change of traffic attributes, the decoupling of the store and the home has enabled the tool-based application to start the content transformation.

However, the competition for external traffic is one after another, and the competition around group buying-takeaway is becoming increasingly fierce. In April this year, Kuaishou launched the Local Life Mini Program, Xiaohongshu recruited store merchants and service providers, and some merchants settled in to open the internal test of "planting grass to pulling grass". Traffic content will become the general trend.

Fortunately, Douyin encountered the difficulties of performance and traffic conversion in the process of cutting into takeaway from group buying.

An industry analyst said, "The first stage of Douyin’s local life is to convert traffic to local business, and group buying has carried it well; the second stage is to further transfer the business operation position to Douyin. The task of this stage is instant retail and takeaway. At present, the talent link is blocked."

A MCN in the southwest region said that since the expansion of Gourmet Talent last year, the main problems encountered are the low unit price of customers in the catering industry, low profits, and unstable customer orders. For merchants, the conversion efficiency of Talent is very limited. Some merchants said that it is "normal to invest tens of thousands of dollars to earn money."

Facing the challenge of content, Meituan can transform the application and go live, but Ele.me’s main position is outside, so it can only find other ways.

Takeaway starts "parasitic war"

The traffic sources of takeaway apps are generally divided into two categories: internal and external, where the app undertakes takeaway needs, or converts group buying users into takeaways. The other part relies on external: providing services to other platforms and replacing traffic.

Due to the nature of tool-based applications, the external traffic of Meituan takeaway and Ele.me currently exceeds that of their own applications, of which Mini Program has become the most important source of external traffic. According to Questmobile data, in the first half of this year, the traffic scale of Ele.me and Meituan takeaway Mini Program (including overlapping users of apps) was 77.8% and 76.1% respectively.

The WeChat Mini Program relies on huge traffic to become the "host" of Meituan takeaway in Ele.me. In May this year, Ele.me deduplicate users were 289.39 million, an increase of 102.1% year-on-year, of which App accounted for 32.3%, WeChat Mini Program accounted for 64.1%, while Meituan takeaway users were 21,788, an increase of 43.9% year-on-year, App accounted for 30.6%, WeChat Mini Program 76.1%. Among them, the user scale of WeChat Mini Program is even 20 million more than Meituan takeaway.

Backed by Ali, Ele.me has support from Alipay, so it has more diverse traffic sources than Meituan Takeaway. However, Ele.me needs to face up to the impact of the split of Ali and the easing of the relationship between Alipay and Meituan. Recently, Meituan Power Bank and Meituan ordered food (to the store) Mini Program landed on Alipay. Once Meituan Takeaway Mini Program is launched, Ele.me will lose the advantage of channel diversity.

Obviously, the business-oriented "group buying + takeaway" is transitioning to the scene-oriented "Mini Program + takeaway". Perhaps seeing this change, Ali will merge the store business "word-of-mouth" into Autonavi in March this year, while Ele.me is completely integrated into various ecosystems in a modular form.

In addition to the "boarding" Mini Program, binding with ecological members was once an important means for Ele.me to resist Meituan, such as the Taobao 88VIP × Ele.me foodie card. 88VIP is a product of "big pot rice" under Ali’s ecology, which essentially uses membership-based e-commerce to deliver high-quality users to local life businesses.

As Alibaba launches the 1 + 6 + N adjustment, each business is split into its own profit and loss, and 88VIP, which has been losing money, may experience a shrinkage in equity. Liu Bo (flower name: Jialuo), general manager of Tmall’s platform operation group, once mentioned that 88VIP "has been losing a lot of money since its launch".

The third is to cooperate with traffic platforms. For example, Meituan and Kuaishou, Ele.me and Douyin, for Kuaishou and Douyin, the cooperation cultivates user habits and prepares for intervention in local life, while Meituan and Ele.me relieve short-term anxiety, which is more like attracting wolves into the house in the long run.

At the beginning of this year, Douyin takeaway became a clear name, and then the cooperation with Ele.me was put on hold last year. In less than half a year, the cooperation only involved three cities, Beijing, Shanghai and Chengdu, and the three cities without exception became the first cities where Douyin takeaway was deployed.

Douyin borrowed Ele.me to dive into takeout, and Ele.me took the opportunity to build a communication matrix in Douyin, relying on multiple accounts to conduct content-based operations through short videos + live broadcasts + activities. Frankly speaking, compared with simply issuing coupons, the "free order" activity that favors probability can stimulate user attention more. We can see the content posted by users who win free orders on Douyin, Kuaishou, and Weibo.

It is worth mentioning that cross-border cooperation often stays at the traffic level due to security factors, and cannot go further. What’s more, after Douyin, content communities such as Kuaishou and Xiaohongshu also intervened in the store, and it was only a matter of time before they got their hands on takeaway. This means that the "boarding" space of Ele.me will be further compressed.

The advantages and disadvantages of modularity

Any change in the host will directly affect the boarders, especially the split of Ali. Under the independent development of each business, Ele.me will no longer have the protection of Ali’s ecosystem.

Although Ele.me leads Meituan in external traffic channels and is more agile in business, it is difficult for the modular Ele.me to pool resources and adjust direction in the face of a major industry transition.

The most obvious thing is that Meituan responded to Douyin erosion this year, revamped the application, and started the content revolution. Ele.me, which was also affected by TikTok, used the official settlement method to operate on the traffic platform. In addition, Taobao launched "Night Taobao" recently, providing a scene-based entrance for Ele.me in live broadcasts, short videos, entertainment and other scenes.

But not all "hosts" will be like Taobao, "giving guns to guns and food".

After the e-commerce experienced the integration of shelf e-commerce and interest e-commerce, takeaway has actually come to the stage of "menu-style" takeaway and "interest" integration, and to complete the transformation, Ele.me needs to regain its autonomy first.

In addition, instant retail and fresh food e-commerce reuse takeaway performance, making it possible for catering takeout to have more synergies. For Ali’s local life, the point-like business layout still needs to find a core support. In the end, building an ecosystem based on performance requires Ele.me as the core, and if it is based on LBS, Autonavi needs to be the core.

No matter how you choose, takeaway is definitely the most important puzzle in Ali’s local life. And Ele.me’s modularity also acknowledges the shortcomings of traffic, so you must find external platforms for traffic.