Meituan’s new live broadcast action
Since Douyin vigorously entered the local life business last year, Meituan’s live broadcast business has been advancing faster and faster.
Meituan live broadcast progress has accelerated again. According to media reports, Meituan Bakutuan is expanding into the city on a large scale and is recruiting pilot service providers for the official city account of Bakutuan live broadcast in 21 cities, including Guangzhou, Shenzhen, and Jinan.
Recruitment documents show that service providers that meet the pilot broadcast standards need to start broadcasting in the designated Meituan Bakutuan city account every month. Meituan will pay the service provider in the early stage of the broadcast to ensure the latter's income. The trial broadcast date is from December to 31st, and the specific trial broadcast time is from 10 am to 9 pm.
From the recruitment requirements, the service provider must be equipped with dual cameras and set the live broadcast background to a real scene; the service provider must have experience in at least one category project, with catering experience being given priority. The specific operating model of
Baotuan Tuan is: Meituan provides discounted goods and sells them; the service provider is responsible for setting up live broadcast scenes, equipping anchors, and delivering live broadcast skills. The service provider will charge a commission to Meituan based on the actual write-off amount.
Currently, Meituan’s live broadcast mode is divided into self-broadcasting and official broadcasting. Merchants need to apply for their own accounts for self-broadcasting and live broadcast in stores. Self-broadcasting is relatively independent and can be broadcast throughout the day.
However, self-broadcasting does not have traffic support, requires dedicated personnel to operate, and has a low conversion rate. Generally speaking, chain brands are more suitable for self-broadcasting. They have a certain number of fans and are relatively well-known. They are easier to increase in the early stage of live broadcasting.
This also means that if merchants want to improve their conversion rate, they have to spend money on traffic. According to data from Guosen Securities, the proportion of small and medium-sized merchants in Meituan is between 90% and 95%. It is difficult for small and medium-sized merchants to spread self-streaming.
official broadcast means that the official provides a traffic diversion package to participate in the official broadcast, and Baotuan Tuan is an official broadcast. The main advantage of the official broadcast is that the platform provides greater traffic, the home page accounts for 40%, and the conversion rate is high.
Currently, Meituan faces two difficulties in the field of live broadcasting. First of all, compared with content-based live broadcast platforms, Meituan is weak in the length of time users stay. Users generally leave after placing an order. Secondly, Meituan’s infrastructure and content in the field of live broadcasting are relatively weak and need to increase investment to improve it.
According to media reports, in July when the first-level portal of Meituan Live was first launched, the GMV of Meituan Live in a single month was about 500-600 million, with a month-on-month growth rate of 20%. In August, it quickly rose to 1-1.2 billion, and Live broadcast rooms with over 100 million revenue appear one after another. By October, GMV exceeded 2 billion yuan in a single month.
Meituan’s live broadcast IP address for food delivery is “hot”, and the live broadcast IP address for hotel and hotel review business is “popular”. The former belongs to the home-delivery category, and the latter belongs to the in-store category.
This also means that Meituan’s live broadcast ecosystem is maturing, and it is natural for Meituan to expand its large-scale expansion of store IPs. Meituan recruits service providers to prepare for the large-scale rollout of Batuantuan and compete head-on with Douyin’s in-store business.
How Meituan defends its position
Since the merger of Meituan and Dianping in 2015, its group buying model has been integrated with the Dianping model, and its in-store business model has been formally formed, making Meituan the leader in the industry. What
can know is that Meituan’s business is divided into two parts: core local commercial business and new business. The core local commercial business segment includes catering takeout, in-house hotel travel, Meituan flash sales and other businesses, while new businesses include Meituan Selection, Meituan grocery shopping, etc. The takeout and flash sales in
's core business are both "home-delivery" businesses; the in-store business is where consumers place orders on Meituan and then go to stores for consumption, such as hotels, travel, etc. In the third quarter, the combined revenue of home-delivery business and in-store business reached 57.7 billion yuan, a year-on-year increase of 24.5%.
But as Douyin continues to penetrate into local life, Meituan’s dominance is under threat. In October 2022, the GMV of Douyin Life Service exceeded 10 billion; since 2023, Douyin Life Service has upgraded hotel tourism to a first-level department, parallel to in-store business (including in-store catering and in-store comprehensive).
BOCOM International Development Research reported that Meituan’s in-store business will have a GMV of approximately 236 billion yuan in 2022. In September 2022, Douyin’s GMV was 8 billion, an increase of 25%.In April this year, media reported that some of the core indicators of Douyin’s in-store business have reached one-third of Meituan’s, and are still on the rise.
As of April 2023, Douyin life services have been launched in more than 370 cities, with more than 2 million cooperative stores. This year, Douyin has set the local life GMV target at 150 billion yuan, doubling the target. Today, when Internet traffic has peaked, such a high growth rate has also made Meituan full of energy to fight against it.
Meituan will also regard live broadcasting as one of its annual company and strategies in 2023, and will increase investment in traffic acquisition. Meituan completed a new round of organizational adjustments in April this year. Compared with the past, in this adjustment, Meituan's in-store business has received significantly more attention. Most of the "internal vitality" positions have been transferred to the in-store and home-based business, with a clear preference for the in-store business.
Meituan also released video-related recruitment positions, including client senior test and development engineer (video client), server senior test and development engineer (video server), short video content cooperation, short video/novel content recommendation algorithm engineer, Video content business analysis, etc.
Judging from the third quarterly report given by Meituan, in-store, hotel and tourism continued to grow, with transaction amounts exceeding 90% year-on-year. Commission income from the core sector increased by 30.5%, and advertising and marketing revenue increased by 31.6%, both of which were greater than orders. The growth rate of volume means that more revenue may be contributed by the in-store segment.
The core model of Douyin’s in-store business is “content planting + conversion and monetization”, that is, merchants use short videos of store visits and live broadcast content to encourage users to place orders and make purchases in stores to increase merchant conversion rates. Based on Douyin's huge user base and accurate algorithms,
has formed a "store-finding" model, which has greatly reduced Douyin's local customer acquisition costs in the initial stage. However, compared with Meituan, this model also involves more content costs paid to store explorers and third parties.
Meituan’s moat for stores lies in the mental and scale advantages it has established early on when people are looking for stores. But in the face of such a strong offensive from Douyin, Meituan still needs to continue to find new breakthroughs to defend the moat it has built over a long period of time.
Whether it is in-store or home-based business, Meituan has increased its focus on live broadcasting, and its core business has also found a new target.
Who is the winner in local life
In the field of local life, Douyin has surpassed Ele.me and become a strong rival of Meituan.
Douyin is based on the huge user traffic and the long-term accumulation of store visits. Developing local life is the icing on the cake. Traffic boost can help merchants get greater exposure. According to
data, in the first three quarters of 2023, Douyin’s 580,000 influencers have obtained stable income through store exploration, which has brought economic benefits of 72.9 billion yuan to physical merchants.
But Rome was not built in a day, and Douyin is still beyond its reach in intra-city distribution, service delivery, and order fulfillment. Therefore, Douyin is also trying to cooperate with third-party errands and delivery agencies in an attempt to open up the closed loop of its intra-city services. But to truly penetrate the core of local life in Meituan, Douyin still needs to make a lot of efforts.
In addition, the magic weapon for Meituan to achieve positive profitability is its huge number of merchants and millions of riders. It has maintained its position as the "biggest brother" in local life for many years.
According to calculations by Zhongtai Securities, only 50%-60% of Douyin’s push-based group buying GMVs are converted into actual write-offs, while Meituan’s active search-based group buying write-off rate exceeds 70%.
At present, Meituan has shortcomings in terms of traffic, usage time, and content supply. Meituan also needs to continue to improve the live broadcast content ecosystem and attract high-quality live broadcast anchors and brand merchants to participate in order to provide rich live broadcast content.
In addition, Meituan still needs to find a live broadcast model that can compete with Douyin to ensure that the live broadcast business can bring considerable revenue.
Since this year, in order to cope with the competition from Douyin, Meituan has had to increase its market investment to seize the local life market share. In the third quarter, Meituan’s core local commercial operating profit decreased by 1 billion yuan, and its operating profit margin also decreased by 4.3 percentage points.
There are two main reasons: first, the subsidy rate has increased; second, the increase in seasonal rider subsidies has led to a reduction in the unit economic benefits of its catering takeout and Meituan flash sales businesses.
This also shows that Meituan is burning money to seize the market. It depends on how Meituan wins this protracted battle for local life.
author | Li Ying
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