"Douyin is going to acquire Ele.me", similar rumors continued from 2022 to 2024.
Starting in 2022, Douyin cooperated with Ele.me, and the competitive pattern of Meitui and Kuaishou took shape. Subsequently, the news that "Douyin will acquire Ele.me" repeatedly appeared in the public opinion field, attracting industry attention. The latest "noise" lasted from December last year to January this year.
This time the acquisition rumors also added many details, such as the acquisition price is about 7 billion US dollars, and it will be completed after the Spring Festival; Douyin only needs the resources of Ele.me riders, but Alibaba hopes to package and sell it, etc. The emergence of these so-called insider details has made things more confusing.
"It's nothing at all, it's just a rumor" and "There is no such plan." Ele.me and Douyin stood up and publicly denied the rumors almost at the same time. The plot of rumor-refutation is very similar to the previous rumors.
In theory, Douyin’s acquisition of Ele.me is indeed very complementary. It is a story with great room for commercial development and full of imagination. However, after more than a year of cooperation, why has the relationship between Douyin and Ele.me not progressed further?
Once upon a time, Ele.me was a hot topic that everyone wanted to win over. was even the first to want to acquire Ele.me, which happened to be Meituan.
Around 2011, the landmark "Thousand Group War" in China's Internet history began. Various group buying websites such as Lashou, Meituan, Nuomi, Dianping, Wowo, and Gaopeng fought against each other. Behind them were giants such as Alibaba, Tencent, and Baidu. And the game of capital.
In the end, Meituan broke through and became the dominant player in the group buying field. At this time, Meituan discovered that in the field of food delivery that it had not yet entered, Ele.me had already taken the lead. So Meituan proposed to acquire Ele.me, but Ele.me founder Zhang Xuhao refused. If the acquisition of fails, then we will fight.
has experienced the baptism of thousands of regiments. Meituan has the industry-famous "local push army", and the overall team's combat effectiveness is also extremely fierce. In 2013, Meituan launched its food delivery business, which quickly made it difficult for Ele.me, a platform founded by a college student team, to withstand the platform, and lost ground.
At that time, Meituan was backed by Alibaba, and Dianping was backed by Tencent. As Alibaba’s rival, Tencent, Dianping, and JD.com have joined forces with Ele.me to compete with Meituan. Ele.me has also learned the "combat power" of Meituan. Both parties are spending money to grab users and business resources regardless of the consequences. The stalemate of makes it very difficult for both companies. If this kind of hand-to-hand combat with red bayonets continues for a longer time, the final winner may not be Meituan.
Times and trends have brought about a big change that Ele.me did not expect. In 2015, after Meituan merged with Dianping, Alibaba withdrew from Meituan. Tencent immediately increased its capital injection and acquired Meituan and Dianping. Alibaba turned to investing in Ele.me and fully supported Ele.me in continuing to compete with Meituan. There was a reshuffle between the two camps.
Ele.me continues to receive financial transfusions, but the source has changed from Tencent to Alibaba. With Alibaba’s blessing, Ele.me acquired Baidu Waimai in 2017, and its market share briefly surpassed Meituan.
However, in addition to funds, Meituan also has access to Tencent’s strong social traffic, high-quality resources such as integration into Dianping’s merchant review system, and its own powerful takeout delivery network, forming a competitive barrier that Ele.me cannot contend with. After 2018, Meituan has been singing all the way. Why is
in 2018? This is also due to an acquisition. In 2018, Alibaba teamed up with Ant Financial, the parent company of Alipay, to acquire Ele.me for US$9.5 billion. Later, Zhang Xuhao’s founding team cashed out and left.
Ele.me has thus become a pawn in Alibaba’s local life strategy. , together with AutoNavi, Fliggy, Word of Mouth and other businesses, form Alibaba’s life service section. Whether it is new retail or local life, Alibaba attaches great importance to the platform value of Ele.me. The core is the merchant resources and rider delivery resources accumulated over many years.
However, compared with the independent period, Ele.me, which was included in the Alibaba system, has always been dependent on others. The development focus of has changed from competing with Meituan in food delivery to cooperating with Alibaba Group's local life strategy. subsequently experienced turmoil due to several strategic adjustments by Alibaba Group, and its competitiveness and market share were not as good as before. The decline of
Ele.me has also established Meituan as the dominant player in the food delivery and local lifestyle markets.
data can more intuitively show Ele.me’s loss of power.
In October 2021, the State Administration for Market Regulation announced the administrative penalty decision on Meituan’s “choose one” issue. It is mentioned that from 2018 to 2020, Meituan’s catering takeout revenue accounted for 67.3%, 69.5%, and 70.7% of the overall market respectively; Meituan’s catering takeout order volume accounted for 62.4%, 64.3%, and 68.5% of the overall market respectively. %.
Meituan has cut 70% of the overall market pie, which means that Ele.me has been squeezed to less than 30%. The State Administration for Market Regulation also pointed out that based on Meituan’s market share, it can be inferred that Meituan has maintained a strong competitive advantage and has a dominant market position in the long term.
In March 2023, Alibaba adjusted its structure and business ecosystem and established six major business groups. The local life group where Ele.me is located is one of them. Subsequently in August 2023, Alibaba announced its financial report for the second quarter of that year, showing that Alibaba's local life business grew by 30%, with revenue of 14.45 billion.
In the corresponding financial quarter, Meituan’s core local business achieved quarterly revenue of 51.2 billion yuan, a year-on-year increase of 39.2%. Meituan’s core local business segments include food delivery, Meituan flash sales, in-store services, hotels and B&Bs, attraction ticketing and transportation ticketing. is basically fully aligned with Alibaba’s local life.
So we can also see that even if Ele.me is packaged with Amap, Koubei, Fliggy and other businesses, the revenue scale is still far less than Meituan, which also confirms Ele.me’s loss in the competition.
However, the industry is always full of variables. won Meituan from Ele.me, but it also needs to face new opponents. As a leader in the short video field, Douyin has attracted a large number of users with its unique algorithm and content ecology. In recent years, as user growth has peaked, Douyin has had to seek new business growth points.
Local life is a field naturally closely related to short video planting. can better convert short video traffic into transaction revenue, so it has become a key business of Douyin's layout. As an important part of local life, food delivery has the characteristics of high frequency and urgent demand. It is bound to be a huge market opportunity that Douyin will not miss. However, to break through in the fiercely competitive food delivery market, Douyin needs a suitable partner.
If Douyin wants to enter the local life and food delivery market, it must start a comprehensive competition with Meituan. The enemy of the enemy is a friend, so Douyin chose to form an alliance with Ele.me. As a veteran player in the food delivery market, Ele.me still has a mature delivery system that can provide Douyin with stable and efficient food delivery service support.
At the same time, Ele.me has also accumulated a wide range of merchant resources, which can improve the efficiency of Douyin in penetrating offline merchants. For Ele.me, cooperation with Douyin can gain huge traffic entrance and further boost business data.
The so-called cooperation is essentially about each getting what he needs. Douyin puts more emphasis on what can be obtained from the Ele.me platform and using the value of the Ele.me platform. does not use Douyin’s own funds and resources to Help Ele.me fight against Meituan. This is different from the previous acquisitions and alliances Ele.me has experienced.
In 2021, ByteDance founder Zhang Yiming stepped down as CEO and was replaced by his college roommate and entrepreneurial partner Liang Rubo. At the same time, ByteDance has divided into six major business segments, namely Douyin, Dali Education, Feishu, Huoshan Engine, Zhaoxiguangnian and TikTok.
In 2023, which has just passed, the two major strategies set by ByteDance CEO Liang Rubo are focus and pragmatism. As a result, the industry saw Byte decisively abandoning its heavily invested game self-research business. Even if had invested tens of billions in the end, it was unambiguous to turn around and give up.
These facts all reflect a core characteristic of Byte. The giant is more willing and better at doing the asset-light traffic algorithm business. has learned from the past experience of the game business and must be more cautious about the more asset-heavy and operation-heavy food delivery business.
In 2021, some media revealed that Douyin was internally trying to create the "Xindong Takeout" brand to enter the takeout market. Its business model is to invite catering merchants on Douyin to settle in, and the merchants will provide delivery services independently. However, during the promotion process, problems such as the lack of an efficient distribution network and poor management of self-delivery teams are the flaws that make this model unsustainable.
However, Douyin publicly denied the relevant reports at that time, saying that the platform had no business plan related to food delivery, and the investment and agency information related to "Xindong Food Delivery" were untrue. The truth behind this Rashomon cannot be verified, but what can be seen is that whether in 2021 or 2024, Douyin has never rashly entered the field of takeout delivery.
The most intuitive example is the management cost of delivery riders. Meituan has struggled to make profits in its food delivery business over the past many years. The core reason is the high rider cost.
Based on Meituan’s financial report data in the past few years, commission income in 2019 was 49.6 billion, rider costs were 41 billion, accounting for about 83%; food delivery revenue in 2021 was 57.1 billion, rider costs were 72.1 billion, and gross losses were 15 billion; in 2022, food delivery revenue 70.1 billion, cost 80.2 billion, gross loss 10.1 billion. It is in 2022 that the number of Meituan riders will reach a huge scale of 6.24 million.
It is worth noting that riders are currently more outsourced and have no employment relationship with Meituan and Ele.me. If subsequent relevant policies establish the employee status of riders, then food delivery platforms such as Meituan and Ele.me will need to pay greater employee costs, which is a high cost that Douyin is inevitably unwilling to bear.
In fact, the food delivery field seems simple, but in fact it has very high entry barriers. , for example, manages millions of riders, balances delivery timeliness with rider safety and income, massive merchant-side fulfillment connections, user-side responses and customer service, and in addition to catering, more and more products such as fresh food, home delivery, and new retail Delivery coverage, etc.
If Douyin starts its layout from scratch, it will require a lot of learning costs and labor costs to establish and polish the mechanism, and there is no guarantee that it can do better than Meituan, which has been working hard for more than ten years, let alone gain certain advantages. . This huge investment in , coupled with the same huge uncertainty, naturally makes Douyin hesitate.
On the other hand, if it acquires Ele.me, it will change from a cooperative relationship to a subordinate relationship. Douyin needs to be responsible for Ele.me. It will inevitably pay a higher price in the future to help Ele.me compete with Meituan. Gradually regain the disadvantage. Combined with the several duels between Ele.me and Meituan over the past few years, it is not difficult to see that is also a road with huge costs and uncertainties.
So taken together, it is not difficult to understand why the seemingly compatible "strong alliance" between Douyin and Ele.me will never become a reality.
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