Meituan and Ele.me are in a fierce battle in the field of food delivery, and young people have become the core traffic in this competition. This article provides an in-depth analysis of how the two major platforms attract young users through crazy couponing, as well as the business logic and opportunities behind the instant retail model, revealing why young people’s consumption habits and emotional needs have become the key to competition for large manufacturers.
01 Young people’s business
The regret of life is that a person cannot have youth and feelings for youth at the same time.
Young people don’t know how valuable traffic they are, but big manufacturers know very well. A well-known investor directly stated at the dinner that he would not invest in post-60s entrepreneurs, but only in the post-80s and post-90s. Unfortunately, the famous post-90s entrepreneur he pitched in still owes me a deposit of 99 yuan.
The big factories crowded in the instant retail track are also targeting young people.
How to win over young people? The most direct way is: let them work hard to gather wool.
So, today (July 5), when middle-aged people are busy paying attention to whether the earthquake in Japan has occurred and where to walk their babies on Saturday, young people are busy grabbing takeaway coupons.
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Meituan and Ele.me suddenly made efforts on the same day and issued coupons frantically. My daughter-in-law received a call from Ele.me customer service at around 10 a.m.: The 12.5 yuan coupon has arrived. She ignored it. But many young people ate and hiccuped, and shared their achievements on social platforms:
- 0.001 yuan to buy 6 bottles of drinks;
- Meituan ordered 26 takeaways and spent 53 yuan;
- Meituan points 10 orders with a total of less than 1 yuan;
Some have already booked lunch for the next 5 days; Some people really can’t finish drinking milk tea, so they give it to the courier brother to drink, and tell him to deliver it directly when he gets it; Someone described it: a steady stream of takeaways poured in, and the refrigerator couldn’t be put down; Some people also call this day “National Diabetes Day” because a lot of “wool” is milk tea.
▲ Netizens on social media commented on the day’s takeaway war
Some people have begun to worry: Meituan’s Hungry War, the final victim is themselves – because they are at least three pounds fat.
When I found this information at 10 p.m., my daughter-in-law, who spent 30 yuan on Starbucks in the morning and 52 yuan on Luckin in the afternoon, was as upset as losing her winning ticket. According to the battle report just released by Meituan, as of 22:54 on July 5, the daily order volume of instant retail on the Meituan platform exceeded 120 million orders.
Sure enough, it was a miracle.
Ele.me next door has not yet announced the battle report, but judging from the excitement of everyone’s participation, it should not be too bad. After all, in the recent round of subsidy wars, it was Alibaba who first “provoked trouble”: Taobao Flash Sale announced a 50 billion yuan subsidy plan on July 2.
However, this 50 billion yuan subsidy is planned to be spent in 12 months, which is a long stream. Unexpectedly, Meituan directly came to a big flood and launched a surprise attack on the weekend.
The more young people eat, the more stable Meituan’s position in the instant retail battlefield will be.
Instant retail is fundamentally a business that competes for young people. As a middle-aged person, I don’t mean to discriminate against everyone here, but the business of young people is really wonderful: it is like a small shop standing at the school gate, always with one stubble after another.
We will grow old, but young people’s business will not.
As for how important young people are in the Internet business, my former employer Tencent knows best.
Let’s talk about QQ this product. When I was in high school, a few years before the millennium, it was popular all over the country, and I believe that its news prompt can evoke many memories of youth in the post-80s and post-90s. Later, our generation grew up and became cattle and horses who skillfully replied to “received” in WeChat and DingTalk, and many people even forgot the login password of QQ, but QQ came back to life – primary and secondary school students who relied on new stubble.
Just like us back then, they also posted text and pictures in QQ that adults couldn’t understand. Tencent also has a channel to reach fresh “leeks” outside the game.
02 Gold content
Instant retail is not a new business model. If you follow the most basic understanding: what consumers want can be delivered immediately, this is an old business for at least 10 years. JD.com did JD Home in 2015, and Meituan and Ele.me made ordering takeaway a regular action for everyone.
Instant retail is not a good business either.
Because its first category is fresh. Users have the highest requirements for the timeliness and freshness of such goods. The “predecessor” Daily Fresh has been reduced to cannon fodder, and Dingdong will only end its long-term losses in 2024 to achieve annual profits. A very important reason is that its performance costs (warehousing, distribution, manpower) costs are extremely high, accounting for 20-30% of revenue, far exceeding 5%-15% of traditional e-commerce.
But it has become one of the hottest businesses of the year.
From JD.com to Alibaba, the big companies have invested so much in it that it is almost forgotten that a few months ago, the focus of the entire industry was still on AI. It can only be said that from tall to pyrotechnics, the big factories focus on a flexibility. Just like my daughter-in-law’s shopping cart, there are both skirts for thousands of dollars and water guns for a few dollars.
On the surface, it is because JD.com wants to be a “catfish” to enter the takeaway, forcing Taobao to strengthen its offensive, Meituan tightened its defense, and the war raged.
But if you go to the complex, the two keywords that large manufacturers compete for are: high frequency and young people. ——As long as these two points are met at the same time, this arena has enough gold content.
The data shows that 71% of the user group of instant retail is 21-35 years old. Meituan flash sale data also mentioned that young people in Beijing use instant retail twice a week.
My daughter-in-law is a deep user of instant retail.
All kinds of urgently needed but not commonly used things, she relies on instant retail all year round, such as business trips or travel with children, and when she encounters a hotel with a bathtub, she will place an order for a bathtub cover. ——I also agree that this way of consumption is better than hoarding a bunch of things at home.
Some things that are commonly used but forgot to bring because of poor brains, instant retail can also satisfy her. She began to develop the habit of swimming this year, I looked at her Meituan order, since the beginning of summer, she has bought: swimsuits, swimming caps, swimming goggles, slippers, towels, just swimming-related items, the consumption amount has exceeded 500 yuan. The reason is the same: I forgot to bring it when I went out.
This situation will not occur in my parents’ generation. They don’t easily forget to bring things, and more importantly, their spending power and scenarios are limited. The only thing that can make my mother consume is the 9.9 free shipping pajamas in the live broadcast room. She has time, and it doesn’t matter if the express delivery arrives in a few days.
What you want, you get right away – instant retail is inherently emotional consumption, which is an important reason why it is popular among young people.
I feel the same way in the process of running a jade business. Many of my clients are female college students, and they will ask me to help keep the goods and place orders when I get the scholarship. They buy not only a commodity, but also a reward.
Compared with this kind of delayed consumption, instant retail with a unit price of only 80-120 yuan can allow young people to be satisfied faster at a lower cost.
03 Opportunity
The popularity of instant retail is an opportunity for many small businessmen.
A friend from Jiangsu said that he opened a convenience store on Meituan, selling everything from snacks to daily necessities, and the income was much better than going to work. I also considered doing a sex toy store on a takeaway platform in the first two years, because it has low operating costs, as long as the location is suitable, I don’t have to worry about losing business.
This is the charm of near-field consumption.
The sales path of traditional e-commerce is: user order, store delivery, logistics or express delivery, and user signature. The advantage of it is that I can buy flower cakes from Yunnan, spicy chicken from Guizhou, and big mangoes from Guangxi in Beijing, but I need to wait. For merchants, the advantage is to broaden sales channels, but for some products that are not just needed, users may be “sober” during the waiting process and finally choose to return them.
Instant retail focuses on a fast one: quick ordering, quick use, and transactions can even be completed within half an hour.
Before you regret it, the goods have already arrived. This situation is now often seen in e-commerce promotions.
The key here is the front position. Whether it is an e-commerce or a life service platform, the popular practice in recent years is to build front-end warehouses, which have crushed offline stores in terms of cost and efficiency. Nowadays, many online convenience stores also do the front-end warehouse model, and the warehouse is arranged in an inconspicuous corner such as the basement of the community, and the cost is extremely low.
For the relevant analysis of the front warehouse, you can refer to the article I wrote last year, “Meituan’s Hand Has Reached the Street Store”.
The current warehouse is dense enough, and even instant retail can challenge traditional e-commerce in key elements such as SKUs and prices – not relying on chicken-bloody subsidies, but daily low prices, then the retail industry may change again.
Of course, this day is still a bit far away.
One or two beautiful battle reports cannot change the “bitter business” label of instant retail. Meituan, Alibaba and JD.com’s “instant retail Three Kingdoms” are so lively, and Pinduoduo and Douyin next door have not kept up, which is a statement.
But for small businesses like us, change means opportunity. Recognize the situation and follow the trend, and you are more likely to get twice the result with half the effort.
High-frequency young people are emotionally satisfied, and in the current business environment, a business that can do this well is at least not a bad business. From LABUBU to instant retail, it may be the same.
