At a time when competition in the retail industry is becoming increasingly fierce, the business layout of the two giants, Meituan and Pinduoduo, is undergoing major changes. Meituan’s strategic adjustment to the preferred business has triggered changes in the community group buying market, and has also brought new development opportunities to Pinduoduo. This article will delve into the latest developments between Meituan and Pinduoduo in the field of instant retail, and analyze how the two sides are competing for the commanding heights of the new track in the retail industry through resource integration and business upgrades.
Not long ago, Meituan’s strategic adjustment of the preferred business and the increase in the layout of the instant retail business not only broke the original pattern of the community group buying market, but also caused an uproar in the instant retail track. This change is not only related to the business trend of the two giants Meituan and Pinduoduo, but also reflects the development trend of the entire retail industry.
Meituan Preferred: Strategic contraction, focus on core competitiveness
On June 23, users in many places across the country found that Meituan’s preferred app suddenly displayed “insufficient capacity, suspended sales”, and many suppliers also received business change notifications at the same time.
In fact, this is not a complete shutdown, but a deliberate and active strategic contraction of Meituan.
Meituan preferably chooses to withdraw from some long-term loss-making urban markets, retains operations in areas with development potential such as Guangdong and Zhejiang, and concentrates limited resources on more strategically valuable business segments.
From the perspective of business logic, Meituan’s decision has clear considerations. The community group buying business is facing a profitability dilemma that is difficult to break through, and the problem of low customer unit price and limited gross profit margin has existed for a long time.
The data shows that the average unit price of community group buying is usually in the range of 20 to 30 yuan, which is much lower than the unit price level of takeaway and flash sale business, and the link is more complex than that of takeaway and flash sale business.
At the same time, after deducting various expenses such as group leader commissions, high logistics costs, market subsidies, and personnel costs, the unit economic benefits (UE) of community group buying business are always difficult to achieve.
To achieve these three challenges, product managers will only continue to appreciate
Good product managers are very scarce, and product managers who understand users, business, and data are still in demand when they go out of the Internet. On the contrary, if you only do simple communication, inefficient execution, and shallow thinking, I am afraid that you will not be able to go through the torrent of the next 3-5 years.
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In the past few years, Meituan has invested a huge amount of money in the community group buying business, and although the loss has narrowed, there is still a long way to go to achieve profitability.
In addition, the development ceiling of the community group buying market is gradually emerging. Even though Meituan and Pinduoduo occupy a leading position in this field, the overall market size is always limited to a few hundred billion yuan.
In contrast, the instant retail market shows broader growth space and development potential, and the scale of the instant retail market will exceed the 1 trillion mark in 2025, maintaining a growth rate of about 20%, which is beyond the reach of community group buying.
With the strong entry of competitors such as JD.com and Alibaba into the instant retail track, the market competition is becoming more and more fierce. As Meituan’s core layout in the field of instant retail, Meituan’s flash sale carries an important strategic mission for Meituan’s future development.
In order to gain an advantage in this fierce competition, Meituan decisively decided to tilt its resources to the Little Elephant Supermarket and flash sale business, and enhance its competitiveness in the field of instant retail by focusing on its core business.
Duoduo grocery shopping: seize the opportunity to achieve resource integration and upgrading
Meituan’s preferred business adjustment has brought rare development opportunities to Duoduo grocery shopping. In order to avoid losses caused by inventory backlogs, many Meituan’s preferred suppliers urgently need to find new sales channels.
In this case, Duoduo has become the primary choice of suppliers with its huge market size and perfect supply chain system.
In just 72 hours, a large number of Meituan’s preferred suppliers poured into the Duoduo grocery platform with goods, and a large-scale resource transfer was quickly launched.
This resource undertaking has had a profound impact on Duoduo’s pallet system.
Previously, Meituan preferred took the branding route, with extremely strict control over supplier qualification review and product quality, mainly for mid-to-high-end consumer groups. Duoduo Grocery takes cost performance as the core and deeply cultivates the sinking market.
With the addition of Meituan’s preferred suppliers, the pallet structure of Duoduo has undergone significant changes, forming a differentiated dual pallet model: in the central city, a quality-oriented home service pallet that meets the needs of mid-to-high-end consumers has been built; In the sinking market, continue to maintain cost-effective self-pickup pallets.
The optimization and upgrading of this pallet has laid a solid foundation for Duoduo to expand the service to home.
In the past, limited by the commodity structure of the sinking market, it was difficult to stimulate users’ enthusiasm for ordering.
Nowadays, the introduction of new pallets makes it possible for Duoduo to carry out high-quality home services in central cities.
At the same time, Duoduo Grocery has actively taken a series of measures to consolidate its competitive advantage, not only throwing an olive branch to some of Meituan’s preferred team leaders in first- and second-tier core cities to attract them to join with favorable conditions of increasing 10%-20% commissions, but also promoting the integration of grid warehouses in the sinking market and incorporating some Meituan’s preferred grid warehouses into its own system.
Through these measures, Duoduo has achieved all-round optimization and expansion in terms of supply chain and group leader resources.
Instant retail: compete for the deer and seize the commanding heights of the new track
The rapid changes in consumer demand have pushed instant retail to become a new outlet in the field of e-commerce and local life services.
Relying on an efficient instant delivery system, instant retail realizes the delivery of online orders within 30 minutes, which greatly meets consumers’ pursuit of timeliness and convenience.
At a time when “instant gratification” has become a new consumer trend, the traditional community group buying model of “order today, pick up tomorrow” has gradually lost its appeal, which has also prompted major e-commerce giants to shift their strategic focus to the field of instant retail.
While adjusting Meituan’s preferred business, Meituan is making every effort to expand its instant retail business. Meituan Flash Sale actively expands high-margin categories such as 3C home appliances and fresh food to improve business profitability; Little Elephant Supermarket plans to fully cover all first- and second-tier cities and accelerate market layout; By increasing the intensity of “direct procurement at the source”, we will optimize the supply chain system and enhance market competitiveness.
In addition to Meituan, e-commerce giants such as JD.com and Taobao have also made efforts to instant retail. JD.com integrates the fresh food supply chain through the takeaway business to build a complete ecological closed loop; Taobao vigorously promotes Taobao’s flash sale business and includes Ele.me and Fliggy in Alibaba’s China e-commerce business group, trying to build a comprehensive consumption platform.
It is reported that Duoduo is also actively preparing to build its own commodity warehouses in first-tier cities such as Shanghai, and plans to launch instant delivery services in August.
The competition of many giants indicates that instant retail will become the main battlefield of the next competition in the e-commerce industry.
Fresh food field: timeliness wins, and new development trends are achieved in half an hour
In the field of fresh retail, delivery timeliness directly affects consumers’ purchasing decisions. Compared with the community group buying model of next-day delivery, the instant retail model of half-hour delivery has obvious advantages.
Fresh products have a short shelf life, consumers have extremely high requirements for freshness, and the fast delivery service of instant retail can ensure the quality of fresh products to the greatest extent and reduce losses, so it is more favored by consumers.
Although Duoduo Grocery currently operates mainly in the community group buying model of next-day delivery, with the integration of Meituan’s preferred resources and the continuous development of its own business, it is feasible to transform to an instant retail model of half-hour delivery.
Through the “farmland cloud spelling” model, Duoduo Grocery Realizes Direct Procurement from the Origin and Effectively Reduces Procurement Costs; After integrating Meituan’s preferred resources, the product category and quality have been further improved.
If the distribution system can be continuously optimized, whether it is with the help of third-party distribution forces or the development of its own distribution team, Duoduo Grocery is expected to achieve a breakthrough in the field of fresh instant retail.
Once successfully transformed, Duoduo will stand out in the highly competitive fresh food market and attract more consumers who pursue freshness and timeliness.
Meituan’s preferred business adjustment is an important turning point in the development of e-commerce and local life service industries. It marks a new stage of development of the community group buying format, and also accelerates the arrival of the era of instant retail.
Meituan is trying to achieve a breakthrough on the new track by focusing on the instant retail business; Duoduo Grocery Seized the Opportunity to Complete Resource Integration and Business Upgrades, Laying a Solid Foundation for Future Development.
In the field of fresh retail, the instant retail model of half-hour delivery has become an important trend in the development of the industry, and whoever can take the lead in making a breakthrough in this field will be able to occupy a favorable position in the future market competition.
This transformation in the retail industry continues, and the future is full of infinite possibilities and challenges.
