Although the subsidy war may come to an end, the battle is not in vain. The strategic focus of JD.com, Alibaba, and Meituan actually points to the instant retail market – takeaway, as an important foothold for instant retail, is a key starting point for platforms to compete for this potential field. JD.com will not give up its logistics advantages to deepen its cultivation of instant retail, Alibaba will integrate Ele.me into the core e-commerce sector to strengthen its layout, and Meituan will continue to consolidate its leading position. In the future, the competition between the three major platforms around “takeaway + instant retail” will continue, and the outcome is not yet known. This article analyzes the logic behind the end of the war and discusses its long-term impact on the industry pattern.
After the State Administration for Market Regulation interviewed the three major takeaway platforms at the same time, even the most insensitive people should be able to feel that this takeaway war is coming to an end.
Or to use a more conservative word: the food delivery war with huge subsidies as the main form of competition is coming to an end.
Since February this year, the war has been going on for more than five months, almost less than half a year.
In fact, before today, there were at least two signs that food delivery platforms were not willing to continue.
The first sign is that Meituan Wang Puzhong was interviewed (which is very rare), proposing that “we don’t want to roll, but we can’t fight back”. The second sign is that JD.com told the media that JD.com did not participate in the “0 yuan purchase” at all.
The interview of the State Administration for Market Regulation actually gave the competing parties a chance to withdraw their troops and borrow the donkey from the slope.
The only suspense now is whether the platform’s huge subsidies will disappear in a short period of time, or will they slowly exit over a period of time (such as a few days or a week).
In February this year, when the war in the food delivery market reignited, I am afraid that no one expected the competition to be so fierce: the average daily food delivery order volume in the country increased by more than 1.5 times, and on some days it may have increased by 2 times! It is still a mystery how many subsidies the platform has smashed, but some analysts estimate that the monthly subsidy amount of the whole market may reach 30 billion. Even for companies of the magnitude of Meituan, Alibaba, and JD.com, this burden is too serious and is destined not to last long.
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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Why is the takeaway war so “lively”?
I think the key is that the number of players involved has changed from two to three.
In February this year, everyone generally believed that this was a competition of “Meituan VS JD.com”; But soon, Alibaba entered the market strongly, attaching great importance to it and promoting it very much. Just over a year ago, many people thought that Alibaba would control the development and even withdraw from the takeaway business, and now the situation will definitely surprise them!
As we all know, the reason why “Romance of the Three Kingdoms” is so good is because there are three families instead of two families competing for hegemony. The dynamic balance formed by the three major food delivery platforms makes neither of them willing to take the lead in retracement; Conversely, the increase in any of them will lead to a stress response in the other two.
My previous judgment was that at most until the end of the summer vacation (the end of August or early September), the three major platforms would passively withdraw troops due to financial pressure, and the difference was only in who would collect first – there would be a game around the decision to “withdraw troops”.
Now there is no need to play, everyone can withdraw troops at the same time without worrying about affecting the balance.
The question is: does this mean that from next week everything will return to the state before January this year?
In other words: in a commercial sense, were the takeaway wars in the previous months in vain?
I don’t think so.
Some things are destined to go down the drain, such as people are unlikely to order milk tea every day without subsidies, and the number of takeaway orders in the whole market cannot be maintained at more than 250 million for a long time. However, some things don’t end with the end of the subsidy war.
First of all, JD.com will definitely still do takeaway.
Because takeaway is not only takeaway, but also the foothold of instant retail, JD.com, which is already known for logistics, cannot allow instant retail to erode its own e-commerce base camp, so the best way is to do instant retail by yourself. The intensity of the takeaway war may far exceed JD.com’s initial vision, but the established strategy of doing takeaway and taking takeaway as a foothold to strengthen instant retail will never change.
Secondly, after this battle, Alibaba will probably not consider giving up the takeaway business, for reasons similar to JD.com: the instant retail market is already very large, and it will be bigger in the future, and it cannot be given up.
Not long ago, Ele.me merged into Taobao/Tmall, which clearly reflects Alibaba’s change in its strategic positioning – no longer an isolated “local life sector”, but an organic part of the “core e-commerce sector”.
This seems to be reminiscent of the “near-field e-commerce” that Alibaba once bet heavily on four or five years ago, but Alibaba did it in an asset-heavy way, and now it is doing it in a relatively asset-light way.
Third, Meituan will further increase its investment in the instant retail business – it is now the leader and will try to maintain the lead gap before the two rivals catch up.
Meituan’s advantages in this field are not only reflected in user habits and huge capacity, but also in comprehensive and in-depth control of the supply chain.
I have discussed this in several previous articles, and again there is no need to go into detail.
If there are still people who still wonder why the meager profit takeaway market has set off such fierce competition this year, then the answer has been given above: rather than the three major platforms competing for the takeaway market, it is better to use this as a starting point to compete for the instant retail market.
There was a lot of controversy a few years ago about what to do in instant retail (I believe many people still remember the debate on concepts such as “front-end warehouse” and “store-warehouse integration”); Now, strictly speaking, these controversies have not disappeared, but one thing is certain, that is, takeaway and instant retail are two sides of the same coin, and if you do the former well, you can do the latter well (and vice versa).
Suppose you are like some of my friends who once purchased diapers, milk powder and other maternal and baby products late at night; Or, like myself, used to buy cat litter or cat food temporarily before going on a trip; Or, like some of my friends, who find out you don’t have tennis pants an hour before your scheduled tennis lesson – you’ll definitely realize how big the potential of the instant retail market is and how high the potential profit margins are. The management of e-commerce platforms definitely knows this better than we do.
So I think that even if the takeaway war comes to an end, the three major platforms will still adhere to the strategic line of “takeaway + instant retail”. As for who wins and who loses, there is obviously no conclusion at the moment, and there is likely to be more than one winner.
