When “0 yuan drinking milk tea” swiped the screen, the daily order for takeaway soared from 80 million to 250 million – Meituan, Taobao, and JD.com baked the stock market into an incremental cake in 150 days. The three CEOs beat the drum and tens of billions of subsidies to bombard each other, but they are rare “all-team winners”: users are soft, merchant orders have doubled, riders’ monthly income has exceeded 10,000, and even the platform has extended the life of instant retail and shelf e-commerce with high frequency bands and low frequencies.
The MAD (Meituan, Alibaba, JD.com) takeaway war, after two consecutive “crazy Saturdays”, is evolving into a rather rare war without losers.
Since the launch of JD.com’s takeaway on February 11 this year, the takeaway “Three Kingdoms” has been fighting for 150 days. The three major platforms of Meituan, Taobao and JD.com are far from distinguishing the winner or loser, but the total size of the entire takeaway (including non-catering categories) market has more than tripled from before the war.
According to the latest battle reports of various platforms, Meituan’s instant retail orders have reached 150 million, Taobao flash sales and Ele.me have exceeded 80 million daily orders, and JD.com’s daily takeaway orders have exceeded 25 million. The total order volume of the three major platforms has reached 250 million.
Before the start of this round of takeaway wars, the total number of domestic and foreign orders was about 80 million, which has been maintained for many years. Roughly calculated, this war has more than tripled the market volume of the food delivery industry.
In just 150 days, 170 million new daily orders have been added, and the takeaway market, which has long matured, has burst out with amazing growth. Before this year, in the eyes of most people, the food delivery market pattern has long been solidified, the main players lack fighting spirit, and there is not much room for growth.
According to iiMedia Consulting, between 2022~2024, the penetration rate of China’s food delivery market will only rise from 25.4% to 28%. In first- and second-tier cities that account for the majority of the share, the takeaway market has gradually become saturated.
However, with JD.com and Taobao entering the game one after another, Meituan went all out, and the growth curve of the takeaway market, which had been flat for a long time, rose sharply. Even if the subsidies of various platforms are reduced and the number of orders naturally falls in the future, it is impossible for this market to return to the level of 80 million orders per day after absorbing new users and new merchants.
This is enough to prove that the demand in the takeaway market is far from peaking and deserves to be explored deeply. The best way to tap demand is to use subsidies as a spear to fight a vigorous war and encourage the enthusiasm of consumers, merchants and riders.
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More importantly, Meituan, Taobao, and JD.com launched a takeaway campaign, although they burned money fiercely, but did not bring negative externalities, but benefited platforms, consumers, merchants, riders and other participants.
On the one hand, consumers are overwhelmed by large coupons and “zero-yuan purchases”, and opening the APP every day to “gather wool” has become a new habit, promoting the takeaway and in-store orders of merchants to take off. The huge demand has given riders more opportunities to make money, and some have even doubled their income.
On the other hand, platforms that have invested heavily in the game, whether it is Meituan, Taobao, and JD.com, which are attacking, have seen rapid growth in order volume, bringing new momentum to instant retail, in-store, shelf e-commerce and other businesses, and creating a large number of high-quality jobs. The huge cash reserves of large Internet companies also have higher returns.
This all-round positive externality means that there is likely to be more than one winner in the food delivery war, but everyone can benefit from the secondary growth of the entire market.
The last war in which there was no loser on the Chinese Internet was the sinking market war in 2018-2019. At that time, all Internet companies were moving towards “outside the Fifth Ring Road”, trying to win over more consumers and merchants in the circle.
This war not only ran out of a new generation of giants such as Pinduoduo, Douyin, and Kuaishou, but also allowed Alibaba, JD.com, etc. to gain a large number of new users and inject growth vitality. The entire Internet is also driven by thousands of users in the sinking market and has entered a new growth cycle.
Today, a similar story is playing out again in the food delivery space. Meituan, Taobao, and JD.com all tried to defeat their opponents, but regardless of their subjective will, they jointly wrote a script of no losers and shared growth.
01
In this round of takeaway war, the three major platforms have all put on a posture of dominating the world and not returning. From the CEO to the front-line operation and maintenance, the takeaway brother, everyone has been inspired by unprecedented combat effectiveness.
Meituan, in particular, has stronger motivation and greater determination to defend its territory because the war is taking place in its hinterland. In the first quarter earnings call at the end of May, Wang Xing declared that there is a trend of irrational and involution competition in the food delivery industry, while emphasizing that Meituan will win the industry competition at all costs.
According to the “Late Post” report, in the face of this takeaway summer campaign, Meituan’s theme is: “Fight for a summer, set the world”, and also placed a golden dragon-patterned war drum in the office area.
Taobao is also not far behind.
Taobao Flash Sale previously announced a peak of 80 million daily orders, and then it was reported that Jack Ma asked to “stabilize at 80 million orders”, which is equivalent to making the peak into a daily value. In the second “Crazy Saturday” on July 12, Taobao flash sale issued large red envelopes such as “16 minus 16” and “25 minus 18”, forcing Meituan to also throw out a large number of large full discount coupons to meet the emergency battle.
As for JD.com, although it is slightly low-key under the light of “Crazy Saturday”, Liu Qiangdong personally delivered food and drank and ate with delivery people, and CEO Xu Ran said that “there is still a lot of room for improvement”, all of which show that JD.com’s takeaway ambitions are far from being satisfied.
The top leaders have shown their determination to fight to the end, and the three major platforms have naturally gone all out. The huge investment in this round of food delivery war is rare for China’s Internet in recent years.
Up to now, the overall investment scale announced by the three major platforms is: JD.com’s “Double Hundred Plan” will invest more than 10 billion, Taobao Flash Sale will launch a 50 billion subsidy plan, and Meituan will announce that it will invest 100 billion yuan in the catering industry as a whole in the next three years.
Before June, JD.com went on a fierce offensive and took off in a straight line; In the past half month, the protagonists of the war have become Meituan and Taobao. The two major platforms have come and gone, bayonets are red, and the subsidies for two consecutive “crazy Saturdays” are amazing, and even a large number of “zero yuan purchases” have appeared.
However, the three major players continue to increase their efforts to burn money, but there is still no clue of “boiling” their opponents to death. On the other hand, the vigorous and crazy welfare takeaway war, with the help of short videos and social media, has completed a wave of lightning-fast user education, and the number of orders on various platforms is increasing rapidly.
It is not difficult to see from the attitudes and actions of the major platforms that the three major players all want to win with one blow and become the only winner. But judging from the results, there is no real loser in this evenly matched offensive and defensive battle.
As an offensive party, Taobao flash sales and Ele.me have reached 80 million in daily orders; Prior to this, most industry insiders believed that its daily order volume was only 20 to 30 million. The development of JD Takeaway is even more amazing, with a daily order volume of 25 million orders in a few months from scratch.
At the same time, Meituan’s order volume has also soared from 60 to 70 million orders per day to more than 150 million orders. Last year, Wang Xing predicted in a conference call that perhaps the peak season could exceed 100 million orders.
In other words, the rapid growth of orders from Taobao and JD.com does not mean that Meituan’s cake is shared. The three platforms worked together to make the cake bigger, and both offensive and defensive sides got a much bigger cake than before, even exceeding their original expectations.
In terms of strategy, the three major players also got what they wanted and achieved their goals in stages.
In the takeaway war, Meituan’s flash sales have developed rapidly, especially in categories such as 3C digital; In the takeaway sector, key businesses such as God Hot and Good Meals have received a lot of exposure and growth. Taobao not only once again launched the name of flash sales, but also ran through the model of diverting traffic to non-shelf e-commerce business. JD.com has initially achieved the goal of driving low frequencies with high frequencies and injecting momentum into the core shelf e-commerce business.
Looking back at the past 150 days, the three major players have invested hugely and are full of tricks, and the marketing war, public relations war, and subsidy war have been endless, but they cannot be said to have overwhelmed their opponents. However, the tactical stalemate does not affect the three major players to get their place at the strategic level and share the dividends.
02
Another unusual thing about this takeaway war is that not only did the three major players not lose, but the consumers, merchants, riders, etc. involved also won.
Regardless of the starting point, once the Internet war enters the white-hot stage of bayonet red, it usually carries some negative externalities that harm the interests of those who are actively or passively involved.
For example, the bicycle sharing wars of the past caused chaos in road traffic, abandoned bicycle cemeteries, and millions of people’s deposit losses. The community group buying war not only caused the prices of some agricultural products to fall to the freezing point, but also hit the employment-absorbing formats such as community mom-and-pop stores hard. This negative externality often leads to regulatory authorities stopping and the entire industry being hit by the deceleration button.
In contrast, although sparks flew in this takeaway war, there were no obvious negative externalities.
On the consumer side, the three major platforms are competing to issue large coupons to bring real benefits. Some people joked that in this most “vicious” business war, “the food delivery platform was unscathed, but I gained three pounds.” ”
On the merchant side, the takeaway war is also a timely rain.
The catering industry is still at a low point. Taking Beijing as an example, in the first half of this year, the operating income of the city’s catering industry fell by 2.9% year-on-year, and the total profit fell by 88.8% year-on-year. dine-in is weak, and merchants can only rely on takeaway to “recover blood”; The three major platforms have spent a lot of money to subsidize consumers, which not only brings a large number of takeaway orders to merchants, but also attracts a large number of customers to the store.
Taking the key subsidy category of the three major platforms – coffee and tea as an example, since the launch of Taobao flash sale on May 2, Cudi Coffee’s orders have increased by nearly 10 times in one day, and the average daily order volume of Jasmine Milk White in Ele.me has increased by nearly 3 times. In the 4 months since JD.com’s takeaway was launched, the sales of brands such as Luckin, Cudi, and Mixue Bingcheng have exceeded 100 million, and the sales of brands such as Bawang Chaji and Gu Ming have exceeded 10 million. Meituan’s coffee and tea takeaway orders are also frequently “exploding”.
In the long run, the takeaway industry has developed from a dominant company to a three-country stand, which has also reduced operating costs for merchants.
For example, JD Takeaway previously launched a phased commission waiver, and Taobao and Meituan also launched huge industry support plans respectively. When issuing large coupons, the platform and merchants share the cost, and the more they are issued, the more they share, which is equivalent to the platform using real money to help merchants drain traffic and acquire customers.
In addition, the fierce competition between the three major platforms and the rapid expansion of order scale have also improved the living conditions of millions of riders across the country.
Some riders said, “In the past, I could run an average of 300 yuan a day, but now I can run about 100 yuan more.” According to The Paper, some riders in Shanghai originally could only earn 6~7 yuan per order, but now they can earn more than ten yuan; Based on the calculation of working 12 hours a day, there is no problem in monthly income exceeding 10,000.
An implicit “benefit” is that the takeaway war has also significantly improved the insurance coverage rate of riders: JD.com pays five insurances and one housing fund for full-time riders, and provides accident insurance and health medical insurance for part-time riders. On the basis of “new occupational injury” protection, Meituan piloted rider insurance subsidy policies in Chengdu, Wuhan, Shenzhen and other cities in early July, bearing 50% of the pension insurance participation cost for eligible riders.
While improving the treatment of riders, the takeaway war also creates more jobs. Meituan previously disclosed that in June this year, the monthly income of crowdsourced high-frequency riders across the country reached 9,793 yuan; On the weekend in July, more than 400,000 crowdsourced riders earned more than 500 yuan per day; JD.com announced that 3,000~4,000 full-time delivery riders joined every day in the second quarter.
Covering the positive externalities of consumers, merchants and riders, although this takeaway war is fierce, it is basically on a reasonable track of healthy competition. Especially since the end of June, the war of words on major platforms has basically subsided, and the focus of competition has shifted to subsidies, operations, distribution and other links, and the “rationality” of the war has been further improved. In the context of less regulatory pressure and enterprises gearing up, the “dividend period” of consumers gathering wool every day and merchant riders burying their heads to make money is expected to last for a long time.
03
In the past 20 years, China’s Internet has become accustomed to zero-sum games, and there is often only one winner in large and small wars.
The basic paradigm of zero-sum games is to “boil” the opponent and occupy the main share through large-scale burning, subsidies, drainage and other means, forming the Matthew effect, and finally excluding competitors from the market and obtaining most of the profits.
Most of the main characters on China’s Internet stage today have experienced one or more zero-sum games and become the winners. But this does not mean that all wars must have losers.
The last war without a loser on China’s Internet was the sinking market war between 2018~2020.
In the war that swept the entire Internet, Pinduoduo in the e-commerce track and Kuaishou in the content field rose from the cracks of the giants and became the biggest winners: Pinduoduo’s MAU increased by more than 70 million in a single quarter; Kuaishou has also found a growth space in counties and towns that is far greater than that of Beijing, Shanghai, Guangzhou and Shenzhen.
But this does not mean that large companies challenged by Pinduoduo and Kuaishou have lost the war. Alibaba, JD.com, Douyin, etc. actively participated in the sinking battle and gained a lot.
Taking Alibaba as an example, its annual active users increased from 636 million in 2018 to 725 million in 2020, although it is not as astonishing as Pinduoduo’s increase from 420 million to 790 million, but the two-year increase of 100 million is also very impressive.
Broadening the perspective, before the sinking battle, practitioners generally believe that the e-commerce industry has entered a mature period, and the growth rate of low single-digit percentages will be the norm. However, after going deep into the sinking market, both the offensive and defensive sides have gained huge increments, indicating that the potential of the e-commerce market is far from being fully tapped.
At the same time, large Internet companies in the field of e-commerce and content have sunk, driving users, merchants, advertisers and other parties to profit: users have benefited, merchants have new orders, and advertisers have spread their reputation and minds outside the Fifth Ring Road.
Seven years later, a similar win-win scenario is being staged again on the takeaway battlefield.
The takeaway war lasted for 5 months, and the industry’s order volume soared from 70 to 80 million to 250 million. But that’s just a starting point. The three major platforms have seen the benefits of fighting the takeaway war to the end and are frequently allocating resources to support long-term operations. For example, Meituan’s strategic abandonment of Meituan Preferred at the end of June can save about 4 billion yuan in costs per year for pan-takeaway scenarios such as Little Elephant Supermarket.
From the perspective of cash reserves, all three platforms can fight for a long time. As of the most recent reporting period, Meituan held about 180 billion yuan in cash, Alibaba held about 190 billion yuan, and JD.com held more than 200 billion yuan.
On the other hand, according to Goldman Sachs’ forecast, in the second quarter of this year, Meituan, JD.com, and Alibaba’s takeaway investment will reach 25 billion yuan. Under the baseline scenario, Meituan’s EBIT (profit before interest and taxes) will decline by 25 billion yuan in the next 12 months; Alibaba’s takeaway business is expected to lose 41 billion yuan; JD.com lost 26 billion yuan.
It is not difficult to see that despite the huge investment in the takeaway war, the three major platforms have huge amounts of cash and strong cash flow, and they all have ample ammunition to continue the war for many years.
From another point of view, in the case of the scarcity of high-quality targets and the fact that large AI models still cannot be accounted for, the three major platforms smash the cash in their hands on takeaways, which is one of the ways with a high ROI and immediate results.
In the sinking market war from 2018 to 2019, all parties fought fiercely and fiercely, but in the end they all received more reasonable returns. Seven years later, the three major players in the food delivery war have more funds in their hands, starting another war in which it is difficult for everyone to win, but there are no losers.
