On the basis that both sides do not give up, this is destined to be a long-term battle, short-term than burning money, medium-term operation, long-term industrial organization and supply chain depth.
01
A rare large-scale battle in the Internet is being staged in the field of “takeaway”: the protagonists are JD.com and Meituan, and the battlefield is catering and instant retail represented by “takeaway”.
On February 11, JD.com announced its entry into the “takeaway” in a high-profile manner and officially launched the recruitment plan of “quality dine-in catering merchants”. At first, this did not attract much attention to the industry, but the next two events quickly heated up the matter.
First, a week after announcing the launch of the recruitment plan, JD.com announced that it would gradually pay five insurances and one housing fund for JD.com’s takeaway full-time riders, and all the costs of the five insurances and one housing fund were borne by JD.com; Second, on April 10, JD Takeaway announced that it would officially launch a subsidy of 10 billion yuan the next day.
Xu Ran, CEO of JD.com, gave an explanation for “entering the takeaway” at this time, which is to solve the pain points of the industry and meet the needs of users. “We have seen hidden dangers such as food safety, high commissions reported by merchants, and riders basically have no social security. JD.com has the will and ability to solve these problems. ”
Subsequently, Meituan’s core local business CEO Wang Puzhong posted on social media on April 12, which attracted wider attention from the industry.
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Wang Puzhong said, “JD.com is not the first company that wants to do takeaway, and it may not be the last.” Alibaba, Didi, and Byte have not all done it, and Didi is still doing it overseas. ”
In fact, it is true. The previous entrants have failed to make too many waves in the field of “takeaway”.
But this time, Meituan realized that JD.com is not just “playing”, but serious: first, tens of billions of subsidies; Second, pay five insurances and one housing fund to full-time riders for takeaways.
Because these require huge costs.
On March 1, JD Takeaway was officially launched, and the daily order volume exceeded 1 million orders in just 24 days. According to JD Blackboard News, on April 22, JD.com’s daily takeaway orders exceeded 10 million, covering 166 cities across the country.
This seemingly good start is a defensive battle that has to be fought.
To some extent, the basic market of JD.com e-commerce is under pressure and has fallen into “growth anxiety”. The reality now is that although JD.com is still growing and the data is also performing well, the growth rate has slowed down.
According to the Economic Observer, in the past 15 years, JD.com’s overall revenue growth curve has shown a downward trend, from 96% in 2011 to 6.8% in 2024, with only a slight correction in 2020 and 2021 due to the impact of the epidemic.
However, in the past three years, the growth rate of JD.com’s retail business has slowed significantly, from double-digit growth in previous years to 1.66% in 2023.
Until 2024, after JD.com played a combination of increasing the low-price strategy, increasing investment in the POP model and expanding the self-operated model, retail business revenue increased by 7.4% year-on-year, which only returned to the growth momentum in 2022, and it is difficult to match the growth rate of more than 30% before the epidemic.
In 2024, JD.com’s GMV (gross merchandise transactions) will be overtaken by Pinduoduo and Douyin e-commerce, falling to fourth place in the industry.
More importantly, JD.com’s original core 3C sector is constantly being eroded.
Meituan’s flash sale has grown rapidly in recent years, with 3C home appliance orders reaching 40% of JD.com’s total site in 2024, and the computer office category even surpassing JD.com.
JD.com’s “growth dilemma” is essentially an industry problem and the ceiling of traditional shelf e-commerce. At a time when traffic dividends are peaking, JD.com needs a new high-frequency entrance to activate user activity, and takeaway is the best choice.
02
According to a report by Blue Whale Finance, the data shows that in 2024, Meituan’s flash sale of 3C home appliances will be close to 40% of JD.com’s entire site, of which the number of orders for computer office products has exceeded that of JD.com, and the number of orders for mobile communication products has exceeded 40% of JD.com’s entire site; beauty category orders reached 30% of JD.com’s entire site; In addition, orders for daily FMCG products such as water drinks, dairy products, and snacks significantly exceeded the single-category orders of multiple e-commerce platforms.
Although this data has not been officially replied by Meituan’s flash sale, according to a person close to Meituan, “Although the order volume of 3C home appliances is growing rapidly, there is still a big gap between Meituan flash sale and JD.com in terms of customer unit price, and the flash sale is also continuing to strengthen cooperation with digital and major home appliance brands, and the brand has a more positive attitude towards lightning warehouses and other models.” ”
This is enough to show that Meituan Flash Sale has certain advantages in the field of instant delivery of “30 minutes to send everything”.
Wang Puzhong even bluntly said in a social media post that instant retail has been in full swing in recent years, and Meituan’s non-catering orders have exceeded 18 million, which can be said to make some companies feel like they are in their throats and in their backs. “The development trend of instant retail is unstoppable…… and the new experience created by ’30 minutes to deliver everything’ will definitely meet the needs of more users and sweep those large and unreasonable warehousing systems into the historical garbage heap.”
Meituan’s instant delivery capabilities pose a direct challenge to JD.com’s “fast logistics” moat. JD.com’s 211 limited-time delivery (same-day delivery/next-day delivery) was once an industry benchmark, but today, when “half-hour delivery” has become a new expectation for users, JD.com must make up for its instant delivery capabilities, otherwise the foundation of its retail empire may be shaken.
JD.com’s logic of doing takeaway is the same as Meituan’s use of takeaway to drive wine tourism – high frequency band and low frequency.
Takeaway is a typical “three high” business – high frequency, rigid demand, and low gross profit. Although it is difficult to make a profit, it can bring stable traffic. If JD.com can increase the frequency of user opening, it can divert traffic to self-operated categories such as fresh food, 3C, and Ribai, and even empower JD.com’s instant retail business.
More importantly, the takeaway war can contain Meituan’s resources and slow down its penetration into JD.com’s core categories. Just as Liu Qiangdong played against Suning in the 2012 home appliance war – the real strategic purpose is often hidden outside the battlefield.
This can also be said to be JD.com’s “yang plot”, using high frequency to fight low frequency and feeding back e-commerce with traffic.
Catering takeaway, with an annual transaction volume of 1.63 trillion yuan, accounting for 22.6% of the catering industry, is high-frequency, rigid and stable, and naturally has the attributes of becoming a traffic pool.
Moreover, takeaway not only brings orders, but also a training ground for instant retail – from food delivery to delivery, one step away.
More importantly, takeaway can also revitalize the “idle assets” in JD.com’s hands. JD Logistics’ more than 3,600 warehouses and millions of Dada riders do not have a high reuse rate in e-commerce distribution on a daily basis, lack of high-frequency business support, and heavy capacity costs. Takeaway can efficiently fill the peaks and troughs of delivery, optimize the overall asset turnover rate, and improve the profit model.
From a more macro perspective, JD.com is transforming from a “retail platform” to an “industrial operating system” and going deep into the real economy to transform the supply chain. Without a stable and huge C-end consumption entrance, this ambition may be unsustainable. The takeaway business can stabilize the basic market for JD.com and lock in the minds of users.
In short, JD.com’s takeaway is not only for immediate order volume or revenue growth, but to continue the competitiveness of the next ten years or even longer.
This may be a “no fighting” sortie.
03
JD.com entered takeaway, and Meituan responded quickly.
On April 15, Meituan Flash Sale officially released an independent brand, announcing that instant retail is Meituan’s top priority in the future. On the same day, Xue Bing, general manager of Meituan Takeaway, said at the chain catering summit that in the next three years, Meituan will invest 100 billion yuan in subsidies in the field of local life to support merchants, motivate riders, and activate demand.
At the same time, the competition around the rider side and the merchant side is also extremely fierce.
JD.com has spent a lot of money to grab riders and subsidize merchants, while Meituan has strengthened its defense line by increasing humanistic care and strengthening the service provider system. On the front line of the market, riders are beginning to “change jobs”, many riders are attracted by JD.com’s high unit price and low fine policy, and some merchants choose to settle in under JD.com’s “zero commission” offensive.
In just two months, Meituan and JD.com have been confronting each other at all levels of brands, riders, merchants, and users, alternating offense and defense, and smoke is everywhere.
It can be said that this is not only a collision between two companies, but also a confrontation between two different business logics. This unprecedented takeaway war is not destined to be a simple power showdown. Both sides have their own killer moves and their own weaknesses.
JD.com’s advantages and disadvantages are more obvious.
Advantage: Strong supply chain foundation.
JD.com has been deeply involved in the supply chain for more than ten years, with a high proportion of self-operated goods, short inventory turnover days, and strong cargo control capabilities. This underlying capability is particularly critical in the realm of instant retail.
The distribution system is complete. It has two major systems, Dada Express and JD Logistics, covering major cities across the country, with outstanding delivery timeliness and reliability.
Sufficient capital and sustainable subsidies. The annual report shows that JD.com has strong cash reserves and is safe to invest in high-intensity subsidies in the short term.
High brand recognition. JD.com has long been positioned as “genuine” and “efficient” in the hearts of users, and entering the food delivery field helps to quickly accumulate trust.
Disadvantages: Insufficient experience in takeaway operations.
Catering distribution is different from e-commerce distribution, involving more frequent commodity circulation and instant response, and JD.com still needs time to polish its system and operation.
The C-end mind is not solidified. In the field of catering, the first reaction of users is still Meituan and Ele.me, and JD.com needs to establish takeaway brand awareness from scratch.
Organizational culture focuses on orthodoxy and process. In the field of fast-paced and high-frequency decision-making, it may seem a little slower.
Meituan’s advantages are:
First, the absolute hegemon in the field of takeaway. It occupies more than 70% of the market share, has a large number of users, merchants and rider resources, and has a strong scale effect.
Second, the layout of instant retail is perfect. Meituan flash sale has formed a multi-category layout such as food, daily necessities, and 3C digital, and the number of non-catering orders has exceeded 18 million orders per day.
Third, high-frequency scenes are deeply bound. Users have formed a habitual cognition, “want to eat, want to buy, go to Meituan”, and their minds are deeply penetrated.
Fourth, flexible and fast organizational mechanism. Adapt to the complex changes on the front line, and quickly adjust subsidy policies and distribution strategies.
Meituan’s disadvantages are also more obvious:
First, the cost structure is heavy. High subsidies and outsourced rider management lead to limited profit margins and are vulnerable to sudden competition.
Second, the supply chain control is weak. Compared with JD.com, Meituan relies more on third-party merchants, and there are challenges in product quality and inventory stability.
Third, it relies too much on the local service ecology. In the face of the sudden rise of new players, such as Douyin, the moat is narrowing. 4
How will this tragic battle end in the end? It is not yet known, but according to the current situation and the layout of all parties, the following possible endings can be deduced:
The first possibility is dynamic equilibrium and the formation of a duopoly pattern.
JD.com has gained a firm foothold in the food delivery field, winning 10%-15% of the market share, or even higher, and forming a three-legged situation of Meituan, JD.com, and Ele.me. Meituan’s flash sales continued to grow, but encountered a bottleneck of slowing growth; JD Takeaway has steadily contributed to the growth of new users and traffic diversion. The two sides have their own focuses on different categories and different groups of people, and the market has entered a stage of hierarchical competition.
This may be the most probable outcome, and it is also the one that best aligns with the resource endowments and long-term trends of both parties.
The second possibility is that JD.com takeaway will retreat in stages and focus on instant retail.
If the short-term investment is huge but cannot form a scale effect, and cash flow is under pressure, JD.com may choose to shrink its takeaway investment, focusing on instant retail fields, such as 3C, home appliances, and FMCG distribution, and continue to erode the Meituan flash sale market.
This depends on the user retention and repurchase rate of JD Takeaway in the next six months.
The third possibility is that Meituan is holding its position strongly, and JD.com is difficult to move.
With its high-frequency moat, deep push system and strong user stickiness, Meituan successfully maintained 70% of the takeaway market share, and JD.com’s takeaway growth was limited and became a marginal role.
This is less likely. With Liu Qiangdong’s determination and resource investment, JD.com will not fail easily in the short term.
The fourth possibility is that the industry has ushered in policy supervision and competition has cooled down.
If the competition between the two sides evolves into a vicious price war, the rights and interests of riders are damaged, and the pressure on merchants intensifies, the relevant departments may intervene and require the platform to ensure the fairness of services and the sustainable development of the industry, and mandatory subsidy reductions and stable commission ratios.
It is foreseeable that with the rise of the status of instant retail, it is an inevitable trend to strengthen industry regulation.
To some extent, this takeaway war is not only the confrontation between JD.com and Meituan, but also the beginning of a new round of reshuffle in China’s retail industry.
The future competition has long gone beyond the superficial competition of “who distributes faster and who subsidizes more”, but competes for who can integrate “people, goods, and fields” more efficiently, and who can build deeper supply chain capabilities and a more agile organizational system.
If both sides do not give up, this is destined to be a long-term war, short-term than burning money, medium-term operation, long-term industrial organization and supply chain depth.
The outcome is undecided, and everything has just begun. (Original work of Spirit Beast Media)
