Community group buying fierce battle this year’s GMV goal： Meituan preferred 200 billion, buy more food 150 billion

The community group buying war is entering a new phase.

36Kr exclusively learned from a number of independent sources that after the Spring Festival, various community group buying giants have established their goals for 2021: Meituan preferably locks the annual GMV at 200 billion, and will impact the order volume of 5000-60 million/day; Duoduo buys GMV in 2021 The goal is 150 billion; the orange heart is preferably 100 billion, and the prosperity is about 80 billion. 36Kr verified this, and Meituan, Pinduoduo and Xingsheng Preferred did not respond.

This means that each company has put forward a high goal of doubling its performance this year. A comparable data is that the GMV that is prosperous and preferred in 2020 is 40 billion, and the GMV of Ten Hui Group and the same journey life are 10 billion. At the recent fourth quarter financial report meeting, Meituan CEO Wang Xing disclosed that in the second half of December 2020, Meituan’s preferred order volume has exceeded 20 million orders/day.

As far as the current progress is concerned, according to informed sources to 36Kr, after the Spring Festival, Meituan’s preferred order volume can be stabilized at 23 million/day, with a daily peak of 27 million; in contrast, the order volume of Duoduo grocery shopping is up and down 20 million, and Xingsheng is preferably close to 15 million single.

At present, the unit price of Duoduo’s shopping and Meituan’s preferred pieces is about 8 yuan, and the orange heart is about 5 yuan. According to this calculation, Meituan’s preferred daily average GMV is 180 million, and Duoduo’s shopping is around 160 million (this data reached 180 million before the Spring Festival). According to people familiar with the matter, the daily average GMV after the Orange Heart Preferred Festival is close to 100 million yuan, "which has resumed growth from the Spring Festival". Recently, Orange Heart Preferred has increased subsidies again in key areas, and the order volume is approaching Duoduo’s shopping.

So, how to value the community group buying business? On the evening of March 29th, Wumart Group submitted a listing prospectus, the prospectus shows that on March 26th, Wumart and Orange Heart Preferred signed a share purchase agreement, with a maximum consideration of 100 million US dollars to subscribe to the latter not more than 2% of the equity, from which it is estimated that the valuation of Orange Heart Preferred will reach 5 billion US dollars, in the context of business data is not as good as Meituan Preferred and Duoduo Shopping, the valuation of the latter two will exceed this probability, and after the completion of 3 billion US dollars financing, the valuation of Xingsheng Preferred is 8 billion US dollars.

In addition to the GMV goal, the community group buying giants will also be more refined in their play in 2021. "Duoduo Shopping currently accounts for 60% of the traffic on the site. This year [Duoduo Shopping]’s goal is to increase BD efforts, recruit the head of the team, increase the traffic on WeChat, and seize the core users of other companies."

According to people familiar with the matter, the product categories of various companies will also be adjusted this year, and the low unit price products will be reduced. Meituan prefers the unit price of the target piece to be more than 10 yuan. "But it is not realistic to reduce the subsidy in the short term, mainly by expanding the SKU category and adding high unit price products. This year, Meituan prefers to expand the SKU from 1000 to 2000 (up to 1500), and optimize the performance link to make the UE model look better."

This is largely a reference to Xingsheng Preferred. Before the giants entered the community group buying track, Xingsheng Preferred had already achieved profitability in some core areas by reducing the proportion of fresh products (currently from 33% to 25-26%) and increasing the high unit price of products (such as handsets, electric products, furniture, etc.). People familiar with the matter told 36Kr that the gross profit of the fresh products (including losses) of Meituan Preferred, Duoduo Shopping and Orange Heart Preferred is generally negative, and the gross profit of other categories is generally less than 10%. Whether the unit price and gross profit margin of customers can be improved will largely determine whether several giants can successfully complete the GMV target in 2021.

At the level of grid warehouse construction, a meeting notes obtained by 36Kr shows that as of mid-March this year, the number of Duoduo grocery buying grid warehouses was roughly 400-500, Xingsheng 600-700, and Meituan 1300. However, Xingsheng Preferred cut about 200 grid warehouses last year when doing logistics optimization.

"The goal is to merge the grid warehouses and build them into a second-level urban warehouse (1000-2000 square meters), which will assume the function of part of the main warehouse." A person close to Xingsheng Preferred told 36Kr. In the past six months, according to media reports, Duoduo Shopping has also closed a number of regional grid warehouses. One of the cores of Duoduo Shopping this year is still to optimize the performance end cost. According to industry estimates, if the current unit price is maintained, Meituan Preferred and Duoduo Shopping will reduce the performance cost to less than 0.6 yuan to make a profit, but there is still a lot of gap between the two.

Previously, a Meituan preferred grid warehouse franchisee in Jiangsu, Zhejiang and Shanghai revealed to 36Kr that in order to optimize the grid warehouse operation process, Meituan would require its grid warehouse to add cameras, monitor in real time, and digitize each process. Through data operation, fine adjustments are made; in addition, Meituan preferably sends headquarters personnel to the station one after another to keep an eye on the operation process.

After relying on the Hema market to test the waters for a period of time, Ali also recently established the MMC business group, focusing on the community group buying business, integrating the retail community group buying business and the Hema market.

Although Dai Shan said in the open letter that the MMC business group is different from the current community group buying model, its model is "near field e-commerce", but many people believe that this is Ali’s integration of group resources to develop community group buying. And this business obviously faces many challenges. An Ali insider who has inspected the frontline competition told 36Kr, "On the one hand, we have to face the problem of operational cooperation with the Ten Hui Group (the Ten Hui Group has now all been connected to the handmade shopping – Taobao shopping entrance), on the other hand, it is too far behind in the early stage, especially in the performance of the contract.

Some people in the industry told 36Kr that "Taobao shopping" still relies mainly on Shihui group when it is connected to Shihui group and Hema market at the same time; but in the total order volume of Shihui group, Taobao shopping traffic only accounts for 20%, and Shihui group officials also confirmed this proportion to 36Kr – this shows that the user’s mind to buy food on Taobao has not been fully established. On April 1 this year, Shihui group announced the completion of the D round of 750 million US dollars financing, and Ali led the investment again, which shows that Ali still has not given up the business logic of "foreign investment and internal integration" in community group buying.

After getting 3 billion US dollars in financing, this year’s Xingsheng Preferred will also carry out a national layout. At present, in addition to "Beijing and Shanghai + three eastern provinces + Inner Mongolia, China, Tibet and Hainan", Xingsheng Preferred has covered nearly 200 prefecture-level cities in 18 provinces, and Meitu Preferred, Duoduo Shopping and Orange Heart Preferred have covered more than 300 prefecture-level cities.

Some capital markets sources told 36Kr that Meituan invested about 10 billion yuan in the community group buying business last year, and Pinduoduo invested 60-7 billion. This year, Meituan’s investment may reach 20 billion, and Pinduoduo will continue to increase investment. – 36Kr confirmed this, Meituan and Pinduoduo said they would not comment. Although Meituan and Duoduo’s losses in new businesses have expanded visibly in the past four quarters, this hand-to-hand battle cannot be decided in the short term. Next is the time to compete for internal strength.

The author of this article: Dong Jie, Source: 36Kr

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