How Meituan Dianping Became The World’s Most Innovative Company
The Fast Company recently named Meituan Dianping as one of the most innovative companies in the world. As one of the shining stars of the Chinese tech world, let’s take a deeper look at the features and strategies of another of China’s super-apps, Meituan Dianping
Within just the first half of 2018, the company facilitated over $33.8 billion dollars in transactions, for more than 350 million people through its platform. It was named as one of the most innovative companies globally and has risen to become China’s No.1 marketplace for various services. To date, Dianping offers services in more than 2,800 different cities.
Let’s get to know more about this super-platform which can handle nearly all of your life’s transactions, and how you can use it to promote your business!
Table of Contents
- What is Meituan Dianping? Read Now
- Services Covered by Meituan Dianping Read Now
- The Secrets behind Meituan Dianping’s Runaway Success Read Now
- How to use Meituan Dianping For Business Read Now
What is Meituan Dianping?
Originally Meituan and Dianping were two separate companies competing in essentially the same space. Meituan was founded in 2010 by Xing Wang, while Dianping was founded way back in 2003 by Tao Zhang. Both companies placed a strong emphasis on the F&B industry and group buying. However, Meituan focused primarily on food delivery, while Dianping focused on restaurant reviews. Meituan was more popular in second and third-tier cities while Dianping was most well known in first-tier cities.
Both apps incorporated location-based features to suggest nearby restaurants and services. In 2015, these bitter rivals finally combined forces through a merger and became another Chinese super-app including features from apps like Groupon, Deliveroo, Tripadvisor, and Yelp! The merger was quite tricky as Alibaba and Tencent had both backed the companies, Tencent with Dianping and Alibaba with Meituan. During the merger, Alibaba sold all its shares in Meituan and chose to back a new entrant into the space, called Ele.me.
The apps offered by Meituan Dianping cover a huge range of services. Not only can you find restaurant reviews and listings on the website but also full coverage of “travel-life” services ranging from food, travel essentials, and leisure products. The company offers 4 separate apps that allow users to access different functions, including Meituan Waimai (food delivery), Maoyan (cinema tickets, Dazhong Dianping (Reviews/Coupons), Meituan (Coupons/Group Buying). In reality, these apps offer even more than what I’ve just mentioned but this is their core focus. The apps offer everything from information on cosmetic surgery to hotel bookings, placing it firmly among the ranks of China’s many “Super-Apps.”
Services Covered By Meituan Dianping
Meituan Dianping’s Core Business: Food & Beverage
Launched in 2013 as the company’s core business, Meituan Dianping has now created a range of products to provide customers with services throughout the entire food purchasing process. With the company combining restaurant reviews, coupon group-buying, and home delivery service all under one roof, Meituan Dianping has consistently dominated this space since 2015.
Due to strong backing from Tencent, Meituan Dianping also integrates heavily with WeChat. Users can pay for services directly through their Wechat Pay account. Since it’s merger with Dazhong Meituan has absolutely dominated this market. Through the merger, Meituan was able to acquire an absolutely massive user base spread throughout cities nationwide. Meituan leveraged this user base to launch Meituan Waimai. This app has consistently dominated the food delivery market.
The app has been doing so well that it was able to capture nearly 60% market share in the first half of 2018. What makes it so special is its integrations. Users can access Meituan Waimai directly on a range of apps, including WeChat, Dazhong Dianping, Meituan, and even on Tencent’s QQ! With the app being so available to users it’s no wonder it’s been able to do so well! Meituan Dianping is looking to dive even deeper into this market with new services including deliveries of fruits & vegetables, groceries, clothing, flowers, and more!
The company also announced they’d be launching a driverless vehicle to make deliveries in 2019 called, Xiaodai. This will be an AI-driven robot that will be able to pick up and deliver food using the optimal route to ensure the fastest delivery time. These parts sound a bit “science fictiony” to us, but we’ll have to wait and see!
Meituan’s Q2 2019 Financial Results – Food Delivery Service
As of Q2 2019, Meituan made great strides in improving its market position in the food delivery sector. As of Q2 2019, Gross Transaction Value (GTV) of its food delivery service grew 36.5% to RMB 93.1 billion while the number of orders increased by 34.6 percent to 2.1 billion orders.
Naturally, this increase in orders and transaction values resulted in increased revenues. Total revenues from Meituan’s food delivery service increased by 44.2% to RMB 12.8 billion as of Q2 2019. This is impressive considering that it was also able to improve its gross margin from 15.8% to 22.3%.
This increased growth led to the first time since its public listing the company was profitable, with profits reaching 875.8 million, a significant improvement over its RMB 7.72 billion loss it posted one year ago. Profits were mainly driven by the food delivery service however other segments did also help to drive this profitable quarter.
Meituan Dianping’s Most Recent Success: Hotels & Tourism
Meituan Dianping kickstarted its journey in the travel and holiday space in the year of 2015. Along with the huge range of services offered by Meituan Dianping, customers can now settle their hotel bookings, transportation, and entertainment through them as well. In terms of hotel bookings, the platform ranked second in the Chinese market in 2018. According to TrustData, the company was able to capture 46.2% of market share in hotel bookings! A tremendous achievement for something only launched a few years prior.
It was able to set an industry record with over 2 million domestic hotel rooms booked on December 31st, 2018. As Meituan’s fastest growing business line, it’s expected that Meituan Dianping will continue to invest and develop its capabilities in this area.
Meituan’s Q2 2019 Financial Results – Hotels & Tourism
According to its Q2 2019 results, Meituan has also been making tremendous strides in hotel bookings. In this latest report, Meituan reported that the number of hotel rooms booked in the domestic market through Meituan increased by 28.9% to 94 million bookings as of Q2 2019.
GTV of its total in-store, hotel & travel business increased by 20.7% to RMB 51.3 billion. Revenues increased by 42.8% to RMB 5.2 billion compared from the previous year’s RMB 3.7 billion. In a bid to bring more high-end hotels onto the platform, Meituan also launched its “Hotel+X” campaign, which was created to help hotels promote their non-hotel related services such as spas, restaurants, and activities. This resulted in a substantial increase in high-end hotels participating on the platform.
Overall it seems like Meituan’s hotel & tourism business is really picking up! If you’re in the tourism industry this is one platform you’ll need to explore further!
Group Buying on Meituan Dianping: Shopping & Retail
Not only does the platform act as an agent between potential customers and dealers, but it also provides marketing and promotion services for industry partners. In other words, it fulfills both B2C and B2B customers’ demands. Meituan Dianping rose to popularity initially due to its group buy offerings similar to what Groupon has done in the rest of the world. It offers group buys for a range of different categories.
While customers can get access to retail products and services at this one-stop-shop, retailers can also take advantage of Meituan Dianping’s enormous customer database to promote their goods and services. With Meituan Dianping positioned in the middle taking a piece of each sale, it’s easy to imagine why they were able to raise over 4 billion dollars during their IPO in September 2018.
Meituan Dianping’s Foray into Cinema: Maoyan
Meituan launched Maoyan way back in 2012. Over the years it’s developed into one of the most powerful forces in the Chinese movie industry. It now leads the industry with reviews and movie-ticket-selling services. Like all of Meituan’s other services Maoayan also integrates with the full range of Meituan’s other products, making it convenient and easy to use for users. Together with its competitor Taopiaopiao these two companies process nearly 90% of online movie ticket bookings! With over 80% of movie tickets purchased online in China, it puts Maoyan in an incredibly strong position.
Maoyan offers movie ticket booking services through two apps, Gewara, and the Maoyan app. The Maoyan app had 130 million MAUs in the first half of 2018, with the service covering theaters in more than 600 cities across China. In terms of coverage, Maoyan covers nearly 95% of the theaters in China. Although the company has over 60% market share it has still been unable to turn a profit.
To further its tie-up with Tencent, Maoyan became an early adopter of WeChat Mini-Programs. The Company launched its mini-program in 2017 and it has since developed into a powerful platform for the company. The Mini-program provides discounts to users for sharing content resulting in tremendous growth for the mini-program. As of 2019, the mini-program has acquired over 250 million users, a 50 million user increase from the start of 2019.
Secrets behind its huge success
Meituan Dianping: The Super-App
Meituan Dianping is a super-app that can solve a wide range of its user needs. It offers full coverage of travel and lifestyle services, allowing users to complete their online purchases within just one app. The convenience is what keeping the customers clinging onto the platform. It’s also what enables it to succeed in so many areas.
Its status as a super-app makes it extremely easy for the company to expand into new sectors, as through their cross-selling tactics they are capable of bringing their existing user base into new business lines. As a matter of fact, its CFO claimed that more than 90 percent of its first-time hotel-bookers had used either Meituan’s food delivery or in-store dining services.
Meituan Dianping gives customers access to a spectrum of location-based services, ranging from food delivery, shop recommendations, bookings for entertainment spots, ride-hailing, and travel ticketing. It helps to establish a one-of-a-kind, geo-specialized customers profiles to help merchants to pinpoint and match the demands of their target markets.
With such a database, the platform portrays a complete user profile including online habits, consumer behaviors, and preferences, all over the country. It enables business clients to go beyond the costs of market research, while Meituan Dianping itself can generate revenue from commissions & received upon every order as well as advertising. We’ll discuss this in greater detail later on in this post with Meituan’s advertising service, Meituan Union.
Daily refreshed, specialized offers
As mentioned, Meituan Dianping built up its lifestyle empire based on locations. Another unique feature of the platform is that it features daily offers and deals personalized according to every user’s preferences and whereabouts.
This ensures customers’ return rates and brings tailor-made experiences to users, making sure they would continue revisiting and checking the platform for more deals.
A Willingness To Burn Cash
The most well-known strategy of Meituan Dianping is the way it rapidly expanded without the promise of revenue or profit at the start of its business. The super-app typically targets everyday people thus it has to lure in cost-conscious customers with capital put into the business before it is able to generate profits.
Meituan has had to burn cash so that rivals to deter competition and increase their market share. This strategy is often employed in the tech world, but very few have matched the amount of cash that Meituan Dianping has burned in its quest for growth, with the company showing losses of over RMB 3 billion in 2017 prior to its IPO.
With its confidence and “death or victory” spirit, the firm’s aggressiveness has been shown in its various cash wars throughout the years. Bytedance’s TikTok might be one of the only company’s that comes close when it comes to burning cash.
How Businesses Can Use Meituan Dianping
“Xue” in Chinese means to learn. By paying for a membership with a monthly, seasonal or annual fee, you’ll gain access to unlimited online video courses 0n business tips in the food industry. It’s filled with industry experts online answering your questions. Basically, it is like an Udemy for food start-ups and small businesses in China!
Topics include marketing, management styles, real-life case studies and more. Follow-up consultation services are also a major part of the “academy”. Members can even purchase data reports with industry-specified statistics.
Meituan Xue has accumulated a large group of businesses owners with similar interests. It is like a specific social networking site for the food industry. With appropriate use of the site, you can gain access to valuable market insights and get to know your potential rivals. While businesses can learn from each other with more frequent contact it also provides businesses with the possibility to collaborate and potentially work together with one another through its social features.
The word “Shouyin” is simply the Chinese pinyin for the word “cashier”. Meituan Shouyin sells PoS (point of sale) systems with Meituan’s software pre-installed. Customers can choose from a wide range of extra hardware at reasonable prices!
The PoS systems have a range of different functions, including receiving real-time orders, group orders, coupons sale, and more! All the software you need within just one single system. As Meituan wants to expand deeper into this industry and given its tendency for burning cash, it provides incredibly advanced systems for great prices. Meituan also wants these businesses to continue using the systems so it also provides outstanding support if there are any issues. This can be an incredibly cost-efficient way for new businesses to get their point of sale set up!
Advertising with Meituan Dianping: Meituan Union
Making use of its huge database, Meituan Dianping offers a marketing platform that works both online and offline. Users are able to access Meituan’s 260 million active customer profiles and the treasure trove of data that the Meituan app has collected. This way businesses are able to easily advertise themselves based on the demographics, location, consuming patterns and preferences of their target customers. By analyzing their target customers’ locations and tailor-making their marketing strategies, they can increase customer loyalty and brand awareness.
Users can choose from a wide range of services including search engine optimization, image promotion, URL promotion and website ads. There’s a huge range of options available to marketers on the Meituan platform. If you want to get started advertising with Meituan, just shoot us an email and we’re happy to help!
All things considered, Meituan Dianping achieves dramatic success by initiating a brand new category in the service industry with no comparison globally at all. However, the stakes of their growth is as high as their ambitions are. But beyond all the doubts, the enormous geo-based database of Meituan Dianping users would be an amazing start of your marketing journey.
Dragon Social is a China Digital Marketing Agency dedicated to providing expert solutions to businesses around the world! Our team of professionals will take a deep dive into your business and determine the optimal channels and strategies for promoting your business in China, so be sure to Contact us for a free consultation!
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