| Meituan mode is contrary to business rules, or start a new miracle?

Thanks to Tonytoni for the article

The original link: https://www.jianshu.com/p/b17ad7f8828e

Although I have a habit of using Dianping, my attention to Meituan has only recently started.

This is because Meituan intends to open taxi service in Beijing, Meituan set a condition: the number of registered users reach 200,000. By January 9, the number had reached the required number.

I was surprised at the news. After all, since the merger of Didi and Kuaidi, Didi has dominated the ride-hailing market with a 90% share. Meituan at this time involved in taxi, will face two situations: one is to burn money; Second, it is very unlikely to surpass Didi to become the number one in the industry.

So why did Meituan get involved in the taxi industry? Where is the logic of meituan’s business expansion?

Based on these questions, I have read two interviews with Wang Xing by Caijing. In fact, the answers are hidden in Wang Xing’s words.

Before sorting out the interview with Wang Xing, let’s take a look at the current situation of Meituan, so that we can understand wang Xing’s thinking and logic more easily.

Meituan started with group buying and merged with Dianping. Meituan has moved horizontally into several verticals, including food delivery, movie tickets, hotel reservations, short-term rental, and now taxi hailing, and even payment and retail markets. And in these industries it entered, there are giants, such as the elei? Hotel booking ctrip; The Didi of the taxi industry.

The diversified expansion of Meituan is very different from the business model we generally recognize. Throughout BAT, after the core business has achieved a single point of breakthrough, on the basis of the core business, the extension and related expansion.

For example, Alibaba expanded its C2C and B2C businesses on the basis of B2B, and then naturally expanded into payment, logistics integration, cloud computing and big data businesses.

After the success of QQ, Tencent developed wechat and became the absolute leader in social networking. Then I got into games.

Cash flow is good, but overall losses. Attack on all sides, and in every industry, are facing fierce competition. That makes Meituan the only company in China’s Internet industry without a rival. Some say Meituan is more like Amazon, and Wang xing is the closest Chinese entrepreneur to Bezos’s ideas.

What is the logic of Meituan mode and what kind of chess game Wang Xing is playing after all, we can get a hint from the interview.

1. Endgame and boundary thinking are not the only ways of thinking

The online car hailing industry is an industry with network effects. Once the industry pattern is formed, the subsequent participants are likely to be in a thankless state. How does Wang Xing view this?

Wang Xing believes that:

In fact, both talking about boundaries and talking about endpoints is a way of thinking, but it’s not the only way of thinking. Where is the real end? Endgame is a term for chess, but the reality is that the board keeps growing.

It’s too easy to set limits and always see that this is the biggest, the same size, or an order of magnitude smaller. People didn’t realize that this was actually an intermediate stage in the transition to a larger scale.

Wang Xing believes that the pattern of business competition is dynamic and there is no such thing as an endgame. Competition and cooperation will become the norm and exist for a long time.

Meituan can enter the ride-hailing industry even though Didi is dominant. On the one hand, Wang Xing thinks that the existing online car hailing cannot fully meet the needs of users. On the other hand, it is location based service. Meituan’s business features are largely related to location, including takeout and group buying.

Therefore, the ability requirements of online ride-hailing and takeout businesses are similar: off-line integration, location in different cities, use the Internet to improve experience and reduce costs. Entering the online car hailing, the team’s business capability can be supported.

From meituan into the taxi industry posture can be seen, What Wang Xing said is true.

Unlike wechat, which has a national network effect, taxi hailing business is a kind of urban network effect business, and the network effect between cities is relatively weak.

Unlike the previous group purchase wars, Meituan focused on provincial capitals and third – and fourth-tier cities. In the case of the formation of the basic pattern of taxi industry, small cities are difficult to move. This time, Meituan first tested the waters in Nanjing, and then expanded in Beijing, Shanghai, Hangzhou, Chengdu and other first – and second-tier cities.

In addition, the city’s taxi service was opened only after the number of registered passengers reached more than 200,000.

How to fight the battle of online car hailing and whether it is still a crazy subsidy, Wang Xing answered as follows:

The money spent on educating passengers, drivers and popularizing mobile payments has now been accomplished. And instead of spending money to win, we should provide a better B-side and C-side experience, combine it with a better product, and let the consumer make the choice.

For example, Meituan’s involvement in the payment industry is to provide more convenient payment services for B-end merchants, rather than competing with wechat Alipay for C-end users. I believe that Meituan’s entry into online car hailing is by no means a simple copy of didi Kuaidi’s model, but a differentiated return based on an understanding of the industry and consumer needs.

Second, focus on consumers, not competitors

Because of the expansion of diversification, Meituan entered many industries and made enemies everywhere. Some people joke that half of the Internet is the enemy of Meituan.

But Wang doesn’t care:

Quantity is not the problem. We are a customer-focused company, we are never out to make enemies with others. When it comes to opponents, it’s like driving a car. You have to check your rearview mirror occasionally, but you can’t drive with your eyes on it.

As long as the core is clear — who are we really serving? What services are offered to them? We’re going to keep trying things out.

In fact, The logic of Wang Xing’s diversification expansion is to provide users with one-stop services for eating and drinking. From the beginning of the thousand regiments war, Wang Xing deeply realized that in order to win the business competition, he had to stand on the side of consumers. It is also based on this idea that Wang created a group buying model different from Groupon, the originator of group buying. Instead of offering a single product or service, he provides diversified life services.

Based on this logic, it is easy to understand why he wants to enter the food delivery, hotel, video ticket, taxi industry. He is to provide a full range of services for this group of users. And these service scenarios, based on eating, drinking and skittering, are totally stringing together.

Now that we’re starting from the user, we need to provide these services. So, we need to know if there are people who are doing this service and how well they are doing it, but it’s not relevant for us to enter the industry. That’s wang Xing’s idea.

This kind of philosophy and practice is a bit like “I have passed away from thousands of people”. You know, in traditional business concepts, like Porter’s five Forces model, competitors are something we need to focus on.

Don’t pay attention to the competitors, the last only way, that is, you can no longer target enterprises, their own to create a unique model. Success is to become a pioneer, but lost is often the norm, because there is no companion.

Consolidation, rather than single operations, will be the way to release dividends

Why not vertical field do deep do thoroughly, and want to be so “capricious, regardless of” diversified expansion?

Wang Xing was ambitious, and his mission for Meituan was as follows:

Our mission is “We help people eat better, Live better”, Chinese is: let everyone eat better, Live better. With this mission, we think that whatever is ultimately going to happen, we will choose the right Angle to enter.

If stuck in a corner, only satisfied with the group purchase alone, then meituan is only a group purchase website, which is obviously unable to achieve Wang Xing’s grand vision. In Internet circles, there is a saying that TMD may become the next BAT. TMD refers to Toutiao, Meituan and Didi.

Wang Xing has a clear idea about the relationship between focus and diversity:

I spent a lot of time thinking about it. In the first half of technological change, small teams need to explore because the risks are so high. But in the second half, dividends get smaller and consolidation becomes a way to release dividends. A multi-business company has an advantage over a single-business company.

With this view, Mr. Wang embarked on an unusual path of diversification and expansion.

The current diversification of Meituan is a bit like building an ecosystem. And this ecosphere model, Letv played, did not succeed. Millet, Ali looks to play at present gradually into a good situation.

Ecology is not a simple pluralism, but a complex system. In this system, species depend on each other for mutual benefit. Amazon’s success is due to the flywheel effect generated by its three business segments. In China, Jia Yueting once proposed the so-called “ecologization”, which means that chemical reactions will occur between subsystems or species in the ecosystem, so that the entire ecosystem will not be a simple superposition of species, but may produce a product effect.

Uber, for example, operates take-out services in foreign countries. Meituan Taxi is likely to integrate takeout and express delivery, PK away the similar “flash delivery” model. It may even cooperate with restaurants to share the cost of taxi, which cannot be achieved by the single taxi mode.

The Meituan model is likely to be an ecologically-oriented system.

From the beginning of Meituan’s entry into the taxi-hailing industry to the understanding of the entire development of Meituan, Wang Xing overturned some of my established business worldviews. In the pattern of the situation has been determined to enter the taxi industry, this is not burning money to find guilt? Isn’t it harder to scale horizontally based on users than it is to scale horizontally based on a single point of penetration? If every dimension is not first, can the whole system achieve comprehensive first?

Through wang Xing’s interview, I found that all business laws have application boundaries and assumptions. If you’re only in the ride-hailing business, you’re looking for death by entering the ride-hailing business. And ride-hailing is just one part of the ecosystem, and you do have the potential to approach the competition in a different way, because other species in your ecosystem will probably push it.

“On the contrary, I shrink, although thousands of people, I am toward.” Although the road ahead is not clear, this deep thinking on business is an important driving force for Wang Xing and Meituan. Let’s bless Meituan.