Shulou(Shulou.com)06/03 Report--

During the Spring Festival, the epidemic in Wuhan affected the nerves of the public. In the face of the rising number, epidemic prevention and control work has been started all over the country, and many enterprises have also participated in it.

Recently, takeout platform ele.me issued emergency response measures for the pneumonia epidemic infected by novel coronavirus, saying that food delivery services were suspended for some hospitals in Wuhan and other epidemic areas. At the same time, a comprehensive survey of game products on the platform, offline-related products and merchants.

In addition, from the data point of view, ele.me 's recent performance is very commendable. According to monitoring data from Analysys Analysys, the overall market share of ele.me, an online food ordering company, continued to rise to 43.9% in the third quarter of 2019, with new retail sales growing at a month-on-month growth rate of more than 50%, leading the industry. Analysys pointed out that ele.me has entered a new digital track, instead of staying at the level of traffic grabbing.

At the same time, the Alibaba Group disclosed in the financial report that the revenue of local consumer services, dominated by ele.me word of mouth, has risen all the way since the consolidation in the second quarter of 2018. It rose from 2.61 billion yuan in the second quarter of 2018 to 6.18 billion yuan in the second quarter of 2019, a growth rate of 137%. As of September 30, 2019, its operating income was 6.835 billion yuan.

Now, ele.me plans to sink third-and fourth-tier cities and develop the vegetable business in the new year, both to explore new growth space and to break the situation.

Ele.me sinking for profit, sinking distribution is still a difficult problem.

The potential to sink the market is huge.

According to QuestMobile, the sinking market in third-tier and below cities has a population of 600m, and the demand for real-time distribution for the elderly and children is growing rapidly. In addition, the penetration rate of life services in the sinking market is only 57.4%.

Alibaba officials also said that 77% of the more than 100m new users on Taobao in the 2019 fiscal year came from third-tier and below cities. While e-commerce Taobao is trying to sink, ele.me, the flagship platform for Ali's local life service, is naturally heading for third-and fourth-tier cities.

In April 2018, ele.me was acquired by Ali for US $9.5 billion and merged with word of mouth to establish Ali Local Life Services Company, claiming to focus on digital services and comprehensively promote the digital upgrading of the local life service industry. The strategic goal has also changed from focusing on first-and second-tier cities to actively investing and expanding business in third-tier and lower-tier cities.

After establishing the strategic position of ele.me word of mouth, Ali did the second thing is to take advantage of the advantages of the group to continue to contribute to it.

Ali opens the flow "valves" of Taobao, Alipay, Feizhu, Youku and other ports to guide ele.me merchants and help their passenger flow and order record; on the other hand, through Ali's cloud computing infrastructure, hummingbird real-time delivery, Alimama precision marketing and other aspects to help merchants to upgrade their management system digitally.

Then, Ele.me received more than $3 billion in financing funds from Softbank Corp. and other old shareholders. Based on this, ele.me successively launched a summer subsidy campaign of 3 billion yuan and a warm winter plan to reduce service rates, grabbing users at preferential prices and saying that they would strive to increase their market share to more than 50%.

Ele.me has adopted a price war in the sinking market, although it is a bit old-fashioned, but it has achieved remarkable results.

Official figures released by ele.me show that thanks to the increase in the number of orders, revenue of ele.me (Ali local life service) is 6.835 billion yuan, up 36% from 5.021 billion yuan in the same period last year. At the same time, it is pointed out that in the second quarter of 2020, the GMV of the less developed areas with Ele.me 's reputation reached 45% year on year.

According to the 2018-2019 China online takeout Industry Research report released by Ai Media Consulting, the market share of ele.me has soared, and its multi-location trading share in third-and fourth-tier cities has exceeded 50 per cent. The market share of Nanjing, Suzhou, Shenyang, Qingdao and other places rose significantly, with the highest increase of 6%.

Ali makes an ecological integration of data, products and services for ele.me, making it climb to the "third floor" to provide differentiated services for users. On this basis, from determining the status to integrating into Ali ecology, and then to reducing the price to attract users, the operational measures taken by ele.me in order to achieve the expansion of scale and new business are effective and commendable.

However, when ele.me sinks to the third and fourth line, it will encounter high operating costs due to the short geographical distance of the city, the low demand for real-time service distribution, labor costs, and so on. At this time, how to allocate the management team and distribution personnel reasonably? in order to promote the realization of resource value maximization and other problems follow.

During the epidemic period, it is fresh and fresh, accompanied by the danger of tigers and wolves.

In the past, fresh distribution and pharmaceutical distribution have been lukewarm in the sinking market. After the outbreak of the epidemic, more and more sinking users began to try to buy fresh, pharmaceutical and other products online.

Zhongyan Industrial Research Institute's "in-depth investigation and Future Development trend Forecast report of Fast Food takeout Industry from 2019 to 2025" pointed out that leapfrogging from catering to non-catering is an important reason for the rapid growth of the takeout industry. At present, the takeout service has spilled over to more life scenes, such as life supermarkets, fresh fruits and vegetables, flowers and green plants, beauty makeup, daily necessities, clothing, shoes and hats, mother and baby products and so on.

As a leader in the takeout field, ele.me naturally conforms to the trend.

In addition to catering takeout, ele.me extends the comprehensive service capacity of medicine, fruit, flowers, Shangchao and other industries, especially in fresh food. According to official data, the market size of the fresh industry in 2018 is nearly 5 trillion yuan. In the first quarter of 2019, the number of orders of fresh and active users of ele.me exceeded 2018, a year-on-year growth rate of 384%. The growth rate of orders and merchants in third-and fourth-tier cities is 1.4 and 1.49 times that of first-tier cities, respectively.

Ele.me 's fresh business can achieve such eye-catching results, there are passive factors of the external environment, but more benefit from the internal initiative.

In March 2019, ele.me formally reached a strategic cooperation with Ding Dong, a representative of fresh pre-position mode, and announced the establishment of a brand-new fresh open platform. Merchants grow together through five major ways: digitalization, supply chain, distribution, flow and finance.

In September of the same year, Chema ele.me jointly announced strategic interoperability, and more than 150 domestic boxmaxiansheng entered the ele.me platform online. Subsequently, ele.me word-of-mouth also put forward: "with accurate service as the core and data-driven as the means, every business is equipped with its own" operation center "and" decision-making brain "to guide business decisions through the data of people, goods and markets." New service "strategy to help businesses reduce costs and increase efficiency in an all-round way.

According to various signs, ele.me moves frequently in the field of fresh food, and its essence is to switch to the B end, empowering merchants to operate, in order to promote the realization of a complete closed loop of digital local life.

As Wang Lei, partner of Alibaba Group and president of Ali Local Life Service Company, said, after Alibaba's underlying data of various business bodies are connected, it is possible for more consumption scenes to be superimposed. To provide merchants with a complete set of services for local life merchants Ali business operating system, ele.me word-of-mouth will lead the industry into a digital upgrade acceleration period.

Unfortunately, even if ele.me tries to catch up, there is still a gap with fresh platforms such as fresh horses and Yonghui life. These platforms have been specialized in the field of fresh food for a long time, forming a complete supply chain and business model from upstream to downstream. In addition, there are other agricultural products based on the upper reaches of the supply chain of one mu of farmland, agricultural products B2B Meicai Network and Rong small vegetables and other enterprises also come to share.

In addition, due to the characteristics of fresh, there are great limitations in cost, user experience, background management and so on, not to mention that fresh transactions are still mainly offline, in terms of the throughput capacity of the fresh e-commerce platform, when it comes to the season of mass production of fruit and meat, the platform is very difficult to concentrate digestion, which can easily lead to unsalable goods, especially during the epidemic.

The big test of ele.me

The strategy of Ele.me sinking third-and fourth-tier cities and expanding the consumption scene is imperative, but competitors and diversion users all reveal ele.me 's sense of pressure on the transformation of Ali's local life services.

On the one hand, the leading effect of the takeout market is significant, and Meituan's takeout position is still unshakable in the short term. Through the unremitting efforts of ele.me, it can be regarded as raising its previous minimum market share to 43.9% from 35.4%, but its market share is still lower than that of its competitor Meituan takeout.

Comparing the market share of the two in the third quarter from 2015 to 2019, ele.me only surpassed it with a share of 36.80% in 2015, taking over Meituan takeout. But since then, ele.me has been in a state of chasing Meituan takeout. The gap between the two was the biggest in 2017, when Meituan's market share was nearly twice that of ele.me.

Although ele.me has courted users by means of large subsidies and reducing the cost rate of merchants, Wang lei, partner of Alibaba group and president of Ali local life service company, has also said that there is no upper limit on investment in the construction of local life service platforms such as ele.me, but this is only a short-term behavior after all.

Meituan takeout, which has long controlled the online takeout market in China, while relying on the traffic resources of Tencent, its development conditions are easier to occupy the development opportunity in the takeout field than ele.me.

On the other hand, Ali's e-commerce ecological users have a low diversion frequency of ele.me, and the growth of new users is under pressure. Although Ali has opened various ports for ele.me, the potential awareness of its Taobao and other platform core users is not easy to change in a short period of time. In addition, for local life merchants, the services and sales provided by merchants are strong in the region. the demand for remote traffic resources is weak. It can be predicted that the huge flow of Ali e-commerce actually does not meet the needs of local life merchants, and it is not easy to achieve the purpose of accurate diversion for local life.

In addition, the platitudes of food safety and security issues have not been cured. Due to the low degree of standardization in the field of takeout and the uneven quality of each restaurant, food safety issues such as food delivery staff stealing customers' food, entry of takeout restaurants without relevant industrial and commercial license registration and dirty catering environment have been banned repeatedly. Of course, not only ele.me, but almost all online catering enterprises, including Meituan takeout, have food safety problems, and this major criticism needs to be properly addressed.

Conclusion:

Ele.me has been integrated into Ali for more than a year, and although its merchants and orders have increased, compared with Meituan takeout, it is far from enough to rely solely on sinking and buying food business.

Under the epidemic in 2020, the collective recession of the catering industry will also be a bigger test for takeout distribution.

(Liu Kuang official account, ID:liukuang110 / tr. by Phil Newell)

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