Recently $ Jingdong (JD) $ takeaway heat, Liu Qiangdong a takeaway business for the internal speech "no surprise" to "accidentally" out, alluding to the United States group profits are too high.
But look carefully at the full version, this is just Liu Qiangdong down the PUA, outside the persona of the marketing strategy.Do takeaway according to Liu Qiangdong this line of thinking, is unable to pose any threat to the United States group.
His three core ideas have logical problems.
First, the control of profit margins, to maintain net profit within 5%, in order to ensure that the merchant profits
Jingdong gives the public a preconceived illusion that takeout can be very simple to achieve "very high profits", but Jingdong "good intentions" convergence, deliberate concessions to merchants.
The question is: Is it so easy for takeaway platforms to achieve a 5% profit margin?
Meituan, which averages 70 million units per day in takeout, has been profitable from the start of its takeout business until 2019, but the strife of the epidemic has also led to recurring profitability, with an operating margin of just 3.3% in the era of Everyone's Home (21Q3), and a full-year takeout business net margin of just 3% in 2024 (this figure comes from a trio of parties, and Meituan hasn't announced it, butin line with reality based on the gross margin levels of the different business segments before the earnings report was restructured).
Some may confuse Meituan's takeaway business with its big core local business division, which has an operating margin of 19.7% in 2024Q4, but includes local life, flash sales, and in-store liquor and travel.The main profit is contributed by the store arrival wine and travel (gross margin of over 70%), and the local business (mainly high-margin bidding ads).
Hungry Mansion, which averages 20 million units per day in takeout, is not even profitable yet, and after being acquired by $ Alibaba (BABA)$, it took until 2023 for takeout unit economics (UE) to turn positive for the first time (i.e., each unit of takeout started to turn a profit), and overall quarterly profitability after leveling off fixed costs won't be realized until2024Q2 is barely close, and overall profitability may not be realized until 2025.
Jingdong, which claims that its daily average is currently 5 million orders (with a large amount of money-burning subsidies), how can it achieve this 5% profit margin without the added benefit of scale effects?
There is even a scenario that Liu Qiangdong simply does not understand the difference between "total orders (GTV)" and "revenue (Revenue)", and therefore does not engage in "Take rate" (the average per-order profit from merchants ).rate" (from the merchant side of the single average commission rate) and "net profit" (income after subtracting all the costs and expenses after the balance) difference.
Liu Qiangdong deliberately out of the meaning of the "internal speech", more inclined to the current Meituan merchant commission is too high, if his real goal is to reduce the "commission rate" to 5%, then perhaps the whole industry can refer to him how to extreme!"cost reduction and efficiency", after all, from the historical point of view, Jingdong is not the industry's highest operational efficiency company.
Overall, the takeaway industry is after many years of weak and strong melee, and then with the merchants in the game with each other, only gradually formed from the barbaric growth to the trend of refined operation.And Liu Qiangdong's sentence of 5% may re-launch the industry melee.
Secondly, full-time delivery workers sign labor contracts and full coverage of social security.
This point has not been done well enough by Meituan, the enterprise should indeed pay more attention to the rights and interests of employees from the beginning, there is no doubt about it.The proposal to give riders on the social security even appeared in the proposal of the National People's Congress, but the implementation will still not Liu Qiangdong shouting as overnight.
According to calculations, if Meituan pays social security for all riders, the annual cost or more than 10 billion yuan, far more than its 2021 net profit of 4.7 billion yuan.Even if only 11% of high-frequency riders (about 820,000 people) pay, the annual expenditure still reaches 2-3 billion yuan.And this may ultimately be borne by multiple parties, including platforms, consumers, the government, and even the riders themselves.
The difficult nature of paying social security for riders is the conflict between efficiency and fairness, short-term interests and long-term responsibility.
Consideration from the rider's point of view: mobility.Riders themselves are a particularly mobile profession, and many of them are part-time and transitional workers, who prefer "cash as king"; social security contributions are made by both the individual and the enterprise, and the actual salary in hand may be reduced by 15%.And a high proportion of riders are not local people, may have participated in the "new rural cooperative" and other contributions in their hometowns, and repeated contributions will also have the problem of transfer difficulties.Therefore, medical and occupational injury insurance (e.g., for traffic accidents) may be more important than the long-term protection of pension insurance.In addition, riders may also be concerned about a drop in order unit price (revenue) once they are insured.
Platform point of view: If the whole industry can not be in a long-term profit (even if the profit margin is very low) sustainable development, it is also impossible to protect the rights and interests of riders in the long term.Meituan's current profit line is after the industry chaos, through the "algorithmic optimization", "low-cost expansion" model honed, and Jingdong as a new entrant does not have a molded profit line, but also in a long period of time"Burning money" subsidies, can afford a longer trial and error, so Jingdong is more willing to stir up the current industry pattern.
Consumer perspective: If the platform's profit margins are low, according to the principle that the wool comes out of the sheep's body, after the price increase is ultimately the consumer to pay the bill, which is the same reason as tariffs.
In addition, Liu Qiangdong history of speech are very good at grass-roots employees "empathy", but the average salary of Jingdong employees is not much higher than the industry average, and therefore intentionally mentioned this part is to incite populism to force competitors of doubt.
If the United States group began to give riders on the social security, in fact, will rewrite the industry's commercialization of the process of maturity, the industry's overall stability and profitability will be pushed back a few years.Of course, we can't rule out the possibility of $ Pound Duo (PDD)$ (by not paying social security) rising up and disrupting the industry all over again.
So just rely on these can not promote the progress of the industry, the real potential to change the instant delivery industry may be technology, for example, through the non-human means of delivery.On the one hand, technology needs to keep progressing, and on the other hand, enterprises need to have enough investment.
Three main attributes of people's livelihood and long-termism, including quality takeaway, refreshing algorithmic values
Liu Qiangdong expressed the core of the "anti-involution", for example, the current industry algorithms to compress the delivery time (calculating the fastest route) and lead to high-risk behaviors such as riders retrograde single, advertising rankings in the involution of the restaurant is forced to compress the cost of the use of poor-quality ingredients.
According to his meaning, as long as the Jingdong to the delivery staff planning a reasonable route (double the time not to go against the traffic lights and so on), the delivery staff will not go against the traffic lights?
Liu Qiangdong is not unaware of the "inner volume", on the contrary, because the Jingdong "too flat", early by Pinduoduo overtaking.Liu Qiangdong also joined the army of scrolls.
In fact, Jingdong into the takeaway, a variety of distribution coupons is not the essence of the inner volume?
In fact, Liu Qiangdong has repeatedly highlighted "to buy social security for the riders", but also want to put then "Jingdong takeaway unit price is higher than the U.S. group takeaway" (referring to the same store) rationalization.But the market will eventually conform to the principles of economics.
The most likely outcome
True long-termism begins with the ability to determine the survival of the industry, with at least one company achieving breakeven, followed by dynamic equilibrium among players in the industry (competing with each other and constraining each other), and ultimately moving upward together under the enhancement of technological progress.
The current takeaway industry is a typical macroeconomics oligopoly (an industry form in which a few large enterprises dominate the market and control most of the market share), characterized by high market concentration, a high degree of dependence on inter-firm decision-making, and the existence of significant barriers to entry.
In oligopolistic industries, the impact of new entrants on the industry pattern is often characterized by " precision strikes against non-leading players " rather than direct subversion of the industry leader.As a result, HungryMall is likely to be more affected than Meituan.Example:
$DiDi Global Inc.(DIDIY)$ When Dripping was in a crisis of confidence due to safety incidents, Gao De taxi and Cao Cao travel quickly filled the void, while the original second-place Shouqi was instead overtaken by new entrants;; and
Taobao live rise, Jingdong failed to follow in time, and Pinduoduo through social fission to open up a new battlefield, resulting in Jingdong in the live e-commerce and the sinking market double line of defeat
Jingdong now wants to be the spoiler, making waves in the industry.Just rely on "burning money", pull step, can not solve the industry problem, on the contrary, destroying the balance of the industry may make the chaos last longer.
Jingdong should really focus on publicity, not Liu Qiangdong himself how "pro-people" image, but how the output of science and technology, how to bring greater value to the industry (for example, Jingdong in the logistics and distribution aspects of the industry is a leader), or Jingdong is how to promote the progress of the industry as a whole through a new industry pivot point.
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