Per reporter: Zhao Wenqi
The long-standing "commission contradiction" between catering merchants and takeaway platforms may usher in an inflection point.
On February 18, the National Development and Reform Commission and other departments issued a notice on the official website of the National Development and Reform Commission on "Several Policies on Promoting the Recovery and Development of Difficult Industries in the Service Industry Sector". In particular, it is mentioned that Internet platform enterprises such as takeaways are guided to further reduce the service fee standards of merchants in the catering industry and reduce the operating costs of relevant catering enterprises.
This news has a direct impact on the main players of the catering takeaway platform, Meituan and Ele.me. This afternoon, the US group plunged short-term, and Hong Kong stocks fell by more than 15% at one point. As of today's close, the stock price fell at 14.86%.
The shares of Alibaba, the controlling shareholder of Ele.me, were also affected, rising nearly 1% in the morning, falling rapidly to 3% after the policy was released, and falling 0.9% at the close.
For a long time, the commission problem has been the main contradiction between takeaway platforms and catering merchants. In the past two years, many local catering associations have publicly called out to Meituan to reduce commissions, and Hungry and Meituan have also announced commission reforms in May last year. But key points of conflict remain untreated.
Now, the NDRC has mentioned "reducing commissions", which means that the official personally solved the problem is officially put on the agenda. Some insiders told the "Daily Economic News" reporter that if the initiative of reducing commissions is implemented, the operating costs of the real economy and small and medium-sized merchants will be further reduced, driving the development of the real economy; and the commission pricing discourse power of the monopoly-type takeaway platform will be weakened, which will promote the refined development of the entire takeaway industry and promote the platform to continuously optimize the income structure.
As of press time, the US group has not responded to the "Daily Economic News" reporter.
National Development and Reform Commission: 43 policies to help the service industry tide over the difficulties
In the "Several Policies on Promoting the Recovery and Development of Difficult Industries in the Service Industry Sector" issued today (February 18), it is mentioned that in order to help the difficult industries in the service industry to tide over difficulties and resume development, on the basis of implementing the policies and measures that have been introduced, with the consent of the State Council, 43 policies and measures to help enterprises bail out and support are proposed.
The "Daily Economic News" reporter noted that in the policy, the National Development and Reform Commission proposed support measures for the catering industry, retail industry, tourism, highway and waterway railway transportation, civil aviation industry and other industries, including tax reductions and exemptions, providing financing and credit enhancement support.
However, the most interesting thing is the measures for the catering industry, that is, to guide Internet platform enterprises such as takeaway to further reduce the service fee standards of merchants in the catering industry and reduce the operating costs of related catering enterprises. Guide Internet platform enterprises to give preferential service fees to catering enterprises in county-level administrative regions where high-risk areas are located during the epidemic.
As early as March 25 last year, the National Development and Reform Commission, the Central Cyberspace Administration and other 28 departments have jointly proposed that they will guide online platforms such as takeaway, online ride-hailing, and e-commerce to reasonably optimize the fees such as commissions and commissions for small and medium-sized enterprise merchants and individuals to use the platform to operate, and use technology empowerment to promote the cost reduction and efficiency of operators in the platform.
The mention of "reduced commissions" this time can also show the further attention of the official to the issue of commissions on Internet platforms in the catering industry.
"It is not difficult to see from the title of the document "Several Policies on Promoting the Recovery and Development of Difficult Industries in the Service Industry Sector" that the main purpose of the policy is to promote the recovery of various industries under the influence of the epidemic, such as catering, tourism, retail and other industries. To a certain extent, this policy will also alleviate the difficulties faced by the service industry after the epidemic. Chen Liteng, an e-commerce analyst for life services at the E-commerce Research Center, said in an interview with the Daily Economic News reporter.
Since 2020, the epidemic has been repeated across the country, and the catering industry is facing huge challenges. Public data shows that more than 1 million restaurants will close in 2021, while in January-February 2020 alone, the number of catering enterprises cancelled has reached 13,000. According to the survey data of the China Hotel Association, due to the impact of the epidemic, more than 50% of catering enterprises will close 20%-80% of their stores, and 3% of catering enterprises will completely withdraw from the industry.
In this environment, most of the catering industry has to improve the level of digitalization and rely more on the traffic of online platforms, which will inevitably hit the problem of Internet platform commissions.
In April 2020, the Guangdong Catering Association issued a "Letter of Joint Negotiation from the Guangdong Catering Industry to Meituan Takeaway", saying that it had received various complaints from hundreds of catering enterprises. The negotiation letter said that the catering industry is a key people's livelihood industry during the anti-epidemic period, but also a key industry affected by the epidemic, dine-in closure, takeaway has become the only source of revenue for the catering industry, but Meituan's "commission for newly opened catering merchants is as high as 26%, which greatly exceeds the critical point endured by the majority of catering businesses".
Prior to this, catering associations in Sichuan, Chongqing, Shandong, Yunnan and other places have also publicly "shouted" meituan, demanding that the commission be reduced. In 2020, the Hebei Provincial Rice and Cooking Association issued an "Open Letter to E-commerce Platforms", saying that offline and online commissions and high marketing costs "overwhelmed catering enterprises" and called on the platform to reduce takeaway commission rates.
Zhao Zhanzhang, deputy director of Beijing Yunjia Law Firm, who has long been concerned about the e-commerce industry, told the "Daily Economic News" reporter that for takeaway platforms, reducing the charging standards for merchants will directly affect their income and profits; but for merchants in the catering industry, the reduction of support can reduce their operating costs and reduce operating pressure.
The main business shrinks, what will happen to the platform?
Although this initiative is good for catering enterprises, it is undoubtedly a "shackle" for takeaway platforms, especially Meituan, to its main source of income.
The catering takeaway business has always been the main revenue business of Meituan. The "Policy" released this time clearly points out that it will guide Internet platform enterprises such as takeaway to further reduce the service fee standards of merchants in the catering industry, which may have a certain impact on the revenue of meituan's main business of catering and takeaway in the short term.
The catering takeaway business has always been the main business of Meituan's revenue Image source: Per reporter Liu Xuemei photo
Meituan's 2020 financial report shows that due to the impact of the epidemic, Meituan's in-store wine and tourism business was seriously damaged, but Meituan's performance still grew against the trend, mainly due to Meituan's catering takeaway business. In this year, Meituan's annual revenue exceeded 100 billion yuan for the first time, and the number of catering takeaway transactions exceeded 10 billion for the first time. Meituan's catering takeaway operating income reached 66.27 billion yuan, accounting for 57.73% of the total operating income.
In the third quarterly report of 2021 recently released by Meituan, Meituan's catering takeaway revenue was 26.485 billion yuan, an increase of 28.0% year-on-year; the total commission income in the quarter was 23.128 billion yuan, of which the catering takeaway commission income was 18.251 billion yuan, and the commission income of new business and other businesses was 1.556 billion yuan, which is also the absolute head of commission income.
In May last year, Meituan made adjustments to the commission system for catering enterprises on the platform, dividing the commission originally drawn according to a fixed proportion of the order amount into two parts: technical service fee and performance service fee. The performance service fee is affected by factors such as distance, price, time period, etc., and the distance, price level and time will affect the total final service fee sooner or later.
In this regard, Meituan has explained that the adjustment of the fee structure has little impact on the revenue conversion rate of the company's takeaway business. In terms of the proportion of the total amount of takeaway transactions / commissions, the overall commission ratio of Meituan in the second quarter of 2020 was 11.68%, while the figure in the second quarter of 2021 was 11.72%, year-on-year, the overall commission ratio did not increase with the adjustment of the merchant service fee structure.
In this regard, Chen Liteng said that as an important source of income for Meituan, the profit margin of catering takeaway is not high (the latest data is about 3.3%). The reduction of the service fee standard for merchants in the catering industry will further compress the profit margins of Meituan's catering takeaway. For takeaway platforms, in addition to further refining operations in the catering takeaway business, developing new business is an important means for them to continuously optimize their revenue structure and achieve sustainable development.
Based on this, in the past two years, Meituan has continuously laid out new businesses, including Meituan taxi, Meituan Preferred, Meituan grocery shopping and other businesses are also in full swing. But at this stage, it is still difficult to expect these new businesses to contribute profits quickly. In fact, Meituan's new business has been facing huge losses. According to the latest third quarterly report, Meituan's new business lost 10.9 billion yuan, and the amount of loss expanded by 437.5% year-on-year.
However, Zhao Zhanzhan said that because the fees charged by takeaway platforms to merchants belong to the scope of market adjustment prices rather than government pricing and government guidance prices, the regulatory authorities cannot and will not directly stipulate the proportion of specific fee reductions to takeaway platforms, but more in a guiding way.
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