On February 18, Meituan's share price fell 14.86%, falling below HK$200 to HK$188 per share.
Earlier in the day, the National Development and Reform Commission and 14 other departments issued the "Several Policies on Promoting the Recovery and Development of Difficult Industries in the Service Industry", which mentioned in the bailout support measures for the catering industry, "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 relevant catering enterprises." ”
The difficulty of catering under the epidemic is well known, whether it is the catering business's own demands, external help or social discussion, the focus is on takeaway. However, what needs to be pondered is: is the operation of takeaway really the solution to the problem of catering?
The truth behind the "difficulty of catering"
On January 25, Rural Foundation submitted a prospectus to the Hong Kong Stock Exchange; on January 12, Qixintian submitted a prospectus; at the end of December 2021, Lao Niang's uncle planned to IPO in A shares; in November 2021, Lao Xiang Chicken planned to prepare for listing on the main board of the Shenzhen Stock Exchange... Since 2021, Chinese restaurants have been on the market.
One of the reasons behind it lies in the lessons of the epidemic, as Jia Guolong, the founder of Xibei Noodles, said, "The disaster is very educational, the epidemic told me that my hematopoietic ability and anti-risk ability are not so strong, and the cash flow industry also needs capital support."
In the past two years, Ben's offline catering has been hit hard. Data from the National Bureau of Statistics shows that in 2021, catering revenue increased by 18.6% over the previous year, down 1.1% from 2019, and down an average of 0.5% in two years, and the scale of catering consumption has not yet recovered to pre-epidemic levels.
As an industry that is dominated by small and medium-sized enterprises and carries a large number of labor and employment, capillary catering plays an important role in society and economy, and the difficulty of catering has thus become a topic for the whole country and society. So, what is the truth about the difficulty of catering?
The first is the difficulty of income. It is not only catering companies that have learned lessons from the epidemic, but also consumers, and the decline in consumption willingness is now affecting all walks of life, and catering is also one of them.
The second is the high cost. In the absence of a large increase in revenue, rising costs have become a straw that crushes many catering companies. At present, there are "three highs" in the mainland catering industry, that is, high rental costs, high labor costs, and high food costs, resulting in continuous compression of corporate profits.
The highest proportion of catering enterprises is undoubtedly raw materials and employee costs, which are basically around 40%, such as a hot pot head enterprise, the third quarterly report shows that its raw materials account for 42.3% of revenue, employees are 35.6%, and hydropower is 3.4%. In 2021, the cost of raw materials and manpower has risen, and the operating pressure of catering enterprises has increased.
For this hot pot head enterprise, the rent proportion is relatively low, which is because of its strong brand effect and relatively speaking voice in commercial real estate. For general catering enterprises, especially small and micro catering enterprises, the proportion of rent can even reach 20%-30%, that is to say, an order of 20 yuan, 4-6 yuan to pay rent.
Of course, for some catering companies, they also need to pay commissions to takeaway platforms. Once, someone gave the commission figure of 20%, but this was actually a misreading. Last year, Meituan, Ele.me successively commission transparency reform, people often say "commission", in fact, refers to the technical service fee, from the survey data can be seen, this number is not high.
According to the "2021 Catering Takeaway Merchant Research Report" released by Aurora Big Data, more than 90% of merchants pay commissions, that is, technical service fees are less than 8%, and the proportion of merchants with commissions in 6%-8% has reached 66.3%. The "waiting for me to send" commission of the net red seafood food stall located in Guangzhou accounts for 7%, in the understanding of the merchant, this is a channel fee, you can enter the platform, participate in the operation of activities and services, get platform traffic, etc. According to the person in charge of its online operation, the average person in the three stores on the "wait for me to deliver the door" dianping is about 100 yuan, and their takeaway service is more often self-delivery, so the cost of handing over to the platform is basically 7% of the technical service fee.
Previously, "A Little Finance" had studied the transparent adjustment of the rate of DoorDash, the largest takeaway delivery platform in the United States - the charging items were divided into a fixed 6% proportion of the platform basic channel fee (commission) and a different proportion of delivery commission. Among them, the delivery commission is divided into three levels: ordinary basic, preferred Plus, and selected Premier, of which the ordinary delivery commission is 15%, the preferred delivery commission is 25%, and the selected delivery commission is 30%, and the scope of distribution is constantly expanding.
The more obvious difference is that unlike raw materials, manpower, rent, etc., takeaway commission is a flexible cost, that is, the income is generated before expenditure, rather than rent, manpower and other people who have no income to pay rent and also pay wages. It can be said that this is a cost strongly associated with revenue, and the opposite of high cost is more revenue.
Therefore, for more merchants, the takeaway platform is an additional revenue unit, not simply a cost unit, behind each commission is actually the increase in revenue and profit of each order, which is the premise of the normal operation of the entire takeaway industry.
This is especially evident during the pandemic – if merchants are unable to operate normally during the epidemic, there will be no commission charges if there are no orders online, but even if they do not operate, offline rents must be paid correctly.
"I think the effect of the rate transparency reform is not only to reduce the commission, but also to make us more aware of the cost composition of takeaway (technical service fee and performance service fee)." Li Ling, head of Wuhan One Lamp, said that during the rebound of the epidemic in Wuhan in August, under the circumstance that dine-in food was greatly affected, the income of takeaway could cover the hard costs of rent, water and electricity, ingredients, labor and other hard costs of the store, ensuring the normal operation of the store.
However, when solving the problem of "catering difficulties", catering businesses, the outside world and society invariably focus on reducing takeaway commissions again, compared with the income growth brought about by the reduction of consumption willingness, rent, raw materials, manpower and other uncontrollable cost factors, it is indeed the simplest and most direct solution. It can be said that this is a choice after a soft and hard problem.
Is the general reduction of the takeaway commission the solution?
From the initiatives of catering associations and merchants in 2020, to the discussion at the social level in 2021, and then to the policy-level regulations in February 2022, takeaway commissions have been placed at the core of solving the problem of catering difficulties, and takeaway platforms such as Meituan and Ele.me have also become the focus of "everyone's attention".
Whether it is businesses, society or policy, they are exploring the possibility of further decline in takeaway commissions, and the decline in Meituan's stock price on February 18 seems to indicate the future that this may lead to - a future that no one will benefit.
This future is related to the three contradictions that exist in takeaways.
Contradiction 1: short-chain economy vs multi-stakeholder
Takeaway is a short-chain economy, composed of merchants - platforms - consumers, where the role of the platform is aggregation and distribution, to achieve maximum matching. But in fact, there are multi-stakeholders in this short chain, in addition to merchants, platforms, consumers, and delivery workers.
Among them, merchants (mostly small and medium-sized businesses), consumers, and delivery personnel are aggregated and carried by the platform, which makes it natural to become the meeting point and flashpoint of multiple contradictions (merchants - consumers, distributors - consumers, merchants - deliverers), and when dealing with contradictions, it is also pressed to float the scoop and become a "spotlight" existence.
At the same time, the takeaway platform is also the intersection of multiple interests, the takeaway brother earns more or less money, consumers get more or less subsidies, the merchant's commission is high or low, these factors are closely related, but also maintained by the takeaway platform.
According to the semi-annual report, meituan's commission (technical service fee, fulfillment service fee) revenue from catering takeaway in the second quarter of last year was 20.354 billion yuan, and the cost of distribution was 15.5 billion yuan, which means that more than 76% of the commission from merchants was used to pay for the cost of riders.
If the takeaway commission is blindly required to continue to decline, the interests of takeaway delivery workers, consumers and platforms will be affected in the interest community of "merchant-platform-takeaway delivery-consumer".
Contradiction two: the Internet eliminates physical boundaries vs distribution but restricts boundaries
Takeaway platforms have an advertising effect on catering businesses, which is one of the reasons why platforms charge technical service fees. Mr. Xiong, a merchant in Shaoguan, Guangdong Province, has a deep understanding of this: "In addition to helping us deliver food, takeaway is also a platform to broaden the popularity of the store, and consumers can taste our meals without going to the store, which is equivalent to an advertising entrance with huge traffic." ”
He has operated three brands/categories and 9 stores, such as Duoshi, Doublemays Big Wave Puff Shop, and 24 Flavor Coffee Shop in the World, accounting for about 40% of takeaways, and the newly established coffee shops have achieved the first place in meituan takeaway and the first place in dianping in the local area.
Mr. Xiong is actually a "second generation of meals", his parents run a food stall restaurant, once had the old view of the previous generation on the "new things" such as the takeaway platform, the regional manager of the takeaway platform invited them to move in when they were driven away - "vampires", "the business of the store can not do or do takeaway?" ”
Unexpectedly, after the epidemic came, his parents took the initiative to find Mr. Xiong and asked him to find a regional manager, hoping to settle in the takeaway platform. They, who used to be able to do business nearby, can now receive orders from farther away, and the food stalls have survived.
If, like e-commerce, the advertising effect of the takeaway platform has no boundaries, then the catering business will be able to expand indefinitely, and the technical service fee of a few points is not a problem at all - Taobao live broadcast commission of 20%, and merchants are still flocking to it, because of the advertising effect of the Internet borderless boundary.
But in fact, takeaway is limited by physical distance due to timeliness and delivery, and the cost gradually increases with the increase of delivery distance. This means that it can give businesses advertising effects, scale effects, that is, incremental value, but it needs to be within a certain geographical range, and the marginal cost changes brought about by scale growth are not significant.
Further, the construction cost of the platform cannot be amortized indefinitely, and a certain proportion of each order must be used for platform maintenance.
Contradiction three: high frequency VS low price
Although takeaway is a high-frequency demand, it is a good traffic entrance, but at the same time it has low-cost, high-cost (delivery) attributes, which determines that it is not a very profitable business. As Mr. Xiong puts it, "The delivery cost of many orders for riders accounts for almost the vast majority of the overall cost, and the actual fee charged by the platform is often a few cents." ”
Meituan's financial report shows that in the third quarter of 2021, the operating profit of catering takeaway was 876 million yuan, and the profit per single profit was only 0.22 yuan according to the number of transactions of 4.013 billion yuan.
According to the technical service fee (6%-8%) of the range where most catering merchants are located, the order income of a 20 yuan order on the takeaway platform is 1.2-1.6 yuan, the vast majority of which is used for front-line labor costs, platform maintenance, technical support and other costs.
If the commission ratio continues to decrease, in order to maintain its own survival, the takeaway platform has no choice but two choices, one is to improve the operational efficiency of the platform, reduce costs and increase efficiency, which is a long-term task, short-term is not realistic; the other is to share the cost pressure, in the "merchant - platform - distribution - consumer" interest chain, the interests of riders and consumers may be affected.
But in fact, in the context of reduced consumption willingness and increased choices, this is not a good solution - after takeaway is expensive, consumers may choose to eat in the store, and the order volume of the takeaway platform is not enough to carry too many takeaway delivery workers; consumers may also choose convenience foods, prepared dishes, etc., and catering merchants, platforms, and takeaway delivery workers are affected.
epilogue
Catering difficulty is a comprehensive problem, its solution must also start from the root causes, from all aspects to solve. Now, the takeaway platform and the commission problem seem to be the optimal solution to this problem, but in fact, the real optimal solution should be the coexistence after finding the balance of interests of all parties, rather than the collapse after the interests of one party are extremely compressed.
The "takeaway" problem is actually a multiple choice question of whether to ask for chickens or eggs, and it is not advisable to kill chickens to get eggs. In the past decade, takeaway and catering complement each other, have achieved rapid development, when the policy stick hits, takeaway may be only one step away from "stall", may be better catering?