Image source @ Visual China
Text | Pole Business, author | Yang Ming, Editor | Liu Shanshan
Recently, many hot spots are related to the catering industry.
On the one hand, it is the head catering enterprises such as Cha Yan Yue and Haidilao that are deeply involved in the whirlpool of losses due to cost problems, and KFC and McDonald's also said that they have collectively increased prices due to cost reasons. For example, the head hot pot enterprise Haidilao, just recently warned that the pre-loss of 4.5 billion yuan was caused by the closure of more than 300 stores that did not meet expectations, as well as the sharp increase in raw materials and property rents, and the repeated impact of the epidemic.
On the other hand, it is the takeaway commission that has once again sparked discussion. On February 18, the National Development and Reform Commission and 14 other departments jointly issued the "Several Policies on Promoting the Recovery and Development of Difficult Industries in the Service Industry Sector". One of them pointed out that it is required 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.
Merchant service fees, commonly known as "commissions", are also part of the long-term contradiction between takeaway platforms and merchants. After the release of the policy, the outside world will focus on the Meituan and Hungry Mo: under the guidance of the administration, will the takeaway commission continue to decline?
The people take food as heaven. The two major hot spots in the industry actually illustrate the same thing: the catering business is becoming more and more difficult to do, and the imbalance in the cost structure is becoming more and more prominent. If you want to help the catering industry in the post-epidemic era, as well as more small and medium-sized businesses to survive, how to reduce operating costs is the key.
Among them, the three hard costs of rent, raw materials and manpower have always been called the "three mountains" of offline catering operations, and takeaway commissions have also been controversial in recent years. However, due to various reasons, the "three mountains" can not be changed in a short period of time, reducing the takeaway platform commission to relieve the pressure of merchants has become the easiest choice.
In May last year, Meituan and Ele.me carried out the reform of the transparency of takeaway rates, dividing the commission originally extracted according to a fixed proportion of the order amount into two parts: technical service fee and performance service fee, which is an important step in the adjustment of the platform and the synergy of the interests of merchants.
At present, the above rate reform has been implemented in many cities for 9 months. When the catering industry makes waves again, it is necessary to ask again in depth, what is the proportion of takeaway commissions today? Is rate transparency "new wine in old bottles" or is it really put into practice? When the pressure of the "three mountains" is not solved, even if the takeaway commission is reduced to zero, can it really alleviate the current problems of the catering industry?
01 Commission VS "three highs", who brings the biggest cost pressure to the merchant?
"In my opinion, rent, manpower, raw materials, is really a mountain on the head of our businesses." On the evening of February 22, Han Baolin (pseudonym), the head of the April Cafe in Dongguan, Guangdong Province, told "Extreme Business".
On the road to open a store, Han Baolin stumbled and groped for nearly 5 years. Her café now covers an area of more than 200 square meters, employs nearly 20 people, mainly dine-in, but takeaway is still an important part, averaging more than 2,000 orders per month. In other words, dine-in and takeaway are indispensable and important revenue methods for Han Baolin.
In terms of takeaway costs, she calculated an account for "Pole Business": each takeaway is priced at 40-59 yuan, and the commission is calculated at the new rate - that is, the technical service fee, which is currently 6.6% in Dongguan, with an average commission of 2.64-3.8 yuan per order; the majority is the delivery fee for the rider, that is, the performance service fee charged according to the distance and the order price, and the average delivery fee per order is about 3.9 yuan. In total, each order needs to pay a cost of 6.54-7.8 yuan, and the income is 33.5-51.8 yuan.
If this is calculated, then the profit per order is considerable. The problem is that in terms of hard costs such as rent, manpower, and raw materials, it costs about 300,000 yuan per month, so that Han Baolin's business directly becomes a small profit.
"In terms of rent, the landlord said that he would increase the rent by 10% per year, which made me very distressed and did not know how to solve it." Han Baolin said that in terms of raw materials, the recent price of fruits and imported animal cream has been rising, resulting in the cost of the store's signature strawberry milk tea, succulent grape lemon tea and so on, but dare not easily increase the price.
The way Han Baolin can think of at present is to increase the scope of takeaway delivery to make up for the impact of the uncontrollable rise in rent raw materials. "The 6.6% takeaway commission is not very high, and it makes me really earn." She said that even the monthly performance service fee of 8,000 yuan is also cost-effective: more than 2,000 takeaway orders, looking for someone to deliver by themselves, at least 3 delivery workers are needed, and they simply can't afford to bear it, and they also have to bear the risk.
In Renshou County, Meishan, Sichuan, there are currently more than 5,000 takeaway orders per month, with an average price of 35.5 yuan per order, and about 24 yuan after deducting commissions and performance service fees.
On February 23, its head Li Minyi also made it clear to "Pole Business" that he did not agree with the maximum pressure that takeaway commissions brought to merchants, "Takeaway does have to deduct points, the more orders, the more total commissions, but the more sales, the more profits, and the commission is the cost that needs to be paid in incremental business." ”
In his view, this account needs to be calculated like this: even if there is no takeaway this month, the rent and labor costs will not be reduced by one point, and each time he sells a string of spicy hot - rent, manpower, and raw materials together account for about 60% of the cost, and it is rising uncontrollably. "Only by doing catering can we really understand this pressure."
If small and medium-sized businesses do not have scale advantages and bargaining power is not strong, many head chain catering enterprises can not escape the rising pressure of rent, manpower and raw materials, and even fall into a crisis of life and death.
In haidilao, for example, the slope of its cost growth curve has become very steep: the average annual rental cost per shop is about 599,800 yuan; in the first half of 2021, the cost of employees was 7.162 billion yuan; the cost of raw materials and consumables reached 8.502 billion yuan, an increase of 95.5% year-on-year. Tea Beauty, Starbucks, McDonald's, etc. also attributed the recent price increase to the upward price of raw materials - some data show that the cost of raw materials in China's catering industry accounts for about 30%-40% of operating income, and it grows at a rate of 2% per year.
There are countless restaurants that have collapsed due to costs such as rent and raw materials. According to the "2021 Catering Development 6 Trends Briefing", the number of new stores opened in the catering industry in 2020 is about 2.5 million, and the number of closed stores is about 3.55 million.
"Raw materials and labor costs are high, and the worst can be controlled by concessions to food quality and scale reduction, but the rent is a fixed cost that cannot be adjusted, even if you want to change hands, no one will take over." Li Hui, who has opened the store four times in the past decade and failed four times, said.
Under the influence of the epidemic in the past two years, this pressure has increased unabated. According to the survey, 77.5% of catering merchants in 2021 said that there was operating pressure on store rents. Moreover, this high rent pressure is not only in the catering industry, such as the general rent ratio of offline supermarkets between 20% and 40%, shopping department stores charge high rents, and clothing formats charge another 18% to 25% high rent.
Compared with the uncontrollable hard costs, the takeaway commission was adjusted in 2021 - from the extensive model to the transparent reform, the commission is clearly a technical service fee, and the performance service fee will only be generated when the merchant chooses platform delivery.
Source: Aurora Big Data
Judging from the multi-party understanding of "Pole Business", the new takeaway rates have been rolled out on a large scale across the country in the past 9 months, and more and more merchants have begun to adopt new rates. 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%.
02 Why are takeaway commissions controversial?
Commission is a reasonable remuneration for labor services in business activities, and has existed in all walks of life since ancient times. Its claim has a long history and has long been recorded in Chinese historical records, and the "Chronicle of The Chronicle of Cargo Breeding" calls it a donkey.
"The takeaway platform collects commissions, which is understandable from the perspective of business model, and is also the cost basis for supporting the development of enterprises and service operations." Some insiders pointed out that takeaway delivery is a "point-to-point" model, that is, each order needs to be delivered by the delivery staff according to the corresponding address, and the marginal effect and scale effect of many enterprises on the Internet have not yet played a role in the takeaway industry, but the cost of manpower, research and development, service and so on behind it is difficult to be diluted by scale. (For example, according to Meituan, tools include information display, transaction settlement, and business analysis; services include customer service consulting, system maintenance, etc.) ）
Source: Meituan Financial Report
A key question is, from the above survey data, is the current 6%-8% takeaway commission ratio within a reasonable range?
Exactly how reasonable the proportion of the commission is, there has been no final conclusion. In March last year, there was a national industrial and commercial proposal: "Takeaway platforms in the range of 10%-15% are acceptable to catering enterprises, otherwise it is difficult to achieve profitability." If you look at it in this way, the current takeaway commission rate is in the lower half of this range.
In horizontal comparison, European and American takeaway platforms are almost twice as much as domestic and foreign selling platforms - taking Grubhub as an example, the previous delivery fee of more than 20%, 12.5% of the basic commission, 0-17.5% of the 4 promotion fees add up, a total of 30%-40%. And, after New York City legislated in August last year to set a 15 percent cap on commissions, Grubhub publicly stated its opposition.
In longitudinal comparison, the commission ratio of live streaming with goods is 20%-30% and does not include pit fees, the actual percentage of online ride-hailing business in 2020 is 15%-25%, and the general commission of e-commerce commission is about 5%, and does not include other expenses such as technical annual fees and margins. In addition, Apple also drew 30%, and the Android application market even drew up to 50%.
Compared with pure data, the current 6%-8% commission ratio of takeaway is not high. From the perspective of the takeaway platform, it has also repeatedly "wronged" that takeaway is a low-profit business, and the profit is declining.
Taking Meituan as an example, merchant commissions, that is, technical service fee income has always been the core of Meituan - the 2020 financial report data shows that Meituan's annual profit of catering takeaway is 2.8 billion, rider cost is 48.7 billion, and the annual catering takeaway orders exceed 10 billion, with an average profit of 0.28 yuan per takeaway; by Q3 of 2021, Meituan's commission income is 23.22 billion yuan, but due to factors such as fixed costs, the single takeaway profit has dropped to 0.22 yuan.
Survey data shows that the profit of a single takeaway fell to 0.22 yuan
The strange thing is that although the takeaway commission is not high compared with other industries and foreign counterparts, almost all catering practitioners unanimously believe that "pole business" is that manpower, rent, and raw materials are the most important factors affecting the survival of the catering industry. Why is the takeaway commission so frequently controversial?
There are many reasons for this.
First, the "three highs" problem of domestic catering enterprises has been prominent for a long time, but the public perception is not strong. In 2011, when the takeaway industry was not yet rising, the China Cuisine Association said that the rent had risen by 5 times in ten years, and the average life expectancy of restaurants under the pressure of the "three highs" was two or three years, and there was a 15% failure rate per year.
"The three highs continue to rise, but it is difficult for the public to perceive, such as the cost of rent, landlords scattered all over the country, and the taste is only experienced by catering operators themselves." Li Hui, who has failed to open a store for four consecutive times, believes that the takeaway platform is mainly Meituan and Ele.me, and most of the merchants are delivered through these two platforms, and the sensitivity and topicality of the commission are higher.
Second, the takeaway platform as a connector for the public, merchants, and riders can be perceived by everyone, and it has attracted much attention. As of June 2021, the mainland has 469 million takeaway users, an increase of 49.76 million over 2020, accounting for 46.4% of the total internet users - which means that nearly half of the mainland netizens have ordered takeaways and have more participation.
Third, under the impact of the new crown epidemic, more small and medium-sized catering businesses have launched takeaway platforms, taking an important step in digitalization. However, in view of the particularity of the takeaway platform, it is impossible to separate the delivery costs like the e-commerce industry, and before the rate is transparent, the merchant can only see a total number, which is the source of the commission controversy.
"As a merchant, I am not afraid of paying commissions, but I am afraid that the rules and rates are not transparent." Han Baolin said that in the past, the charging model of takeaway merchants was more extensive, and orders at different distances and different periods were charged according to a fixed proportion, and it was impossible to clearly understand the proportion of various parts of the tariff in the commission, which made her quite complain about it. Later, the gradual transparency of the rate became the main reason why she recognized the current commission.
"Pole Business" learned that since May last year, although the new rate has been rolled out on a large scale across the country, it takes more time to land on every catering business. In addition, although there are more and more merchants like Han Baolin who understand and support the new regulations, there are still a small number of merchants, riders, and the public who confuse commissions with delivery fees, and there is still a certain deviation in understanding.
This can also be seen in the "misreading" of the policy. Taking the latest notice as an example, "guidance" is not "order", and 7 relief support measures are proposed for the catering industry, involving enterprise epidemic prevention subsidies, deferred payment of insurance premiums, and broadening financing channels - among them, the rent reduction of small and micro enterprises and individual industrial and commercial households in the county-level administrative region listed as high-risk areas in the epidemic in 2022 is actually the most helpful for catering businesses to tide over the difficulties, but there is little attention.
What makes more sense than a general commission reduction?
Unlike the outside noise, many merchants have clearly stated to "Pole Business" that reasonable takeaway commissions are more important and more transparent than reducing to zero.
"Even if the 6.6% takeaway commission is reduced to zero, it saves less than 3,000 yuan per month, which is not enough for an employee's salary." More importantly, if the takeaway platform cannot continue to serve and operate because of this, the branch only has a door, and the gain is not worth the loss. Han Baolin said that she had also complained about the commission problem, but after falling to a reasonable range, it was not a good thing to "forcibly decline" the merchants.
This is not difficult to understand: in the takeaway industry chain, the platform, merchants, riders, consumers are a community of fate that is interdependent, but the takeaway industry is a special industry with marginal effects and insignificant scale effects, and it is difficult to reduce costs and increase efficiency through scale and operation in a short period of time, plus the cost of manpower, research and development, services and other costs will only become higher and higher, and the commission reduction space of 6%-8% is indeed getting smaller and smaller.
"If the commission continues to decrease or even fall to zero, either the platform loss is getting bigger and bigger and it is difficult to survive, or the cost pressure is shared with the riders and consumers, or even the cost is transferred with other charging models." Platforms, merchants, riders, and consumers will all be damaged. Some Internet observers made it clear.
This truth also applies to other commission income-based industries. For example, real estate intermediaries, commissions are more controversial than the takeaway industry, coupled with fierce competition in the industry, mixed fish, opaque fees, the head of the intermediary industry chain home in 2015 has proposed a "zero commission" model, but this exploration eventually failed: neither improve the efficiency of housing transactions, nor reduce the cost pressure of tenants.
Undoubtedly, in view of the "three highs" pressure on rent of human raw materials for more than a decade, the catering industry has long bid farewell to the golden age of high profits and entered the stage of hand-to-hand combat, takeaway has a significant significance for the catering industry that cannot be ignored: for the "dine-in" business is a good business is incremental supplement, for poor business business, it is a new opportunity - this from the epidemic two years, if it is not the takeaway industry, many catering businesses are difficult to survive can be proved. Therefore, the Economic Daily commented on this: If the merchant has no income, even if the commission is reduced from 20% to 2%, the merchant still cannot hold up.
This means that, rather than simply reducing commissions, long-term doctrines are applied to takeaway platforms to assess their value: First, the platform trading rules are required to be transparent and the allocation of responsibilities and rights is clear. The second is how the platform can help more catering businesses reduce costs and increase efficiency, and create more value.
Some observers believe that the reform of rate transparency implemented in May last year did not achieve 100% satisfaction of everyone, but to some extent reflected the future thinking of the takeaway platform's important exploration: clearly informing merchants that technical service fees are commissions, and at the same time giving the choice of performance service fees , that is, delivery service fees , to merchants to choose independently.
Some merchants now seem to have benefited. "The most intuitive thing about rate transparency is that there are fewer costs." Guangzhou Zhang Tengji burned wax person in charge said that compared with the past, each single will reduce the cost of 8 cents, a store monthly sales of more than 5,000 orders, can save more than 4,000 yuan in costs.
Compared with cost savings, what is more important is whether merchants can be promoted to re-evaluate the value and profit logic of the takeaway market according to their own advantages and needs.
From the perspective of "Pole Business" multi-party understanding, due to the elastic increase or decrease of takeaway business volume, the proportion of performance service fees charged is no longer uniform, in order to pursue more profits and income, some merchants will tend to choose orders with close distance and higher prices. For example, Changsha Shrimp Youhui Barbecue City, more than 80% of the orders are delivery distance within 3 kilometers of the near order, after doing a good job of "nearby 3 kilometers" business, the overall revenue of the store increased by 10%.
Others have different business experiences. Liaoning Shenyang has been operating for many years of "Xichen dumplings", from dozens of takeaways per day 3 years ago, to now the monthly takeaway orders exceed 10,000, the boss Mr. Meng has figured out the operation strategy of "3 kilometers and beyond": 85% of the proportion comes from within 3 kilometers, and the commission will save 6,000 yuan-8,000 yuan per month; 15% comes from 3 kilometers away, although the cost has increased, but it can expand the reputation.
The question is, does the above case apply to all catering businesses? Can the above-mentioned merchants maintain a profitable growth trend?
Obviously not necessarily. "Catering is a special industry that is difficult to build a moat." Li Hui believes that whether it is dine-in or takeaway, consumers are changing restaurants, tastes and needs at any time, and this change has almost no cost, nor is it low-cost, coupons can win, resulting in quite low user stickiness in the catering industry.
Under the pressure of the "three highs", all this obviously tests the comprehensive operation ability of takeaway platforms and catering businesses. Many observers believe that the wave of online and digital trends in the catering industry is unstoppable, and takeaway is a vital means for most businesses to break the situation, "so simply reducing commissions is not a solution to the dilemma of the catering industry." How to work together for takeaway platforms and businesses will also be a long-term exploration topic. ”