Good food "kills" merchants, and abundant food is behind it

The institutional catering market was once called the last blue ocean of the takeaway industry.

According to the "2021 China Institutional Catering Industry Research Report" released by Ai Media Consulting, the size of China's institutional catering market will reach 1.77 trillion yuan in 2021, accounting for 39.7% of the total scale of China's catering industry. With the diversified development of the institutional catering industry and the upgrading of industry services and technologies, the report estimates that the market will maintain a growth rate of 10%, reaching 2.25 trillion yuan in 2023, accounting for more than 40% of the total scale of China's catering industry.

However, the institutional catering industry has also been in a relatively closed and extensive primary stage of development for a long time. Although the scale of the domestic institutional catering market has exceeded one trillion, the overall market share of the top 100 enterprises is only 6.7%. The market transparency is low, the concentration is low, and the industry lacks strong brands.

It can be said that "no super little giant" is a long-term portrayal of the domestic group meal market.

At the end of 2021, Mei Catering.

As one of the earliest digital institutional catering platforms in China, Mei Catering has made great contributions to the informatization, standardization and large-scale development of the domestic institutional catering market, and the institutional catering market has gradually opened up and become transparent. However, in the process of development, Meifang.com is also facing common problems in the takeaway industry, such as a relatively single way of profit, higher merchant commissions, and non-standard distribution.

With the gradual maturity of the institutional catering market, especially driven by the post-epidemic market demand and technological development, capital and Internet head players cannot hold back and have entered the market with ecology.

In 2020, SF launched the "Feng Food" Mini Program, which focuses on the takeaway service of corporate employee group meals. As soon as it came up, it directly hit the pain points of the industry with low-point, standardized distribution, promotion and rewards, and cross-border entry. After the takeaway giants Meituan and Ele.me ended the Red Sea war, they also continued to attack the group meal market.

Today, the institutional catering market accounts for one-third of the total size of China's catering industry and will exceed 40% in 2023. No one can refuse this tempting pie. In the next few years, the institutional catering market is likely to face the battlefield of burning money and enclosure, and the giants who bring capital and ecology to enter will eventually be slightly better.

Good food: Hard work to cultivate the group meal market for ten years

Dining.com was founded in 2011.

At that time, it was still the era of relying on takeaway single telephone orders. Since they do not like to eat out in the office, founders Zhao Xiao and Xu Yang put the collected takeaway information into the internal wiki system, with food pictures, which became the prototype of the food network.

Meishi.com charges merchants a commission of 10%-20% according to the order, but it is free for users. Just over a year after its establishment, it has covered more than 16,000 restaurants in Beijing, Tianjin and Sui, and developed more than 10,000 ordering users.

The first investment in the meal also came very smoothly. At that time, investors saw employees using Meishi.com to order meals during meetings. So a page of business plan was useless, and Meidian received joint investment from Xu Xiaoping Zhen Fund and Jiuhe Venture Capital Fund.

At the beginning, Mei Catering also did a personal ordering market, but at that time, Hungry Mo and so on had risen, and the personal takeaway market was seriously killed. Since receiving the A round of financing in 2012, Mei Catering has quickly abandoned personal ordering and turned to the corporate ordering market. After clarifying the direction, Meidian got a B round of financing the following year, and the transaction volume climbed rapidly.

Avoiding the personal takeaway business can be said to be the most correct decision for Mei Catering. According to Analysys data, since the budding of online takeaway in 2011, a large number of capital and Internet giants have poured in, and the personal takeaway market has been in a big wave in just five years, and the "yellow, blue and red" (Meituan, Hungry, Baidu takeaway) has quickly formed a three-legged stand. In 2017, Ele.me announced the merger of Baidu Takeaway, and in 2018, Ali acquired Ele.me, ending the track competition with a situation of "two males competing for supremacy".

Individual meal ordering and corporate group meals seem to belong to two segments of the same market, but in fact, they are quite different.

"There is a natural moat between 2C and 2B, and the traffic acquisition methods are different, and the pain points are different." In 2015, founder Zhao Xiao said in an interview with the media that at that time, Meidian had just announced the completion of the 140 million yuan C round of financing led by Dianping. For example, individual users, as long as there are discounts and subsidies, will definitely try to promote in effective scenarios. However, corporate users are not sensitive to price, mainly focusing on the service experience, "if the meal is a problem or 20 minutes late, it will face complaints from 150 people."

Enterprise order operation is difficult, so the offline team hired by Mei Catering is the manager or deputy store manager of the catering enterprise, which is used for customer relationship maintenance and management, and also does a lot of market cultivation work to help offline businesses improve efficiency and reshape workflow. Some data show that the initial cost of fine meals for the education of merchants and consumers is as high as millions of yuan.

It is worth mentioning that Mei Catering does not build its own logistics, nor does it cooperate with third-party logistics, choosing to let the merchants deliver by themselves. It is not due to cost considerations, but mainly for fear that the user experience cannot be guaranteed. However, good food will also provide optimization assistance for merchants in terms of efficiency and so on.

It is precisely under the unremitting efforts of enterprises such as Mei Catering that the digital group catering market has gradually matured. In 2015, after completing the 140 million yuan C round of investment led by Meituan Dianping, Meidian has reached an annual revenue of hundreds of millions of yuan on the platform. At the end of 2021, Mei Catering received 1.1 billion yuan of E-round investment from Dapu Capital and Sodexo, and the number of monthly trading orders on the platform exceeded 10 million, covering a wide range of scenarios and multiple industries.

In the eyes of industry insiders, the working environment of The Food Network is relatively relaxed, and it belongs to the "small and beautiful" entrepreneurial enterprises, so it also has a certain attraction for talents. Some certified employees said on the pulse that the meal is technology-oriented, the commuting time is free, and there are various meals.

However, in the development, The catering industry also faces common problems in the takeaway industry, such as a single way of profitability and higher commissions for merchants. At the same time, as a digital group meal platform, its delivery methods are not yet standardized, which also lays hidden dangers for the next track competition.

Abundant food: "Crossover catfish" admission group meal

The outbreak of the new crown pneumonia epidemic has fundamentally changed people's living habits. During the epidemic, corporate dining has become a necessity. SF saw this opportunity and launched the "Fengshi" corporate group meal mini program in early 2020.

When entering, SF looked very low-key. According to the Beijing News at the time, SF said that "Feng food" is only for the group meal takeaway business, the team is currently only a project group, only a dozen people, not the development plan of SF city, not to mention the development strategy of SF headquarters, the benchmark enterprise is the US restaurant network, "definitely not to call the US group, hungry."

According to the official website of Fengshi, Fengshi emphasizes the original intention of "SF Shunshui, Follow the Trend", and devoutly learns the way of "water conservancy and all things without dispute". Such a low posture, presumably to avoid the sharp edge of the track giants. After all, the days of "killing red eyes" in the personal takeaway market, anyone will be afraid.

However, this low-key cross-border entry, from the group meal to the takeaway market, is actually of far-reaching significance. SF uses its advantages accumulated in distribution, channels, online operations, customers and other aspects to gradually import hundreds of billions of C-end resources into the B-end, with the intention of improving its business layout.

As soon as Feng food went online, it went through low-pumping points, tube distribution, and "subsidy price war", first grabbing merchants, and then grabbing users, directly hitting the pain points of group meal enterprises. At the same time, relying on the long-term accumulation of corporate customer resources in SF Tongcheng, Fengshi has made smooth progress in customer expansion.

It is reported that the sampling point charged in the early stage of "Feng food" is 3/1000, and from July 1 of that year to the end of the contract period is 2%, and the logistics service fee is calculated separately. In addition, SF will set aside 5 million yuan in promotional fees to encourage individual referrals. Customer orders go directly to SF system, covering the surrounding area of 3 kilometers.

In fact, group meal delivery has always been a major challenge in the takeaway industry. Takeaway riders can carry limited meals, and the profit of commissions per order is not high, so riders do not like to receive group meals. Logistics, express delivery, and even online ride-hailing companies have long been eyeing this due to their distribution advantages.

According to The China Business Daily, in 2015, the logistics platform Dada launched a takeaway platform Pie Fun, but it was immediately blocked by the takeaway platform. There is also the Didi takeaway that we have in mind. SF also cooperated with KFC, McDonald's, Dicos and other companies to develop the same-city distribution business during the same period.

In fact, SF Tongcheng has long been deeply involved in various industries such as catering, supermarkets, and medicine. Some analyses show that the access of Fengshi can not only expand application scenarios and improve the ecological chain of local life, but also become a new traffic entrance through high-viscosity services, and find a second growth curve for the traditional business of SF that has slowed down.

For merchants and users, it is always a good thing to have one more competitor, and the ecology is more diverse. However, there are also many problems with Fengshi, such as the lack of operation and promotion teams. At the same time, some analysts said that takeaway is actually a whole complex ecosystem, involving a wide range of aspects, and delivery capacity is only one of the links. Some Ele.me certified employees said that fengyu's transportation capacity on the performance side may have advantages, but the supply side is not.

The takeaway market seems to be considerable profits, but in fact it is intricate and complex, and the dark tide is surging. If SF wants to fight and win this battle for a long time, it will inevitably be led by the nose of capital.

Traditional takeaway giants: with capital and ecological influx

In front of the big cake in the group meal market, the two takeaway giants of Meituan and Ele.me have long had a layout.

The institutional catering market has always been relatively closed and scattered, and there is a "natural moat" between customer acquisition methods, service levels, operating standards, merchant management, technical specifications, etc. with personal takeaways. Therefore, although the US group has a lot of resources in the early stage, it mainly uses strategic investment methods to intervene externally.

In 2015, Meituan-Dianping led the investment in American Restaurant, completing a C-round investment of 140 million yuan. Ele.me laid out the group meal business in 2016, but it did not form a brand effect.

In recent years, with the unremitting efforts of digital institutional catering platforms such as Mei Catering Network, the institutional catering market has gradually become more open and transparent from the traditional relational market. At the same time, some analysts pointed out that Internet catering and capital began to penetrate, supply chain finance, big data systems and other informatization accelerated development, and the boundary between group meals and other catering formats was gradually blurred.

The embrace of informatization, standardization, scale and openness in the institutional catering market has also made capital gradually confident in entering the institutional catering market.

After the outbreak of the new crown pneumonia epidemic, social meals have been impacted, and enterprises have faced the problem of difficulties in eating for employees after resuming work.

Crises represent opportunities. In February 2020, Meituan and Ele.me successively announced the launch of the enterprise group meal business, successively launched the "assured work meal direct supply" and "enterprise group meal delivery", invited thousands of social catering enterprises to join, actively docked the dining needs of various enterprises, institutions, industrial parks and other units, and provided contactless delivery services for enterprise employees after they resumed work.

Taking Ele.me as an example, in the week when the enterprise resumed work, nearly 9,000 catering enterprises in 13 cities across the country have joined the "enterprise group meal delivery" service.

In May 2020, according to 36Kr news, Meituan set up an independent group meal incubation center, hoping to make up for the business shortcomings of the multi-person dining scene. In the eyes of industry observers, this is a natural extension of the development of takeaway enterprises, which is smoother than SF's entry into local life from logistics and distribution.

At the same time, various capitals are also competing to invest in the track. According to the data, in March 2020, Meituan-Dianping led the food delivery company Wangjiahuan (600 million yuan B round financing), and in May, Meituan Dragon Ball Capital jointly led the food supplier Lehe Food (400 million yuan C round financing). In the same month, The group catering service company Holtpoel was invested in tens of millions of yuan in Series B financing.

Under the impact of capital and giants, group meal start-ups such as Meidian have been affected by many parties, such as customers being robbed and merchants losing. The industry is speeding up the reshuffle. Therefore, when receiving E round financing, Mei Catering has also made greater efforts in product research and development, overseas promotion, supply chain system optimization, and organizational capabilities.

"The lack of dish innovation ability, backward supply chain management system, and weak awareness of brand development are the three main reasons that restrict the institutional catering industry from reaching the public." Ren Zili, chief operating officer of Meifang, said in an interview with the media that only by digitally upgrading the whole chain, expanding front-end service scenarios, improving the management level of mid-end enterprises, and improving the construction of back-end supply chains can institutional catering enterprises move towards a new stage of professional development.

Perhaps as Ren Zili said, what the institutional catering enterprises have to do at present is to enhance their professional capabilities, play a good job in basic skills, and open up the second pulse of Ren Dou. The battle of the group dinner is not far from the stage of street fighting.