Meituan Dianping App Follows A Different Business Model

The Meituan Dianping App: Food Delivery Apps all over the world be it in China, India, U.S.A, Australia etc. face stiff competition because of rising demands for the service. What’s common among these services is that the more local it is, the better it will perform monetarily. Customers are humans and like humans, they form habits. Customers choose to patronise local restaurants because they have been acquainted with it for a while, but what really catches their attention is the discounts.

Meituan Dianping adopted the ‘discounts to lure people to use the app’ strategy on the surface but maintained an overall strategy that involved the merging of food + platform formula. In marketing terms, it is called the ‘cross-selling’ strategy, but Meituan leveraged it differently. We shall discuss how Meituan took this strategy to a whole new level

Presenting To You The Meituan Dianping Business Model

Are you planning to launch a delivery app or know someone who has started one already? Then you might want to note down a few important tips from this article to fuel your business because the Chinese do food and apps better than anyone!

What Does The Meituan Dianping App do?

Meituan is China’s leader in O2O (offline-to-online) services, creating a one-stop super app for a range of services, from haircuts, manicures and massages, to movie tickets, food delivery and hotel bookings. Meituan has delivered impressive revenue growth at 744% from 2015 through to 2017 and has continued to generate profits from its multifaceted platform.

The company’s platform uses technology to connect consumers and merchants just like any other app. It boasted of 340 million annual users in 2018 which indicated that 1 in 4 Chinese people has made a purchase on the platform. The company works with 4.7 million merchants, including restaurants, hotels, movie theatres, hair salons and others, across more than 2800 cities and countries in China. The platform generated over 20 million transactions per day in April 2018.

How Did Meituan Dianping Bridge The Food Delivery App Gap In The Market?

According to data from the National Bureau Of Statistics, the food-delivery market only accounts for less than 10% of China’s total dining market. To grow the market further and get more people to use its app, Meituan has been subsidizing meal purchases for consumers to avail greater incentives to order online.

Meituan Dianping believes food delivery is not just an alternative for the traditional restaurant business. Food delivery addresses the market for total food consumption, as many young people don’t cook, yet don’t want to go out to eat every day.

Their Hiring Model

The combined company, Meituan Dianping, has pursued a clear mission: to help people eat better, live better. The team has grown to more than 45,000 people, among whom over 10,000 are engineers, and nearly 30,000 are local sales and business development representatives. The tech team works in collaborative efforts with the local sales and business members to bring about a fusion of services

Their Revenue Model

Platform Services

The app combines a range of services like ordering meals, booking hotel rooms, and arranging transport similar to Groupon, Yelp and Uber Eats through the 4.7 million merchants that have joined the platform which in turn allows Meituan to earn its revenue through commissions and delivery fees.

Food Delivery Services

The food delivery business is the largest source of Meituan’s income, accounting for 62% of revenues last year. Consultancy Trustdata says the company has amassed a 54% share of China’s food delivery market, which is estimated to have an overall value of $44 billion in the first quarter this year.

Other Services

Meituan Dianping also has an active in-store business. The company has been doing restaurant reviews for 15 years. As of April 2018, its user-generated content database contained approximately 4.6 billion user comments, including 1.5 billion in-depth reviews, 648 million photos and 5.3 million videos regarding more than 13.7 million points of interest in over 2,800 cities and counties in China and over 900 cities abroad. The company also offers a wide range of solutions to merchants to help with online marketing, delivery, ERP and payment systems.

Conclusion

Meituan Dianping, just like China’s super app WeChat is turning into a one-stop-app where users can avail many more functions apart from food delivery with one app. Owing to its rich content the company is in the process of developing a ‘local search + marketplace’ model, under which Meituan will be the ultimate destination that connects consumers to merchants for successful search and order services.

The moral of the model is that, if you have to start your own food delivery app, you must have multiple business models to generate that revenue because every other app can be a food delivery app but not every app with multiple functions is a food delivery app alone.

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