The competition among domestic e-commerce giants is becoming increasingly fierce, from the competition on the e-commerce platform itself at the beginning, to WeChat and Alipay payment in the past few years, to taxi-hailing, take-out, etc. wait. From being the dominant player to being evenly matched, from competing on two platforms to now where a hundred flowers are blooming. The local life services that have been promoted for several years have made some progress in recent years, but they have still not entered the most critical moment. Ali's frequent replacements and active adjustments to the company's strategy show that in the field of local life services, all parties are still in a state of anxiety and are still inseparable for a while.
At the end of 2018, Alibaba announced the merger of Ele.me and Koubei and began to establish a local life service company. Food delivery is Ele.me’s core business, while Word of Mouth focuses its business on offline store experience. In contrast, Meituan and Dianping also follow this model. If it is just a separate takeout business and offline store services, neither Ele.me, Koubei, Meituan nor Dianping will have any advantage. Alibaba's merger of the two parties not only improved operational efficiency, but also reduced operating costs. However, Meituan and Dianping also actively followed suit. In the process of constantly competing for the market, the two platforms are no longer limited to competing in traffic and categories. Developing vertical businesses and improving the ecology have become the main directions of expansion.
At the beginning of this month, Ali Zhang Yong "organized his troops" and issued an announcement to officially announce adjustments to Ali's organizational structure, targeting Meituan. In response to the new requirements for geographical location services, Amap, Ele.me and Fliggy formed a new project segment, which is local life services. Let Yu Yongfu take the lead, and Li Yong will serve as CEO of Ele.me (local life).
The adjustment of this model is also a commonly used method by Alibaba. Previously, cloud intelligence and other businesses have adopted this direction to develop their businesses at the same time. This organizational structure upgrade is less than a month since the last one. There is increasing pressure from Tencent, Yin, Yinduo, etc., and they are all marching into local life services. Ali's opponent is too powerful, so now he has begun a full showdown, almost showing his strength.
Some clues can be seen from this structural adjustment. Originally, when Wang Lei was appointed CEO of Ele.me, he reported directly to Wang Yong. After this adjustment, the heads of AutoNavi and Fliggy reported to Yu Yongfu. What seemed like a downgrade was actually a strengthening of centralized power, allowing Yu Yongfu to fully control the newly formed local life services sector. The advantage of this adjustment is that it does not need to be affected by too many external influences, and the tasks of the separately divided sections are more clear, which facilitates reporting and management during collaborative work, and is more conducive to the collaboration of the sections and increasing cohesion.
Despite the re-adjustment of the organizational structure, Ele.me, as the core of the local life services sector, has always struggled to take on major responsibilities. After Wang Lei became CEO, he suffered successive defeats in the food delivery market, which was completely opposite to the Haikou he boasted about. In 2019, Wang Lei proposed a new strategic direction, aiming to achieve a market share of 50%. However, after two years of operation, not only did it fail to reach the original goal, but it became further and further away from the goal of 50%, falling below 30%. This is already the fifth quarter that Ele.me’s market share has declined.
In Alibaba’s 2019 financial report, it can be seen that Ele.me’s losses are very large, and it has almost become a heavy burden for Alibaba. But fortunately, Fliggy’s current performance is pretty good, ranking third in the country, behind Ctrip and Qunar, and its biggest competitor Meituan ranks fifth.
In fact, in the battle between Ele.me and Meituan, the main battlefield between the two parties is still focused on food delivery, and the method of competition is no longer limited to subsidies for merchants and users, but also covers all aspects of life. Both sides are secretly competing with each other. For example, for some time last year, you could see that riders from Meituan and Ele.me had different headgear on their helmets. If you just focus on these cute headgear, you will obviously miss a lot.
At the same time, "afternoon tea" that appeared repeatedly in Meituan's financial reports was the focus of competition between the two parties, and headwear was just a marketing method for "afternoon tea".
In the competition for "afternoon tea", Meituan won first, but Ele.me did not give in. At the end of last year, Alibaba made another adjustment to food delivery, not only delivering food, but also delivering everything. As long as users need Hungry.me, they are welcome to do so. Even services are delivered to your door, such as manicure and eyelashes, massage and housekeeping, etc. You can make an appointment for door-to-door services on Ele.me.
In order to seize market traffic, the two parties have continued to expand their service models in the field of food delivery. The coverage is so wide that the performance of just one Fliggy can no longer affect Alibaba’s market share. Obviously, this adjustment of the company's strategy is also to deal with Meituan's. In the local life sector, not only Meituan is gaining momentum, but more platforms are joining. How to save Ali's decline in the local life section in the future and break through on many platforms again depends on Yu Yongfu's talents.
Ali attacks! This time the target is pointed at Meituan
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