Take-out has become a must-have for urbanites, saving lonely stomachs in countless moments when they don’t have time (or are too lazy) to cook. Meituan Waimai is undoubtedly the leader in the food delivery industry, and many of its functions and designs are worth learning from. This article will conduct a product analysis of Meituan Takeout from five aspects, I hope it will be helpful to you.

1. Introduction

1.1 Purpose

A comprehensive analysis of the Meituan Takeaway APP was conducted from the aspects of basic product information, market structure, user needs, core functions, and commercialization. Combined with competitive product analysis and user research, suggestions for improving the functions and commercialization of the Meituan Takeaway APP were put forward.

1.2 Disclaimer

The data and information involved in this report are all public information on the Internet, and the sources of the information have been indicated for citations.

1.3 Environment

Date: September 12, 2020

Device: HUAWEI Mate 30 5G ( EMUI 10.1.0 )

Meituan Takeaway APP version: V7.43.4_6447 (Android)

2. Product positioning and market analysis

2.1 Product Positioning

Meituan Waimai is an online food delivery ordering APP under Meituan. It was officially launched in November 2013 and is headquartered in Beijing.

The main function of Meituan Takeout is online ordering, and it also provides supporting delivery services. In the later stage, services such as Meituan special delivery, city-wide shopping, errand shopping, and in-store pickup will be added.

2.2 Market Analysis

Under the wave of "Internet +", the catering takeaway industry has developed steadily.

In 2019, the scale of China's catering takeaway industry was 603.5 billion yuan, a year-on-year increase of 30.8%. Looking at individual factors, the number of takeout users and total orders have grown steadily from 2016 to 2019. However, due to the gradual narrowing of user dividends, the growth rate of the food delivery industry has gradually slowed down.

Figure 1: Trend of scale of China’s food delivery industry from 2016 to 2019

Source: analysis Analysys, Trustdata, Founder Securities Research Institute

The two giants compete for supremacy, with a market share of 98.2% in Q1 2020: Ele.me was founded in 2009, Meituan Waimai was launched in 2013, and Baidu Waimai was launched in 2014. After 2016, the Internet positions of Ele.me and Meituan Waimai gradually became clear, and the food delivery field has entered the battlefield of BAT competition.

In 2017, Ele.me acquired Baidu Takeout (renamed Ele.me Star Selection), and the takeout industry showed a duopoly competition landscape. Meituan and Ele.me monopolized the takeout market share, while the tail companies were gradually eliminated, with a market share of only 1.8% in Q1 2020.

Meituan Takeout currently has obvious advantages: its market share has steadily increased and ranks first. Ele.me's market share continued to decline, but its revenue increased steadily.

Figure 2: Competition landscape of food delivery market from Q3 2018 to Q1 2020

Source: Meituan’s financial report, The Economist, Trustdata, Founder Securities Research Institute

Market penetration will expand Meituan Takeout's future advantages: the growth of the first-tier market in the takeout industry has peaked and the growth rate has slowed down, while there is still a lot of room for growth in users in the sinking market.

Meituan Takeout has entered third-tier cities and below earlier. Currently, Meituan Takeout covers about 2,800 counties and cities. The proportion of users in third-tier cities, the proportion of new users, and usage rate are all higher than those of Ele.me.

In addition, in the second quarter of 2020, Meituan tested a new feature called "Pin Hao Fan" in some areas (embedded in the Meituan Takeaway Mini Program and the Meituan Takeaway APP), and began to test the waters for low-price group ordering for takeaway, aiming to further expand the sinking market.

Figure 3: Distribution of cities where Meituan Waimai & Ele.me users are located in 2019

Source: Trustdata, Founder Securities Research Institute

3. User Demand Analysis

3.1 User Profile

Figure 4: User portrait analysis diagram

Younger, with slightly more females: concentrated in the 16-35 age group, people in this age group are more receptive to new things.

There are slightly more women than men, which may be due to:

• Campuses are one of the main markets for food delivery. The latest statistics in 2020 show that the proportion of female students in Chinese universities is slightly higher than that of male students.
• Women's willingness and ability to consume milk tea, fruit, cakes, etc. are higher than men's.

Figure 5: Gender and age distribution of takeaway customers

Source: QuestMobile, Founder Securities Research Institute

Users are mainly distributed in big cities: 269 million food delivery users are mainly distributed in economically highly developed cities.

From the perspective of city level, the proportion of takeout users in first- and second-tier cities to all network users is much higher than that in third-tier cities. The Internet in economically developed regions often develops rapidly, and people are more receptive to Internet catering. At the same time, higher work and life pressures also prompt people to use takeaway products and reduce dining time.

Figure 6: Distribution of Chinese food delivery users by city level in the first half of 2019

Source: The Economist, Founder Securities Research Institute

Users have high online consumption capacity and willingness: users with a consumption capacity of more than 200 yuan account for 93.72% of the total number of users, and users with medium to high consumption willingness account for 94.61% of the total number of users.

Figure 7: Distribution of online consumption capacity and willingness of Meituan takeaway users in 2017

Source: QuestMobile

The white-collar market has the highest share of takeout transactions: in 2018, the transaction share of the white-collar business market accounted for 85.8%. On the one hand, this is due to the large number of white-collar users who are relatively concentrated (in the core business districts of developed cities). On the other hand, higher consumption capacity and willingness also make the unit price of takeout orders of white-collar users generally higher than that of the student market and the family community market.

Figure 8: Distribution of transaction shares of China's Internet catering market segments from 2017 to 2018

Source: Analysis Analysys

3.2 User Demand Analysis

The scenario cases are extensive and the user needs are complex and diverse: Meituan Takeout’s scenario cases are very extensive and involve many factors, so the user needs for different scenarios are also different.

First, by analyzing the target users, the product usage scenarios are mainly divided into five scenarios: ordering, payment, delivery, dining, and evaluation.

Secondly, since the takeout market is mainly concentrated in the white-collar business, campus student and family community markets, the volume of takeout orders is closely related to the time period.

Therefore, we add user groups and time factors to further segment the scenarios and explore user needs in real scenarios.

Figure 9: User needs analysis diagram

Based on basic needs, expand expected/exciting needs: Through user needs analysis and combined with the KANO model, user needs are divided into three levels (basic needs, expected needs, and exciting needs).

As an online food delivery app, Meituan Waimai’s basic requirements are online ordering, online payment, timely delivery, clean and hygienic meals, and post-meal evaluation, which are also the primary requirements of an online food delivery product. At the same time, expected demands are reflected in aspects such as category screening, quick payment, delivery status checking, evaluation rewards, etc. Once these demands are met, user satisfaction can be greatly improved and user stickiness can be increased.

Excitement needs are mainly concentrated in high-level needs such as food recommendations, diverse payment methods, and privacy protection. These needs can further increase the dependence of old users on the product, allowing them to develop or maintain the habit of ordering takeout from Meituan, and realize the identity transformation from general users to core users.

Figure 10: Demand hierarchy distribution diagram based on the KANO model

4. Core Function Analysis

4.1 Core Function Structure Diagram

Substitute into the scenario and analyze the needs to sort out the core functions of Meituan Takeout.

Figure 11: Core function analysis diagram

4.2 Core Function Flowchart

Based on the usage scenarios of Meituan Takeaway users, the five core functions of Meituan Takeaway are sorted out, and divided into two core functional areas before and after receipt according to the timeline of user receipt. The core functional area before receipt includes the three core functions of ordering, payment and delivery. The process is as follows.

Figure 12: Functional flow chart of ordering (before), payment (during), and delivery (after)

The core functions after receiving the goods match the user's needs in dining and evaluation scenarios, and the process is as follows.

Figure 13: Flow chart of core functions of dining (before) and evaluation (after)

4.3 Core Function Experience Analysis

4.3.1 Analysis of the core functional experience of the pre-receipt module

Search function: Meituan Waimai uses icons and text to display content, and the homepage pushes a large amount of discount information to stimulate users' consumption psychology. There is a search box at the top, and historical search records are displayed below the search box. When you find a target merchant, you can click on the search box. After jumping to the interface, you can directly search for products or merchants. You can also make choices based on search findings (smart recommendations) and historical search information. If you are not interested in the smartly recommended products, you can also choose to change a batch.

There is a category navigation bar below the search module, where users can browse products in specific categories according to their preferences, reducing user operation steps and listing products that best meet user needs in the shortest time.

Figure 14: Screenshot of merchant/product search function

Recommendation function: When users do not have a target merchant or product, the system's intelligent recommendation function can assist users in making choices, including search discovery, selection of good stores, discovery of good dishes, and sorting of nearby product ratings/distances/sales volumes. At the same time, Meituan Takeout has a multi-field feature in the display of merchant/product information, providing customers with information including delivery fees, monthly sales, delivery time, etc.

Figure 15: Screenshot of merchant/product recommendation function

Order function: After confirming the merchant/product, enter the product selection interface, which is mainly divided into three modules: ordering, evaluation, and merchant.

On the ordering page, there is a navigation bar on the left and a graphic description of the product on the right. It is worth noting that if a user has purchased goods from the merchant before, then when purchasing again, he can directly choose to place another order. This function is also set in the My Order module. Depend on

Due to the special relationship between the products, the evaluation page of Meituan Takeout is quite similar to the evaluation pages of Meituan and Dianping APP, and users are highly selective in their evaluation operations.

The merchant page generally displays the merchant's basic information, allowing users to obtain important information such as offline real-life pictures of the merchant and food safety certificates, which helps increase users' trust in the merchant and the Meituan Takeout APP.

Figure 16: Screenshot of the ordering function

Estimated delivery time acquisition/setting function: After browsing the menu and adding the product to Pocket, click "Go to Checkout" to enter the submission page. On this page, users can obtain estimated delivery time information for immediate delivery. If the time is not within the user's psychological tolerance, they can reselect the merchant/product. If the user is making an appointment to order food, he or she can also set the estimated delivery time and obtain the delivery fee information for the current time period.

Figure 17: Screenshot of the estimated delivery time acquisition/setting function

Discount function: The payment process of Meituan Takeout is to submit the order - pay the order - complete the payment in 3 steps. On the order submission page, the system will display subsidy discounts, new customer discounts, and gift discounts for purchases over a certain amount, etc.

For discounts on purchases above a certain amount, the system will automatically prompt that there will be greater discounts for additional purchases, thereby motivating users to place additional orders. When it comes to the use of Meituan red envelopes, the product gives users the right to choose. As for why the red envelope with the maximum discount is not automatically set, it may be because each red envelope has other attributes such as validity period, and users need to choose for themselves.

Figure 18: Screenshot of the promotion function

Payment function: After completing the delivery information and discount selection, click Submit Order to enter the payment order page. Users can choose Meituan payment or third-party payment according to their needs.

In addition, Meituan Waimai has also launched an ultra-fast/password-free payment function to simplify the user payment process. This function can be set up in My Wallet. Due to the cooperative relationship between Meituan and Tencent, Meituan Waimai launched the "Find Someone to Pay" feature, which allows users to share payment links with friends through WeChat, thereby increasing traffic interaction between the two platforms (including sharing lucky red envelopes through WeChat).

Figure 19: Screenshot of the payment function

Delivery status viewing function: Users can view the delivery status of goods between successful payment and delivery. Meituan Takeout quantifies the delivery status by time and distance, allowing users to directly and clearly know how long they need to wait.

Figure 20: Screenshot of the delivery status check function

4.3.3 Analysis of the core functional experience of the post-receipt module

Mediation function: If any problems arise while users are dining, they can contact the rider or merchant through the platform in a timely manner. If users are not satisfied with the communication results, they can also solve the problem through the platform customer service.

Figure 21: Screenshot of the mediation function

Evaluation function: After the order is completed, users can evaluate the rider and the merchant/product. Evaluations can earn gold beans as rewards. The amount of gold beans earned is closely related to the quality of the review content (text, pictures, evaluation of a certain dish, etc.). Gold beans can be exchanged for red envelopes on the My Assets page to encourage users to actively participate in reviews.

Normally, when users give a bad review to a merchant, they worry about being harassed afterwards. Therefore, Meituan Waimai launched anonymous reviews. Users can set whether to review anonymously so that they will not be affected by the external environment, making the review more objective and fair.

Figure 22: Screenshot of the evaluation function

4.4 Functional Optimization Space

Function name: Order reminder

User: White Collar

Scenario:

• Being busy at work, I forgot to order food;
• I was so focused on my work that I didn't realize it suddenly started raining heavily outside. When I went out at lunch time, I found it was still raining heavily. If I ordered takeout at this time, I would have to wait with an empty stomach, and it might affect my rest/work time later.

Demand: It is divided into core user demand and general user demand. Core users refer to users who already have the habit of ordering food from Meituan, while general users refer to users who only use Meituan when they are short on time, miss meal times or the weather is inconvenient. Core users hope to receive ordering reminders within half an hour to an hour before meal time every day. For general users, when a sudden rain shower occurs in the location, it is hoped that a decision on how to dine will be made in advance.

Function: Added ordering reminder function. After clicking to enter, you can add or modify reminders. The editable fields include reminder time, recurrence (Monday to Friday, weekends, every day, rainy days only). Only the rainy day reminder function requires access to local real-time weather information.

Figure 23: Screenshot of the order reminder function (from the Ele.me app, adding the rainy day only field in the recurrence cycle)

5. Commercialization Analysis

5.1 Commercialization Model Analysis

After the subsidy war, food delivery O2O has gradually emerged, and the market has shown a duopoly competition pattern of Meituan Waimai and Ele.me. Although large subsidies have prompted users to develop the habit of eating takeout, rapid growth without considering the commercial model would be an unreasonable and barbaric expansion.

Therefore, both Meituan Waimai and Ele.me are actively exploring commercialization models that suit them. In 2019, Meituan Waimai turned losses into profits and achieved profitability for the first time. At present, the main commercialization model of Meituan Waimai is as follows:

Commission on successful orders: Meituan’s food delivery business model is mainly based on commission, and it generally charges 20% to 30% of the total amount to the merchant for each successful order. It is worth noting that as the platform's commission rate increases, the profitability of small and medium-sized businesses will be affected to a certain extent, which may easily prompt small and medium-sized businesses to turn to local self-operated food delivery platforms, which is not conducive to the long-term development of Meituan Food Delivery.

Figure 24: Commercial model of commission collection based on orders

Bidding promotion service: Based on Meituan Takeout’s high-traffic platform, the platform will use the first few stalls as promotional stalls and charge a promotion service fee based on the merchants’ bidding. However, the scale of this model is currently relatively low, mainly because the local service nature of takeaway products limits the service radius to within 3 kilometers. In a limited area, the number of merchants is limited, and the promotion effect is far less than that of traditional e-commerce platforms such as Taobao;

Figure 25: Commercialization model of bidding promotion services

Value-added services: Starting from the second half of 2018, the scale of Meituan’s subsidies has become smaller and smaller. After 2019, as the subsidy red envelopes were significantly reduced, Meituan’s food delivery members began to play the role of substitutes. The threshold for membership has become higher, but user stickiness is stronger and the invisible stimulus of unit price is also stronger. From a psychological perspective, no one will include the cost of a membership when ordering takeout, but in reality it increases the revenue from value-added services.

Figure 26: Commercialization model of value-added services

5.2 Commercial expansion space

5.2.1 From the “platform model” to “platform-based, self-operated as a supplement”

The platform has access to the order data of all merchants, and through big data analysis it can know what to sell in what location and at what time to make the most money. Meituan’s own-operated merchants entering the platform can, on the one hand, strictly control quality and build their brand, and on the other hand, ensure that profits are not lost. Compared with the collection of a single commission, self-operation can bring in greater income.

Meituan Takeout still needs to mainly rely on a platform model, similar to Tmall Global. Otherwise, it will easily cause merchants to leave the platform and turn to cooperate with local self-operated platforms, and the company will not have enough resources to meet all the needs of users. Taking Kaola, which also focuses on cross-border e-commerce, as an example, its membership e-commerce platform attributes are more suitable for a self-operated model. The product’s target audience is limited to middle-class users and it cannot meet the needs of users from other classes, so its scale is smaller than Tmall Global.

Figure 27: Tmall Global (mainly platform) and Kaola.com (mainly self-operated)

5.2.2 Increase joint membership activities and improve value-added service revenue

Joint membership is a cross-border product collaboration that leverages the influence of both parties to increase interactive traffic and product value-added service revenue. In 2019-2020, Meituan Waimai launched joint memberships with Tencent Video and iQiyi, but it did not last long. Currently, only Tencent Video offers a quarterly Meituan takeaway monthly pass (non-joint membership) activity, while Ele.me has established a stable joint membership mechanism based on Alibaba's ecosystem and Youku Video.

Figure 28: Meituan & Ele.me’s joint membership activities with video products

Therefore, how to establish its own joint membership mechanism will be a major breakthrough for Meituan Waimai to increase its value-added service revenue. Specific plans include:

• Cooperate with Meituan products to launch joint membership activities, including Meituan Bike, Maoyan, etc.
• Increase joint membership activities with video products such as iQiyi and Tencent Video to break through traffic walls, improve user loyalty and activity, and increase user crossover.

Figure 29: Traffic interaction between Meituan Takeaway and video products

Author: ~ Source: ~