Meituan and Dianping merged, and the O2O melee escalated into the ultimate battle for the boss of BAT

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On the 6th, an investor told me that he wanted to share some news with me. I was accompanying my child at the time and did not ask in detail. As a result, I missed the breaking point. After that, all kinds of news were flying around.

Throughout the day on the 7th, details of the merger between Meituan and Dianping were revealed slowly, like peeling an onion, and gradually became clear. This news was both unexpected and expected.

A strange collaboration

The reason why it was unexpected was that Meituan and Dianping had been fighting overtly and covertly for a long time. Whether their grudges could be resolved quickly and their very different corporate cultures were obstacles to their merger.

As expected, Meituan's financing progress was very unsuccessful, with no results for several months. Even a stubborn man like Wang Xing had to compromise. The results of the battle for Dianping throughout 2014 were not satisfactory. Continuing the battle would only endlessly waste the money and energy of both sides and would not benefit the industry.

Of course, more importantly, the merger of the two parties is very complementary. Last year, I mentioned that Meituan's business is like a sharp knife, eating up various businesses sharply, but this approach is facing various resistances, for example, many companies regard Meituan as a big enemy. Dianping has built a good product framework and business prototype, prepared a set of "combination tools" for merchants, provided various products, and its promotion department has very considerable income. But when the specific business was sinking to the third and fourth tier cities, it encountered great resistance from Meituan.

The conclusion is that the merger of the two companies will face more resistance than that of Didi Kuaidi, but they will be really powerful after the merger. After all, Didi Kuaidi was established not long ago and has spent most of its time developing incremental markets. The two companies do not have deep grudges and can better integrate. However, after the merger with Meituan Dianping, from a business perspective, they can achieve a "home run" in the local life O2O field, from first- and second-tier cities to third- and fourth-tier cities, from decision-making to transactions to reviews, to reservations, membership management and other products. The toolbox has a sharp knife that has not been sharpened before, and it will naturally be more powerful after the combination.

Will the O2O war end with the merger of Meituan and Dianping? Of course not. Instead, with the birth of another company with a valuation of more than 15 billion US dollars, the O2O war has risen to a boss battle between BAT.

At this point, we should continue to explain the concept of O2O. Alibaba's e-commerce transactions account for 7% of offline transactions, which has made Alibaba's market value of more than 100 billion, while O2O is the technological revolution of the other 93% of the industry. So there is no doubt that BAT is determined to compete in the O2O field.

However, there is no "popular" product like group buying that can sweep across many cities in a short period of time. Different products can only be prepared according to different industries. For example, Didi Kuaidi has become the leader in the travel field, while Meituan and Dianping are fighting in the local life service field. BAT's goal is to cover all the fields that can be covered, so in the larger O2O competition, what is being competed is BAT's layout capabilities, and what is being competed in a specific scope is business capabilities.

BAT role after the Boss game

In the field of local life services, Meituan and Dianping are indeed very powerful after their merger, and will cover more than 80% of the market share in the short term. However, their competitors Baidu Nuomi, which is fully supported by Baidu, and New Koubei, which is supported by Ant, are not competitive enough in terms of data at present. But in the long run, they are also capable of sharing the local life O2O market.

How should I put it? The key point of O2O products is to serve merchants and users well, and another dimension is to do a good job in product and operation. There is a lot of knowledge in this. The product experience of merchants and users is very important, but few people seriously appreciate the intention of product and operation when burning money. However, when everyone is burning money, burning money is not a threshold, but an entry ticket, and the competition will return to the dominance of product and operation.

Take my own National Day travel as an example. Whenever I am going to eat, I usually check Dianping.com. After I have basically chosen a restaurant, I compare prices among three restaurants and make the deal on Baidu Nuomi (recent subsidies are really huge). By the way, if all merchants are listed on Dianping.com, will anyone still eat the shrimps that cost 38 yuan each? This proves that there is still a lot of room for local O2O to develop new users, and not everyone uses it.

Meituan's product page experience is indeed better, with more options in the front instead of directly showing a lot of hotels and prices. However, Baidu Nuomi has already integrated Qunar's hotels into its own products. In addition to group buying, it also has online booking, cashback and other products. Baidu Nuomi is indeed the best.

If nothing unexpected happens, the transaction flow of Baidu Nuomi should be very good this holiday. Of course, this is data that was created with money. If Meituan and Dianping have new financing after the merger, and the funds are no longer as tight as they are now, then both parties can also increase the intensity of subsidies.

Then the next thing to compete is the product and operation capabilities, or the scene competition. Large-scale products, such as group buying and payment, are no longer a threshold. It depends on who can grab more territory. After the merger of Meituan and Dianping, they have more than 10 million merchant information and more than 3 million business partners, which are further divided into brand merchants, general merchants, catering, non-catering and other sub-categories. They have already been deeply cultivated.

These are roughly the product directions that Baidu Nuomi and New Koubei are working towards. Baidu Nuomi chose to enter the market with memberships, and in addition to group buying transactions, it established a traffic pool based on a membership system. Although New Koubei is still in the stage of searching for merchants, it has already used brand merchants such as KFC and Waipojia as cases. Its next targets will also be payment, customer management services based on payment credit, marketing and other products.

In other words, after so many years of cultivation, the local O2O market has become very mature for merchants and users, so the giants can finally come and pick the fruits. Baidu wants to pick the fruits by itself, while Alibaba wants to pick all the fruits, of which local life services are just one piece. In addition to the new word-of-mouth, Ant Financial's goal is to expand in finance and various scenarios such as airports, shopping malls, and hospitals.

Tencent has become the biggest beneficiary of the investment. Although Alibaba invested in Meituan earlier, the two sides did not connect in the field of product data. After Tencent invested in Dianping, the cooperation between the two sides became more in-depth. Therefore, after the merger, Meituan and Dianping are mainly independent. If we have to say who will intervene more behind the scenes, then Tencent's efforts are definitely better than Alibaba. And Tencent will add more investment in the future.

With so many things to say, it seems to be getting more and more complicated. In a nutshell, the O2O war has gradually gained momentum after the merger of Meituan and Dianping. The fruits are ripe and there are fewer competitors on the scene. The next step is to discuss how to divide them. Some people hold bamboo baskets, some hold iron buckets. Some want apples, and some want pears. Anyway, the orchard is big enough.