Data from China Business Industry Research Institute shows that in 2017, the size of the online takeout market was 207 billion yuan, with a growth rate of 25%. It is expected that in 2018, the size of the online takeout market will break 250 billion yuan. In the first half of 2018, the number of online food delivery users was 363.87 million, 20.49 million more than at the end of 2017.
From the above data, the online takeaway industry has a bright future, but from the perspective of the tail platform, it is difficult to walk, according to incomplete statistics of Baidu data, more than 20 failed online takeaway platforms.
The Matthew effect behind the wave of closures is increasing. According to the “Evaluation and Report on The Market Operation Situation and Investment Prospects of China’s Fast food Takeout Industry in 2018-2022”, in the first quarter of 2018, the combined transactions of Meituan, Ele. me and Baidu Takeout accounted for 98.9% of the takeout industry. With baidu Takeout being acquired, In the food delivery industry, meituan and Ele. me have changed from a three-way rivalry to a two-way rivalry.
As the market share of the two giants continues to grow, it is increasingly difficult for the tail platform to survive. Before we discuss how tail-end platforms survive, we need to understand why other platforms fail. In general, online delivery platforms such as takeout fail because they can not overcome the three obstacles of capital, time and profit.
Money,
The development of all walks of life is not without the promotion of capital, and the trend of capital to a large extent also indicates the survival of enterprises. For example, yellow Car, which has not had any financing news since March this year, is in deep trouble at present. Similarly, once the funding chain breaks, the death of an online food delivery platform is not far away.
On the one hand, the source of capital is profit and on the other hand, financing. However, most takeout platforms have no platform to achieve profit and can only rely on capital. Data from China Report Hall Takeout platform show that in 2017, there were 42 cases of financing for takeout brands, accounting for 55% of the overall catering industry.
By the end of 2017, Meituan-Dianping had raised $4 billion and Ele. me $1 billion, respectively, ranking the top two in takeout fundraising, while the mid and rear platforms had raised less than $500 million, data showed. As can be seen from the financing situation, the capital is gradually moving towards the head platform, and the opportunities for the middle and rear platforms to obtain financing have become smaller and smaller.
Why is the middle and rear difficult to finance? The lack of bright spots in platform business is an important reason. At present, online takeout is marketing and expansion through subsidies, red envelopes and other money-burning strategies, and has fallen into a vicious cycle of no subsidies and no orders. All online food delivery platforms are slowly moving forward under the support of “gold storage pool”. Large platforms have a large number of users, while small platforms have no story to tell. They are completely in a state of being empty, which is easy to lead to the fracture of the capital chain and unable to operate normally.
In its glory days, Maestro Taste had numerous orders and customers. Apple, Mercedes Benz, Tesla and other big companies were customers of Maestro Taste. Before its closure, Maestro Taste also had a central kitchen of 800 square meters and 24 crowdsourcing distribution stations. But because the investment is not in place, the capital chain of the taste of the master is broken, which eventually leads to the kitchen being recovered, the water and electricity of the property is stopped, and the new campaign plan has died before it starts. Finally, the flavor of the master of unlimited scenery can only declare bankruptcy, leave the field.
Throughout the current takeout industry, Master flavor is by no means an individual case, in the period of financing difficulties, the future collapse of the platform will only be more than less.
Time,
You know what they say, it’s a one-time thing. No matter which industry, seize the opportunity can get twice the result with half the effort, otherwise it is half the result with twice the effort, if the game time is too late, it is easy to fall behind.
The development of online food delivery is very fast, and the industry quickly turned from blue sea to red sea. The scale of platforms such as Ele. me and Meituan takeout has increased significantly in a short period of time. The late entry of takeout platforms not only reduces their living space, but also finds it difficult to gain popularity, so they can only be slowly swallowed up or squeezed out of the market. There are no shortage of platforms that miss out on bonuses because of late entry.
Backed by a rocket company, Takeout Superman is not short of cash, having already gone to a Series D round. However, takeout Superman entered the game too late. At that time, there were already strong rivals in the market, such as Ele. me and Meituan. Meituan takeout and other platforms have long been deeply rooted in people’s hearts by means of subsidized marketing. Even if the superheroes of takeout make efforts to subsidize later, it is difficult to snatch users away, and eventually they are squeezed out of the takeout market step by step.
Getting in early and late is important for the platform, but reaction time is more important. Entering the game early does not mean to occupy an absolute advantage, if the reaction is slow, the grasp of the competitive situation is not accurate, can only get up early to catch the late set. For example, Taodiandian, which got up early, failed to respond timely and effectively in the face of the changeable market, leading to the rapid market takeover by meituan, Ele. me and other platforms. The company changed its name to Koubei Takeout and did not make any achievements.
Profit camp
High cost, low profit, profit is far from expected, is the true portrayal of online takeout platform. Although it has been developed for more than ten years, no platform has truly realized profit so far, and the takeout platform is still struggling to explore a feasible profit model.
The difficulty in making profits is closely related to the operation mode of the platform. The serious homogeneity of the operation mode of the takeaway platform is an important reason for the difficulty in finding profit points. Self-established logistics teams, platform subsidies, merchants’ big discounts, logistics and distribution fees, merchants’ commission, etc. Similar models naturally bring similar services, resulting in low user stickiness and low user stability of the platform.
This operation mode also leads to the fact that many takeout platforms rely on subsidies to acquire users. Once subsidies are lost, users will disappear, so almost all users flow to meituan Takeout and other large platforms with many discount benefits.
At present, takeout platforms earn little income, and most of them rely on advertising and bidding ranking to make money. However, compared with high marketing expenses such as subsidies and red envelopes, such income cannot make ends meet. Such a profit model cannot even reach the break-even point, let alone the profit. Hungry? Platform, for example, it is primarily through smoking into orders, member services, advertising, platform, merchants and room team cost to profit, but the model need to break even or even very large scale profit, plus subsidy war continues, hungry? Haven’t profit, while Meituan take-away is in the same situation.
Poor profit model, profit point is difficult to find, which is one of the primary culprits leading to the platform to change or withdraw from the market and reduce. For example, momma flavor entered online takeout just two years later announced to suspend the use of strategic adjustment, is to be tripped up by the profit barrier. According to related news reports, Momaflavor had obtained 10 million yuan of financing in the year before the suspension of business, but it was difficult to maintain its daily operation because it was always in a state of expenditure and had no profit and income. At the end of the day, mom didn’t find a viable profit model, and the profit was too low to support the business.
Monetization is the last hurdle for online food delivery, and the last sting that drags down platforms. How to fight this big Boss, Meituan takeout and Ele. me can not give the standard answer.
Kankan in front, tail platform should be taken as a reference
From the hundred regiments war to the tripartite confrontation and then to today’s two-strong pattern, all the way bloody rain, everywhere is broken halberd businesses, the tide of closure still exists this year. It is not easy for the tail platform to survive in the market, so we need to learn from it.
First of all, rational use of capital, do not blindly burn money. Although burning money marketing is an effective measure to rush rankings, but now the financing problem is increasingly prominent, burning money is not wise for small platforms with weak financial strength. Therefore, I have take-out, point delivery and other tail platform funds must be used in the blade.
Meituan during the Hundred Regiments War is a typical example. During the Hundred Regiments War, many platforms were spending money on marketing to grab users and market share. However, Meituan did not aim at capturing the market, but focused on improving efficiency and making progress while maintaining stability. Finally, it seized the market gap after the Hundred Regiments War and became the winner. I have takeout, order delivery and other tail platform can also put money on the platform, do not burn money compared with the head platform, but from the platform itself, first improve the benefits of the platform, ensure the stability of the platform, and then gradually advance. Although Baidu Waimai was acquired by Ele. me, its strategy of accurately targeting white-collar users and establishing a reputation in the high-end market is worthy of reference for platforms like Dianzi.
Secondly, improve the platform credit, to deal with the lack of late entry. Late entry time and failure to seize the opportunity to create popularity are the main reasons for the small market share of take-out and other tail platforms. As the entry time is early, the head platform, which brands and users get first, has occupied most of the market share, leaving the market space for the tail platform will only become smaller and smaller. The tail platform, as the latter entry, can only find another way, and credit can be regarded as one way.
Here credit refers to the user trust, users have a sense of trust in the platform, then the platform can have a place in the market. The credit of takeout platform is nothing more than product quality, value for money is the bottom line of users, should also be the bottom line of the platform. Therefore, the tail platform can obtain data through questionnaires, activities, feedback and other means, so as to improve product quality and increase users’ trust. For example, after meituan receives the goods, there will be multiple choice questions such as “is there less tableware? Is it more expensive than in the store?”. Knowing the real needs of users will make them trust the platform more.
Finally, build core competitiveness, alleviate profit dilemma. Profit is a common problem for takeout platforms. At present, platforms can hardly find any viable profit model except for advertising and bidding ranking. Under the background of serious homogeneity, tail platform can start from differentiation to build core competitiveness.
Differentiation can start from users, and create characteristics and advantages centering on users. For example, make light food features, provide the most comprehensive light food services, and form a takeout platform focusing on light food and other auxiliary services. At the same time, the platform can stratify users’ needs, so as to provide users with the most suitable light food service under different conditions. For example, fitness food is a light food with high nutrition and low fat, and users can also learn how to eat healthier, thus forming core competitiveness.
In general, although the prospect of online takeout industry is broad, but the practical operation of the problem is also many, closed enterprises continue to go bankrupt, the size of the bubble of 240 billion has never broken off. In the future, if the tail platform wants to make new breakthroughs, it needs to learn lessons from the present, continue to deeply cultivate the market, take the industry trend as the guidance, and be flexible and adaptable, so as to remain in the market forever.
Article/Liu Kuang public number, ID: Liukuang110, this article first kuang Venture capital network