How does Meituan Work? Insights into the Business Model & Revenue Model of Meituan

How does Meituan Work? Insights into the Business Model & Revenue Model of Meituan

Meituan-Dianping, more commonly simply known as “Meituan”, is the largest O2O or “online-to offline” platform in China. Never heard of Meituan? You’re definitely not alone. Meituan, the Beijing based company, led by Xing Wang, is almost unbeknownst for other countries despite it’s huge success in such a short period of time.

What is Meituan?

China’s Meituan-Dianping just became the world’s fourth most valuable startup, acquiring a $30 billion valuation that puts it in the driver’s seat much ahead of the giants like Airbnb and Space X. Meituan sells movie tickets and groceries, delivers food to people’s homes, provides discounts and offers to customers who buy in bulk and provides review of restaurants. So, it wouldn’t hurt to say that it’s a mash-up of Groupon, Foodpanda and Yelp.

Meituan’s been termed as China’s “Amazon of services”, rightfully so.

Meituan Business Model

Meituan Business Model

Meituan is an internet commercial business center that interfaces shippers to buyers by offering stock and undertakings at a markdown. Usually, neighborhood sellers have attempted to accomplish purchasers and make bargains through a variety of systems, including the professional resource, standard mail, day by day paper, radio, TV and online promotions, and progressions. By bringing the physical universe of close-by business onto the web, Meituan Business Model is making another course for neighborhood dealers to pull in customers and offer items and endeavors. Meituan outfit purchasers with hold subsidizes and empower them to discover what to do, eat, see and buy in the spots where they live and work.

Consistently they email their supporters diminished offers for items and endeavors that are centered around the region and individual tendencies. Clients get to their plans clearly through the destinations and convenient applications. Their salary is the sticker price paid by the customer for the Meituan business model. Their gross advantage is the measure of salary they hold in the wake of paying an interminable supply of the sticker price to the included dealer.

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 Meituan Funding Rounds and Investors

As you can see in the images below, Meituan, in Aug, 2010 received the funding of $20M from Sequoia Capital which ballooned up in 2015 with $700M.

According to the recent news, It has raised $4 billion in a funding round, sending a clear message to its competitor “We are coming”.

Acquisition

Funding Rounds

Investments

How will Meituan Business Model Work in Future?

Meituan’s Business Model takes a shot at the distinctive methodologies other than regular commercial center procedures. It deals with economies of scale and economies of systems administration. This plan of action works for the win-win condition. In Meituan Business Model vendors get more clients which tend to return over and over and Meituan gets the more clients by giving increasingly and better arrangements.

Meituan Revenue Model

Meituan has an inside and out formed salary demonstrate where it obtains money from brokers as commissions by giving them customer and displaying mechanical assemblies.

How Does Meituan Make Money?

Meituan makes the larger part of its income by exhibiting and propelling associations on its site. The process goes about as an agent between potential customers and the dealers and charge commission on every customer implied the business.

Regardless, this commission salary exhibit isn’t as direct as it shows up.

Let’s assume that dealer ‘XYZ’ runs a campaign on Meituan to offer his $100 advantage at half off and signs a 50-half salary granting contract to the association. This suggests for every course of action sold on Meituan, XYZ secures $25 dollars and Meituan obtains $25.

In any case, Meituan just offers the salary of the courses of action recouped at the dealer’s store and not the total whole of plans sold. That is if out of 100 courses of action sold by Meituan, only 70 were recovered:

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XYZ earns: 70*25= $1750

Meituan earns: (70*25) + (30*50) = $3250

The wage sharing rate depends upon the courses of action and the publicizing gadgets utilized by the shipper. These gadgets join thing headway, advertisements, a course of action of the day postings, et cetera.

How does Meituan Work?

 Meituan Business Model is exceptionally basic. It is made up to offer arrangements and rebate coupons to clients and procures income as commissions for each client alluded to the vendor.

How does Meituan Work for the Customers?

Meituan is a free course of action business focus which allows customers to research and spare cash on things and organizations offered by the area associations. The stage in like manner enhances customers’ contribution by using focused on sees and redid messages which allows them to save more on their purchases.

Customers purchase these courses of action and discounts as electronic coupons which can be recuperated at the dealer’s site or upgrading zone.

Meituan’s expected premium gathering consolidates early adopters with significantly well off and optional income and urban women with a propelled training.

How does Meituan Work for Sellers?

Meituan passes on more customers to the brokers and charges them commissions for the same.

These are the key aspects to understand how Meituan works!

Supporters

Meituan portray endorsers as the total number of individuals that have completed selection through a specific date, less individuals who have pulled back. To consent to acknowledge the organization and transform into a supporter, an individual gives an email address. Meituan can check our general improvement in the market and furthermore our potential pay open entryway as a part of our total endorser base. The supporter base does not consider the activity level of the endorser with our organization, nor does it change for various or unused records. Notwithstanding these detriments, Meituan trust this metric gives a critical comprehension about the course and size of the business. In spite of the way that by a long shot the vast majority of our salary begins from supporters, they moreover pitch Meituans to customers that purchase as guests and, therefore, are prohibited in our total endorser number.

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Aggregate clients

We portray add up to customers as the total number of unique customers that have gained Meituans from January 1, 2009 (the principle date we began tailing stand-out customers) through a specific date. We see this metric as a basic marker of our business execution as it urges us to grasp the purchase rate of our supporters.

Highlighted dealers

This metric addresses the total number of shippers featured in a given day and age. For deals offered on a the nation over start, we count the national dealer once. For deals offered by national shippers on a close-by or regional preface, we consider the national seller an alternate broker in each market in which the course of action is publicized. We see this metric as a better than average marker of advancement and moreover a basic measure of the sufficiency of our arrangements and exhibiting system.

Meituans sold

This metric addresses the total number of Meituans sold in a given day. This metric is shown net of Meituans marked down in the midst of a comparable day. We use this metric to evaluate our advancement and activity level in the aggregate and also in our individual markets.

So, what do you think about this? Share your thoughts in the comments section. In case you are planning to startup, contact our business team at NCrypted for serious business consultation.

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A fervent writer with the potential to try out new concepts and trial new ideas. I write on segments like E-commerce, startups, travel & hospitality, business models, industry watch, etc.

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3 Comments
  1. This is a good read, I recently wrote on this same topic about Meituan and I find this very helpful reading your blog.

    Best Regards! 😀

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