The flames of community group buying wars have yet to subside. What was once dubbed the "Hundred Regiments War" among Chinese tech giants now leaves behind deeper reflections on business models. Meituan Select, once hailed as the company's promising new growth engine, now faces unprecedented challenges. Can its massive investments in logistics and supply chains help it break through in this experience-focused second half of the competition?
Geely's Entry: Meituan Select's New Logistics Strategy
Meituan Select's recent strategic partnership with Geely Holding's Farizon New Energy Commercial Vehicle Group has sparked fresh market speculation. The collaboration will focus on community delivery logistics, exploring customized products, digital transportation, and smart logistics in the new retail landscape. This represents more than a simple partnership—it's a crucial step in Meituan Select's supply chain optimization and user experience enhancement.
Farizon's expertise in new energy commercial vehicles could provide Meituan Select with a comprehensive community delivery solution, integrating personnel, vehicles, goods, stations, and energy management. Geely's strong brand backing may significantly improve delivery speed and cost control for Meituan Select.
This isn't Meituan's first logistics investment. Months earlier, the company leased 19,000 square meters of warehouse space in Qiqihar's comprehensive logistics park to expand its coverage in northeastern China. In December 2023, Meituan also recruited nationwide suppliers for its city distribution network to ensure timely product delivery.
"Next-Day Delivery Supermarket": Betting on Speed and Experience
Meituan Select's logistics focus stems from its commitment to service experience. In October 2022, it rebranded as a "Next-Day Delivery Supermarket," improving last-mile delivery through extensive self-pickup networks. By August 2023, it upgraded to "Next-Morning Delivery," shortening delivery times by five hours to before noon.
Such delivery precision requires massive logistics investment. Only through continuous fulfillment capability improvements can Meituan Select handle the pressure from service upgrades. Future investments in logistics infrastructure appear inevitable as user expectations grow.
Losses Continue: Meituan Select's Strategic Pivot
Reality paints a different picture from these ambitions. Meituan's 2023 financial report revealed a strategic shift—prioritizing core capabilities and user experience over market share growth, acknowledging persistent losses.
Meituan's new business segment, primarily Meituan Select, recorded staggering losses of $5.9 billion in 2021, expanding 36.6% from 2020. While losses narrowed to $4.3 billion in 2022 and further to $2.8 billion in 2023, the business continues to drag on Meituan's valuation. Following its Q3 2023 earnings report, Meituan's Hong Kong stock price hit its lowest since April 2020.
Slower-than-expected growth prevented significant reduction in per-order fulfillment costs, while intense competition made price increases and subsidy reductions difficult. For 2024, Meituan Select plans to reduce subsidies, cut losses, and focus on core competitiveness and user experience—evident in recent logistics investments.
Product offerings are expanding through increased supplier recruitment. Management reshuffles in April 2023 brought executives from Meituan's profitable Kuailu business to Meituan Select, signaling profit expectations. However, Meituan CEO Wang Xing's original vision—that Meituan Select would bring 300-400 million new users to boost food delivery and local services—remains unrealized.
Community Group Buying: A Prolonged Contest
Meituan Select's struggles reflect broader challenges in community group buying. The sector's 2020 boom saw Alibaba, Meituan, JD.com, and Pinduoduo burning cash for market share, imitating early leader Xing Sheng Youxuan. By 2022, many players collapsed—Shi Hui Tuan and Chengxin Youxuan shut down, JD's Jingxi Pinpin merged into JD Retail, and Xing Sheng Youxuan retreated to core provinces.
The market now consolidates around three major players: Meituan Select, Pinduoduo's Duo Duo Mai Cai, and Alibaba's Tao Cai Cai (renamed from Taocai Cai after merging with Taoxianda). Competition has evolved from price wars to service quality and user experience.
Meituan Select focuses on delivery speed and product variety. Alibaba offers both one-hour delivery and next-day pickup options. JD relaunched community buying as "JD Pinpin," while Pinduoduo leverages direct farm sourcing and explores private traffic through its Kuai Tuan Tuan mini-program.
The community group buying battlefield has transitioned from capital-driven expansion to meticulous operations. In this new phase, success will belong to those mastering refined operations and earning consumer trust through superior service.