Meituan’s B2C E-Commerce Business Merged Into Community Group Buying Division

Chinese media previously reported that Meituan’s e-commerce business has merged with its community group buying division, Meituan Select, which has not been responded by the company yet. However, according to a report by Jiemian News on August 31, B2C e-commerce business group “Tuanhaohuo” has been placed under the Select Division of Meituan. In addition, the original organizational structure of Tuanhaohuo is still retained, and there is no more detailed departmental adjustment.

Realizing collaboration at the supply chain level is one of the major reasons for the merger between the e-commerce and community group buying businesses. According to analysis by insiders, Meituan Select provides next-day delivery services, and the goods need to be transferred from regional distribution centers to warehouses. The e-commerce business provides multi-day delivery services, which acquires delivery from factories or merchants.

An insider at Meituan said that Meituan Select had previously internally evaluated multi-day e-commerce business, but the plan was not passed in the end.

Tuanhaohuo is a B2C e-commerce business independently hatched by Meituan. At the initial stage of its establishment, it adopted the form of direct delivery from the place of origin and group purchasing, to provide a cost-effective shopping experience. After executives from NetEase joined the team, it started to adopt a boutique e-commerce framework.

Meituan opened the first-level entrance of e-commerce on the homepage of its main app, showing that it attaches great importance to e-commerce business. According to 36Kr, in the first half of this year, the GMV of Tuanhaohuo nearly tripled year-on-year, and it is expected to achieve an annual target of 800 million yuan ($115.9 million) ahead of schedule.

However, the community group buying business, which was once regarded as the new growth point of Meituan, is not developing smoothly. In April 2022, Meituan Select started strategic contraction and gradually withdrew from four northwestern Chinese provinces and Beijing.

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With the slowdown of business expansion in the sinking market, the growth of active users of Meituan has also stagnated. In the second quarter, the number of trading users of Meituan decreased month-on-month, from 692 million in the first quarter of 2022 to 684 million, an increase of only 8.9% compared with last year.

Food delivery platform’s cooperation with ByteDance’s Douyin, and‘s investment in intra-city retail will be new challenges for Meituan.