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Meituan China

Meituan, the leader of online group buying websites in China started in Beijing in 2010. It is the market leader in the China group buying industry since 2012. The company has dramatically grown since 2011. It has now with nearly 16,440,000 active customers and over $2.6 billion transaction volume in 2013. Meituan, the leader of China online group buying market

Though it showed tremendous growth and leading market share, Meituan has struggled for the past 3 years with competitors like Lashou, Dianping and even Taobao’s sub group buying sites Juhuasuan for market shares. Moreover, Meituan plans to realize RMB market transaction volume by 2015.

Meituan transaction volume
Source: Tuan

Thus, strategies Meituan implemented have dragged the company into its current leading place.

5C analysis-an analysis of Meituan website

Meituan China
The 5C Analysis originally consists of 5 elements of internal, macro and micro environmental situation: Company, Collaborators, Customers, Competitors and Climate. However in an online environment of electronic business, we incorporated the adapted 5C analysis to provide better understandings of the elements of a website. The adapted 5C Analysis comprises of 5 different aspects of an electronic business: Company, Collaborators, Community, Content and Connectivity.
Meituan’s product strategy is focusing on providing local service while Meituan goods-sales remains less than 10% of its total market volume. Nevertheless, in June 2013, Meituan acquired 100% shares of which is a goods-provider in group buying industry. But this doesn’t affect much for Meituan goods market performance in 2013.
When it comes to the pricing policy, it is hard to measure how much total price difference among different group buying websites without doing deeper market analysis. But looking at the price range where above 50% merchants offer on Meituan website can help release the problem. We can see that as a discounted price offer, Meituan studied the market and customer behavior very well. It not only provides the customers with well accepted price range, but also enlarges the service scope for which customers can choose. The reported data reveals that the whole China group buying industry charges around 5-10% from its suppliers. Meituan charges around 10%. Compared with Groupon American’s average 40-50%, Meituan makes less money on its core business. Together with high promotion and labor costs, it took Meituan 3 years’ to start making money.
Meituan puts its major technical efforts on improving user experience.
  • Merchants can modify the price and pictures from the backstage system easier than other platforms.
  • Customers can use search engine, 3 navigation bars to look for the exact products instantly.
Besides, the overall structure of Meituan’s homepage is characterized by a rather appealing appearance.The colors white and green dominate the overall theme, leading to a relaxed and comfortable atmosphere while orange is used to stress anything that should be highlighted. The homepages of all cities in which Meituan is available share the same outline, construction and design. However Beijing, Shanghai, Shenzhen homepage differ a bit, which is due to additional services available there. Nevertheless most of the online presence is the same. To conclude, user experience plays a vital role for Meituan’s business model.
Even though, Meituan is well connected to social network sites such as QQ, Weibo, Douban, Qzone, it is still limited in cultivating its own community, with less attention paid to customer interaction. In contrast, the American group buying originator-Groupon launched 3 Groupon platforms to establish the community among customers. In this business model, customer interaction plays a vital role for Groupon: Firstly, spreading the news of a deal in a wide community helps attracting people needed for realizing a deal, and secondly, maintaining a community helps protect against competitors. Thus, cultivating an own community is a key part of Groupon’s marketing strategy.Altogether, Groupon site is well connected to social networks and the company actively and successfully promotes socializing and building communities among their subscribers.
  • Search for the websites:
When searching on the web for Meituan, the search engines provide an enormous amount of correct hits. Baidu gives 100.000.000 results, Bing 1.100.000 results, Google 395.000.000 results, Yahoo! 24.900.000. The hits from Baidu even show direct links to specific Meituan cities: Beijing, Xi’an, Linyi, Taizhou etc. The website can be accessed from all popular browsers (Windows Explorer, Mozilla Firefox, 360 and Google Chrome). Anytime when switching on the computer and browsing for, one chooses a nearby city and enter with cooperative websites’ usernames and passwords. You can also “visit” the page without leaving any personal data.
  • Sign in
There are two ways to browse through the Meituan page: by signing in with one’s register e-mail address or by using cooperative websites’ user name and passwords. However, there is no substantial difference between both ways.
  • Navigating websites
Navigating through the website is facilitated by 3 navigation bars; one on the left, one at the top, one on the right. All provide efficient group selling product information.
To conduct its business, Meituan relies on different kinds of partnerships with merchants, data centers, and other internet platforms. Partnerships with merchants provide the basis of Meituan’s business as merchants provide discounts. Thus, today, Meituan partnered with over 300,000 merchants across China. The company also provides technical support platform for its partners by offering tailor-made services and marketing plan. On the other hand, partnerships with Internet platforms such as search engines or social networks, such as Weibo, are developed. Teaming up with search engines, e.g. Baidu, gives Groupon a competitive advantage as their ads will pop up first in the advertisement bar and those of competitors further down. Weibo is an extremely valuable partner for Meituan as the brand has its own Weibo pages and use this social network as the main communication platform with followers. Beside, partnership with Xiecheng provides company with well guaranteed hotel service.
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