Meituan is in anxiety

Source | Dongge's E-commerce Insights
Author | Jin Shan

Before the first half of 2024 has even ended, Meituan has already initiated its fourth organizational restructuring this year. This is unusual for Meituan, as its last large-scale restructuring occurred back in 2017. At that time, Meituan had already won the "Group Buying Wars," and its food delivery business was entering a critical phase of competition.

After six years, frequent organizational changes reflect Meituan's "anxiety." To compete with Douyin and Kuaishou for more growth in lower-tier markets, Meituan has no choice but to improve efficiency.

Strengthening Core Business Sectors, "Young Guns" Take Charge

Just a week after the last adjustment, Meituan announced detailed organizational changes. On April 18, Meituan CEO Wang Xing issued an internal email outlining the latest restructuring:

1. Meituan Platform, In-store Business Group, Home Delivery Business Group, and Basic R&D Platform were merged into the Core Local Commerce sector, with Wang Puzhong appointed as CEO.

2. The In-store and Home Delivery Business Groups were dissolved, with their departments now reporting directly to Core Local Commerce. Meituan Platform and Basic R&D Platform remain unchanged, with department heads still reporting to Wang Puzhong.

3. A Core Local Commerce HR department was established, led by Song Xiaodong, reporting directly to Wang Puzhong and dotted-line to Mu Rongjun. Liu Meng was transferred to the corporate HR platform. A Core Local Commerce Finance department was also created, led by Yang Ziliang, reporting directly to Chen Shaohui and dotted-line to Wang Puzhong.

This is not Meituan's first adjustment this year.

The first adjustment occurred in February, integrating the Home Delivery, In-store, Meituan Platform, and Basic R&D units under Senior VP Wang Puzhong.

The second round came in March, with leadership rotations including VP Wei Wei overseeing In-store Dining, Zhang Ruoyu taking over Food Delivery Operations, and recent graduate Xue Bing leading the Food Delivery Business Unit.

The third adjustment on April 10 restructured the Food Delivery Business Unit, replacing the Direct Sales Department with a City Operations Department while adding Chain Business and Supply Exploration units reporting to Xue Bing.

The four restructurings reveal two clear signals: flatter, more refined hierarchies with "young guns" taking charge, and consolidation of previously separate in-store/home delivery operations into a unified Core Local Commerce framework.

Public records show Wang Puzhong (b.1984) is the youngest member of Meituan's S-team (top decision-making committee). Since joining in 2015, he has led food delivery products, operations, and logistics.

In 2019, Wang Xing emphasized developing homegrown leaders as key to Meituan's future competitiveness. Co-founder Wang Huiwen similarly stressed "cultivating talent over external hires."

Meituan's last major reshuffle was in 2017 post-fundraising during its food delivery expansion. Four adjustments in under six months underscore the intensifying battle in local services, forcing an "anxious" Meituan to transform.

Meituan's Strong Fundamentals Face New Rivals

Douyin, Kuaishou, and Xiaohongshu are all targeting local services—a rare growth area in today's saturated internet landscape.

iResearch data forecasts China's online food delivery market will hit ¥1.75 trillion by 2025, with local services exceeding ¥2.5 trillion.

QuestMobile shows local services had 500 million MAUs in April 2023, with 38.4% penetration vs. just 15.6% for food delivery—indicating huge untapped potential.

This growth has attracted tech giants.

Meituan and Douyin remain deadlocked after six months, with no major share shifts. QuestMobile notes over 300 million users overlap—81% of Meituan's base.

LatePost reports Douyin Life Services (dining, leisure, hotels) hit ¥100B+ in Q1 GMV (100% YoY), while Meituan stabilized at ~¥200B quarterly.

But subsidies and traffic aren't cure-alls. Douyin must balance commercialization with content needs, and discounts aren't sustainable.

Lower-tier markets are now the battleground. Douyin restructured its sales team in April to target SMEs, while Meituan counters with discount group buys and live commerce.

Kuaishou, with 700 million "laotie" users, is also going all-in on local services. SVP Xiaogu pledged "billions in subsidies + trillions in traffic" to boost GMV, which grew 25x YoY in Q4 2023 per Feigua Data.

"Different business lines serve overlapping merchants with divergent traffic and pricing models, creating confusion," says Li Chengdong of Dolphin Research.

A leaner Meituan stands better chances in this defensive war.

References:

1. Jiemian News, Meituan's Fourth Restructuring This Year

2. E-Commerce Daily Pro, Wang Xing Rearranges Pieces Amid Challenges

3. LatePost, Exclusive: Douyin Life Services Hits ¥100B+ in Q1

4. 36Kr Exclusive, Meituan's Ongoing Restructuring for Precision Ops

5. Shangyin Club, Kuaishou Charts Its Own Local Services Path