The departure of all the top executives of the original Meituan and the Dianping department has made Meituan Dianping the company with the "fastest executive loss in the history of the Internet". What happened to Meituan after the merger with Dianping? Under internal and external troubles, what will the future of Meituan Dianping be like?
Text | Bai Xiaoxi @Guangzhou
Source | Uncrowned Finance (ID: wumiancaijing)
ChinaVenture
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Yeah.
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In the past year, in addition to CEO Wang Xing’s "second half of the Internet" theory, Meituan’s most eye-catching features have been the dazzling structural adjustments and waves of executive departures.
On May 5, Meituan Dianping released an email saying that Chen Ye, senior vice president of the group and head of the ad platform, would leave due to personal and family reasons. The former Dianping department was just transferred from the business department to the functional area of business earlier this year.
According to media reports recently, Gan Jiawei, the former COO of Meituan Network, has joined Hillhouse Capital. As the original Meituan No. 2 employee, Gan Jiawei was given the idle position of the "Internet + University" president set by Wang Xing during last year’s adjustment. His resignation is also expected.
The departure of all the top executives of the original Meituan and the Dianping department has made Meituan Dianping the company with the "fastest executive loss in the history of the Internet". What happened to Meituan after the merger with Dianping? Under internal and external troubles, what will the future of Meituan Dianping be like?
Frequent architecture adjustments
In October 2015, the young Meituan annexed the 7-year-old Dianping, and Wang Xing also used this to prove his outstanding judgment in the O2O field. But Meituan has undergone several structural adjustments before and after, and a group of capable cadres have left the market one after another, which is regrettable.
In July 2015, Wang Xing began to re-examine the catering-related business, and successively established a takeaway delivery business group, a hotel tourism business group, and a store business group. Wang Huiwen, Chen Liang, and COO Gan Jiawei served as the presidents of the business group, respectively.
In November 2015, a month after the merger of Meituan and Dianping, the new company underwent a large-scale structural adjustment, which retained Meituan’s previously established delivery and takeaway delivery business group. It also emerged as a comprehensive business group based on related businesses that overlap with Dianping. In addition, there was also a hotel tourism business group and a platform business group, and a wholly-owned subsidiary of Maoyan Film.
In July 2016, Wang Xing released an internal letter, once again announcing new structural adjustments and personnel appointments. The original restaurant catering business group, takeaway delivery business group and catering ecological platform were merged into a "catering platform". So far, catering, comprehensive, and wine travel have been designated as the "troika" of Meituan’s review business.
In January this year, Wang Xing announced the adjustment of the core business organizational structure through internal emails to further integrate the group buying business. After that, all business groups of Meituan Comments will be classified into three major sectors: catering, comprehensive, and hotel tourism, forming a new "troika".
After a series of dazzling personnel adjustments, the "Eight King Kong" who made great contributions in the development of Meituan have left the field one after another.
Shen Peng, the 10th employee of Meituan, left to start a business in March 2016, which caused an uproar in public opinion. Shen Peng joined Meituan at the age of 22. As the second salesperson, he worked in Meituan for 7 years and was the head of Meituan’s national food delivery.
After the structure adjustment in January this year, there were media reports that Zhang Qiang, the former general manager of Meituan South Four Regions, Lu Yinfeng, the head of Meituan Sales Support Department, and Qu Zhiyuan, the head of Meituan Sales Training, took the initiative to leave and chose where to go.
On March 23 this year, according to Yiou.com, Ma Hongbin, the senior operating director of Meituan Takeaway, has left Meituan Takeaway and joined the live broadcast platform Kuaishou. Ma Hongbin joined Meituan in May 2015 as the senior operating director.
In a shake-up last July, Gan Jiawei, a former COO who joined Meituan in 2011 and built a strong ground marketing team, was appointed by Wang Xing as the president of "Internet + University", responsible for the development of talents in the new company, which Wang Xing said was to "allow him to better balance work and take care of his family from other places." It is reported that Gan Jiawei has been in Australia since then, in a state of unemployment.
At present, the only titan who has stayed is Yao Juntao, the former head of Meituan Shanghai, who has been transferred to Maoyan. But Maoyan Movie has been controlled by Enlight Media and is not nominally owned by Meituan.
The No. 3 figure who left Meituan at the end of 2014, Yang Jun, the former vice president of sales, has already caused personnel turmoil in Meituan. In 2015, some media broke the news that, according to the feedback from Meituan’s departing employees, Meituan had 8 district managers, 9 district managers, and more than a dozen important city managers. More than 10 district managers and city manager-level employees have left Meituan, including many old employees and core middle-level employees who have worked in Meituan for more than three years.
There was unrest.
Under Meituan’s series of structural adjustments, in addition to the departure of the old department, Dianping executives have also been eliminated, and the company’s personnel turmoil has not subsided.
When Shen Peng left, he was speculated by the outside world to be related to ****. When Shen Peng was still in the group buying business department, there was a rift between the rumors and Gan Jiawei. When he left the group buying to take away, Shen Peng took away the original group buying department’s subordinates and hoped to no longer have too much intersection with the group buying sales team.
In January this year, the Internet media personality Zhu Yi wrote an article directly accusing Wang Xing of "cronyism" and threw out an internal circulation of Meituan’s power map, the core of which was Wang Xing’s relatives and classmates.
After the personnel adjustment at the beginning of the year, Wang Xing’s wife Guo Wanhuai took control of the group’s financial and personnel appointments, and his cousin Yin Zhihua became the leader of the smart restaurant. Wang Xing’s five classmates, Chen Liang, Mu Rongjun, Wang Huiwen, Yang Jinfang, and Lai Binqiang, respectively, served as president of Meituan Platform and Wine Travel, technical senior, CEO of Catering Division, back-end executives, and former Meituan legal person.
Some media people broke the news that with the continuous departure of executives, Chen Liang and other five-member "classmates gang" have been in constant conflict with Guo Waihuai’s camp, and the most direct confrontation is the return of the wine travel business department. At the end of 2016, Chen Liang’s wine travel business group tried to raise funds independently, but the financing failed, while Guo Waihuai prefers the return of the wine travel business group in order to take charge of more real power departments.
In addition, after the merger of Meituan and Dianping, the executives of the comment department have encountered personnel turmoil one after another.
Just one month after Meituan and Dianping merged, Dianping CEO Zhang Tao was announced to no longer serve as co-CEO and transferred to the virtual position of chairperson of the new company. Since then, among several generals in the Dianping department, Li Jing has retired, and Zhang Bo’s whereabouts are unknown. On January 9 this year, Meituan Dianping announced the fourth large-scale structural adjustment. The soul of Dianping and the former Dianping COO Lv Guangyu resigned, announcing that the executive team of the Dianping department was eliminated.
According to the list circulating on the Internet, the core team of the Dianping Department has reached 24 people since last year. Meituan Dianping is the first in the Internet industry to have such frequent senior changes.
Revenue and listing suspense
On April 15, Wang Xing proposed at the CEO Summit of the New Economy 100 that Meituan globalization is the general trend. But personnel turmoil, valuation continues to decline, and the 2018 listing period of the previous financing and gambling is not far away. What will Wang Xing’s "globalization" promise rely on to achieve?
As a member of the small BAT portfolio, Meituan Dianping’s situation is bleak compared to the other two. On April 28, Didi Chuxing announced the completion of a new round of financing of more than 5.50 billion US dollars. In early April, media reported that Jinri Toutiao had completed a D round of financing of about 1 billion US dollars at the end of last year. Meituan Dianping has since completed a financing after the merger, and its valuation has begun to decline, which has been snubbed by the capital markets.
In January, according to a person close to Meituan investors, the valuation of Meituan investors’ sale of the old shares was lower than the valuation of $7 billion in the penultimate round of financing, and the last round was valued at $12 billion. The old shareholders would rather sell Meituan shares at half price for a safe exit.
This is not the first time Meituan shares have been sold at a discount. In August 2016, the media exposed that Ali sold Meituan old shares at a 20% discount and sold them through fund channels. At that time, the "Unicorn Equity Investment Fund No. 3 – Meituan-Dianping" launched by Yizhou Assets announced: "The valuation price of the old shares of Alibaba transferred by this fund is 12.45 billion US dollars, which is a 8.3% discount for the valuation of this round of financing 15 billion US dollars. The margin of safety is higher than that of the same type of product in the market in the same period!"
Behind the discounted sale of shares is the capital’s concern about the value of Meituan’s comments, which also casts a shadow on its listing.
In early 2016, Meituan Review completed a $3.30 billion financing. As a price, Wang Xing promised that Meituan Review would complete the listing in 2018, and at the same time ensure that the IPO valuation is not less than $20 billion. If it cannot be completed, Meituan Review will pay 120% of the investment amount – nearly $4 billion.
Group buying, takeaway and wine travel are Meituan’s three main businesses. Group buying is in decline; takeaway is always a big hole that burns money, and there is no hope of profit; low-end hotels are not only difficult to make profits, but also have strong enemies. What is Meituan’s revenue?
Wang Xing revealed at the 2016 Yabuli China Entrepreneur Summer Summit that as of July 2016, Meituan Dianping’s other businesses other than takeaway have achieved break-even. The specific revenue situation is unknown.
However, according to the financing documents of Meituan Dianping exposed by self-media "Kaiba" in December last year, it is expected to lose as much as 10.537 billion yuan, or about 1.62 billion US dollars, in 2015, and Meituan Dianping is expected to achieve profitability in 2018.
According to an article in the Economic Observer in August last year, Meituan’s internal executives once said that Meituan’s greatest core competitiveness is to burn money subsidies. Meituan’s subsidies in group buying are as high as 300 million yuan, but the huge number of customers it has cultivated have no loyalty. Meituan’s logic of burning money has temporarily taken the lead in group buying, takeaway and movie ticket business, but the same logic of burning money has failed one after another in the hotel and takeaway market.
From this perspective, it is still unknown when Meituan will be able to turn losses into profits as a whole.
In order to go public, Meituan Dianping can only find ways from other aspects, first of all, to cut expenses. According to media statistics, it has laid off 4,000 grass-roots employees, which can save about 200 million yuan a year. In addition, news from the sales staff of the catering business department in Shenzhen, Shanghai and other places said that since the second half of last year, Meituan Dianping’s usual commission to catering merchants has been raised from 4% -6% to 8% -10%, while in some areas, the commission ratio has reached 15%.
In the opinion of industry insiders, it is easy to reduce expenses, and how to improve profitability is the key. The lack of an effective profit model is the fatal flaw of Meituan Reviews.
Now that 2018 is getting closer and closer, analysts believe that if Meituan Dianping does not have external capital to continue blood transfusion, it may fall before dawn.
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