Great retreat! With the entire Beijing business shutdown, another e-commerce giant can no longer bear it!

The new round of epidemic has made a comeback, and many cities have pressed the pause button. Since then, fresh food e-commerce companies, mainly community group buying, have once again ushered in highlights and are busy in various communities.

Unexpectedly, at this time when the situation was positive, Meituan Youxuan chose to retreat.

Close all business in Beijing

On April 25, Meituan Youxuan issued an announcement in the Beijing market stating that from April 26, 2022, Beijing's self-pickup points will temporarily stop services. Regarding the reasons for the suspension of service, in the announcement, Meituan Youxuan said that it was to ensure the provision of stable and reliable next-day delivery services. For users who purchase money-saving cards within the valid period, they will be returned in full at the purchase price within April 25, and are expected to arrive in 1-3 days. Meituan Youxuan did not give a specific time for the plan and time to restore services.

Not only that, when opening a pickup point business in Meituan Youxuan Beijing area, the home page will also display an announcement of "The pickup point temporarily stops business" and a whiteboard with the product "sold out". At the same time, the Meituan Preferred Portal has been removed from the Meituan APP homepage guide area and can only be accessed through search.

In fact, Meituan Youxuan not only closed down in Beijing, but also closed down in self-pickup points in the northwest region as early as the evening of April 20, and business in the northwest provinces and regions including Gansu, Qinghai, Ningxia, and Xinjiang were withdrawn.

Shutdown and retreat are just the tip of the iceberg. In early April this year, Meituan was exposed to start adjustments to personnel in multiple business lines, involving not only Meituan Youxuan, but also Meituan Maicai, Kuailu, etc., with layoffs ranging from 10% to 20%.

Meituan Youxuan faces major adjustments

Faced with the epidemic, just as major e-commerce platforms such as JD.com, Pinduoduo, and Dingdong Maicai were trying their best to seize the sinking market, Meituan Youxuan announced that it would suspend business services. What is it?

Perhaps, this is inevitably related to Meituan's loss-making performance. In March this year, Meituan released its fourth quarter and full-year financial reports for 2021. In this year, Meituan's revenue was 179.13 billion yuan, a year-on-year increase of 56%; the adjusted net loss for the whole year was 15.6 billion yuan, and the net profit in the same period last year was 3.12 billion yuan, from profit to loss. New business investment, including Meituan Youxuan, is one of the main reasons for Meituan's losses.

As a business that loses 10 billion yuan in annual funds, Meituan Youxuan established a Youxuan business unit in July 2020, and has been launched in Jinan, Wuhan, Guangzhou and Foshan. Less than two months after the business unit was established, it held an investment promotion conference and launched the "Thousand Cities Plan". By the end of 2020, the community group buying business will be completed nationwide and will be placed in the county-level market.

Such rapid expansion and development will inevitably require a lot of financial support. Faced with a large amount of financial expenditure, Meituan Youxuan did not meet expectations. Only by stopping losses in a timely manner can the status quo be changed.

It can be seen that strategic adjustments are imperative. Meituan Youxuan’s closure in Beijing is just the beginning.

Shrink the e-commerce market and retreat to advance

In fact, while the northwest region began to retreat, Meituan Youxuan has started a new round of recruitment in economically developed regions such as Jiangsu, Zhejiang and Shanghai.

While retreating and shutting down, recruiting a large number of people, why did Meituan give priority to the situation of ice and fire? On the one hand, it is because of the epidemic control in Shanghai, the number of orders on online grocery shopping platforms is overwhelming, and the demand from consumers has increased sharply. On the other hand, the operating costs in remote and backward areas such as the Northwest are relatively high, and optimization is urgently needed. After weighing the pros and cons, Meituan Youxuan finally chose to shrink its business, eliminate stores in weak areas with losses, and focus on developing strong areas with stronger demand.

It is worth mentioning that Meituan has recently launched the "Extreme Edition" APP, aiming to attract traffic to community group buying and e-commerce businesses. Various actions show that Meituan has not really given up on the hot market of community group buying.

This time, Meituan Youxuan's business adjustment actually chose the "retreat to advance". Perhaps, the right way is to continuously optimize the business, invest more time and funds in the right direction, strengthen the products and services of community group buying, improve supply chain and quality control capabilities, and take the regional differentiated operation route.

Conclusion

Many people say that the epidemic is a catalyst and a mirror of demonic reflection. Indeed, in the face of the sudden outbreak, everyone will react differently. Some people actively look for ways out, some people complain about Liantian, and so do companies.

In the epidemic in 2020, Meituan Youxuan chose to develop rapidly. After less than two years, in the face of the same severe epidemic, Meituan Youxuan repositioned itself and chose to survive with a broken arm.

The weak pursue fairness, the strong solve problems, and the light is to survive. As Lao Gao said, everything has the opposite side, and the opposite side of difficulties is opportunities. Especially for e-commerce bosses, as the helmsman of the company, they must calm down, think more about the future development direction of the company, practice their strength hard, and use wisdom to break the deadlock, so that success can become inevitable.