Thread by @ruima

Finally got around to listening to the Meituan podcast by @AcquiredFM from 3/10! It's a pretty entertaining walk through the third largest Chinese internet company by market cap, ~$250Bn. The CEO Wang Xing has a Twitter @wangxing_mt. (Well, it's a bot.*)

A few things to add:

1/ The breakup btwn Meituan & Alibaba is such a pivotal moment. Wang Xing was originally a big Jack Ma fan. He wanted both Tencent & Alibaba as partners, BABA wanted exclusivity, whereas Tencent was like whatever. Now Wang Xing hates Alibaba's guts. The feud is still ongoing.

1a/ But what it shows is that BABA's requirement of ultimate loyalty and exclusivity is unlikely to fly with the best entrepreneurs. If you want folks like Wang Xing you don't get him by telling him to work for your interests above his own company's.

1b/ We will never know if the ele.me team could have beaten Meituan if they stayed in charge (my guess, no). But could they have at least beaten the current BABA team who flipflops on strategy a lot? ie subsidies. I think yes. But that's BABA, install insiders.

2/ I agree that Dianping (reviews, AKA Yelp) was a great biz. However, it is actually no longer really relevant (DAU now 60mm lower than at acq). That's bc the high frequency everyday food ordering biz is still ultimately abt price & convenience. Meituan excels at both.

2a/ Side note, I know from insiders that Dianping was micromanaged, vs Meituan is much more decentralized in comparison. In fact, former execs have told me Wang's mtgs can be downright chaotic 😉. Maybe similar biz, but polar opposite in how they were run.

3/ Meituan stuck to local services when everyone else tried to improve GMV & moved to discounted physical goods (that moves way faster & has far less limitations). They knew if Alibaba came in everyone'd be blown up. They were right. Alibaba did & everyone else did get blown up.

4/ Meituan had a fantastic on the ground salesforce & that's what they're known for today, it's true. But that's not really the point. The point, as co-founder Wang Huiwen said, was their scientific expansion strategy. They weren't the only ones to go rural.

4a/ They didn't even cover the most cities. But they covered the RIGHT cities. # of cities wise they were actually in the middle of pack. They focused on ROI. Whatever got best ROI became best practice that was quickly pushed out to rest of salesforce. So, it's abt organization.

4b/ That's still the case today. Consider Community Group Buying. PDD just hires like mad. Meituan gives its salesforce a booklet of what to say, when, and what to do, when. Obviously pros and cons to this but the point is, they are super precise. This is Meituan style.

5/ I think when people talk abt govt regulations they get confused & think that the credit tech regs that brought Ant to a halt are what's in store for CGB. That's clearly not the case. The govt has already said this is OK. State media has said, yeah this may be disruptive, but..

5a/ .. it's necessary. Why? Because go live in rural China & see how much room there is still for improvement esp when it comes to everyday goods like groceries. Rural logistics in particular is HUGE goal of govt. This fits into that. Just don't be too abusive w monopoly/capital.

6/ Meituan has scale that is really really hard to beat. It has a lot more users than ele.me. Also more exclusive merchants than ele.me (3x+ in 2019). The former leads to the latter in a flywheel. More orders > more vendors > more users, repeat.

7/ BTW, Meituan is widely known as a 1085 company (10a-8p 5 days a wk), which puts it on the lighter end of hardworking Chinese cos. CGB grp will of course be worse, but let's just say it doesn't have the HR crisis and rep that shops ahem PDD have. Ppl happier. This is good.

8/ Obviously Meituan has its challenges. Personally, I don't actually even like the app. (I'm a simple American, I find the coupons confusing.) But I do like the company. Mainly the vision & execution is top notch. Hope this thread helped shed some light as to why.

Here's the original podcast. We've done a few at @TechBuzzChina as well, although kinda dated and don't include the details I shared above. If you read Chinese, do follow Wang Xing's bot. Interesting guy!!

acquired.fm/episodes/meitu…