Does Wang Xing love the Metaverse?

Telling the story of everything coming home is far more important than the Metaverse

From 11 to 12,000, this is not a myth of explosion created by a certain digital currency, but the change in the number of domestic applications for “Metaverse” related trademarks in the past year.

The listing of Metaverse’s first Roblox in 2021 will blow the wind of the Metaverse from the other side of the ocean to China, and applying for the Metaverse trademark has become a fashion that big manufacturers are chasing after. According to Tianyancha, as of December 31, 2021, there have been more than 12,000 trademark applications with “Metaverse” in the name in China.

In this long list of applications, in addition to Alibaba, Tencent, Baidu, Bytes and other big Internet companies, there are also SAIC, “Weixiaoli”, Michelle Bingcheng, Foxconn and other automotive, catering, and manufacturing companies. It seems that players of any track do not want to miss the Metaverse.

At least on the surface, the most urgent, most ruthless, and most decisive turnaround is Facebook: the company name has been changed to Meta, and the stock code has been changed from FB to MVRS. Zuckerberg, the company’s founder, said, “We hope that within the next decade, one billion people will have access to the metaverse and become a digital industry that carries hundreds of billions of dollars.”

But in this wave of heat, Wang Xing, who claimed to be “naturally curious”, was extremely calm in the face of the Metaverse: Meituan was not on the list of 12,000 trademark applications.

For Wang Xing to realize the dream of “everything comes to home”, he needs millions of riders, ground pushers, group buying webmasters, algorithms, and black technology in distribution.

01 Local life to the left, metaverse to the right

Meituan’s basic plan is local life, and it pays attention to instant, just-needed, and on-the-ground services, and the Metaverse seems to run counter to it.

In layman’s terms, the Metaverse is an artificial space that is artificially created parallel to the real world using technologies such as VR, AR, blockchain, and artificial intelligence. Although the Metaverse emphasizes authenticity, experience, and immersion, it is ultimately is a virtual world.

Trying to emphasize a virtual world that is “more like the real world” is genetically incompatible with local life services that pay attention to timeliness and what you see is what you get.

Food delivery, in-house hotel travel, and new businesses (including community group purchases, instant retail, and shared bicycles, etc.) constitute the three most important business segments of Meituan, and they are also the troika that drives Meituan to gallop on the local life track. These three businesses all place the most importance on the ability to perform contracts.

In contrast to the Metaverse, the most important thing is the underlying hard technology capabilities, such as AR (augmented reality), VR (virtual reality), AI (artificial intelligence), 5G (or even 6G), etc., whether it can present a true experience to users virtual world. Based on this, a group of chip, cloud computing, and related hardware companies need the metaverse most to strengthen their ability and image to provide hard technology.

Since it is to create another real world, it also runs through social, content, and entertainment. Therefore, Tencent and iQiyi also need the metaverse, and even Soul has launched the banner of “young people social metaverse”.

The Metaverse uses the underlying technology to build the skeleton of the virtual world, fills the flesh and blood with content and social interaction, and enriches the entire world. Ultimately, the goal of the Metaverse is “full simulation”.

Meituan’s local life business is centered on the ability to perform contracts, and is upgraded by the type of goods or services and the speed of delivery. “Everything arrives at home” is Wang Xing’s sea of ​​stars.

To achieve this strategic goal, Meituan has continuously enhanced its contract performance capabilities. This can be seen from the cornerstone of contract performance – the number of takeaway riders. According to Meituan, the number of registered riders in Meituan was 2.8 million in 2018 and nearly 10 million in 2021.

In order to realize the delivery of everything to home, from the previous delivery of food delivery to delivery of everything (services, 3C appliances, beauty, etc.), Meituan began to focus more resources on instant retailing and expanding SKUs (commodity categories). It is not the best choice for Meituan to develop the Metaverse, from company tonality to strategic assistance.

02 Want “wheels” instead of “wings”

The concept of the metaverse has provided new stories for many companies and gave wings to many dreams. But compared to wings, Meituan, which has always been about landing, needs wheels that can land faster.

In 2020, Wang Xing delivered an internal speech on Meituan’s 10th birthday saying: “In the next 10 years, we will increase investment in technology research and development.” In October last year, Wang Xing changed Meituan’s strategy from “food + platform” to “technology” +Retail”.

Meituan, whose core business is food delivery, has always made people feel that its scientific and technological flavor is not as strong as “rice fragrance”, but Meituan’s R&D investment is not low.

Meituan’s Q3 R&D investment in 2021 is 4.7 billion yuan, a year-on-year increase of 60%. In addition to the 3.5 billion yuan and 3.8 billion yuan in the previous two quarters, Meituan’s R&D investment in the first three quarters of 2021 will reach 12 billion yuan, which has exceeded the 11 billion yuan investment in 2020.

Does Wang Xing love the Metaverse?

Based on this calculation, Meituan’s R&D investment in the first three quarters accounted for 9.3%, which also exceeded the average R&D expenditure of Chinese Internet companies.

According to statistics from the Ministry of Industry and Information Technology, in 2020, my country’s Internet and related service enterprises above designated size will invest 6.2% in R&D. Meituan’s R&D ratio is also higher than that of big companies such as Alibaba (8.4%), Tencent (7.2%), and (2.3%).

Although Meituan’s R&D investment is at a relatively high level, its use still revolves around the ability to perform local life services. Chen Shaohui, CFO of Meituan, said: “Meituan is now using technological innovation to improve customer consumption experience.”

In Q3 2021, Meituan delivered more than 44 million takeaway orders every day. In order to maximize the performance of the contract, Meituan has developed a delivery scheduling system that uses AI algorithms to comprehensively consider factors such as rider routes, weather and road conditions, and the user’s estimated delivery time to automatically allocate orders and select the optimal solution.

Does Wang Xing love the Metaverse?

(Source of Meituan’s unmanned delivery vehicle: Meituan’s official website)

Meituan has also continued to invest in the field of unmanned distribution, and currently has drones, food delivery robots, and warehousing robots. Wang Xing once revealed that during the epidemic, Meituan completed an unmanned delivery experiment of more than 15,000 orders in Shunyi District, Beijing, and completed a drone delivery test in Shenzhen.

Whether it is a scheduling algorithm or unmanned delivery, the starting point is to improve the performance of the contract, trying to improve the service level of the whole chain and improve the offline experience of users, and the metaverse with online virtuality as its fundamentals has little investment for Meituan. necessary.

03 Who is more important than the Metaverse?

Compared with seizing the high ground of the metaverse, in the short to medium term, Meituan has more pressing matters.

After the anti-monopoly fine, takeaway is still the most powerful cash cow of Meituan. Although the moat of the food delivery business remains solid, the growth rate has slowed significantly. In Q3 last year, Meituan’s catering takeaway revenue was 26.48 billion yuan, and its net profit was 876 million yuan, which has fallen sharply from Q2’s 2.447 billion yuan. CFO Chen Shaohui said that in 2022, Q1 will enter the off-season for takeaways, and the order volume will be affected to a certain extent. It is expected that the trend of slowing growth will continue.

Meituan also needs to expand its territory faster, so that new businesses can gain a firm foothold and end the money-burning stage as soon as possible. Since Q3 2020, the new business has lost money for five consecutive quarters, with a total loss of more than 36.2 billion yuan. However, compared with the steady increase in the speed of new business burning money, the growth rate of new business revenue is declining, indicating that the new business has bid farewell to the bonus period, and this black hole will become more “thankful” in the future.

In short, the market position of the old business is stable but the growth is slowing down, and the new business sectors including Meituan Choice, Shared Ride, Meituan Flash Sale, etc. have placed high hopes on Wang Xing’s “retail + technology”. However, both new and old businesses require strong offline contract performance capabilities, and a chain of efficient operation is connected in series with nodes such as ground push, warehousing and logistics, and stationmasters.

The moat of Meituan lies not in how high it “fly” in the Metaverse, but in how “deep” the hard technology that can effectively improve the quality of local life services is implemented.

In addition to Meituan, Didi, Dingdong Maicai, SF Express and other companies that focus on offline contract performance capabilities have also maintained relative restraint and calm in this metaverse boom. Liang Jianzhang, co-founder and chairman of Ctrip, said bluntly: “The Metaverse cannot replace real tourism, and should not replace the exploration of the real universe.”

Going back to Meituan, Wang Xing may be more concerned about how to tell the story of “everything comes home” rather than building a “science fiction future” that is weakly related to or even unrelated to his main business, just like his previous judgment and attitude: ” No matter how exciting the technology, the ultimate purpose is to serve human life.”

Today’s topic

Besides Meituan, what other companies do you think do not need “Metaverse”?

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.