Author | Wang Xiaojuan

In today's weather is good. Today's weather is good.

Meituan's army of delivery riders is still racing at high speed.

Recently, Meituan CEO Wang Xing internally announced to all staff that last year, about 7.45 million delivery riders earned income on the Meituan platform, an increase of 1.21 million from the previous year, with these riders collectively receiving over 80 billion yuan in compensation.

Meituan has made a significant contribution in providing employment opportunities. It also aims to emphasize the social responsibility borne by the company amidst skepticism by disclosing rider data. Wang Xing also mentioned in the announcement that Meituan is making efforts to improve the level of protection for the riders, with 4.5 million riders participating in the national occupational injury protection pilot program.

While the number of delivery riders has increased significantly, Meituan's delivery service revenue has not grown synchronously. This means that Meituan is still in the state described by Wang Xing as "losing a dollar for every order delivered". Additionally, this year, Meituan has been focusing on promoting lower-priced takeout orders like 'Pinghao Fan', placing higher emphasis on order volume over GMV. In the instant delivery competition, Meituan must maintain its leading edge.

Nowadays, the instant retail industry is also becoming more competitive. Recently, JD.com increased its stake in Dada to 63.2%, further demonstrating JD.com's intensified efforts in instant delivery services. In addition, various e-commerce platforms are expanding their footprint in instant retail, providing more employment options for delivery riders.

Under competition, for each platform, it also means more challenges.

Chassis

Delivery has always been the last line of work for many people. In the past two years, more and more people have reached this line of defense.

Taking Meituan as an example, last year, about 7.45 million couriers on the Meituan platform earned over 80 billion in revenue. 80 billion yuan may seem like a lot, but when divided among 7.45 million people, it is only a little over 10,000 yuan per year, which is clearly not the whole picture.

On September 19, the Meituan Research Institute further explained the above data and income of couriers.

Data disclosed by the Meituan Research Institute shows that among the 7.45 million couriers last year, 11% were high-frequency couriers (taking orders for over 260 days throughout the year), about 0.8195 million people; around 48% of couriers with order income took orders for less than 30 days throughout the year.

This means that nearly half of the people treat courier work as a transitional occupation. In between job searches, "doing delivery while looking for other opportunities" has become the norm in the industry.

Due to the low employment threshold, the number of couriers has been increasing in recent years. Taking Meituan as an example, in 2021, the number of Meituan couriers was 5.27 million; by 2022, the number increased to 6.24 million; and in the past year, another 1.21 million people joined, with an increase of nearly 20%.

Of course, Meituan's instant delivery orders reached 21.9 billion last year, setting a new historical record.

For Meituan, the massive number of orders and riders currently surrounding it as the "king of delivery" is its most important moat. However, after gaining an advantage in the delivery industry competition, Meituan also needs to adapt to market changes and further solidify its position. For example, to meet the low-price demand of consumers, Meituan's Pindao Good Food was vigorously promoted last year and became a project mentioned in this year's financial report.

However, as the unit price of deliveries decreases, the average income per order for riders is also decreasing. Calculated with 21.9 billion orders and 80 billion yuan, last year, the average income per order for riders was only 3.65 yuan.

According to the research report from Kaiyuan Securities, from 2019 to 2023, Meituan riders' average income experienced a process of initial increase and then decrease, with a continuous decrease in average income per rider since 2022. The report "2023 Gung Mao Gig Economy Interpretation Report" mentioned that in 2023, rider income decreased by 25.93%.

Currently, 7.45 million riders support the basic operations of Meituan, but this basic operation is still in a loss-making state.

According to the financial data for the first half of this year, Meituan's revenue from delivery services was 44.09 billion yuan, while delivery-related costs were 48.03 billion yuan, still resulting in a loss of 3.94 billion yuan. The loss has expanded compared to last year, with a loss rate of 8.9%.

However, this year, Meituan's overall performance has seen significant growth. In the first half of the year, Meituan's revenue was 155.527 billion yuan, a year-on-year growth of 22.9%, and adjusted net income of 21.005 billion, a year-on-year growth of 60.4%.

It is evident that delivery, as the core business, while not directly bringing sustained profits to Meituan, is allowing the platform to connect more businesses, thus achieving diversified growth.

Currently, in the food delivery business, Meituan is also dedicated to seizing the trend of consumer downgrading and becoming the 'pdd holdings' of the food delivery industry.

Recently, there have been reports that Meituan has made strategic adjustments internally for the food delivery business, shifting from pursuing GMV to focusing on order volume.

Since the beginning of this year, Meituan's 'pinhao fan' is being expanded to more cities, especially in first-tier cities with high proportions of food delivery orders. According to Meituan's projections, food delivery will maintain a volume growth rate of 10%-12% in 2024.

With this plan being implemented, more people will enter the delivery industry in the future.

In addition to income, delivery riders will also encounter a series of specific challenges on the race against time, all of which need Meituan to balance. As a platform connecting delivery riders, merchants, and users, only by balancing the relationships between the three can Meituan's moat be further strengthened.

Crowded

Currently, delivery riders are transitioning from delivering food to delivering everything.

Since the rise of the 'to-home' business, major companies have been continuously exploring the boundaries of categories for home delivery. Today, the reality of delivering everything is becoming a reality.

Taking Meituan as an example, among its primary entrances on the homepage, apart from food delivery, services like Xiaoxiang Supermarket, medical treatment, pharmacy, and supermarket convenience store, are all instant delivery businesses.

Platforms like JD.com are also intensifying their instant retail efforts. JD.com is specifically building a comprehensive instant retail service system covering all categories and time periods through the introduction and upgrading of services like JD Daojia and JD Instant Delivery.

Previously, JD.com's self-operated products were known for their fast delivery speed. Now, not content with next-day express delivery, they offer instant delivery services like delivery within hours and within seconds, delivering to consumers at the fastest speed to reduce the chances of order cancellations.

In May, JD.com will further upgrade its instant retail business to "JD Instant Delivery," integrating previous services like JD Instant Delivery and JD Daojia to meet consumers' demand for "enjoying good products immediately" with deliveries as fast as 9 minutes.

Apart from its food delivery service Ele.me, Alibaba has also connected to numerous instant delivery services. On the Ele.me app, there are services like supermarket convenience store and pharmacy. Within Taobao's primary entrance, under the Express Delivery section, there are options like Hema, dingdong purchasing, Yonghui Superstores, enabling purchases of anything available in offline supermarkets.

Even some 3C digital products and beauty products can be quickly delivered to consumers through nearby store delivery methods.

This delivery method not only caters to users with immediate needs, solving urgent needs and capturing convenience store business but also compared to traditional e-commerce courier delivery, reduces the impulse shopping behavior's cooldown period, ensuring maximum satisfaction for spur-of-the-moment purchases.

In the preceding years, community group buying offered cheap prices with next-day pick-up, but it has noticeably lost steam in the past two years, even being discontinued in first-tier cities, yet instant retail remains popular.

Instant retail is also considered the next trillion-dollar market.

The China Chain Operation Association predicts that by 2024, the market size of the instant retail-related market will exceed 1 trillion yuan. The "Instant+" 2023 Instant Retail Development Trend White Paper also shows that from 2023 to 2030, the annual compound growth rate of the instant retail market is expected to be 25%. By 2030, it is expected to increase to 3.6 trillion yuan, equivalent to 6% of the total retail sales of social consumer goods during the same period.

This has also given major factories further motivation to compete in this market.

Delivery riders have also transformed from traditional takeout riders to a more diverse group. Takeout riders usually concentrate on orders during peak hours, while other categories are not limited by time, making the riders' working hours more flexible.

Of course, with e-commerce platforms entering the instant retail sector, and riders being one of the "employment reservoirs", the demand is also increasing.

However, the discounts offered by various companies often start from a low price, which also means that the "cake" left for the riders is limited.

Once each company has its own riders, it will also face the balance between delivery time and rider rights protection. Previously, jd.com received a lot of praise because they were the only logistics industry company to have formal contracts with couriers and pay social insurance. Currently, jd.com is also dealing with rider operations, and how to maintain a good balance will set a benchmark for the industry.

In recent years, various social conflicts have been continuously occurring involving riders. As an important part of instant delivery development, ensuring the rights of delivery personnel will also be a part of future development.