Let local business fireworks return, Meituan flash buying connects the last mile of the pet industry

The TOPS Pet Expo, held from May 5th to 7th, was the first national pet industry exhibition held in Shanghai after the epidemic. 800 exhibitors and over 4000 participating brands made their appearance on site, bringing together 47628 professional visitors from all over the country and 132436 public consumers. It also brought the pet industry's long-awaited human fireworks to the city of Shanghai.

After three years of the epidemic, local consumption gradually returned and the market returned to a thriving state. Faced with the increasingly personalized, multi-level, and high-quality consumption needs of users, real-time retail channels have become one of the key factors in reviving local business vitality.

When "whether to make takeout" has become a hot topic of discussion in the pet industry, we see that some pet stores have achieved counter trend growth through real-time retail channels, and some pet brands have also achieved revenue doubling goals through real-time retail. Therefore, we believe that real-time retail has become a channel that the pet industry needs to focus on.

When it comes to instant retail, Meituan's instant retail platform - Meituan Flash Shopping - is naturally an important industry co builder. At this TOPS Expo, Meituan not only had a deep cooperation with Meituan, but also invited Wang Chao, the head of Meituan Flash Shopping's non food monopoly business, to share with everyone the market trends and opportunities of instant retail, and discuss the future of the pet industry in instant retail together.

Meituan needs to go through instant retail

Is it the last mile to open up the pet industry?

Before this topic, we also need to understand what instant retail is.

In February this year, the No. 1 central document 1 mentioned instant retail for the first time and pointed out: "comprehensively promote the construction of county business system, vigorously develop new models such as joint distribution and instant retail".

Despite being mentioned for the first time in the central document, the concept of instant retail has actually taken root and rapidly developed. Especially during the pandemic, real-time retail has become a means for most people to effectively consume, and is seen by various platforms as a new engine to drive offline merchants' revenue growth and digital transformation. It is also a common opportunity for physical supermarkets, convenience stores, community stores, and other large and small physical merchants.

Simply put, instant retail="local supply+instant delivery". 'Delivery' has gradually evolved from 'catering to home' to 'everything to home'. Among the four key retail strategies of "more, faster, better, and less", real-time retail focuses not on cheap prices, but on prioritizing efficiency. It can help merchants avoid vicious price competition to a certain extent, while also expanding the operating radius of supply side physical merchants, thereby increasing profits.

And in today's consumer environment, consumers are rapidly stratified, and their consumption needs are becoming increasingly refined. The demand for ultimate experience and efficiency is becoming increasingly high. This is also one of the fundamental reasons why real-time retail can develop rapidly.

As a leading platform in the local life service industry, Meituan's real-time retail is one of its core businesses.

According to the 2022 financial year performance report of Meituan, the number of Meituan trading users reached 678 million; 9.3 million active merchant users; Instant delivery of 17.67 billion transactions. In terms of real-time retail, Meituan's real-time retail platform Meituan Flash Buy saw a year-on-year increase of nearly 30% in transaction users and active merchants in 2022. The peak daily order volume in December exceeded 11 million.

Relying on the high-quality customer base of nearly 680 million people of all ages in Meituan Ecology, purchasing pet products through Meituan has also occupied more user minds among the mainstream customer base of young users.

Overall, instant retail, as an important supplement to traditional retail formats, meets new consumer demands. And for the pet industry, it not only overcomes the pain point of the last mile barrier, but also meets the digital transformation of pet stores and the increasingly diversified consumption needs of pet consumers.

Pyrotechnic gas return

Highlighting opportunities for Meituan to flash purchase pet categories

During this TOPS Expo, Wang Chao, the head of Meituan's flash purchase non food specialty business, shared the theme content of "Real time retail trillion scale, new pet market" with everyone on site.

Unlike tourism and catering, there is no phenomenon of retaliatory consumption in the pet category, and more offline stores face the challenges of profit compression and user diversion, Wang Chao mentioned: "The real-time retail model is rooted in local entities, leaving demand, supply, and performance all locally, leaving traffic and benefits to physical stores. This model can accelerate the integration of local stores online and offline, and solve business pain points." According to data from the China Chain Store Association, the size of the real-time retail market is expected to exceed the trillion yuan level in 2026.

Focusing on the pet category, there is still huge room for development. Taking Meituan flash buying as an example, the pet category is showing a trend of high growth and low penetration. According to Meituan data, the retail market of pet products will reach 276 billion yuan in 2027, with an online scale of 173.2 billion yuan, accounting for over 60%. Among them, real-time retail will account for 14.6 billion yuan in online channels, with an expected online penetration rate of 8.4% and an overall overall market penetration rate of around 5.3%.

Behind the rapid development of the real-time retail market is the evolution and cultivation of consumption habits.

Women account for 70% of the main user profiles in the Meituan flash purchase pet category; The majority of young users are born in the 1990s and Generation Z, with 89% of those under the age of 35. Their consumer needs are diverse, mostly belonging to deep mobile phone users, with considerable purchasing power and a preference for sharing. Moreover, the Meituan platform has accumulated over 80 million potential pet owners, which is in line with the pet brand's target audience of attracting new customers.

The cultivation of consumption habits also brings subdivision of demand. On the platform, cat and dog staple foods, cat litter, canned snacks, and nutritional health products are the high-frequency hot search categories for platform users. The search terms are mainly "pan category words", supplemented by "pan brand words", and have certain seasonal characteristics. For example, during the autumn and winter seasons, "cat's nest" is a popular search term. At the same time, there is potential user demand for the small pet category, and scenarios related to rabbits, hamsters, and aquariums have a high degree of compatibility with O2O real-time retail channels. This type of supply has a certain competitive advantage.

As of now, Meituan's flash purchase pet category has covered key categories such as pet food, pet snacks, pet toys, outdoor pet travel, pet daily necessities, pet services, and beauty care. It has signed contracts and cooperated with more than ten top pet brands, and has helped these brands achieve rapid growth.

Wang Chao also stated that based on the performance of segmented pet product categories on the Meituan flash buying platform, we have also seen more opportunities and opportunities for brands. For example, cat and dog staple foods have the highest overall proportion among all categories of pet flash purchases in Meituan, followed by cat and dog daily necessities and snacks. In pet food, cat products account for the main share, and in pet daily necessities, cat litter is a subcategory of the top 1; The business scale of cat and dog travel products, washing and beauty products has also grown rapidly.

Wang Chao specifically pointed out that cat litter will be one of Meituan's main product categories in the future:

1) Cat litter is the most universal consumable, and users have low brand loyalty;

2) As a heavy commodity with stable demand, the delivery cost relying on the real-time retail network system is basically the same as that of e-commerce;

3) Cat litter has greater opportunities to drive sales in other categories. Based on Meituan flash purchase data, taking February as an example, among users who first purchased cat litter, 79% purchased other categories and 15% purchased staple foods within 30 days.

And through continuous exploration of user needs, the emergency needs of current flash buying users are shifting towards daily needs. Users who purchase frequently have developed, and the categories of products purchased have expanded from cat litter in emergency scenarios to pet food, snacks, toys, and more. For example, pet snacks have become high-frequency search and ordering keywords due to their abundant supply and discounted prices.

From the consumption demand generated by homestay, urgency, and busyness, from a single vertical category to a more comprehensive sub category, users upgrade and place orders in daily scenarios. These changes all originate from the daily life scenarios of pets and users, representing the transformation of users' lifestyles and attitudes towards rapid shopping and entertainment, driving the rapid development and growth of the real-time retail market.

Focus on pet categories

What has Meituan flash buying done for both brands and retailers?

According to the official introduction, as a key support category, Meituan Flash Buy will continue to increase investment and support in the pet category this year, especially in cooperation with brand merchants and retailers.

According to Wang Chao, "Currently, Meituan Flash Buy has collaborated with over 50000 pet stores, covering various forms of businesses such as pet stores, pet hospitals, and front-end warehouses. The cooperative brands cover mainstream pet food and supplies brands. Meituan Flash Buy also works with brand merchants to help retailers create sales growth through various methods such as collaborative creation, subsidy investment, and marketing diversion

For offline physical pet retailers, with the continuous extension of real-time consumption scenarios, offline pet stores can expand their business radius and cover a wider range of consumers through real-time retail. And pet retailers who seize the opportunity, adjust their store product structure according to consumer demand, and embrace real-time retail have also taken the lead in achieving business growth and transformation. Taking a pet store on Meituan Flash Buy as an example, it has been in real-time retail business for less than a year, and the monthly sales of single store products have increased from 20000 to 90000. The overall profit of the store has increased by over 350%. This type of store is a representative of the rapid development of real-time retail, and also a microcosm of many merchants who rely on real-time retail to achieve online "counterattack".

Meanwhile, for entrepreneurs who want to delve deeper into real-time retail, Meituan Flash Buy has also launched a pet pre warehouse model, focusing on online services within a 5km range, better assisting pet industry entrepreneurs in opening stores at lower costs, increasing revenue, and providing consumers with a richer supply format. Taking Lin Xiaohu, an excellent partner of Meituan's pet pre warehouse project, as an example, by virtue of this model and the cooperation with Meituan's flash purchase, up to now, it has opened more than 70 warehouse stores across the country, covering 15 cities, serving 700000 pet lovers in total, breaking through 4000 orders a day, and more than 95% of the stores have achieved sustainable profits.

Faced with how to assist brand merchants in achieving business breakthroughs and enhancing consumer intelligence, Wang Chao stated:

Firstly, we will enhance the level of refined operation for users, and conduct user operations based on the frequency, preference, and price sensitivity of pet products purchased by users. We will increase investment to assist brand owners in accurately reaching potential users and better completing novelty acquisition and conversion;

Secondly, we will strengthen the advantage of "fast" real-time retail by enhancing user awareness through advertising and other means. We will select high-quality resource positions with high exposure, high clicks, and high conversion from multiple channels such as takeout, flash buying, and channel pages, and collaborate with industry media, social media platforms, and other high-quality KOLs to promote brand exposure. On the other hand, in collaborating with more offline retailers and brand merchants, optimizing supply to leave users with the best shopping experience and strengthening user retention;

Finally, in terms of product categories and brands, we will focus on breaking through categories such as snacks, supplies, and staple foods, create hot topics and marketing activities, collaborate with brands, jointly create popular products, optimize user prices and selection experiences, and continue to drive the transformation of user needs towards convenience needs.

In order to continue creating marketing scenarios that belong to the real-time retail ecosystem, Meituan Flash Shopping has also launched the "Mengchong Festival" IP series of activities, which are divided into Mengchong New Year's Goods Festival (January), Mengchong Novice Season (April), Mengchong Travel Season (May), Mengchong Changyou Season (October), and so on. It is reported that in April of this year, focusing on the scene of "baby pet birth and new pet arrival", Meituan Flash Buy launched the "Cute Pet Novice Season" pet themed marketing campaign, working together with brands and businesses, and on the first day of the event's launch, the number of pet consumption users increased by over 40%.

At the same time, the "Moe Pet Festival" series of activities will also launch marketing activities such as Moe Pet 1 yuan trial, Moe Pet litter 9.9 yuan, and Moe Pet 567 based on daily scenarios such as "testing, stocking/restocking" to meet the normalized needs of pet users.

Wang Chao said, "Online and offline integration has become a trend, and Meituan Flash Shopping is also looking forward to more brands and merchants joining the real-time retail market." In addition to the "Cute Pet Festival" marketing campaign that runs throughout the year, Meituan Flash Shopping will also focus on pet categories in the future. Through platform user insights, product selection and stocking guidance, consumption scenario construction, and performance service guarantee capabilities, Meituan Flash Shopping will continue to help brand merchants and retailers achieve efficient growth, Jointly Digging for Trillion in Real Time Retail Track