Authors: Wang Xunkui and Zhou Xiaodan
Before the trial and error of the blue strands, after the drop of strict prevention, Meituan’s shared car business is destined to wade through a muddy road.
Geek Park has learned that Meituan’s time-sharing car business has been launched in Chengdu’s Pidu urban area, called "Meituan Car Rental", and this app can already be downloaded on the app store. At present, there are only two fuel models, Volkswagen Langyi and Volkswagen Santana. According to the available vehicles on the user map, it is estimated that there are about 50 to 100 vehicles in operation. Orders are still calculated according to "frequent + mileage".
Meituan has established a mobility division internally, and new businesses in the mobility field, including shared cars, Meituan maps, and driverless and taxi-hailing, are slowly being integrated into this division. According to media reports in early November, Meituan is recruiting relevant teams.
After testing the water taxi business in Nanjing at the beginning of this year and launching the Mobike bicycle entrance in September, Meituan’s hunger for big travel has stopped concealing.A former Meituan executive told Geek Park that within Meituan, travel has been listed as one of the company’s key business directions in 2018.
Like the ride-hailing business that went live before, Meituan’s shared car timeshare rental business will be piloted in a single city first.
A person close to Meituan told Geek Park that in the planning stage of this business, domestic second-tier cities including Chengdu, Xiamen, Hangzhou, Nanjing, and Chongqing were all considered by decision-makers, but because "Xiamen market is too small, Hangzhou is heavily guarded by Ali, and it is afraid of diverting Nanjing’s taxi business. Chongqing also has a relatively mature start-up company (Panda car) to take root and try," and finally chose Chengdu.
Meituan’s almost borderless business expansion model has made it an "outlier" in Internet companies. Previously, Meituan’s layout in the travel field was explained by Wang Xing as "starting from the needs of customers", "anything related to food and life, we should consider participating."
The shared car timeshare rental market in Chengdu is not a blank. At present, there are already many timeshare rental companies such as Panda Car, Go Fun, EVCARD, and Tuge in the streets of Chengdu.
Although it is far from Beijing, Shanghai, Guangzhou and Shenzhen, Chengdu has long been the best training ground for time-sharing rentals.
The greatest dividends come from the policy levelIn September 2017, the General Office of the Chengdu Municipal People’s Government issued the "Notice on Encouraging and Regulating the Development of New Energy Vehicle Timeshare Leasing Industry", which directly stated that Chengdu will increase policy support for new energy vehicle timeshare leasing enterprises, and gave specific goals: "By the end of 2018, the city will basically form a new energy vehicle timeshare leasing service network, with 2,500 service outlets and 10,000 charging piles; by the end of 2020, the city will form a comprehensive new energy vehicle timeshare leasing service network, with 5,000 service outlets and 20,000 charging piles."
The release of this policy has brought a huge incremental market to Chengdu. At the same time, compared with Beijing, Shanghai, Guangzhou and Shenzhen, which strictly control the number of car license plates issued, Chengdu has not yet issued a license restriction order, which also lowers the threshold for "intruder" Meituan.
"Chengdu government support is relatively strong, the crowd is relatively open, and the traffic conditions are relatively good." Zeng Hao, the head of Panda’s Chengdu operation, said that he has not yet received news that Meituan’s time-sharing rental business is going to land in Chengdu, but he speculates that the good market and policy environment in Chengdu may be an important reason for Meituan’s choice.
The data shows that Chengdu is the second largest car ownership market in the country except Beijing, with car ownership exceeding 4 million and driving license ownership reaching 7 million. After a period of operation, Zeng Hao is very optimistic about the capacity of the Chengdu market:"That is to say, about 3 million people have a driver’s license without a car, and even if only 2% of them use shared cars, there is still 60,000 market space to explore."
In terms of vehicle sources, Chengdu-based shared car operators also have an advantage. Since 2007, Chengdu Economic Development Zone has been turned into a "Chengdu Automobile Industrial Park" specializing in the development of complete vehicles and supporting parts. In the International Automobile City located in Longquan, Chengdu, including Geely Volvo, FAW-Volkswagen, FAW Toyota, Chengdu Ruihuaxian Energy Automobile and other automobile manufacturers have established large production bases.
According to the above-mentioned person close to Meituan, similar to other domestic shared car operators, Meituan will also adopt the cooperation method of financing and leasing with several car factories and rental companies to "get the car": "In the early stage, fuel vehicles and new energy vehicles may be deployed, but in the future, new energy vehicles may be the main one."
For Meituan, choosing Chengdu can be described as the right time and place. But it is not easy to land services in this city in the southwest.
Meituan’s previous data and offline operation and expansion capabilities were largely based on the business of takeaway, in-store service, and even other life services. Whether it was the difficulty of operation or scheduling, it had little in common with car timeshare leasing. In fact, Meituan’s test of the water is very likely to "start from scratch".
But Meituan’s internal expansion into new businesses is also very "goal-oriented", the person close to Meituan said: "Usually a goal is set first, and then external resources are found, rather than judging by how much resources the company has."
The early entry of Go Fun and Panda cars and EVcards has established certain resource barriers to varying degrees.
For example, parking stations are still a scarce resource for the time being, and developing them is not an easy task. At present, Go Fun (Beijing Shouqi Zhixing Technology Co., Ltd.), which has the largest market share in Chengdu, is a wholly-owned subsidiary of Shouqi Group. In February this year, Go Fun officially signed a cooperation agreement with Sichuan Transportation Investment Group and established a joint venture company, and then launched the Go Fun Sichuan Jiaotong cooperation project.
According to a local car-sharing operator in Chengdu, Sichuan Transportation Investment Group controls all public and road parking spots in the city. "It would be great if the number of on-street parking spaces could be increased, which is very helpful for improving operational efficiency."
In order to facilitate charging and changing electricity and improve operational efficiency, shared car operators generally recommend that users park their vehicles at the company’s stipulated parking spots. And the resources of such parking stations are almost exclusive to each company. At present, Panda has won more than 200 parking stations in Chengdu, each of which can accommodate 10 to 20 vehicles."After all, some of the resources in a city are limited," Zeng Hao admitted that Panda’s parking resources still need to be expanded, "but at least our stations have signed contracts, so it is more difficult for new entrants to expand parking resources in the same places."
As a unicorn whose valuation has soared to $30 billion, Meituan’s every invasion can trigger an earthquake in a specific field. According to a person familiar with Meituan’s travel business, like previous attempts at power banks and convenience stores, Meituan is just pushing forward with a test of the water for shared cars. "Whether it will be done on a large scale in the end is still uncertain."
This is the expansion logic of Meituan’s new business.
In November, Meituan announced the closure of the power bank business. Wang Huiwen, senior vice president of Meituan Review, mentioned in an internal letter that Meituan’s important basis for judging whether to close a new business or increase investment or continue to explore is, "The strategic synergy value between our existing business, if the future market size is not large enough, but the strategic synergy value is large enough, you can consider expanding operations, otherwise it should be closed."
How big is the shared car market? Previously, in an interview with a Geek Park reporter, once CEO Wang Yang used a "self-created" calculation method to roughly estimate the size of the shared car market."The number of people in China who have a driver’s license – the number of private cars in China + 20% of the limited number of people, according to the use of 4 people in a car, and then a 50% discount for urbanization (the requirement for travel), based on the rental price of 150 yuan a day in China. If these are counted as the demand for shared cars, this is about a 300 billion market."
Since 2015, a large number of test-takers have flooded into the shared car timeshare rental field. After a few years, there have been a lot of casualties, and there are very few positive cases for reference.
At the outset of the market, the participants were mixed up and each had their own plans. "Car manufacturers use their left-hand products to buy their right hands and earn subsidies, while the right-hand products are used for shared cars." A practitioner broke the news that there was even a situation in the industry where the subsidy income of new energy vehicles exceeded the income of car sales.
But starting in 2016, subsidies for new energy vehicles were fully reduced and subsidy reviews were upgraded. The "policy dividend" gradually disappeared, the bubble stirred up by the trick of cheating and subsidies was pierced, and shared cars ushered in a real corpse.
This is still a game without a clear business model. This has also directly led to the cautious attitude of capital towards the industry. Several investors contacted by Geek Park expressed their "wait-and-see attitude".
Once the heavy investment of assets, whether it can "make money" has become a harsh criterion for considering the industry, while challenging the patience of investors. The break-even line that shared cars aspire to has risen and fallen, and no explosive breakthrough has been achieved so far. An investor who focuses on the shared car sector told Geek Park: "On average, it takes three orders per car per day to make money, and the GO FUN with the highest market share in the country can reach an average of 1.5 orders."
Most of the experimenters are still looking for a breakthrough from a single city. Not long ago, TOGO Tuge CEO Wang Lifeng mentioned at the B round financing conference that Tuge has been able to "level or even start making profits" in Beijing; according to another person in charge of a shared car company who did not want to be named, they can reach four or five orders a day in a good season, with a daily profit of 150 yuan per car.
In October this year, EZZY, which was closed down after only one and a half years of operation, is a typical example. EZZY, which focuses on the mid-to-high-end market, once used the method of "not caring about wear and tear efficiency" to create the ultimate user experience. The model of "burning money" made it extremely dependent on capital. When the 40 million yuan financing was exhausted, the capital chain was broken, and the business ended.
"This is a very heavy O2O field. Although EZZY has received 40 million before, this amount is too small for this industry." The person in charge of the shared car told Geek Park.
Meituan, which just announced a $4 billion financing in October, may become a giant in this field in terms of capital volume. Once it enters the market, it also means that Meituan has further penetrated the hinterland of Didi after the taxi business.
In fact, existing players in the industry are all worried about Didi’s next move. "Compared to Meituan and Mobike, which recently announced the news, we will be more concerned about Didi’s entry. Didi has government resources, funds, and a lot of travel user data, which is likely to bring about some different changes."
Didi, which has a clear first-mover advantage, is taking action.According to a car-sharing company executive contacted by Geek Park, he has received an invitation from Didi headhunters, but after the exchange, the executive said that Didi has not disclosed the specific gameplay for the time being, "I think they may not have thought about it."
Meanwhile, as recently as November, Didi’s vice president in charge of automotive business, Yang Jun, also publicly stated that Didi wants to become an operator of new energy vehicles and charging stations – a layout that can also help Didi pave the way in the field of shared cars.
"This industry still lacks an Internet company that relies on" technology "and volume to win. At present, the policies for shared cars in various places have become clearer. The next step is to see who can do this job that requires heavy asset control capabilities and extremely refined operations." An investor who focuses on the travel sector told Geek Park.
Before there were uncertain industry attempts, followed by Didi’s strict defense, Meituan’s shared car business attempts were doomed to navigate a muddy road.
However, for the entire industry, the arrival of the era of giant invasion must not be a bad thing.