W25 - New Thinking on Merchant Business

This week, based on two reports I read, I developed some new business-related thoughts. One was a merchant management weekly report that shared findings from a delivery-merchant survey. The other was Chu Jun's summary of expert interviews from Alipay.

Overall, the gap between us and Alipay is large for two reasons. One is user scale: we serve over 6 million merchants, while Alipay serves more than 40 million. But this reason does not hit the root cause. I believe the fundamental reason is that from the founding of Alibaba e-commerce, Alipay supported the entire Alibaba ecosystem with a platform mindset. That approach persisted as the business passed through several major stages — PC, mobile, and the mini-program ecosystem. By contrast,Meituan had the business first and the financial services platform laterThis means that for the financial platform to deliver maximum platform value, it mustfirst break business closed loops, clearly define service boundaries, and converge service permissionsMerchants' perception of the financial platform depends not only on the strength of our own products but also on the depth of our cooperation with business units. This is a matter that must be addressed at the level of strategic coordination.

At the same time, we should note the large growth potential for the financial platform. For example, in basic services, when Alipay merchants purchase B2B services, payment method shares are: Yulibao 10–20%, balance payment 40%, and quick-pay 40%. Our balance-payment share is 1%, and quick-pay is still at an early stage. In operational services, many of the formats we serve have considerable room to leverage synergies based on a financial platform—for example, Kuaizhu has not yet integrated merchant wallets. Procurement of supplies accounts for a significant portion of restaurant expenses. Using delivery or in-store revenue to fund procurement would improve the capital closed-loop rate. In financial services, our small loans and wealth-management offerings are at an early stage in terms of product variety, flexibility, and customization.