Through the stages of city coverage expansion, category extension and group purchase fading, the O2O life service business model begins to change from extensive development to refinement operation. The surviving two oligopolies began to pursue profitable growth and no longer regarded the trading volume as a competition measurement indicator.
In October of the fourth quarter, Meituan Dianping repeatedly signaled its deep cooperation with InterContinental Hotels and Huazhu Hotels, indicating that it strived to make a splash with high-star and large hotels. As early as November, Baidu Nuomi stopped looking for cooperation with hotels, but cooperated with Ctrip and Qunar based on their respective advantages (precision diversion and hotel inventory resources, especially high-star hotels), in order to pose a pressure on Meituan Dianping's accommodation business. On the one hand, it's necessary to control the cost and gain profit, and on the other hand, with the O2O development, the competition not just exists between individual companies and it's time to form an ecological competition trend. For Meituan Dianping, how to realize the two-platform linkage and achieve great value effect by virtue of the vertical business lines with greater growth potential, such as catering, hotel, travel, leisure, wedding, and parent-child activities, has become a particularly crucial issue.
The main driver of industry growth in the future will turn to gaining the price difference brought by the improvement of service efficiency through providing flow, technology, marketing and other supports to the businesses. Achieving profitability by making breakthroughs in single preponderant vertical business lines one by one will become a new strategy and the focus of attention. Meituan Dianping announced that its hotel and travel business had turned profitable on the whole in July. Baidu Nuomi is greasing the wheels of profit gaining from film and other business lines. The preponderant vertical business lines ushers in a stage of quality orientation and rapid growth.
By virtue of Baidu's resource collaboration, technology and marketing advantages, Baidu Nuomi achieved a continual growth in trade share, with the GMV accounting for 25%, in the fourth quarter.
In the future, the market pattern may change with Meituan Dianping's and Baidu Nuomi's change in the profit idea. However, from the perspective of maintaining the business development, only a healthy business model can provide more long-term value for the industry.
Meituan Dianping's organizational structure upgrade in the second half of the year reflects the core status of catering business. Catering business was also Baidu Nuomi's key investment category in 2016. With the layout of wisdom restaurant and the support from Nuomi finance, services and content ecosystem, Baidu Nuomi created a one-stop solution to the business marketing management issue. Analysys believes that how to achieve the ecological integration of content and service will be a sally port of the life service trading platform in the content marketing era. With Baidu's strong and high-quality content distribution channels, Baidu Nuomi owns an incomparable advantage in facilitating the closed-loop transformation of services and transactions.
It is expected that with the development of other vertical business lines on the large platforms, the catering business will decline in the total volume of trading on the platforms, but will always be the core business of all platforms. Following the merchants' IT systematization, interface standardization, and the further increase in online rate, the catering industry will have more room for improvement in efficiency and development.
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