Meituan and Kuaishou Technology announce that they have reached a strategic cooperation on connectivity.
At the Kuaishou Technology Ecological opening Conference on December 27, Meituan and Kuaishou Technology announced that they had reached a strategic cooperation on connectivity. Meituan launched Mini Program on the Kuaishou Technology platform, providing Kuaishou Technology users with a series of Meituan's services, including merchant presentation, discounts, booking and display, as well as trading and after-sales services, so that Kuaishou Technology users can directly access Meituan business through the Kuaishou Technology platform. It is expected to enter the trial run phase during the peak consumption season of New Year's Day and Spring Festival in 2022. At present, Meituan Mini Program has taken the lead in completing the pilot launch of the catering category, and will also launch a number of life service categories in the future, such as hotels, accommodation, scenic spots, leisure and play, beauty salon, script killing, and so on.
Respond to "interconnection" and jointly build a benign Internet ecology
The Ministry of Industry and Information Technology held an "Administrative guidance meeting on blocking URL links" on the afternoon of September 9, 2021, requiring pragmatic promotion of instant messaging blocking URL links and other issues. The "interconnection" between the platforms will help to enhance the user experience and build a healthy Internet ecology.
We believe that the cooperation between Meituan and Kuaishou Technology is a positive response under the guidance of anti-monopoly policy "connectivity". For Meituan, the cooperation with Kuaishou Technology enabled Meituan to further reach Kuaishou Technology users. According to Questmobile data, Kuaishou Technology's MAU reached 416 million in September 2021, while Meituan's MAU reached 357 million in the same period.
For Kuaishou Technology, Meituan's deep ploughing of local life for many years will effectively connect the service needs of customers on the Kuaishou Technology platform, providing Kuaishou Technology with a new way to realize traffic.
Content creation capacity, Meituan's local life and business moat deepened
In recent years, Meituan's arrival business has vigorously developed a new consumer category characterized by "low frequency and high guest list". In 2021, more than 100 "new ways of life" service categories have sprung up in Meituan's business, including unmanned restaurant, 360immersion script killing, illustrator studio, 2-hour nucleic acid quick test, pet private weight loss class, hair transplant, shared recording studio and so on. New consumer merchants often face younger customers and need more diversified and personalized forms of advertising.
Kuaishou Technology's content creation ability will empower Meituan to the store business, which will help local life service providers to link the incremental demand in multiple scenarios such as "content recommendation". The short video platform can provide a more intuitive and immersive recommendation experience, which is an effective channel for merchants to get customers, while Meituan's package business helps to improve user loyalty and repurchase rate. Therefore, for merchants, the cooperation between Meituan and Kuaishou Technology will improve the efficiency of advertising, enhance the ROI of Meituan's store business, and thus enhance the willingness of merchants to buy Meituan advertisements.
Maintain earnings forecasts and maintain "buy" ratings
We maintain our forecast for the company's 2021 / 2022 / 2023 GAPP EPS of-3.88 pm 2.19 /-0.67 yuan.
The strategic cooperation between the company and Kuaishou Technology will help to consolidate the competitive strength of Meituan's local life business and maintain its "buy" rating.
Risk hints: intensified competition in the industry, excessive early investment in community group buying, live e-commerce impact, regulatory risks