Wang Puzhong ascends to new heights.

Author | Gu Nian

Editor | Wen Changlong

A year later, Dianping continues to move closer to Wang Puzhong's embrace.

"Market Insights" has learned that Meituan has officially sent an internal email stating that the Dianping business unit will be transferred to the core local business segment, with the former Dianping head Zhang Chuan transitioning to the role of company advisor. Subsequently, the Dianping business unit will be fully integrated into the core local business, with Li Shubin concurrently serving as its head. Xiao Fei, the former head of the SaaS business unit, will take on the role of head of hardware and software services, directly reporting to Wang Xing.

In December of last year, "Market Insights" had already been informed of this directional change: one of the core objectives was the integration of Dianping into Meituan's core local business segment. While specific details had not yet been finalized at that time, insiders from Meituan indicated that it had been essentially confirmed.

According to sources close to Meituan, this merger aligns with the company's long-term strategy of organizational restructuring: reducing internal friction and enhancing collaboration efficiency. The adjusted organizational structure is expected to play a positive role in growth. Previously, after integrating home delivery and store visits into the core local business, the synergistic effect of resources has already benefited Meituan.

According to a summary obtained by "Market Insights" last year, in the first half of 2024, in terms of on-site group-buying transactions for local living, Douyin's growth began to lag behind Meituan. In the first half of 2024, Meituan's transaction volume before verification and write-off at the transaction end was approximately 450 billion, with a year-on-year growth rate of over 60%. Douyin's transaction volume before verification and write-off in the first half of 2024 was approximately 180 billion, with a year-on-year growth rate of approximately 50%-60%.

Simultaneously, the summary also revealed that Zhang Chuan, the former head of Dianping, would remain at Meituan until the end of 2024 before departing. Currently, Meituan has completed the unification of senior reporting lines, made personnel adjustments, and connected backend systems. However, due to various factors, Zhang Chuan ultimately transitioned to a company advisor in April.

Historically, Meituan has long implemented a dual-platform strategy for Dianping and Meituan. Therefore, in the original organizational structure, Dianping was established as a separate business unit, neither belonging to the Store Visits Business Group, which is closer to its own business, nor to the Home Delivery Business Group.

According to Meituan's conventions, business units usually belong to innovative businesses, such as Meituan Youxuan, Xiaoxiang Supermarket, and other businesses that require long-term investment and have not yet turned a profit. Dianping, which was established in 2003 and once contributed nearly one-third of Meituan's profits, obviously does not fall into this category.

In April of last year, home delivery and store visits were already integrated into the core local business segment. The finalization of the integration of Dianping into the core local business signifies that, at the organizational level, Meituan will achieve a unified structure for its existing mature businesses, ushering in an era of centralized management under Wang Puzhong.

01 Meituan's Seven Adjustments in One Year

According to individuals who have long observed Meituan, after this change regarding Dianping, Meituan's recent high-frequency organizational adjustments may also come to a temporary end.

Based on a review of publicly available market information, since February of last year, in the past year, Meituan has made seven adjustments of varying sizes.

The earliest was in February of last year, when Meituan's Home Delivery Business Group, Store Visits Business Group, Meituan Platform, Basic Research and Development, and other business groups were adjusted to report to Wang Puzhong, a member of the S-team. Wang Xing, senior vice president of Meituan and former president of the Store Visits Business Group, was responsible for Dianping, SaaS, bike-sharing, mobile power banks, and other businesses.

Although Meituan emphasized that the focus of this adjustment was to promote the collaborative development of the "Home Delivery Business Group" and the "Store Visits Business Group", especially actively integrating resources and reducing waste and communication costs in parts with high overlap such as group buying and takeout, organizational structural adjustments inevitably bring about different distributions of personnel focus. Beyond the integration and collaboration of resources on the business side, signs of Wang Puzhong moving towards core businesses have already emerged.

On this basis, Meituan further made personnel adjustments in March. Vice President Wei Wei was responsible for the On-site Dining Business Unit, Zhang Ruoyu succeeded as the head of the takeout fulfillment platform, and Xue Bing, who graduated from campus recruitment, became the head of the takeout business unit.

Entering April, Meituan took further action. The organizational structure of the takeout business unit was adjusted, the direct sales business department was abolished, and the newly appointed takeout head Xue Bing directly managed multiple front-line directly subordinate departments, making management more flat.

The flattening within business units was to prepare for the centralized system at the group level. Some Meituan employees believe that after this adjustment, it allowed Wang Puzhong, the previous main person in charge of the takeout business, to free up more energy and pave the way for becoming the second-in-command of Meituan in mid-April.

In mid-to-late April, Wang Xing issued an internal email announcing the integration of the Meituan Platform, Store Visits Business Group, Home Delivery Business Group, and Basic Research and Development Platform into the "Core Local Business" segment, with Wang Puzhong serving as CEO of Core Local Business.

While Wang Puzhong became the second CEO of Meituan after Wang Xing, Meituan also no longer set up the Store Visits Business Group and Home Delivery Business Group. All departments originally under the two business groups were directly subordinate to "Core Local Business", announcing that Meituan has passed the growth stage of home delivery + store visits and is moving towards a centralized management structure under unified group management.

However, after this adjustment, Meituan did not usher in a grand finale. In August, Wang Xing issued an internal email titled "Continuous Iteration of Company Organization" to announce new progress in organizational structural adjustments. This adjustment mainly focused on the integration of new businesses.

Among them, the Kuailv, Xiaoxiang, and Youxuan business units were merged into "Grocery Retail", led by Guo Wanhuai; the overseas business was renamed "Keeta", led by Qiu Guangyu; among them, Meituan's SaaS, bike-sharing, mobile power bank, and other businesses were merged into "Hardware and Software Services", led by Zhang Chuan.

A noteworthy detail is that in this adjustment, the Dianping business, which belonged to Zhang Chuan in February, was no longer mentioned.

At the end of September, Meituan's Core Local Business issued an internal email announcing a new round of organizational structural adjustments. The "Core Local Business/Hotel Travel" and "Core Local Business/Pharmaceutical Health Business Units" were established, and the new managers of these two businesses will report to Wang Puzhong, CEO of Meituan's Core Local Business segment.

These businesses were previously mainly distributed within the Store Visits Business Group, so it is also believed that Meituan has further strengthened the integration effect of store visits and home delivery.

However, interestingly, among the seven adjustments in the past year, there were not many involving the Dianping business unit. Therefore, regarding the changes in the Dianping business unit, some Meituan employees speculate that it may also bring an end to the adjustments of the past year, becoming the grand finale of Meituan's organizational adjustments.

02 Meituan Under Centralized Governance

Compared to the Wang Xing era, where there was a separate person in charge for the Store Visits and Home Delivery segments, after multiple centralized adjustments, under Wang Puzhong's management, Meituan, based on the centralized governance organizational top-level design of Core Local Business, brings more possibilities for mature businesses.

In terms of marketing products, last year Meituan upgraded its previous takeout home delivery membership system to a platform-level membership system, launching Super Members, providing one-stop access to almost all eating, drinking, and entertainment products on the Meituan platform, no longer distinguishing between home delivery and store visits.

The new platform-level membership system is also becoming a powerful tool for driving the synergistic use of resources between store visits and home delivery.

In the past, the synergy between Meituan's home delivery and store visit businesses mainly referred to the "high-frequency driving low-frequency" methodology under Wang Xing's management: that is, using the losses of higher-frequency home delivery businesses to drive traffic and users, in exchange for lower-frequency store visit business revenue and transactions to obtain profits.

However, as both home delivery and store visit businesses have entered a mature stage, this simple traffic resource synergy no longer has much imagination space. Realizing multi-level resource synergies among users has become Wang Puzhong's task in driving the growth space of mature businesses.

A summary shows that under the new membership system, during the test phase for store visits, there were significant differences in the week-on-week growth rate of member purchases, with the highest growth rate reaching 20%. This means that after joining store visit consumption, users' demand for purchasing memberships has increased.

Richer store visit benefits, in turn, bring new member growth. For merchants who join the membership system, more platform coupons will also bring more repeat purchases and traffic.

Beyond the membership system, more new product features integrating store visits and home delivery have been successively launched on the product side. For example, at the product infrastructure level, Meituan launched its self-developed map within the App last September, replacing the third-party map previously used for Meituan's ride-hailing, bike-sharing, and other services. At the same time, within the Meituan App, users can also use navigation through the map.

In October of last year, Meituan began testing the "Local Eating" service in Beijing, Shanghai, and other places. This service is embedded in the takeout service of the Meituan App, overall similar to a takeout version of "Xiaohongshu". Users can share their takeout dining experiences through content creation.

The birth of these product "patches" is mainly attributed to the newly established Platform Product Department of Meituan in March of last year, which, after integrating internal resources for store visits and home delivery, also brought more new experiences at the App level.

However, growth does not necessarily require more people. After the integration of store visit and home delivery businesses, Meituan currently plans to divide the sales end into three teams: transactional sales, online marketing sales, and telemarketing.

Transactional sales are mainly responsible for the sales of transactional products such as group buying and takeout, with similar quality requirements to the original takeout sales. Online marketing sales are mainly responsible for the sales of online marketing products such as store visit advertising products and Merchant Pass. The telemarketing team is responsible for maintaining old customers.

The adjustment of the sales end will bring some impacts. A summary shows that after the integration of home delivery and store visits for the catering business, overall, the scale will be reduced from the original 32,000 to 33,000 people to around 25,000 people. This adjustment is mainly achieved by reducing the number of higher-cost store visit sales personnel and increasing the number of lower-cost telemarketing personnel.

The number of store visit sales personnel is expected to decrease to 6,000 to 7,000, and then further decrease to 3,000 to 4,500. The number of telemarketing personnel is expected to increase to around 2,000. The estimated impact on profit margins after the integration of the catering business will be between 3.5 and 4.5 percentage points.

Last year, Meituan vigorously promoted internal innovations. By constructing a flattened and more centralized organizational structure, Meituan pooled its strengths and strived to maintain market competitiveness. From the results, these adjustments have further expanded the growth space for local mature businesses while also bringing senior management closer to front-line businesses.

The Dianping business unit has long been independent of these adjustments. If the Dianping business unit can be successfully integrated, Wang Puzhong's degree of power concentration and management ability will also take another step up, ushering in the peak time of his career at Meituan.

After all, reviewing the past heads of the Dianping business unit, whether it was Wang Huiwen or Zhang Chuan, they have all made remarkable achievements for Meituan. However, after taking over the management of the Dianping business unit, due to various factors such as timing and competition, they eventually either retired or distanced themselves from the front line of Meituan's business.