Why was Meituan's moat breached? Let's talk about the food delivery war
Hello everyone, I'm Jack.
I'm doing something foolish: writing about all the constituent companies of the S&P 500 in chronological order of their establishment.
Steve Jobs once said, "Ultimately, it all comes down to taste."
Taste is the ability to recognize excellence. In the world of investing, this taste first points to the ability to understand business models. As Buffett emphasizes, to evaluate a company, one must start with its business model. Only by truly "seeing" can one perceive what excellence is, and taste can form standards through insight.
Buffett's method is extremely simple: turn every page. He once read thousands of pages of the "Moody's Manual" twice, leaving no corner untouched. When Munger was surprised by his familiarity with a small California company, the answer was still—he had already "turned that page."
Therefore, we choose to start with the S&P 500. Turning every page is the first step in building taste.
This is a marathon about "value," a journey of ever-advancing cognition. It is the mutual recognition among peers and a journey from walking alone under a solitary lamp to shining brightly among the stars.
I suggest following first, then reading, and let's dive deep together.
So far, I've reintroduced you to:
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In the last article, we talked about the ninth-largest giant in the U.S., McKesson.
Many readers left messages saying, "Your logic doesn't make sense."
You said McKesson, with its "extreme efficiency" and "extremely low gross margin" (around 4%), outlasted even Amazon and built an impregnable moat.
What about China's Meituan?
Whether it's food delivery or instant retail, Meituan's gross margin is pitifully low, and its efficiency is pushed to the human limit (riders practically fly). Logically, Meituan should have dominated the market like McKesson, with no one daring to challenge it.
But the reality is, Meituan has had a very rough few years. First, Douyin (TikTok) aggressively encroached on the local services market, and then JD.com and Taobao launched fierce attacks in "instant retail" (everything delivered to your door).
Especially recently, Alibaba has been pouring money into supporting Taobao's flash sales, forcing Meituan to burn cash on subsidies, and even its latest quarterly earnings report has fallen back into the quagmire of losses.
Why does the same "low gross margin + high efficiency" formula raise a stable "rent-collecting" dragon in the U.S. but only a "kangaroo" running ragged in China?
Today, let's dissect the new wave of food delivery and instant retail wars set to explode in 2025.
1
B2B "Pipelines" vs. B2C "Waiters"
On the surface, both McKesson and Meituan are "movers."
McKesson moves drugs; Meituan moves meals (and groceries).
But the essence of their businesses is different: one is B2B (business-to-business), and the other is B2C (business-to-consumer).
McKesson operates a B2B business. Its upstream partners are pharmaceutical companies like Pfizer, and its downstream partners are CVS pharmacies and hospitals. In the highly mature, even somewhat rigid social structure of the U.S., once such relationships are established, they are "welded shut."
This is called a "pipeline business." Once a pipeline is buried underground, no one digs it up unless the city is demolished.
How hard is it for a hospital to replace McKesson? Its inventory system, settlement system, and cold chain standards are all tied to McKesson. Switching suppliers means reshaping the entire hospital's operational processes, which is extremely risky.
Thus, McKesson's customer stickiness is extremely high. As long as I don't make big mistakes, you won't switch to save a few cents.
What about Meituan? It operates a B2C business.
Wang Xing faces hundreds of millions of consumers like you and me—picky, shrewd, and utterly disloyal. This is called the "waiter business."
Do we have any emotional attachment to Meituan?
Don't kid yourself. You have both Meituan and Ele.me installed on your phone, maybe even JD.com and Douyin. At noon today, you order a serving of braised chicken rice: Meituan charges 20 yuan, Ele.me charges 19.5 yuan. That one second of hesitation is the greatest insult to your hard-earned money.
Even if Taobao Flash Sales offers a 5-yuan coupon, our fingers swipe uncontrollably in that moment.
This is the original sin of the B2C waiter business: users have no memory, only interests.
Meituan's painstakingly built network of millions of riders is indeed the pinnacle of efficiency. But for consumers, this is just a "basic standard."
Like buying bottled water—we don't feel grateful to the corner store. But if the packaging is damaged or the store next door sells it cheaper, we switch immediately.
Your cost of switching platforms is zero.
This is Meituan's biggest pain point: low gross margins in B2C don't form a moat.
Because B2C users are emotional, greedy, and demand not just cheap but also speed.
McKesson's low gross margins deterred Amazon because Amazon crunched the numbers and found no profit to be made and no customers to poach.
But when Taobao and JD.com attack Meituan, they don't care whether food delivery itself is profitable. They want a "high-frequency traffic entry point."
It's like this: McKesson is the water pipes buried in your home's walls—no one smashes walls to replace pipes for fun. Meituan is the waiter who brings you water. If the waiter at the next table is prettier or doesn't ask for tips, you switch immediately.
McKesson's low gross margins buy "irreplaceability." Meituan's low gross margins buy only a "temporary entry ticket."
As long as someone outside the wall has money (like Alibaba, Douyin) and is willing to subsidize users' meals, the wall Meituan painstakingly built will start leaking instantly.
2
Dimensional Reduction Strike: Why Can Taobao Flash Sales Hurt Meituan?
Why is the 2025 battle different from before?
Because the nature of the war has changed.
It used to be the "food delivery war," where Meituan had an absolute density advantage with riders, and Ele.me couldn't compete.
Now it's the "everything-to-your-door war" (instant retail).
At midnight, you want to buy an iPhone, a carton of milk, or a box of cold medicine. Now, not only can Meituan deliver, but Taobao and JD.com can too.
This leads to the second reason Meituan can't defend its moat: the dimensions of its competitors are different.
For McKesson, its competitors can only be other logistics companies.
But for Meituan, its competitors are super e-commerce platforms.
Why does Taobao attack Meituan? Because Taobao realizes that young people today don't want to wait for deliveries—they want "30-minute delivery." If Taobao doesn't do instant retail, its traffic will be sucked dry by Meituan.
So, Taobao's fight with Meituan isn't about making money from food delivery but about "defending against traffic loss."
This is deadly.
Meituan relies on delivery orders to make a living—this is its lifeblood.
Taobao (including Douyin) treats delivery orders as "customer acquisition costs" or "ecosystem supplements."
When your main business is just someone else's "advertising expense," how do you fight?
This explains why Meituan is stuck in losses or profit declines. Beyond that, Alibaba and JD.com also hold strong supply chains (inventory sources).
Meituan started with food delivery. Its core asset is "legs" (riders), but it has no "goods."
Restaurant meals are made to order; Meituan doesn't need to stockpile.
But when the battlefield shifts to fast-moving consumer goods, electronics, and cosmetics, Meituan is in trouble. It has legs, but the goods are in supermarkets and convenience stores. Meituan can only act as a courier, earning a tiny delivery fee. Meituan launched "Little Elephant Supermarket," but it must build lightning warehouses and develop supply chains.
And Taobao? The Alibaba ecosystem has operated for twenty years, holding the strongest supply chains (Tmall Supermarket, RT-Mart, Freshippo, and countless brand merchants).
This is dimensional reduction strike.
Taobao's logic in attacking Meituan is downright ruthless:
"I have the goods, I have the traffic—I just need someone to deliver, and I can do this business."
Directly cutting into Meituan's core territory.
3
2025: The Endless War Without an End
Back to the original question: Why can't Meituan use low profits and high efficiency to defend its moat?
Because McKesson's low profits buy "irreplaceability" (deep B2B integration). Meituan's low profits buy only "temporary leadership" (B2C users who defect at any moment).
Since Meituan can't become a rent-collecting McKesson, what will be the outcome of this battle starting in 2025?
Will it be like the "Groupon Wars" of the past, burning cash until death?
I don't think so. The most likely outcome is: a dynamic balance of oligopolistic division.
First, Meituan won't die.
Though it lacks B2B stickiness, Meituan has a moat in the physical sense: rider density.
Like McKesson's warehouse network, Meituan's millions of riders form the most efficient delivery network in China today.
Though Taobao and Douyin have money and traffic, rebuilding a delivery network as dense, fast, and capillary-penetrating as Meituan's will take considerable time.
This ensures Meituan remains the leader in extreme delivery experiences.
Second, the era of high profits will never come.
This is what pains Meituan's investors the most.
McKesson, by monopolizing pipelines, can comfortably earn that 1% profit and use the cash flow from payment terms to boost capital returns. It also aggressively repurchases shares to drive up its stock price.
But Meituan is different. If it dares to raise profit margins even slightly, Taobao and Douyin will immediately issue coupons to steal users away.
Meituan is destined to be a "hard business" company.
It must stay vigilant at all times, spend every penny on improving efficiency, and keep burning cash alongside the giants.
In 2025, there will be no winner-takes-all.
Meituan will hold onto its "food" and "urgent needs" base, becoming urban China's infrastructure—but without massive profits.
Taobao/JD.com will carve out the instant delivery share of "high-ticket items" (like phones and cosmetics).
Douyin will continue to harass Meituan in "in-store group buys," using algorithms to capture impulse purchases.
Wang Xing must remain in constant battle mode. Every penny earned must be reinvested in lightning warehouses, drone R&D, and rider subsidies.
Meituan's fate is to keep running in this razor-thin-margin industry—because if it stops, it gets cut.
4
Conclusion
As I write this, I can't help but reflect.
We often envy American companies like McKesson and Coca-Cola—once they build a moat, they can feast on a century of dividends. That's real "Old Money."
But Chinese companies seem born to be "warriors."
From the "Groupon Wars" to the "Food Delivery Wars" to today's "Everything-to-Your-Door" battle, Meituan has hardly had a single peaceful day. With extreme efficiency, it has served hundreds of millions of Chinese, achieving the fastest food delivery speeds in the world.
Yet even so, it has no sense of security.
Because beyond the walls, there are always barbarians with telescopes looking for cracks, and gods ready to defect for a 50-cent coupon.
This is the charm—and cruelty—of Chinese business.
Cruel, because competition is everywhere, and no one can monopolize everything.
Charming, because competition is everywhere, and new species are always emerging.
The only winners may be us, the consumers.
After all, as long as the giants keep fighting, our food will arrive faster, and our coupons will grow bigger.
This, too, is a Chinese-style business miracle—built on the anxiety of countless internet giants.
End of Article—Qin King Circles the Pillar
This article was produced by an ordinary netizen using modern methods, imitating the style of self-media teachers, with significant contributions from Gemini.
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Hello everyone, I've been compiling the constituents of the S&P 500 recently.
Why am I doing this?
Because time is the most merciless judge and the fairest coronator in the business world.
In this series, I will follow the guidance of the "Lindy Effect"—for things that do not die naturally (like technology, ideas, companies), the longer they have existed, the longer they are likely to exist in the future.
What we're dissecting isn't the rise and fall of a few K-lines but the "bones" and "muscles" of business models.
To this end, I've deliberately excluded Financials and Utilities.
Why?
Because the balance sheets of banks and insurers are like an opaque black box—leverage is their oxygen and their poison. Utilities, though stable, rely more on 特许经营权 and regulatory 红利， lacking the 野性 forged in free-market battles.
We're searching for those "non-financial entities" that have survived brutal free competition.
Writing about them in order of establishment, we'll see a grand panorama:
From 18th-century canals and flour mills to 19th-century railroads and steel, to 20th-century consumer goods and oil, and finally to 21st-century Silicon Valley chips.
This isn't just a list of S&P 500 companies—it's a living history of capitalist evolution.
In the journey ahead, I'll take you to uncover the secrets of "enduring greatness," answering these core questions:
The genes of 周期穿越: Why have some companies survived the Civil War, the Great Depression, two World Wars, and the dot-com bubble, still standing tall? How did they 完成 "elephant pivots" amid technological upheaval?
The essence of moats: Is it unparalleled scale effects? Brand mindsets that resist inflation? Or 某些极高的转换成本？ We'll 剥开财报数字 to see the 底层竞争优势。
The first principles of business: Whether selling drugs, soda, or software, the 底层逻辑 of good businesses is often universal. We'll 提炼 those "unchanging" truths from these centenarians.
Some call the S&P 500 "Blue Star Beta," meaning the average return of Earth's economic growth. But to me, these 500 companies hold the wisdom of human organizational collaboration.
This is a marathon. If you too believe in the power of "getting rich slowly," if you too have an almost obsessive curiosity about "good businesses."
Follow me. We start with the oldest companies. This journey begins now.
Completed so far:
【1】Colgate-Palmolive 1806: My Worthless Dog Eats Better Than Me, and Wall Street Is Losing It
【4】Deere & Company 1837: Wheeled Robots Before Tesla? A 188-Year-Old Tractor Factory?
【5】P&G 1837: The 黄埔军校 of Global Business Leaders, Costco's Biggest Victim?
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