03 most interesting news today
- #retail. Fortune
Walmart on online retailing. Walmart accounts for 56% grocery revenue in the US, which creates a sustainable number of visiting customers to their website every day. Instead of shifting the focus to other non-grocery merchandise, the CEO said that they will look at the overall growth of digital business as a whole.
- #startupvaluation. Thesaigontimes
A lesson from the failure in WeWork’ valuation, which led to their IPO scandal. Analyst used Community Adjusted EBITDA (a non GAAP number) to mislead investors.
- #airline. Morningbrew
Tasks for the new CEO of Boeing. #1 Get Boeing flying again, as it has already pulled many US suppliers down. #2 Restore trust, Boeing is having “new” culture of prioritizing speed over safety.
Summary of my favorite topic: Meituan Dianping’s Path towards Profitability
Meituan Dianping (MD), Super App in China, just became profitable last quarter, after 6 years of cash burning in a crowded market. This article illustrates what it is and why it can make profit in a notorious loss-making food delivery service.
MD offers users a wide range of services, ranging from food delivery, to group coupon, household cleaning and hotel booking. Normally MD users first came to the app for scouting restaurants or food delivery, but continue with more than 5 services after that. Its users stickiness and retention rate is the highest among other players.
MD food delivery came profitable from economy of scale and increasing revenue from advertising. MD targeted 2-tier cities first, instead of 1-tier to avoid high competition. When the number of order increases, MD groups different orders in one delivery and optimizes its advanced routing algorithms to reduce cost per order. Also, when the app dominates the market, the increasing number of revenue and orders incentivizes SMEs in China to pour money into the app for advertising
Huy Luu's business blog 