Interview with Zhou Mo of Meituan: Membership is a major matter for Meituan, pointing to a bigger blueprint.

Text by Ren Cairu

Edited by Qiao Qian

At the beginning of 2024, Zhou Mo was transferred from Meituan's Food Delivery Division to the Meituan Platform, taking charge of the User Growth and Operations Department. The "S-level" project "Shen Member", which integrates the home delivery and in-store services, was the first thing he did in his new position. It integrated the "Shen Coupons", originally mainly used in food delivery, into more services.

This move laid the foundation for Meituan to launch a real membership system. A universal benefit applicable to all services with controllable marginal costs is the basis for a membership system, which Meituan lacked in the past. Building a membership system has been a long - cherished wish of Meituan. "The S-team discusses the possibility of doing it every once in a while," Zhou Mo told 36Kr.

On March 31st, "Meituan Membership" finally made its debut. The Shen Coupons (formerly from the "Shen Member" program) are the universal and core benefits. Benefits in areas such as hotels, transportation, daily life, and audio - visual entertainment are also being added. A membership system covering all aspects of life, including food, accommodation, transportation, travel, entertainment, shopping, and medical services, has emerged.

In the context of the Internet industry, Meituan Membership is a latecomer. However, in a sense, it has arrived at just the right time.

Besides the opportunities brought by the integration of Shen Coupons, customer loyalty of existing users is more important for Meituan today. In 2024, Meituan's annual transaction users reached 770 million, covering more than half of China's population. "With a large enough user base, the growth space for new customers is bound to shrink. We need to increase the consumption frequency of existing customers," Zhou Mo said.

In the overall business narrative, membership systems have a long history and come in various types. In 2005, Amazon launched its Prime membership, hailed as "the most successful and disruptive membership program on the Internet." Alibaba's 88VIP and JD.com's PLUS membership were launched in 2018 and 2015 respectively. They are all paid memberships, using differentiated high - quality services to retain the most loyal customers. The memberships of Sam's Club and Costco act as "tickets", directly targeting their desired customer groups. In addition, point - based systems are also simple forms of membership.

However, in Zhou Mo's view, as a latecomer, Meituan Membership still has limited room to copy others. Meituan has chosen to build an all - user incentive system, and the corresponding benefits span both online and offline and multiple fields.

Based on its user base of 770 million, Meituan will use the membership system to achieve "transparent" and explicit user segmentation. As far as we can see, it has two impacts. Firstly, it helps merchants allocate their limited marketing resources to the target customer groups more effectively, achieving more efficient marketing. Secondly, it encourages users to consume more frequently across different industries and fields. It may become a new driving force for user consumption. "For example, when a user is just one cup of coffee, one night in a hotel, or one flight ticket away from upgrading, relevant recommendations are more likely to stimulate their consumption."

In the past year, "supply - side innovation" has been a frequently mentioned term by Meituan. Projects like Shen Qiangshou, Pinhaofan, and satellite stores in the food delivery business are all examples. Today's Meituan Membership may be an innovation in the supply - side of marketing resources and perhaps Meituan's solution to the growth problem.

"We hope that Meituan Membership will become a membership card that everyone in China has," Zhou Mo told 36Kr. This is also a vision and consensus that has excited the internal team. Given Meituan's wide range of business areas and the integration among them, this vision seems reasonable.

The following is a dialogue between 36Kr and Zhou Mo, the head of Meituan's user growth:

Years of vision and a good timing

36Kr: Did the new membership project start to be promoted in November last year?

Zhou Mo: The idea may have emerged earlier. The decision to launch it was made after the integration of Shen Coupons, around October or November last year.

36Kr: When the initial decision to integrate the membership was made, who was involved in the decision - making, and what were their expectations?

Zhou Mo: This is quite detailed, and I can't name specific people. It was both a top - down and bottom - up process. In the early days, the S - team would discuss the possibility of Meituan launching a membership system every once in a while.

36Kr: How early was that?

Zhou Mo: It was five years ago. Since Meituan covers so many aspects of life, a membership card that combines so many fields would be great. So, we've always wanted to do it. The top - down thinking has never stopped, but each time, we spent a lot of effort demonstrating its feasibility and risks.

36Kr: You've discussed it many times in the past. Why did you decide to push it forward vigorously at this time?

Zhou Mo: The starting point of the membership system is to increase the consumption frequency of existing customers because the value of existing customers is greater. In the past, when the business was growing rapidly and driven by new customers, this project had a relatively lower priority. Now, with hundreds of millions of annual transaction users, the growth of new customers is bound to slow down, and we need to increase the consumption frequency of existing customers.

Moreover, one of the difficulties in building a membership system is finding a universal benefit for all users, preferably with controllable marginal costs. Meituan used to lack a benefit point that was suitable for all services. Now, with the integration of Shen Coupons, we are qualified to launch a real membership system.

36Kr: So, Shen Coupons are a product with relatively low marginal costs.

Zhou Mo: Firstly, they offer flexibility in terms of value. Compared with the "point - based proportional redemption" model, the value of Shen Coupons is more dynamic. For example, a 5 - yuan coupon can be inflated to different values and can be inflated differently according to categories and profit margins. Secondly, there is a lot of flexibility in terms of the number of coupons and other thresholds.

So, it depends on what we are comparing with. Compared with simple full - discount promotions and point - based redemptions, the marginal cost of Shen Coupons is slightly better. However, benefits like airline "upgrade" and "skip - the - queue" privileges, as well as audio - visual membership cards, have more controllable marginal costs than Shen Coupons.

36Kr: What was the "bottom - up" part in promoting this project?

Zhou Mo: The integration of Shen Coupons, or the Shen Member program, showed us an opportunity and raised a question: What could Shen Coupons be? In the past, they might have been a form of currency or an incentive to maintain user loyalty. As we thought about it, it was easy to come up with the idea that they could become a membership system. After raising this point, we discussed it from the perspective of the core local business, and the whole company quickly reached a consensus.

36Kr: When was this consensus formed, and what was it specifically?

Zhou Mo: It was when we were formulating the annual plan at the end of last year. The consensus was no longer about whether to do it or not but more specific. Firstly, we should not measure it by short - term goals. Secondly, we expect Meituan Membership to have growth momentum for five, ten years, or even longer. We believe that Meituan Membership may become a membership card that everyone has, not limited to online use.

Membership is infrastructure, not a business

36Kr: In the membership benefits this time, the Shen Coupon package costs 2.99 yuan per card. How was this price determined?

Zhou Mo: From Meituan's perspective, calculating short - term accounts will definitely be a challenge. But the first thing is to provide users with definite benefits. At the same low price, users at each level can get a corresponding number of coupons. There wasn't much consideration in setting the specific price because no matter how we calculate, there will be a loss.

36Kr: Is there a big difference in the amount of loss?

Zhou Mo: There are many uncertainties. We are willing to accept short - term losses to reward users, hoping that users will be motivated to upgrade to higher levels. I expect the returns to come from the subsequent improvement and upgrading of the user level system. It's difficult to calculate this at the moment. How many gold members will be willing to upgrade to platinum at a price of 2.99 yuan? And at 3.99 yuan? It can't be precisely calculated.

36Kr: Is there an expected time for breaking even?

Zhou Mo: When we talk about "breaking even", we are treating it as a business. But today, the membership system is not positioned as a business but more like a set of underlying infrastructure.

36Kr: How should we understand "infrastructure"?

Zhou Mo: In the past, Internet companies' operations and marketing were based on algorithmic recommendations, which were actually a "black box". Operators might not even know who to send push notifications to. I think the essence of the membership level is a "transparent box". It is more certain what level each user is at and what kind of activities they are suitable for. So, for each business, membership becomes a way to conduct marketing based on this transparent box. For example, the best resources can be subsidized to black diamond users. Each business calculates its own accounts, and what Meituan Membership needs to do is to make users feel that this system is valuable.

36Kr: The measurement indicator for a business might be profitability. What indicators should be used to measure the success of the membership system?

Zhou Mo: In the short term, I won't impose any indicator constraints on the membership system. Generally speaking, what we expect is for users to have a good impression of this membership system and like the membership benefits.

If we have to convert it into indicators, it could be the redemption rate and usage rate of certain benefits. At a higher level, we could also set goals for membership upgrades, such as how many members will upgrade from gold to platinum, black gold, or black diamond in a year. We've had these discussions but finally decided not to set such indicators.

36Kr: Do you mean that the ROI of the membership system is not strictly evaluated at present?

Zhou Mo: Yes. Each company has a different definition of ROI, but generally speaking, it means how much money can be earned for every dollar spent. It's difficult to calculate this for the membership system at present. We have a concept called LTV (Lifetime Value). Spending one dollar might result in a loss in the short term, but there could be greater returns in the next year. For example, providing black diamond members with a box experience at a concert might not seem cost - effective in the short term, but it will definitely enhance their favorability towards Meituan in the long run.

Meituan Membership should not be restricted by short - sighted quantitative indicators at this stage, or it will lose its original intention.

36Kr: Do you have any benchmarking objects?

Zhou Mo: We've really thought about this. There are many types of membership systems in the industry. Some are "ticket - based", such as Costco and Sam's Club. Others, like 88VIP, are paid memberships where users pay for better services. Their core is to "lock in a certain group of users". The second type is the point - based system, such as Rakuten in Japan, where points can be used for consumption.

Today, Meituan has actually chosen an all - user incentive system. Each user reaches different levels based on their past consumption behavior and gets different benefits. If we have to find a benchmark, the airline membership system is a good one, but it is only limited to the aviation field, while we aim to cover multiple fields.

36Kr: Why were these two types not chosen?

Zhou Mo: On the one hand, we want to serve all users and hope that members at each level will be motivated. Secondly, we are not building a business but a set of basic capabilities to explicitly segment Meituan's hundreds of millions of users. This segmentation should be available to all players in the industry. For example, when a merchant wants to allocate its budget to a certain group of users, it can find them in this system. We are aiming for a bigger picture.

36Kr: Previously, the logic of the Shen Member program was to attract users from food delivery to other services. Is this still the core for Meituan Membership?

Zhou Mo: I think the term "attracting traffic" is not accurate. In fact, it is easier to drive low - frequency services with high - frequency ones than the other way around. Since food delivery has the relatively highest frequency among all Meituan products, many things are based on food delivery.

However, for food delivery, it is not about diverting traffic. Take Shen Coupons as an example. When they were integrated last year, we were most worried that users would use the coupons for other services, which might reduce the frequency of food delivery. But in the end, we found the opposite. Users actually bought more coupons.

36Kr: Has a new service like Meituan Select joined the membership system?

Zhou Mo: We are in communication, but it hasn't been finalized yet. One definite consensus is that "Meituan Membership" will be the only membership system in the Meituan ecosystem in the future. The original hotel and travel memberships and bike - sharing memberships may no longer use the name "membership", but the specific integration method is still under discussion and will take some time.

Solving business pain points and merchants' pain points

36Kr: Is your current focus to discuss with various business lines to include their benefits in the membership system?

Zhou Mo: To be precise, it's not about including benefits in the membership system but about getting everyone to think about how to transform their user operations based on the new system.

36Kr: Is this work challenging? For example, the other party may not be very enthusiastic.

Zhou Mo: There will definitely be challenges. But many businesses also have their own pain points. I also came from the food delivery business. When operating a business, you will find that many benefits cannot be provided to the users you want to target.

36Kr: For example?

Zhou Mo: The simplest example is pricing. The law prohibits price discrimination, but merchants want to offer discounted prices to high - quality users, and businesses also want to accurately allocate subsidies to a certain group of users. Now, they have an additional option, which is to allocate based on the membership system.

So, what we are doing is providing an open - ended capability to businesses, rather than asking businesses for benefits. There are already too many benefits from various businesses waiting to be included.

36Kr: Which ones are at the forefront?

Zhou Mo: Great benefits from food delivery, flash sales, and accommodation are being added. But we are keeping the initial preparations simple. For example, we conduct some limited - time, flash marketing activities for specific membership levels every week and collect data after the activities. This way, we can gradually optimize the process during the complex product development.

36Kr: In your research, what is the biggest pain point for merchants?

Zhou Mo: Marketing resources are not targeted at truly high - quality users. In many cases, they are taken away by "deal - hunters" who only come during promotions and disappear when there are no activities. Currently, the forced low - price competition in various industries is very intense, and Meituan is also trying to reduce ineffective competition. With the membership system, the marketing efficiency of merchants will be greatly improved.

36Kr: So, the essence of Meituan Membership is still user segmentation.

Zhou Mo: It is explicit user segmentation. On the one hand, merchants can choose to provide benefits to users at a certain level, which will improve marketing efficiency. On the other hand, users may think that "letting the benefits expire is a loss", which can better stimulate high - quality users to try different services on Meituan. This is why I say that Meituan has the greatest chance of making its membership card a must - have for everyone because cross - industry services have more advantages than single - category services.

36Kr: This more precise user segmentation should improve the effectiveness of merchants' promotions on Meituan.

Zhou Mo: Definitely.

36Kr: What impact will this have on your advertising revenue?

Zhou Mo: Merchants' marketing budgets usually have two outlets. One is to buy traffic, which is related to advertising revenue, but the larger part is actually subsidies. The membership system currently mainly focuses on re - allocating the part of merchants' marketing budgets that were originally used for subsidies to users and has no direct relation to the purchase of traffic resources.

36Kr: