Meituan’s Community Grocery Unit to Conduct New Round of Adjustments

On May 15, sources from Meituan disclosed to Chinese media outlet Powerhouse that Meituan Youxuan, the community grocery unit, will begin a new round of adjustments recently.

The main adjustment is to establish a provincial system to replace the regional system inside Meituan Youxuan, and give operational decision-making power to provincial leaders, while weakening the management authority of business departments and closing regional operating departments. An insider revealed that the announcement of the adjustment will be made public this week, and there may still be changes in the situation.

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The change this time does not continue the adjustments made before, but is a new beginning. The core of this adjustment is the provincial system. Each provincial team has operational decision-making power, reports to business heads, and takes responsibility for profits and losses. At the same time, departments such as business planning, merchandise, regional operations and platform operations will be relatively weakened,” said one insider.

This has always been one of the problems with Meituan Youxuan. In the previous organizational structure, the regions played more of a role in supporting business departments. For example, corresponding departments were responsible for planning warehousing and logistics, which were then delegated to be executed at various levels by regions and cities.

In the view of some Meituan Youxuan employees, such organizational structure has several problems. Firstly, there is personnel redundancy. Secondly, unclear responsibilities between business departments. Thirdly, slow response due to multiple layers of reporting and lack of flexibility for frontline staff. Fourthly, it is easy to cause duplication of resource consumption. According to Meituan‘s financial report, by 2022 the new businesses that Meituan Youxuan belongs to have accumulated losses reaching 28.4 billion yuan, which is the largest loss-making business sector for Meituan and within this sector itself, Meituan Youxuan is a major contributor.