For the fourth time, Meituan is now ramping up its deployment of shared power banks across many cities in China. 

According to some sources, the merchant acquisition team for the power bank sharing business has been hiring, including poaching from incumbent players: Jiedian, Xiaodian, Energy Monster and Laidian.

Prior to the covid-19 outbreak, all of the four players had already attained good profitability. 

Easy entry 

Unlike other players, Meituan is already a superapp, with multiple touchpoints to both F&B merchants and consumers: food delivery, reviews, hotel booking etc. 

For consumers, adding a button on the Meituan app is quite easy – and if positioned right, would eliminate customers’ need for a dedicated shared power bank app. 

That ‘right’ includes having enough spots where consumers can easily rent a shared power bank. For that Meituan has significant experience acquiring merchants – it also has a large database of merchants who already work with it in other areas such as food delivery. 

And it is aggressive enough. It can be done if the leadership is serious enough. 

Unlike ride hailing, where Meituan launched a not very successful assault on Didi, shared power banks are not costing that much to build (or even to subsidise), and can take time to be built slowly (not that on-demand). 

Use case, rather than profit

Aside from that, Meituan is probably not trying to make profit from this service, at least in the short term. It has demonstrated its strategic patience in its other business areas.

This is a big threat for independent players which depend on profits from the very business of power banks. 

For Meituan, the objective is probably the same as shared bikes – occupying a high frequency use case or customer entry point. It is both customer acquisition and defensive against encroachment from the likes to Allibaba. 

Quite likely, Alibaba will be tempted to acquire an independent player to balance it out. 

What does that leave Jumei, which just went privatised and whose main business is now power bank sharing instead of ecommerce?

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.