Is the era of “everyone is a VIP” upon us?
Following the lingering aftermath of the food delivery wars， Meituan and Alibaba are now locked in another battle， this time over membership programs. Interestingly， their fight isn’t for the prestigious 88VIP members， but rather over free memberships. Both platforms have revamped their free membership tiers， adding a slew of new benefits almost simultaneously.
For those unfamiliar， let’s briefly explain. A “free membership” doesn’t require any additional payment. Instead， the platform assigns membership levels based on your spending habits and activity. Essentially， the more you spend and engage， the higher your status.
This means that across most applications—whether for e-commerce， food delivery， or ride-hailing—you’re likely to find yourself at least at a “Diamond” or “Gold” membership level.
Despite being addressed as a “valued member，” I’ve rarely seen tangible benefits from these free tiers. After all， if even paid memberships offer limited perks， what can one expect from a “free” one? The current landscape of memberships has seen a form of inflation， with tiers escalating from VIP to SSSVIP， often requiring additional payments for features like early access to content. It’s understandable why free memberships might seem like mere digital badges.
However， upon closer examination， it’s clear that while free membership benefits are generally less substantial than paid ones， the disparity between different platforms can be significant. In some cases， users might even switch to a competitor due to underwhelming perks.
Many platform benefits are actually traded in the market for prices ranging from ¥2 to ¥10. For instance， medical beauty services and dental cleanings offered through Alipay are popular items. Users actively monitor platform promotions， with social media buzzing with shared deals as soon as new activities are announced， all to snag a free item like a McDonald’s McChicken.
Recently， there’s been significant buzz about Taobao’s revamped membership system， with claims that users can access 88VIP benefits without paying， and essentially “snatch” 88VIP perks.
Intrigued by the prospect of free benefits， naturally， I delved deeper. Taobao’s overhaul primarily aims to revitalize its previously less impactful “Taobao Value.” This system now integrates its sister platforms like Ele.me， Fliggy， and Hema. Spend ¥10 or place one order daily on Ele.me or Fliggy to earn 0.8 Taobao Value points， which can be redeemed for membership levels ranging from Bronze to Black Diamond， totaling six tiers.
A quick calculation reveals that regular users of these platforms can easily achieve “Gold” membership status from the outset. All members can enjoy daily coupons， “Billion Dollar Subsidy” deals， movie viewing discounts， birthday gifts， direct access to Fliggy membership， exclusive hotel rates， and Gaode (AutoNavi) travel voucher packs.
However， these initial benefits are quite limited. It’s only upon reaching “Platinum” membership that perks become more substantial. This includes Gaode’s 6-tier membership benefits such as free order cancellations and dedicated VIP customer service. For Fliggy， benefits extend to travel vouchers， direct access to F5 membership， and gold status with 31 hotel chains. Cainiao offers 12% off shipping coupons， and accumulated points can be redeemed for late check-outs， room upgrades， and an 85% discount with “Youzhu Hui.”
Meituan’s approach is similar， with a straightforward slogan: “The more you use， the more you save.” Each ¥1 spent earns 1 growth point， with the highest tier， Black Diamond， typically requiring ¥30，000 to ¥40，000 in spending. Like Taobao， all members receive benefits such as free hotel breakfast， late check-out， membership coupons， and exclusive pricing. Beyond Platinum， hotel benefits significantly increase.
While Taobao partners with Huazhu Hotels， Meituan has collaborated with the established hotel group Marriott. “As long as you are a Meituan user， you will be granted Marriott membership，” with Black Diamond members receiving gold status and Black Gold members receiving silver status. This also includes bundled coupons and late check-out services.
Additional perks include “priority queuing，” “priority dispatch，” 1-on-1 expedited delivery for food orders， fast-track airport services， and weekly 3-day Tencent Video VIP coupons. Occasional limited-time promotions， such as those in July and August this year offering Black Diamond members free ice cream or coupons， generated significant buzz on social media. The partnership with Disney， offering an annual opportunity for an exclusive card to Black Diamond and Black Gold members， is also considered quite valuable.
Having briefly reviewed the upgrades on both platforms， the question arises: why are they shifting focus from subsidies to membership benefits? Free memberships have existed for a while， but their importance has grown this year. Gaode， for instance， has enhanced its membership benefits twice， in January and August， adding over ten items including ride discounts， faster response times， and dedicated customer service. Didi has also forged partnerships with hotel chains like Huazhu， Haidilao， Atour， and Hilton， granting V8 Didi members equivalent elite status in these other programs.
The renewed emphasis and promotion of these programs stem from the reality that even large companies have finite resources. Traditional methods of attracting new users through exposure and low-cost promotions are yielding diminishing returns. The hyper-competitive landscape， exemplified by the intense food delivery wars this year， has driven up acquisition costs. With user growth plateauing， the focus has shifted from rapid expansion to meticulous user retention and extending customer lifetime value.
Platforms are now looking to extract value from their most engaged and highest-spending users. This strategy allows for precise user segmentation. Meituan employees refer to this as “white-boxing，” where， for example， Black Gold and above members have an average annual consumption of over ¥10，000， and Black Diamond members exceed ¥30，000. Further analysis reveals insights like platinum and above members being younger， with over half under 30， and demonstrating a higher expenditure on travel and leisure， with per capita spending in inter-city travel being 342% higher than other tiers. Meituan’s Flash Purchase 618 sales report indicated that Black Diamond members spent three times more than average members during the promotion.
This aligns with the Pareto principle， which suggests that 20% of key customers or products often contribute to 80% of a company’s profits. A small segment of core users generates the majority of a platform’s revenue， akin to “whales” or dedicated players in a game. Enhancing the loyalty and satisfaction of these users has become paramount.
But will this strategy by the major platforms prove effective? The success hinges on the sincerity of these offers. The reason many find these benefits unappealing likely lies in their “usability” and “value.” The perks often feel like a patchwork collection of minor concessions from various departments or merchants—they touch upon many areas but lack significant impact. For instance， free beauty treatments or teeth cleanings might be advertised， but upon trying to book， one finds that the partnered local clinics are often fully booked.
While free hotel breakfasts and upgrades sound attractive， they are frequently limited to a select number of partner hotels. Benefits with high redemption thresholds and limited applicability are unlikely to win over high-value users.
Furthermore， many of these benefits may not represent a significant financial outlay for the platforms themselves. Hotel memberships， for example， are often a mutually beneficial partnership. Hotels are eager to collaborate with major platforms as an alternative traffic source beyond traditional Online Travel Agencies (OTAs). At Meituan’s Accommodation Ecosystem Partner Conference this year， Meituan reported an 88% year-on-year increase in bookings for Marriott hotels on its platform within one day of the membership system launch. Moreover， these platforms provide access to a younger demographic; orders from users born after 1995 increased by over 148%. Thus， the perceived concessions from platforms are often part of a larger business strategy.
By collaborating with other businesses， platforms can expand their reach and offer benefits that also serve to bolster their own service offerings. Some platforms now boast dozens of benefits; Ctrip， for instance， lists 46， spanning shopping， entertainment， and more.
Simultaneously， free memberships serve as an internal business integration tool， using bundled benefits to encourage users to explore and utilize various services within the platform. Taobao， for instance， subtly guides users toward its 88VIP benefits. As a Diamond member， three out of four travel and accommodation discounts I’m eligible for are directly tied to 88VIP.
Moreover， each membership level is tied to your usage history and spending on the platform， much like leveling up in a game. The accumulated time and money invested create a sunk cost fallacy， making users hesitant to switch to competitor platforms due to the potential loss of their hard-earned status and privileges. For the platforms， offering minor benefits to free members is ultimately a net positive.
What appears to be a “welfare war” is， in reality， a fight to retain core users in an era of diminishing traffic dividends. Currently， this is in the nascent stage of competition， with strategies remaining somewhat conservative. Once all platforms offer similar benefits， and everyone is a “Marriott member，” these perks will devalue and cease to create differentiation. It’s likely that after a few more years， or perhaps with a disruptive innovation， another major upgrade cycle will begin.
Therefore， my advice is to keep the competition going and let the war intensify.
