Local Douyin, whose takeaway rivers and lakes can be shaken?
Written by Jing Yu
On 23 February, news spread in the business community like wildfire: Douyin Takeaway has moved from the local lifestyle business line to the Douyin e-commerce business line, and is closely integrated with the instant retail business of Hourda.
This can't help but remind people of Douyin's ** delivery business piloted in Beijing, Shanghai, and Chengdu last year, as well as the short-lived heart-warming takeaway internal testing project.
Recalling that in 2021, Douyin tried to cry for the first time and set foot in the field of food delivery, but the internal testing project of XD food delivery did not make much waves. Instead, in August 2022, Douyin joined hands with Ele.me to launch the Ele.me mini-program, which seems to indicate that its ambitions in the food delivery field have not been extinguished. Sure enough, in November 2023, Douyin launched the hourly delivery business, pointing to the instant retail market and going head-to-head with giants such as Meituan Flash Sale and JD.com.
However, just when the outside world thought that Douyin Takeaway would show its strength, the news in December 2023 was poured like a basin of cold water: Douyin Takeaway is scaling back its business, from 30 cities to 5 cities in Chengdu, Changsha, Shanghai, Shenzhen and Fuzhou. This adjustment not only puts a big question mark on the future of Douyin takeaway, but also makes the ** merchants fall into deep anxiety.
At the same time, a series of adjustments have also been made within Douyin. The change in the management of the local life business line, the concurrent appointment of Pu Yanzi, the head of Douyin's commercialization, and the transfer of Zhu Shiyu, the former head of the company, all seem to be laying the groundwork for the integration of the food delivery business. Now, Douyin takeaway is classified as an e-commerce business line, which undoubtedly means that its strategic position has been improved and the reporting object has changed.
It remains to be seen how Wei Wenwen, president of Douyin e-commerce, the Iron Lady who was the head of ByteDance's commercial products, will lead Douyin Takeaway to expand its territory in the field of instant retail. After all, in a market surrounded by strong competitors such as Meituan and JD.com, it is not easy for Douyin Takeaway to break through.
It is worth noting that the launch of the hourly delivery business has brought new opportunities for Douyin takeaway. In the long run, there are still many variables about whether this integration of Douyin takeaway will be successful.
However, regardless of the outcome, we should see the industry trend behind the integration of Douyin Takeaway: the instant retail market has become a new blue ocean for major e-commerce platforms to compete for.
2023 is destined to be a year of change and gunsmoke for the local life field. The big names are coming down, and from the wait and see to the actual battle, every player at the table is gearing up for a big fight. Among them, the battle between Meituan and Douyin is particularly eye-catching.
In recent years, the Internet traffic dividend has gradually disappeared, and major manufacturers have begun to pursue "reducing costs and increasing efficiency". However, in such an environment, the local life service sector is extremely lively. Douyin, Kuaishou, Xiaohongshu, etc. have crossed over one after another, among which Douyin's offensive is the most fierce. With a strong traffic base, it has quickly gained a foothold in the field of local life. In 2022, Douyin's local life GMV surged 7 times year-on-year to 77 billion yuan, covering 50% of China's cities, with more than 2 million cooperative stores.
However, just as Douyin was soaring, Meituan began to fight back. It has launched a series of activities, such as the "418 Coupon Festival", takeaway and in-store discount coupons, etc., in an attempt to regain lost market share. At the same time, Meituan has also increased its investment in live streaming and short **, trying to compete with Douyin in the content field.
This series of combinations has made the already fierce competition even more intense.
In this melee, small and medium-sized businesses also play an important role. They were initially attracted by Douyin's traffic dividends, but as time went on, more and more merchants found that Douyin's operating costs were rising and the marginal benefits were diminishing. As a result, some merchants began to return to Meituan in search of more stable income.
Of course, Meituan and Douyin are not the only two protagonists in the battlefield of local life. Xiaohongshu, Tencent, Ali and other companies are also trying to break this "fairy fight" barrier. They have chosen interest social networking as a new traffic grab, trying to find a new breakthrough in the field of local life.
Douyin's fierce offensive has made Meituan feel unprecedented pressure. According to the financial report for the first quarter of 2023, the ** marketing service revenue of Meituan's core business segment increased by only 10% year-on-year6%, far lower than Tencent and Kuaishou's 170% and 150%。To make matters worse, the gap between Meituan's marketing revenue and commission income growth is widening, and the headwinds for the life services sector are far greater than expected. In the face of Douyin's fierce offensive, how should Meituan take over?
Meituan's 2023 Q1 earnings report.
Douyin features ** and live broadcasts, attracting consumers through content and narrowing the distance with store owners. Meituan, on the other hand, focuses on "matchmaking" and relies more on the level of physical consumption. In the face of the poor socio-economic situation, Meituan's pressure to reduce costs and increase efficiency significantly exceeds that of Douyin. In order to meet the challenge, Meituan must first solve the problem of its own stock pressure.
As a result, Meituan began to shrink its non-core business and focus on its main business. On March 6, Meituan announced that it would abandon its self-operated ride-hailing business and fully shift to an aggregation model to reduce resource and manpower input.
In response to Douyin's content advantages, Meituan saw a move. At the end of March, Meituan Takeaway launched the marketing tool "God in Demand", and Shenzhen took the lead in testing and launching. The tool features big names and big discounts, focusing traffic to drive growth, while breaking the original pricing strategy. What's more striking is that Meituan's inclusion of live streaming and short ** in the "God Sought-after" model highlights its determination to integrate content models.
On April 18, Meituan launched the first live broadcast of the "God Coupon Festival" takeaway, and then posted recruitment notices for live broadcast content operations and other related positions on the recruitment **. During the 618 period, a group of celebrities were invited to enter the "God Sought-after" live broadcast room to build momentum. In July, the homepage of the Meituan app recommended a fixed anchor entrance, and multiple live broadcast rooms were intensively launched. By August 31, Meituan's live GMV exceeded 2 billion yuan. This series of actions shows that Meituan has achieved remarkable results in the field of live broadcasting.
At the same time, Meituan has also increased its investment in the short-term field. Since the internal testing of the "**earn" short function in March, Meituan has set the entrance in the bottom tab bar of the app's homepage and given a large amount of traffic tilt. This function adopts the browsing mode of sliding up and down of a single column of information streams, supports mainstream functions such as following, liking, commenting, and sharing, and has a bonus game of watching and receiving cash red envelopes. Whether it is the page setup or the content function, it is highly similar to Douyin. In August, the short-term business began to be tested in first-tier cities, and the preliminary test significantly strengthened Meituan's confidence.
In the process of trying to reverse the attributes of "strong tools and transactions", Meituan completed the first round of the "home change" strategy through the attack in the field of live broadcast and short **. However, this is not an easy task. Douyin has a significant advantage in the content space, and Meituan still needs to do more to make a breakthrough in this area.
In addition to the content field, Meituan also achieves straight-track overtaking on the track through a subsidy policy. In April, "* was officially upgraded to a first-class entrance and occupied the C position on the homepage, and played the labels of "10 billion subsidies", "limited-time discounts" and "low prices on the whole network". At the same time, the "418 God Coupon Festival" activity was launched to promote the low-price subsidy strategy on a large scale.
In addition, Meituan's Dianping has also revamped its policies to provide more discounts and support to F&B merchants to attract more high-quality merchants and improve the user experience. At the same time, a new rider subsidy policy, "Salary Power Model", was launched to further retain high-quality riders, and improve the fulfillment rate and delivery speed, so as to improve the quality of service and win the reputation of users.
On the battlefield of local life, the battle between Meituan and Douyin is in full swing. At one time, Douyin seemed to be on par with Meituan with its content advantages and the rapid momentum of its food delivery business. However, the real-world data brought a dramatic twist to this matchup.
Douyin's food delivery business suffered an unexpected setback after soaring at the beginning of the year. In the first quarter, its GTV data was dismal, hovering around 100 million yuan, well below expectations. Although the arrival of peak consumption seasons such as May Day has given Douyin hope, the results have been disappointing - the GMV for the entire first half of the year was only 1.5 billion yuan, far from the target. At the same time, the unsatisfactory write-off rate has also exposed Douyin's shortcomings in consumption conversion.
Faced with such a report card, Douyin had to adjust its strategy. Rumors swirl that Douyin will abandon its own food delivery and instead promote its business through service providers and third-party partnerships. Although the person in charge of Douyin's life service quickly refuted the rumors, the market's confidence in its food delivery business has been hit.
Douyin's predicament is not without warning. In the field of local life, it has long been recognized that Meituan's moat is deep and wide. Meituan has built a solid business foundation by serving more than 10 million active merchants, nearly 700 million annual active users, and more than 7 million annual active riders. The breadth and depth of its merchant coverage, the precipitation of user data assets, and the efficient distribution network are all difficult for Douyin to surpass in a short period of time.
And Meituan didn't sit idly by. While Douyin is trying to leverage the local life market through its content advantages, Meituan is also quietly making efforts in the content field. On the eve of Double 11, Meituan** launched a full test test, which is seen as another big step in its content-based exploration. At the same time, the launch of Meituan's flash sale fills the gap between the short-term and medium-distance transactions between e-commerce long-cycle logistics and short-cycle logistics of life services, further consolidating its leading position in the local life field.
Meituan Flash Sale 2023 Double 11 Event Calendar.
In this showdown, although Douyin is huge, it is difficult to shake the foundation of Meituan. Although other challengers such as Alibaba and JD.com are also actively deploying in the local life field, they are limited by various factors and have not yet posed a substantial threat to Meituan.
However, this does not mean that the dust has settled on the local living market. With the gradual integration of social functions, the local life field is ushering in new changes. Xiaohongshu, Tencent and other major manufacturers have increased the application and exploration of social functions in the field of local life, trying to break the boundaries and restrictions of traditional local life through social services.
At the beginning of 2023, Douyin took a bold step by officially launching Douyin Supermarket and quietly testing its instant retail business "Hourda" in some cities. The move didn't cause much of a stir, but it dropped a depth charge on the retail sector.
After months of testing the waters, in October last year, Douyin decisively separated "Hourda" from Douyin Supermarket and opened a separate entrance for it to fight side by side with Douyin Supermarket. Users only need to stay on the Douyin** interface for a while, and they can easily find the figure of "Hour Reach", or through a simple search, they can go directly with one click.
The page of Douyin Xiaoda has gradually become richer, and there are many types of businesses settled in, from supermarket chains, convenience stores to fresh food stores, and then to all kinds of individual businesses full of local characteristics. Its business scope is on par with instant retail platforms such as Meituan Flash Sale and JD Daojia. Whether it is fresh fruits and vegetables, drinks and beverages, dairy baking, casual snacks, or even clothing, shoes and bags, mobile phone digital, beauty department stores, etc., they can find their home in Douyin hour.
What's even more surprising is that it has also ventured into the instant retail of pharmaceutical products, providing users with a more comprehensive service.
However, TikTok didn't stop there. In addition to the shelf section of "Hour", it also cleverly cooperates with offline supermarkets to play the model of "live broadcast + instant retail" vigorously. In the Douyin live broadcast room of well-known brands such as Apple authorized franchise stores, Xiaomi Home, and Miniso, hourly delivery service has become the standard. At the same time of live broadcasting, consumers can choose a good delivery address and place an order, and after just one hour, they can enjoy the convenience of home delivery.
Douyin's enthusiasm for the instant retail business is not unfounded.
The "Instant Retail Industry Development Report" released by the International Economic Cooperation Research Institute of the Ministry of Commerce reveals an amazing fact: in recent years, instant retail has soared with an average annual growth rate of more than 50%, and the market size in 2022 has reached an astonishing 50428.6 billion yuan. What's even more exciting is that this number is expected to triple by 2025, becoming a veritable trillion-dollar market.
Source: Screenshot of the official website of the International Academy of Economic Cooperation of the Ministry of Commerce.
Naturally, this ever-expanding cake has attracted many pretenders. Entrepreneurs are flocking to this market of opportunities, hoping to get a piece of the pie. As one of the leaders, Douyin stands out in this fierce competition with its strong traffic advantage and innovative business model.
The local life business line to which Douyin Takeaway belongs has also undergone a major change of management, with the concurrent appointment of Pu Yanzi, the head of commercialization, and the transfer of Zhu Shiyu, the former head of the company, both releasing a clear signal: Douyin is comprehensively sorting out and adjusting its business line.
What is even more interesting is the move of Douyin Takeaway from the local life business line to the e-commerce business line, which not only means a change in the reporting object, but also may indicate that Douyin Takeaway will be more closely integrated with the hourly delivery business in terms of instant retail.
[Conclusion].
With the huge traffic and innovative business model of the Douyin platform, the business of Hourda has risen rapidly and become an important part of Douyin's e-commerce business.
Some analysts believe that the adjustment of Douyin takeaway is to better integrate resources and focus on the instant retail market, and the frequent adjustment also exposes the problem that the takeaway business may not be taken seriously internally.
Despite this, Douyin still occupies a place in the instant retail field with its strong innovation ability and market acumen, and it is still worth looking forward to how it will adjust its strategy in the future to respond to market changes.