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Measured Douyin takeaway: mainly push up the unit price package, the price war can't be fought?

Author/ IT Times reporter Fan Xinru

Editors: Wang Xin, Sun Yan

The spring breeze of the platform economy is once again blowing through China's Internet industry, and Douyin seems to be most eager to become the "pig on the wind".

The significance of Douyin's entry into takeaway is not only its increase in the local life scene, but more striking is what kind of chess Douyin is in the next game, challenging Ali, Jingdong, and Pinduoduo in the field of live streaming e-commerce, while Douyin seems to have given the "war book" to another difficult opponent, Meituan.

These days, the news that "Douyin will launch a national takeaway service on March 1" has long been popular. The official website of ByteDance also listed senior operation manager of takeaway products, senior operation manager of takeaway industry solution operation, senior manager of catering live broadcast master operation and other related positions.

Although in response to this news, the relevant person in charge of Douyin life service avoided using the "takeaway" method to refer to Douyin's new business, saying that the "group purchase and delivery" project is still in the pilot project in Beijing, Shanghai and Chengdu, and merchants in the three cities have recently been opened to self-service settlement; In the future, depending on the pilot situation, the gradual expansion of pilot cities will be considered, and there is no specific timetable at present.

According to the State Information Center, the size of China's online food delivery market reached 1 trillion yuan in 2021, which was mainly divided by the "duopoly" of Meituan and Ele.me, with a total market share of more than 90%. At a time when the market is almost saturated, what is the effect of Douyin's launch of the "group purchase delivery" business? What are the similarities and differences between "group purchase delivery" and takeaway?

The mainstream price range is 100~500 yuan; The price advantage of the high-unit price package is obvious

The entrance to Douyin takeout is on the homepage of Douyin. Enter "takeaway" on the homepage of Douyin, or click "Shanghai" and select "takeaway" to enter the takeaway page.

Measured Douyin takeaway: mainly push up the unit price package, the price war can't be fought?

This is not the first time Douyin has entered the local life service. In 2021, Douyin launched the "Arrival" service, and with its blockbuster packages and expert store exploration services lower than other platforms, Douyin's "Arrival" service quickly became a success. The launch of Douyin's "home" service is not so much a takeaway, but more like a kind of copy and extension of the in-store service.

Different from traditional takeaway platforms, most of the products in Douyin takeaway stores are high-priced items or high-value package combinations. There are fewer types of goods, and many stores sell only 2~3 set menus, priced between 100~500 yuan, and the unit price is higher.

From the perspective of the types of stores, most of the first batch of merchants to open Douyin takeaway business are still mainly large chain catering brands, and there are fewer small merchants. TikTok takeout is also delivered farther away. A store clerk of a chain brand that has enabled Douyin takeaway service told the "IT Times" reporter that the current delivery range of Douyin takeaway is 15 kilometers, and orders within 15 kilometers of the store can be placed and delivered to the home.

In the "home" service launched by Douyin, you can still see the figure of the explosive strategy. In order to attract consumers, many merchants on Douyin takeaway have launched packages that are cheaper than other platforms. In the case of Tao Taoju, for example, its set menu for 188 yuan on Douyin is discounted by 5.7%, while in Meituan takeaway, the lowest discount in stores is 6.1%. The strawberry cheesecake ice cream in DQ Douyin takeout for 99 yuan sold for 138 yuan in Meituan, a difference of nearly 40 yuan. In another Zhaoji Yuxian Restaurant, the 128 yuan set meal sold by Douyin can only be ordered in Meituan, and the same dish costs nearly 300 yuan, which is more than half as cheap.

However, this advantage is not obvious in stores that mainly focus on low-unit price products. In the Jinxiaohu bun shop, the final purchase price of the 6 flavored bun set menus sold for 24.5 yuan on Douyin was 27.7 yuan. In Meituan takeaway, after superimposing red envelopes, the final purchase price of the same product is 25.2 yuan.

Measured Douyin takeaway: mainly push up the unit price package, the price war can't be fought?
Measured Douyin takeaway: mainly push up the unit price package, the price war can't be fought?

Douyin takeaway (left), Meituan takeaway (right)

At present, most of the goods of Douyin takeaway service exist in the form of group buying, which is quite different from the takeaway expected by some consumers, and some consumers do not pay for it. Xiaoyun is an urban white-collar worker who orders takeout almost every other day. For her, who likes to change the pattern of takeaway every day, Douyin takeaway has fewer options and higher unit price, which is unattractive compared to other takeaways. "It's not what I want." She said she hopes that Douyin takeaway will fully bloom and provide it with more differentiated takeaway options.

In the future, will Douyin takeaway be on par with other takeaway platforms? A store clerk told reporters that it is unclear whether more items will be on the shelves in the future, and everything is subject to the company's arrangement. But in the opinion of another clerk, low-priced goods are less likely to be on the Douyin platform. "Douyin is online with some special packages, and now Douyin has a small customer flow, it doesn't matter." "But if you want to benchmark against other takeaway platforms, you have to pay additional packaging fees, delivery fees and commissions, which is not cost-effective for merchants." ”

Open a store and do not take orders; Small businesses are still on the sidelines

The reporter found that although some stores opened takeaway stores on Douyin, they did not start taking orders.

On February 14, the reporter opened Douyin takeaway, sorted by distance, and checked the takeout situation of the top 20 stores and found that among the 20 stores, 9 stores had takeaway services that were closed or suspended. In addition to 2 stores marked as "temporarily suspended", most of the remaining 7 stores mainly sell low-unit price products, such as marinated flavors, beverages, etc., of which 3 have appeared that Meituan and Ele.me platforms are open for takeaway, but Douyin takeaway is closed.

"I'm not on TikTok." When asked when Douyin takeout would open, a marinated shop merchant replied. After repeated confirmation, he recalled that he did have a takeaway business on Douyin. He told the IT Times reporter that the Douyin takeaway store was operated by a Douyin business manager, but after it went online, he did not immediately start taking orders.

"Our store mainly sells marinade, and things are quantitatively every day, so it doesn't make much sense to promote it through Douyin." In his opinion, Douyin takeaway means more to chain brands and can help merchants get more new customers from traffic. But for individual merchants with small businesses, Ele.me, Meituan takeaway plus offline channels are completely sufficient. As for whether he will consider taking orders in the future, he said that he is still waiting and seeing.

In order to attract merchants to settle in, the commission ratio given by the Douyin platform is relatively low. Although the 2.5% claim widely circulated online has not been officially verified, one merchant confirmed that Douyin takeout is currently free. As for how to charge in the future and how the platform will take a cut, he is not clear for the time being, only heard that the commission is very low.

According to the official statement in the "Douyin Laike" app, the software service fee of the Douyin takeaway service is calculated as the order transaction amount× the software service fee rate + the delivery fee paid by the user × 0.6%. Among them, the actual calculation method of the order transaction amount is the actual amount paid by the user after purchasing the merchant's takeaway goods on the platform and the subsidy amount provided by other merchants (such as platform general coupons), excluding the delivery fee paid by the user. The description does not disclose the specific software service rate charging standard, but only displays "Please communicate with the corresponding BD for software service rates". For new merchants who open takeaway services on Douyin for the first time, Douyin has also introduced preferential policies for service fee reduction.

But this does not completely dispel the concerns of merchants, especially some small businesses. According to the owner of the coffee shop, although Douyin's commission is relatively low, Douyin relies more on traffic than the other two platforms, which means that merchants need to bear more operational pressure. "But does traffic really give you the results you want?" He said. In his opinion, Douyin home service is currently more suitable for chain stores with high unit prices and wide store distribution.

Considering the indispensable talent exploration game in Douyin's "in-store" service, for merchants who open takeaway services on Douyin, if they want to successfully turn the huge traffic in Douyin into takeaway traffic of the store, they may have to pay more traffic "additional tax" in addition to commissions.

Internet companies seize the high ground of local life; A price war is less likely

From the existing situation, it is difficult to see the shock that Douyin takeaway has brought to the industry, but the news of Douyin takeaway has caused ripples in the industry. On February 8, Meituan's Hong Kong stocks were affected by relevant news, falling more than 9% at one point. As of press time, Meituan's share price hovered around HK$145, and its overall performance was stable.

Many people in the industry believe that Douyin's home business will not stir up waves in the takeaway market for the time being.

SPDB International analyst Zhao Dan believes that the impact of Douyin's takeaway business on Meituan is limited, mainly due to the high requirements for offline performance as an immediate demand for catering takeaway, and more emphasis on user experience, and there are high industry barriers.

As the core link in takeaway, the rider, Douyin does not have direct management rights. Compared with Meituan and Ele.me's self-built platforms, Douyin takeaway delivery is carried out in cooperation with third-party platforms such as Dada, SF, and FlashDelivery. Although it may seem like a cost reduction, it also has relatively little control over costs and services.

Wu Liuyan, an analyst at Kaiyuan Securities, believes that the current core business logic of Douyin is still based on to B, that is, to increase advertising revenue by continuously improving merchant services. Although its logic of cutting into the takeaway track is smooth, Douyin has obvious limitations in consumer mentality and transportation capacity. Before solving the above problems, the unit volume growth space of Douyin takeaway is relatively limited, and the limited unit volume scale will also affect the subsidy resource investment of merchants on the platform, and relying on the platform's own investment is less likely to lead to industry price wars.

It's clear that local living services are a huge piece of cake. Data shows that the size of China's local life service market was 19.5 trillion yuan in 2020, and this number will grow to 35.3 trillion yuan by 2025. At a time when the growth of Internet enterprises is frustrating, local life services are a market not to be missed.

It turns out that there are many players who want to share the cake of local life services. On February 15, some netizens discovered that a new item called "Store Delivery" was added to WeChat's "Discovery" page, with open categories including food, tea, fresh food and department stores. This led to the conjecture of "WeChat doing takeaway".

On February 15, Tencent officially responded that "Store Express" is designed to help consumers discover high-quality Mini Programs that provide express delivery services nearby, and is currently in internal testing in Guangzhou and Shenzhen, and users can experience it in "Discovery-Mini Program". Similar to Douyin's official response, Tencent also denied the claim of doing takeaway. In response, Tencent replied to the media, saying, "We only provide an interface for merchants who already have delivery service capabilities to come in to help users better discover nearby mini program delivery services." ”

Typesetting / Ji Jiaying

Source: IT Times public account vittimes

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