Douyin intends to expand local life services through takeaway, thereby promoting advertising and e-commerce, and creating new performance growth points.
While scrolling through the mouth-watering food videos on Douyin, while ordering instantly, you can eat your favorite food that has just been planted in half an hour, that is, watch, order, and delivery, this phenomenon may become more and more common.
The news that Douyin will open its nationwide food delivery business has been officially denied. In fact, the latest development is that Douyin's pilot group buying and distribution business in Beijing, Shanghai and Chengdu has further expanded the scope of opening, opening up merchants to self-service entry without the need for pre-recommendation by account managers. Douyin officially responded that it will consider gradually expanding the pilot cities according to the pilot situation, and there is no specific timetable at present.
Will Douyin's entry into the food delivery industry have a disruptive impact? The market's attention and expectations are undiminished. Low-cost taxi, low-cost group buying, low-cost takeaway... People have become accustomed to every time a new player enters, merchants and consumers can always "sit and reap profits", merchants can get support from the platform, and consumers can get subsidies.
A person close to Douyin told reporters that Douyin's takeaway business is not as radical as the outside world imagines, and more of a supplement to Douyin's existing business. This move is in line with ByteDance's consistent style, through rapid trial and error, rapid adjustment, leaving the "most playable" business and creating the next business breakthrough.
Promote takeaway business, launch Douyin supermarket, open personal stores... Since the beginning of this year, Douyin has been in frequent action, and more and more people are using Douyin as a shopping platform, a ticket hoarding platform, and a food ordering platform. At present, Douyin has more than 750 million daily active users, an average of more than 2 hours of daily use, and nearly 1.1 billion monthly active users.
The TikTok delivery service is still iterating
Since Baidu Takeaway was acquired by Ele.me in 2015 and Didi closed its takeaway business in 2019, there have been no new disruptors in the takeaway market for a long time. Meituan and Ele.me have a stable 90% market share. Meituan is close to 70%, and Ele.me is more than 20%. The China Business Industry Research Institute predicts that the market size of China's takeaway catering industry in 2022 will be about 941.74 billion yuan, close to trillion yuan.
Douyin first explored the field of takeaway in 2021, and briefly launched the Xindong takeaway internal beta project, and soon stopped. In August last year, Douyin and Ele.me reached a cooperation and launched the Ele.me mini program on Douyin. Users can order directly on the merchant's homepage and then jump to the Ele.me interface to complete delivery. The cooperation between the two parties has entered nearly 20 cities such as Wuhan, Nanjing and Hangzhou, with nearly 50,000 merchants settled.
Subsequently, Douyin piloted group buying and distribution business in three cities, Beijing, Shanghai and Chengdu, and went further in the field of food delivery. This business is delivered to homes through third-party delivery platforms such as Dada and SF City, or delivered by merchants independently. The minimum delivery amount is generally more than 50 yuan, and the package is the main one.
It is not easy for Douyin to pry the takeaway market and get a piece of the pie. Analysts generally believe that consumers prefer to use Meituan and Ele.me tool-based platforms for takeaway orders, and Douyin is positioned as an interest-oriented content platform with more entertainment attributes. It will take time to change users' minds and consumption habits to achieve the migration of the platform.
More importantly, relying only on third-party delivery is obviously not a long-term solution, and solving the takeaway delivery by yourself is an extremely expensive and cumbersome thing.
A research report by Great Wall Securities at the end of 2022 mentioned that Meituan and Ele.me, as winners in the takeaway market, still need to spend more than 10 billion yuan a year to subsidize. In 2021, about 5.27 million riders received revenue on the Meituan platform, and the annual rider delivery cost was 68.2 billion yuan. The research report further pointed out that many of Meituan's businesses are not independent operations, and there are many reuse and collaboration spaces in its local promotion, merchants, distribution resource channels, etc., which has built a solid commercial barrier.
At the same time, there are challenges in setting up delivery routes, customer service, rider management, and more. A takeaway rider told reporters that the details of platform operation are very important, whether there is a professional rider-side customer service, whether the dispatch mechanism planning is reasonable, and whether there is a complaint channel if punished will affect the loyalty of the rider.
"Douyin's entry is more of a change in the traditional traffic distribution model, and the incremental market of takeaway will not have much impact." Wang Taizhou, CEO of Foodheng, a catering and retail digital operation service provider, said that Douyin has enriched the dimension of catering stock competition, and the larger the brand, the more it can extract value from new channels, and the smaller the brand, the more difficult it is.
According to industry insiders, Meituan's daily takeaway volume is 450 million orders, and Douyin takeaway is still stuck at the level of one million orders. Strictly speaking, Douyin takeaway is still in the early stages of testing the waters, whether it is restaurants, meal selection space or delivery efficiency, there is still a lot of room for improvement, whether it will be delivered is still unknown.
Expanding local life services is the focus
Since the pattern of the food delivery market is already very stable, why does Douyin repeatedly explore the food delivery track? The most intuitive explanation is that Douyin intends to expand the comprehensive development of local life service business through takeaway services, convert the high traffic of the platform into high retention and activity of users, and then promote advertising and e-commerce business, and even become the third growth point of performance.
According to the Prospective Industry Research Institute, the online market size of China's Internet local life service industry will reach 2.62 trillion yuan in 2021, and the market size of China's Internet local life service industry is expected to reach 4 trillion yuan in 2025.
In 2018, Douyin began to deploy local life services. The local life service business is mainly divided into "home" and "in-store", takeaway belongs to the "home" service, and the "in-store" service mainly refers to helping merchants sell group purchase coupons through short videos and live broadcasts to attract users to store consumption. After the new crown epidemic in 2020, with the preferential policy of 0 commission, Douyin attracted a large number of catering merchants to settle in, and the scale of Douyin life service team also grew. It is reported that the team currently has about four or five thousand people.
On the merchant side, Douyin has launched an all-round attack and achieved coverage of all categories except medical beauty against Meituan, with commissions ranging from 2.5% to 8%, with a certain price advantage. For example, the commission for catering merchants on Douyin is 2.5%, while Meituan's is 4%-6% and part of the delivery fee.
At the same time, more and more leading brands are submitting articles, live broadcasts, and online marketing products on Douyin. A leading chain catering company began to focus on online channels last year, and the head of community operations of the enterprise told reporters that Douyin, Meituan and Ele.me are all important traffic channels for brands. According to statistics, his company achieved a new 40,000 fans in a single Douyin live broadcast in the second half of last year, and paid GMV (total transaction volume of the platform) of more than 20 million yuan on the spot.
A person in charge of a long-established restaurant brand that settled in Douyin through the Ele.me platform told reporters that Douyin has brought it younger customers and expanded the popularity of traditional brands, which has never been seen on other takeaway platforms before.
According to the "2022 Douyin Life Service Data Report", the total GMV of Douyin's local life is about 77 billion yuan, and there are more than 1 million cooperative stores. According to the media, the goal of Douyin Life Service in 2023 is 150 billion, directly doubling again.
Douyin's advantages lie in attracting users with low prices, gradually changing consumption habits, and a high penetration rate in third- and fourth-tier cities. More and more consumers are planting grass and experiencing eating, drinking and fun on Douyin, which is what makes opponents most fearful.
However, local life services are ultimately "hard work". Whether the high online traffic can be converted smoothly as Douyin wishes, Douyin needs to further cultivate, such as maintaining merchant relationships and building a connection system with merchants, etc., Douyin is still more dependent on third-party service providers to expand business. In addition, it is unknown whether the low-price strategy can be sustained.
According to the West China Securities Research Report, Meituan's annual GMV in stores in 2022 will be about 320 billion yuan, more than four times that of Douyin. Guosheng Securities estimates that in 2025, Douyin's in-store revenue may catch up with or approach Meituan's in-store wine and tourism business revenue. It is worth noting that in-store wine hotels have always been one of Meituan's core businesses and the most profitable sector. In 2021, Meituan's in-store hotel business generated revenue of 32.5 billion yuan and contributed 14.1 billion yuan in profit.
In the field of e-commerce, Douyin is also making continuous efforts. In January this year, Douyin Supermarket was officially launched, covering all supermarket categories except fresh food, and comprehensively benchmarked Tmall Supermarket and Jingdong self-operated. In order to lower the threshold for opening a store, Douyin e-commerce has opened individual store registration since March, and individuals only need to provide an ID card that meets the requirements and pass real-name authentication to register "Douyin Shop" on Douyin e-commerce to become a merchant.
As a rising star, Douyin started with short videos and has developed rapidly in the field of e-commerce. In two years, the GMV of e-commerce exceeded one trillion yuan, so that the "predecessors" Taobao, Jingdong, etc. felt threatened, you must know that it took ten years for Ali and Jingdong to reach this threshold.
In 2021, Wang Xing, founder of Meituan, the largest local life service platform, said on social platforms that "the most dangerous opponents are often not the expected ones." Meituan's biggest competitor seems to be Ele.me, but the most likely to disrupt takeaway is the company and model that we haven't paid attention to. ”
Douyin is likely to be such a company, and it is worth continuing to observe how Douyin expands its local life service business next.
Reporter Zhang Fan
Editor丨Liu Dingwen Hu Xinyue