Xiaohongshu entered the group buying game, Meituan launched takeaway live broadcast, and the local life war resumed

Not long after Douyin piloted the takeaway business, Xiaohongshu also sent a signal to enter the local life field. Xiaohongshu local life official account "Tujia Potato" recently released a number of "'Food' Lifa Store Plan" and "Searchlight Project" related information, attracting catering merchants to settle in, creating a closed loop of transactions from users browsing Xiaohongshu's notes to planting grass to placing group purchase discounts. This is also considered by netizens to be a new competitor ushered in by local life platforms such as Dianping.

The online penetration rate of the local lifestyle sector continues to increase. The Beijing News reporter noticed that since the beginning of this year, the local life competition has been very lively, first Douyin pilot takeaway business has attracted widespread attention, while Dingdong Grocery Shopping, Wumart and other merchants have launched the "hourly delivery" business on Douyin, and then Meituan takeaway tested the water live broadcast model, Xiaohongshu wants to cut the local life cake of catering, and more and more catering brands have built their own takeaway platforms to cater to market development.

At a time when the existing group buying and takeaway platform models are relatively mature, why are traffic platforms such as Xiaohongshu and Douyin still testing the local life business? Zhuang Shuai, an expert in the retail e-commerce industry and founder of Bailian Consulting, told the Beijing News reporter that the online market penetration rate of catering group buying business still has a lot of room for improvement, and the use of group buying methods to test local life has less high requirements for the operation of the platform.

However, many industry insiders and brokerage institutions believe that new players are still in the exploration stage, and the competitive landscape will not be hindered for the time being. There is a fundamental difference between the local life business model of head players and new players, new players can achieve rapid growth of GMV (gross turnover) through traffic irrigation, while the performance barriers of takeaway business are high, and the advantage of head players is to cultivate merchants' direct long-term stickiness to the platform. "From the perspective of consumers, the demand for catering takeaway has the characteristics of high frequency and strong selectivity, and the business model of 'people looking for goods' is more suitable for this scenario, and the push model of short video explosive group buying is difficult to form a fixed consumer mind." Open source securities analysis believes.

New entrants test the water group buying business

The online penetration rate of local life continues to accelerate, and placing orders on online platforms has become one of the daily consumption methods. In this context, various online platforms have tried local life services.

In February this year, the topic of "short video platform Douyin will launch takeaway business nationwide" once rushed to the hot search, and then Douyin denied the news, saying that it will pilot "group buying and delivery" in Beijing, Shanghai and Chengdu, and will consider gradually expanding pilot cities in the future. At that time, Douyin did not disclose whether it would form a complete takeaway team and delivery team. However, the Beijing News reporter noticed that Douyin's attempts to enter local life are expanding, and recently Dingdong Grocery and Wumart have launched "hourly delivery" on the Douyin platform, and these businesses can only be delivered in some areas such as Shenzhen.

Xiaohongshu, a social sharing platform for life, is also quietly deploying local life service projects. The "local pickled potato" on the Xiaohongshu App, which is advertised as the official account of Xiaohongshu local life, mentioned in the introduction that "not only can you grow grass in Xiaohongshu restaurants, but you can also purchase group purchase packages and coupons through notes", and also introduced how catering merchants can settle in Xiaohongshu, how to publish product notes to achieve group buying and traffic conversion, etc. In addition, according to the "'Food' Power Shop Plan" released by the account, the support policies for merchants to settle in, including 0 commissions, 0 deposits, etc., are available until May 31, 2023.

Xiaohongshu local service account Tupu Potato released "'Food' Lifa Shop Plan" and so on. Screenshot of Little Red Book

On May 27, a reporter from the Beijing News noticed that some merchants had launched group buying packages in Xiaohongshu. Among them, the content of the notes released by the Taotaoju restaurant account hangs the link to the group purchase discount. Click on the link to find that there is currently only one group purchase package, small optionality, a certain discount, available stores cover Beijing, Shanghai, Guangzhou, Xiamen, etc., the purchase instructions indicate that the group purchase package is limited to dine-in, no take-out. In addition, tea brands such as cococean coconut water have also launched group buying products in Xiaohongshu, and the current page does not specifically show the order quantity.

At present, the existing group buying and takeaway platform models are relatively mature, but what is the reason why traffic platforms such as Xiaohongshu and Douyin are still testing the waters of local life?

On May 29, Zhuang Shuai, an expert in the retail e-commerce industry and founder of Bailian Consulting, told the Beijing News reporter that the online market penetration rate of catering group buying business still has a lot of room for improvement, and the reshuffle of catering stores has also brought more opportunities for third-party service providers to expand offline merchants. ”

Will the group buying activities launched by Xiaohongshu and the merchant settlement support continue? On May 29, Xiaohongshu customer service staff replied that the current support for merchants is as of May 31, and there has been no notice of whether the follow-up will continue.

Existing players explore new scenarios

Sorting out the development process of local life, we can see that in 2003, Dianping came into people's sight. In the following years, many group buying platforms such as Meituan.com, Lashou.com, and Wowotuan appeared intensively. From 2010 to 2012, group buying websites were in a period of competition, and statistics show that during this period, group buying websites gradually decreased from more than 5,000 to more than 200. In 2013, Ele.me was launched, and then experienced the merger of Meituan and Dianping, Ali restarted Koubei.com, Alibaba's stake in Ele.me, Ele.me's acquisition of Baidu Takeaway, Ali's wholly-owned acquisition of Ele.me and other stages, after 2018, the pattern of confrontation between Meituan and Ele.me is basically stable.

In the 20 years since 2003, the local life scene has been continuously digitized, after the online and offline opening, the service content has also been gradually transitioned from the early store scene - to realize the online of goods and services, and gradually transitioned to the home scene - door-to-door car wash, takeaway service popularization, now the local life service scene has long been realized from delivering food to delivering everything, mobile phone restaurant ordering, unmanned shelves, unmanned smart restaurants and other new retail scenes have penetrated into all aspects of people's daily life.

The online nature of local life has changed people's living habits and brought more consumption opportunities to the real economy. However, as new players continue to rise, existing players are also exploring and trying to open up new scenarios, increase user retention, and hold their ground.

A few days ago, consumer Xiao Yang inadvertently swiped the live broadcast "coupon-grabbing" activity in Meituan, and the large wave of preferential activities made her quickly share it with her friends. It is understood that Meituan opened the first "God Coupon Festival" takeaway live broadcast on April 18, selling takeaway commodity coupons in the live broadcast room. On May 18, the second live broadcast of the "God Ticket Festival" began. According to reports, from the perspective of testing the waters, Meituan plans to use live streaming as a fixed section of the platform for long-term operation.

On May 29, the Beijing News searched for "takeaway live broadcast" on the Meituan App and found that there were both live broadcast rooms of sub-stations in Meituan and store live broadcast rooms of many catering brands. Among them, in the Meituan takeaway "Beijing God Hottest Live Broadcast Room", the main online are the preferential package takeaway exchange coupons of different catering brands, such as Yu Shihu, McDonald's, Drunken Noodles, etc., and the delivery time and delivery fee are determined by the delivery merchant according to the actual distance.

In addition, the Meituan recruitment website also shows that many positions related to live streaming are being recruited since May, such as live broadcast operation positions, takeaway-live content operation positions, channel managers (live broadcast direction), takeaway-live broadcast operation experts (live broadcast room operation direction), etc.

Meituan also mentioned in the first quarter of this year's financial report a few days ago that Meituan takeaway will open up live commodity coupons and merchant shelf sales, and users can buy other goods by the way when verifying commodity coupons, thereby driving the overall sales growth of merchants. According to statistics, the verification of an average of 1 live commodity coupon has led to an order transaction volume of 1.5 times the value of the commodity coupon.

At the same time, Ele.me has also tried to innovate gameplay and open up new consumption scenarios, including reaching an in-depth cooperation with Douyin in August 2022 to launch a new service model of "Look, Click, and Reach". In February this year, Ele.me also relaunched the "Guess the Answer for Free" fun marketing campaign to drive consumption recovery.

Dislocation competition is likely to continue in the short term

According to the Prospective Industry Research Institute, the online market size of the Internet local life service industry in mainland China alone will reach 2.6 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. According to the "2023 Local Life Service Industry Insights" released by third-party organization QuestMobile, in April 2023, the monthly active users of comprehensive services in the local life industry were nearly 500 million, and the monthly active users of takeaway services were nearly 200 million.

On the one hand, the local market has broad potential, on the other hand, the traffic of online platforms continues to become a powerful tool for business conversion and monetization, and the combination of "content sharing + group buying with goods" has opened up new ways for enterprises to achieve marketing and sales. However, a number of research institutions believe that new players are still groping and do not hinder the competitive landscape for the time being.

Guosen Securities analysis believes that in the short term, new entrants have head-on competition with the head players of the existing pattern, but there is also a trend of wrong competition. Among them, Douyin's layout of local life business has the dual consideration of balancing ecology and improving long-term monetization efficiency. For example, under the platform traffic irrigation, it can quickly realize the national users to pull up and quickly promote new brand products. Taking Chabaidao as an example, in May 2022, the combination of new products and popular items sold in the season was promoted, and 3 live broadcasts were held in 3 consecutive days, with cumulative sales exceeding 52 million yuan.

Although new entrants provide incremental market penetration and can play a role in balancing the overall commercialization ecosystem, in the long run, Meituan, Ele.me and other food delivery competition barriers are solid. "From the perspective of consumers, the demand for food and beverage delivery has the characteristics of high frequency and strong selectivity, and the business model of 'people looking for goods' is more suitable for this scenario, and the push model of short video blockbuster group buying is difficult to form a fixed consumer mind." Open source securities analysis believes.

What are the main areas of competition between platforms next? In Zhuang Shuai's view, the competition of local life service platforms at this stage, on the one hand, how to improve user experience, service innovation under new technologies, etc., on the other hand, how to make platforms and businesses better achieve profits, "competition can promote the industry to meet consumer experience with better services and new technologies, but also bring benefits such as efficiency improvement and operating cost reduction." He also said frankly that the future competition is still dominated by technological innovation, including unmanned distribution, the application of intelligent AI technology, etc., but there may not be a significant breakthrough in model innovation in two or three years.

Beijing News reporter Qin Shengnan

Edited by Zhu Fenglan

Proofreading by Wang Xin