Douyin itself cannot do asset-heavy logistics, but it can be solved through investment, joint construction and acquisition.
Yan Junwen, reporter of "China Entrepreneur"
Editor|Li Wei
Source of header image | Visual China
Recently, the market reported that Douyin was planning to invest in or even acquire a Tongda express delivery company, and a person familiar with the matter told China Entrepreneur: "Some managers of Douyin have entered Yunda's headquarters. But he declined to disclose further details.
In this regard, the relevant person in charge of Douyin e-commerce told "China Entrepreneur" that this is false news. The reporter asked ZTO, Yunda, and Shentong about this, but as of press time, ZTO has not responded; Yunda said there was no relevant information; Shentong responded on the investor interactive platform and did not learn about the relevant situation.
Yunda has a close relationship with Douyin.
In March this year, Yunda became the first certified express delivery service provider on the Douyin platform, Yunda provided Douyin e-commerce with product layered guarantee, customer service line and other services, provided a green channel of priority collection, priority transit, priority delivery, and provided a solid logistics operation guarantee for merchant performance.
However, Yunda is not deeply impressed by the shopping of some Douyin consumers, and Douyin merchants mostly choose ZTO and Shentong, in addition, most of the express delivery of Douyin returns is completed by SF.
Express has become the standard of e-commerce platforms, Jingdong has Jingdong logistics, Taojie has rookie, Pinduoduo has Jitu, after the commodity price war, platform traffic war, the competition focus of major e-commerce platforms will also include the delivery war, such as seeking next-day delivery or even half-day delivery.
An industry insider said that now there are already a lot of parcels in the Jiaoji series, and there is a trend of confrontation with Taoji parcels, and in the future, it may form "Pinduoduo + Jitu, Ali + Cainiao + Shentong; TikTok + X" pattern.
Douyin e-commerce disclosed in May this year that in the past year, more than 30 billion packages were generated, with an average of about 80 million orders per day, which is equivalent to about 40% of the order volume of the Cainiao series in 2020. In March 2020, the person in charge of Cainiao's online express delivery business said that Cainiao and Tongda circulated more than 200 million parcels per day across the entire network.
After the rise of Douyin's e-commerce business, Douyin has built a three-dimensional logistics system for local life, live streaming e-commerce and other businesses.
On December 5, 2022, Douyin Life Service reached cooperation with three instant delivery platforms, Dada, FlashDelivery, and SF in the same city; In terms of express logistics, Douyin launched "Yinxuda", linking many express logistics companies such as SF, JD.com, China Post Express, Yuantong, Yunda, and ZTO.
TikTok's third-party partners are undergoing upheaval. After Jitu acquired the Best Express business and Fengwang, it is currently planning to go public, and it is trying to receive more orders from Taoji and Jiji in addition to Pinduoduo; Ali split Cainiao, acquired a 25% stake in Shentong for 3.9 billion yuan, launched Cainiao Express, and personally made express delivery.
Douyin logistics, must be built?
Referring to the development trajectory of Alibaba, JD.com and Pinduoduo, Douyin and Zhang Yiming have reached a time point where to make a choice - whether to build their own logistics through investment, acquisition, etc., or continue to cooperate with third parties?
Alibaba established Cainiao Network in 2013, when the GMV of Alibaba's "China Retail Platform" reached 1.542 trillion yuan; JD.com entered the logistics industry from 2007 and established JD.com Logistics Group in 2017 to fully open up services to customers, at this time, JD.com's annual GMV was close to 1.3 trillion yuan; Jitu entered the Chinese market in March 2020 to undertake the single volume of Pinduoduo, and the GMV of Pinduoduo was 1.6676 trillion yuan that year.
It can be seen that when the GMV of an e-commerce platform reaches a scale of about 1.5 trillion yuan, logistics will become a prominent problem, and if it is handled well, it will become competitiveness, and vice versa, it will drag down the development of the platform.
In May this year, at the third ecological conference of Douyin e-commerce, Wei Wenwen, president of Douyin e-commerce, revealed that in the past year, Douyin e-commerce GMV increased by 80% year-on-year, of which shelf GMV accounted for 30%. According to media estimates, Douyin e-commerce GMV reached 1.4 trillion yuan in 2022, and it has reached the moment to make its own choice.
Douyin itself cannot do asset-heavy logistics, but it can be solved through investment, joint construction and acquisition, etc., to complete the complete e-commerce ecology of "payment-delivery".
If ByteDance wants to do a business, time or competition in the industry is not the most important consideration. For example, doing social networking and launching multi-flash, Zhang Yiming recalled on the 7th anniversary of ByteDance, mainly because it received 200,000 users in the APP alone, and they were all asking, why can't they share links through WeChat? Is your software malfunctioning? Why can't I send my mother a TikTok video, why can't I send a watermelon link to my classmates?
"We can give up commercial interests, avoid competition, and not do something, but how do we face the complaints of these 200,000 users, and should this problem be solved?" Zhang Yiming said. Nowadays, in the e-commerce business, the same user complaints need to be solved by Zhang Yiming.
Source: Medium Attempt Library
A consumer who has been shopping on Douyin all year round said that shopping on Douyin, freight insurance covers about 50% of the goods, taking clothing as an example, Zhongtong, Yunda, Shentong mostly, a few for postal services, generally 3 days to deliver, cosmetics are mainly Zhongtong and SF Express, generally the next day can be delivered.
"Many products are displayed to be delivered the same day, but they can generally be delivered to customers the next day, which affects the shopping experience of consumers." The consumer said. A search of black cat complaints shows that consumers' complaints about Douyin product shopping are not lacking in the voice of "platforms and courier companies ripping each other off".
Good delivery is directly related to the repurchase rate. According to LatePost, Douyin's NPS (Net Promoter Score for Users' Products) in 2022 is about -12%. A senior user found that she bought goods worth 43,000 yuan on Douyin in 2022, but the return amount was as high as more than 20,000 yuan, more than 50%.
The low repurchase rate, on the one hand, stems from the platform mechanism of Douyin, where users purchase according to preferences and platform recommendations rather than the products themselves; On the other hand, it is the ability to fulfill the contract, such as the short board of logistics, which is directly related to the user experience.
Whether it is "618" or "Double 11", Douyin e-commerce will launch a big promotion activity, which requires seamless connection between merchants, platforms, logistics and other aspects. If you encounter explosive orders, for express companies, in the case of tight and limited capacity, who is sent first and whose priority is high is directly related to the quality of user experience.
It can be said that the logistics performance of Douyin has become a clear problem in the development of Douyin's e-commerce.
There aren't many options for TikTok
For example, in August 2021, Zongteng Group, a global cross-border e-commerce infrastructure service provider, completed strategic financing, invested by ByteDance, which has 30 transshipment centers and more than 100 international special lines covering developed countries in Europe, the United States and Japan. In addition, ByteDance has invested in Middle Eastern logistics company iMile, an overseas logistics company founded by Chinese.
ByteDance also has precedents for big acquisitions. In March 2021, ByteDance acquired game company Muxi Technology for a US$4 billion transaction consideration; In August 2021, ByteDance acquired VR hardware company PICO for a high price of 9 billion yuan. These are complementary to the core business.
Therefore, for Douyin, investment or acquisition itself is not a problem, but who to invest, co-build or acquire, and how to integrate into the system after acquisition, is the biggest problem.
Tongda Department is a potential partner of Douyin. These express players, born in the 90s of the 20th century, are experiencing differentiation.
On the one hand, they are moving closer to Ali and rookies. In June this year, Cainiao Supply Chain acquired 25% of Shentong's equity for nearly 3.9 billion yuan, becoming Shentong's largest single shareholder. As of the end of 2022, Alibaba held 20.12% of YTO and was the second largest shareholder; Alibaba holds 8.8% of ZTO and has 2.7% of the voting rights, making it the second largest shareholder of ZTO; As of December 31, 2022, Alibaba's stake in Yunda was 1.99%, the company with the lowest shareholding in Tongda, but media reports said that Alibaba plans to increase its stake in Yunda to 10%, although this has not been confirmed by both parties.
On the other hand, express delivery companies are also seeking more diversified development. For example, ZTO obtained a payment license in July and named it "ZTO Pay", which launched a series of e-commerce group buying actions through Tuxi; ZTO also frequently establishes companies with leading companies in the industry, such as in July, ZTO Express announced that it and Yaodou.com jointly funded the establishment of ZTO Pharmaceutical, providing pharmaceutical production and distribution enterprises with "warehouse-transportation-distribution" and intelligent system of professional supply chain solutions for the pharmaceutical industry.
An investor in the logistics field told China Entrepreneur that he is not optimistic about Douyin's investment or even acquisition of a Tongda company, "General investment is only to enhance the closeness of cooperation, holding will have a negative effect on the socialization of express delivery brands, and express delivery is generally evolving to social infrastructure." ”
The investor believes that for Douyin, solving the "near-field e-commerce" of local life is a priority than traditional express delivery.
"E-commerce will inevitably differentiate into far-field e-commerce and intra-city e-commerce, and the corresponding delivery will also be differentiated." The investor analyzed, "Near-field delivery will move towards the logic of urban common distribution, according to the practice of community group buying, the average delivery cost can be controlled within 5 cents, which is not supported by traditional express delivery." ”