Image source@Visual China
Text | There is always a reason
Since last year, Douyin officially announced its cooperation with Ele.me in the food delivery business, and it has been more than a year.
Recently, the "scandal" between Douyin and Ele.me has been very loud. It was reported that Douyin was secretly negotiating with Alibaba to buy Ele.me for about $7 billion, but the news was quickly refuted by both sides, both saying that they had no plans.
I have to admit that the relationship between Douyin and Ele.me is indeed a bit "ambiguous".
According to iResearch, the size of China's local life service market was 19.5 trillion yuan in 2020, and this figure will grow to 35.3 trillion yuan by 2025, with a compound annual growth rate of 12.6%. With the expansion of more new scenarios such as online catering and online group buying, the online penetration rate of local life services will also increase significantly, and is expected to increase to 30.8% by 2025. In the face of such a large market cake, Douyin has coveted it for a long time, but has tried and failed repeatedly, and Ele.me has been under pressure to face Meituan alone.
So it's big bad news for Meituan to come together, but it's a good cooperation for both parties.
But under the surface of the ambiguous relationship, both sides seem to hide a mentality: mutual cooperation is a last resort, and killing the opponent is the ultimate goal. Except for the acquisition of one party, no one can completely leave the back to the other.
Each needs each other, and each has its own difficulties
How much does Douyin want to meddle in the food delivery business?
Previously, Douyin had selected 300 merchants in Beijing, Shanghai, Guangzhou, Chengdu and other cities to test "Xindong Takeaway". The merchants were almost all made up of top merchants, but they were stopped after only three months of testing. On the one hand, although Douyin, which was born in short videos, has its own traffic, it naturally has no takeaway genes, and on the other hand, the takeaway business needs strong fulfillment capabilities, and Douyin is obviously a fledgling.
On the other hand, although the platform has been mature in the food delivery field for many years, its own traffic has peaked, and in terms of market share alone, Ele.me even dropped to less than 30% for a time. The meeting of the two, from a certain point of view, is a "match made in heaven" for each to take what it needs. Of course, for now, the goals of both sides have also been achieved.
Let's take a look at Ele.me's bonus to Douyin first. The reason why Douyin is interested in Ele.me is that in addition to wanting to improve its fulfillment ability, the most important thing is the massive merchant resources of the takeaway platform. Some media speculated that the number of Ele.me merchants had already exceeded 6 million.
After cooperating with Ele.me, in 2022, compared with 2021, the transaction volume of the Douyin life service platform increased by more than 7 times, and the number of group buying influencers increased by 163% in 2022 compared with 2021. Douyin released a set of data at this year's Life Service Ecological Conference, showing that the number of Douyin service merchants has reached 2 million, and the number of merchants who have launched live broadcasts and have dynamic sales has increased by 432% in January 2023 compared with January 2022.
Although this is inseparable from the platform's own efforts, it is undeniable that holding hands with Ele.me has played a certain role in boosting Douyin's local life.
And Douyin has also become an important traffic channel for Ele.me. After all, short videos occupy a lot of the time of the entire Internet user today, and after the cooperation between the two parties, Douyin's traffic pool has also begun to open up and tilt for Ele.me. Xu Xiang kiwifruit, Chongqing roast duck, crayfish, lamb chop hot pot...... A series of online celebrity delicacies have exploded on Douyin, which in turn drives users to go to takeaway stores for consumption, indirectly delivering a lot of traffic to the takeaway platform.
At present, in addition to the mini program at the order entrance on Douyin, Ele.me also has a series of operating accounts: such as Ele.me, Ele.me takeaway, Ele.me Little Blue Box, Ele.me discounts, Ele.me Blue Knight...... Among them, Ele.me has 2.17 million followers, and Ele.me takeaway also has more than 1 million fans.
But seeing that a year has passed, are Douyin and Ele.me really getting along so well?
In fact, the run-in period between the two platforms has not ended. The first question is, will consumers tend to order takeout on short video platforms? More importantly, even merchants and riders have not fully adapted to the way of taking orders from short videos, according to a report by Beijing Business Daily, riders usually do not like to take orders from Douyin, and merchants often take orders from Meituan and Ele.me first.
As a result, Douyin's delivery speed is much slower than that of traditional food delivery platforms. Zhengguan News once reported that some users had ordered takeaway from the same merchant on Meituan, Ele.me, and Douyin, and as a result, Meituan took 26 minutes, Ele.me took 36 minutes, and Douyin took 43 minutes.
And speed is the point that takeaway users care about the most. According to iResearch's data survey, consumers' attention to the delivery time of instant retail platforms has increased from 43.6% in 2019 to 48.3% in 2020. In the next two years, speed can undoubtedly determine life and death.
According to the cicada mother's "2023 Douyin E-commerce Semi-Annual Report", the number of likes and barrages in the Douyin e-commerce live broadcast room increased year-on-year in the first half of the year, with a year-on-year growth rate of -29.6% and -18.5% respectively, with the audience's willingness to interact and the length of stay shortened. This makes Douyin anxious and impatient about its food delivery business.
At the beginning of this year, Douyin Takeaway set a target of 100 billion GMV, but because the GTV and average daily order volume were lower than expected, Douyin Takeaway had no choice but to lower the GMV target to 5 billion. Perhaps Douyin's expectations for takeaway are too obvious, so another "scandal" was spread at the end of the year. Although the probability of this matter being established is very low, after all, Ali also attaches great importance to the local life business, and the possibility of giving up Ele.me is almost zero, and it is not surprising that they will eventually refute each other's rumors.
However, their common old rival Meituan has become the biggest victim of this matter, and looking at its chattering market value in the capital market, it shows that this "scandal" is obviously not targeted for no reason.
Beware of each other, each pregnant with a "ghost fetus"
In the more than a year of cooperation, Douyin and Ele.me have their own trends.
Douyin has set itself a huge goal this year, according to public data, Douyin Life Service has completed a GMV of about 77 billion yuan in 2022, and in 2023, the number set for itself is almost double that of last year, and specific to each business line, takeaway catering will bear at least 75 billion share.
As a result, Douyin has been making a frantic assault on local life this year, including the long-coveted food delivery market. In July this year, Douyin Takeaway (Group Purchase and Delivery) introduced "regional agents" as partners of the Douyin Life Service Platform in the designated service area to help merchants in the service area who are willing to open group purchase and delivery services in Douyin Life Service.
After the two "opening cities" in July and September, Douyin Takeaway has covered a total of 30 cities, including first-tier and directly governed and provincial capitals such as Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Chongqing, Hangzhou, and Nanjing, and introduced more than 150 regional agents. To be honest, in addition to its poor performance ability, Douyin has a unique advantage: the short video crowd is highly consistent with the takeaway users.
According to a data survey, the number of Douyin users in 2022 will be around 842 million, and the number of daily active users will exceed 700 million, and the Douyin user base will be concentrated in young people aged 24 to 30, accounting for 40% of all user groups, which is highly overlapping with the people who order takeout. This is slowly becoming apparent.
Previously, there were Douyin takeaway merchants with customer orders of two or three hundred yuan in Shanghai, and they achieved a single-day revenue of more than 10,000 yuan by receiving more than 50 orders a day on the Douyin platform alone. In a sense, this can be regarded as a key step for Douyin to gradually superimpose the takeaway gene on itself after a year of cooperation with Ele.me.
Of course, while Douyin quietly tried to amaze everyone, Ele.me didn't stop. Like Douyin, Ele.me is also coveting local life, and this year, Ele.me's takeaway business is no longer limited to catering, and has reached cooperation with Suning.com, Apple, and Xiaomi to deliver various digital products instantly.
The expansion of the takeaway range once increased the revenue of Ali's local life. According to the financial report, Ali Local Life Group's revenue in the first quarter of fiscal year 2024 was 14.450 billion yuan, an increase of 30% compared with 11.131 billion yuan in the same period last year, mainly due to the strong growth of Ele.me's GMV and the rapid growth of AutoNavi's orders.
In the days of holding hands with Douyin, Ele.me has been carrying out content-based operations through short videos + live broadcasts + activities. What's more interesting is that Ele.me has more than one external link entrance to Douyin, such as Alipay and WeChat, which are all mini programs that can enter Ele.me.
According to the relevant data released by Quest Mobile, the traffic proportion of the Ali mini program of Ele.me takeaway exceeds 40%. WeChat, too, in May this year, Ele.me had 289.39 million deduplication users, a year-on-year increase of 102.1%, of which App accounted for 32.3% and WeChat Mini Program accounted for 64.1%.
Obviously, neither Douyin nor Ele.me can put their eggs in one basket, they are intimate at the same time, they are also guarding against each other, quietly arranging, both sides are always difficult to work together, and it is the ultimate goal to restrain each other from extending their long tentacles to their respective territories.
However, as one of the most important branches of local life, the takeaway market is a difficult and sought-after "hard bone". When Douyin was rumored to have acquired Ele.me, news also broke that Douyin may be more likely to suspend the expansion of its food delivery business. Recently, some regional agents have reported that Douyin Takeaway will no longer negotiate renewal in some regions: after the contract expires on December 31 this year, many agents will lose their qualifications.
In addition, WeChat is also wading in takeaways. At the beginning of this year, WeChat also tested the mini program "Store Express" service in Guangzhou and Shenzhen, and in the 2023 WeChat open class, WeChat disclosed data showing that among the top 100 catering merchants in the national chain, nearly sixty percent have opened a mini program takeaway.
Despite this, neither side can challenge Meituan's hegemony in local life alone, and can only work together to "encroach", "so, the drama of "falling in love" is estimated to continue to be played out with "ghosts".
Short videos and takeaways step into the same river
The cooperation of takeaway platforms and short videos also has a certain relationship with the continuous sinking of catering consumption.
With the continued weakness of the consumer market in the Fifth Ring Road, since the beginning of this year, brands such as Heytea, Starbucks, and Luckin that used to focus on first- and second-tier cities have begun to collectively sink into the market outside the Fifth Ring Road. At the same time, county-level brands such as Mixue Bingcheng, Yang Guofu Malatang, and Tianlala have further sunk into the township market, and 2023 is a veritable "year of consumption sinking".
From all kinds of data, it is also understandable why brands are rushing to sink. During the Double 11 period, Ele.me released a report card on Double 11, with the transaction volume, turnover and user scale all reaching a record high, among which the number of merchants participating in Double 11 increased by 50% year-on-year, and the number of consumers in third- and fourth-tier cities who placed orders increased by 60% year-on-year.
McKinsey has also issued a report predicting that the scale of personal consumption in the mainland will reach 65.3 trillion yuan by 2030, of which more than 66% of the growth will come from lower-tier markets such as third-tier cities, county and township markets. In addition, the huge takeaway market in first- and second-tier cities is gradually becoming saturated, but the sinking market may have just begun.
The research report of Northeast Securities pointed out that the proportion of takeaway users in first- and second-tier cities accounted for more than 70% of the users of the whole network, and the penetration rate was at an absolute high level. However, in third-tier cities and below, there is a lot of room for improvement in the proportion of takeaway users and takeaway transactions. To attack the sinking market, short video is a good carrier.
First, short video is an effective way for takeaway platforms to quickly reach the minds of sinking users, after all, in recent years, short videos have become an online carnival mecca for sinking users. Taking Douyin as an example, Douyin has always been deeply rooted in first- and second-tier cities as its basic plate, which is different from Kuaishou who made a fortune from "Lao Tie", and it is also the confidence for it to sit firmly in the top spot of the short video throne.
However, as early as 2019, Douyin began to shift to the sinking market, and during the Spring Festival of that year, the number of video check-ins in Douyin's third- and fourth-tier cities increased by 117% month-on-month, and the "2023 Short Video Industry Research Report" shows that Douyin's first-tier and new first-tier city users are decreasing year by year. This coincides with changes in the food delivery market.
Second, with Starbucks, Haidilao, KFC, Taier Sauerkraut Fish...... Successively started live broadcast careers on short video platforms, subsidies and low prices flew together, and platform merchants also used short videos to expand their living space in the field of sinking consumption. This also means that short videos and food delivery are stepping into the same river.
Facts have proved to confirm this, the data shows that the overlap between Ele.me and Douyin users is as high as 83.3%, and 8% of Ele.me users are using Douyin. In addition to Douyin and Ele.me, the new "symbiotic relationship" of short videos combined with food delivery is gradually maturing.
Of course, this relationship dates back to 2021. At that time, Kuaishou reached a cooperation with Meituan, and users could place orders directly at merchants stationed in Meituan through the mini program. So far, the "hoarding coupons" service jointly launched by Kuaishou and Meituan is still continuing, but it is basically a mode of placing orders online and spending in stores.
At present, compared with the superficial taste of Ele.me and Douyin, the relationship between Meituan and Kuaishou can more clearly reflect the follow-up plot of short videos and takeaways, that is, while cooperating, they also attack each other's hinterland. For example, some merchants in Kuaishou also support takeaway home delivery this year, although there are not many, but almost all of them are top catering brands, which is tantamount to a test of Meituan.
Meituan, on the other hand, began to lay out its own short video business.
According to the survey, since the beginning of this year, Meituan has successively recruited relevant short video business positions. In April, Meituan posted more than 80 short video business-related job requirements on its official website, basically covering the entire link of the short video track. As of November 21 this year, Meituan has listed 174 positions related to the short video business.
Even many Internet celebrities have opened new accounts on Meituan, taking the funny video blogger "Xiao Miao Miao obediently" as an example, this talent currently has more than 40,000 fans on Meituan Video, although it is not as many fans as other platforms, but it is enough to show that Meituan is serious about the short video business, even if it does not have short video genes, it will start to enter and create short videos on its own.
I just don't know how Kuaishou and Douyin will feel.
But what is certain is that whether it is Douyin Eleme or Meituan Kuaishou, they must all understand a truth: relying on others can only be temporarily kept warm, and only you can rely on yourself at critical moments. Even if it is a partner, you must keep your hands on it as early as possible, and be prepared to be safe.