New Position
In 2023, there will be no winners on the battlefield of local life, only Meituan, whose market value is declining, and Douyin, which is constantly changing its formations.
Meituan has been sung down by the market in this competition for a whole year, and the losses of the new business have narrowed unfavorably, and the stock price is only a fraction of what it was at the beginning of the year, and some investors even believe that the only explanation for this market value is not to repurchase vigorously is to reserve ammunition to meet the more tragic battle of local life in 2024, after all, there have been rumors of the acquisition of Ele.me again recently, and Douyin has neither the momentum expected at the beginning of the year, nor the collapse after Meituan's counterattack, Mingjin withdraws his troops, but in this year, he has experienced the capricious treatment of the market, which has not been seen in the fields of advertising, live broadcasting, and e-commerce in the past, and has also generated huge goals, strategies and personnel adjustments.
Among them, how to deal with the low-key but vital group of service providers is the key to this change in strategy. Through exchanges with some service providers, "New Position" found that the evolution of their relationship with the platform can actually reflect the progress of Douyin in the new battlefield of local life, but also see at what point in time and how Douyin's playing style and mentality have changed, and how Douyin intends to do local in 2024.
Back in early 2023, due to the fact that Douyin's local life business segment delivered a good result in 2022, with a GMV of 77 billion far exceeding the 50 billion target set at the beginning of the year, so at the beginning of 2023, this relatively new business segment was given too many expectations internally and externally, including the increase in support for internal organizational structure changes, the annual goal of doubling GMV, and the news of the launch of the national food delivery business in February, for a while, all parties believed that 2023 would be a hot year for Douyin local life and Meituan。
But only half a year later, the momentum of Douyin's local life has taken a sharp turn: in June, according to media reports, Douyin's "food delivery business has given up on achieving the GMV target of 100 billion yuan this year, and GMV is no longer the most important indicator for the team in the second half of 2023"; In September, it was reported that the group was not satisfied with the performance of local life, and I am afraid that there will be personnel adjustments; in November, Douyin local life confirmed the change of coach, and the original Zhu Shiyu was transferred away in exchange for Pu Yanzi, who was responsible for the commercialization of Douyin.
It is worth noting that the old person in charge, Zhu Shiyu, used to be the strategic director of Baidu's business analysis department and Sina Group, while the new person in charge, Pu Yanzi, originally worked in the Beijing Times for seven years, and was good at building good relationships with merchants. Objectively speaking, the idea of first becoming a strategist and then a practical combat school is actually quite clear.
Then, from the end of November to December, Douyin Local Life carried out frequent announcements and updates in the service provider section, removed service providers in a large area, and implemented stricter control over the services of the remaining service providers. The role of service providers is more special for Douyin's local life than other life platforms, and when the infrastructure is not perfect, service providers have been the key to Douyin's opening of the local life market.
The causes of this 180-degree turn in attitude are very complex, and they are related to the unique needs of local life, Douyin's natural business shortcomings in local life, and the chaos of the service provider industry, but if it is summarized logically, then it is actually Douyin that finally believes that the "moat theory" of local life is not empty talk, and the legend of the land push left by Gan Jiawei is indeed stronger than the interest bundle between the platform and the agent.
In a field with a moat, the "refueling tactic" will only drag itself down, and the way to win is to finish the battle in one battle, so the decisive battle must be fast. Douyin has been in the local life for two years, and it must have tasted the sweetness and power, and the local life does not want to become the next game business, and in 2024, Douyin can no longer "save trouble", but practice "slow is fast".
01, keys, burdens, moats
Let's first take a look at the state of local life on Douyin before 2023.
In 2022 and before, the main form of Douyin's local life is the in-store group buying business, although according to the data disclosure, Douyin's write-off rate of less than 60% last year was slightly inferior to Meituan's write-off rate of over 80%, but because the in-store group purchase has a certain degree of planning, and does not require distribution support, and it is deeply consistent with Douyin's own strong grass attribute, this business largely supports the GMV of Douyin local life in 2022, which is also a reasonable thing.
In the "2022 Douyin Life Service Data Report", the most planted video packages are Luckin, KFC, McDonald's, Honey Snow Bingcheng, etc. These packages not only supported the GMV of Douyin's local life, but also brought new growth channels for these fast-food tea brands.
But as far as life services are concerned, there is also a big block of delivery services with instant consumption attributes, which includes delivery of supermarket fresh food, daily necessities, catering takeaways, etc. In a previous related article of "New Position", it was stated that for Meituan, the food delivery business is its traffic entrance, and part of this traffic will be converted into low-frequency and high-gross profit margin of wine and tourism and other businesses. This article argues that Douyin already has its content-based traffic model, so the addition of the takeaway sector will not be a traffic entrance for Douyin, but an advanced attempt of the local life business sector, which is significant in expanding the minds of users to a greater extent.
On August 19, 2022, Douyin cooperated with Ele.me, which is just based on the way that Ele.me Mini Program is connected to Douyin, which seems to be the first time to test the water in the takeaway sector to see the market reaction, but in fact, it is essentially an itch in the boots, after all, the Meituan Mini Program is also connected to Alipay and WeChat. The way the platform mini program is connected to other platforms is more of a solution to the needs of a small number of existing groups, rather than the cultivation of users' minds, at most, it can be regarded as cultivating Douyin's own initial perception of the food delivery industry.
So at the end of 2022, it cooperated with Dada SF Express to provide same-city delivery for merchants, and by the end of February 2023, news came out that Douyin itself "quietly" tested the takeaway business sector in Beijing, Shanghai, Chengdu and other places, which is Douyin's real takeaway test.
It's just that this kind of takeaway is still very different from Meituan's takeaway, Meituan takeaway is mostly a working meal with a unit price of less than 50 for high-frequency customers and daily chemical fresh medicine that is needed in time, while Douyin takeaway was a group purchase at the beginning, with the iconic sentence in the short video: "XX hot pot that has been popular in Chengdu for more than ten years can now be delivered to your home, and you can ...... with your family after work or on weekends" pays attention to using takeout for dinner.
In the "2022 Douyin Life Service Data Report", a separate section is set up for "You can eat a big meal at home", and among the delivery orders, the most popular ones are "cooked food, seafood, and Japanese food." ”
Such an entry point is good or even the best, but after all, its consumption frequency is much lower than that of working meals, and it is closer to the extension of the in-store integration, so it is far from enough to pose a threat to Meituan's food delivery business, but it is still thankless. From the perspective of merchants, it was originally only necessary to consider content drainage and in-store services in the operation of Douyin, but now it is also necessary to consider designing packages for delivery services, cooperating with third-party delivery services such as Shundashan, and remotely supervising the performance of takeaway customers.
Meituan has its own army of riders, and the food delivery merchants cultivated by Meituan are also "born" with the ability to perform contracts remotely and in a timely manner, but Douyin's original stores are not necessarily the same. At this time, between Douyin and merchants, the role of a service provider is more needed than other platforms.
Meituan doesn't do much content traffic (although it is now trying to do live broadcasts), so Meituan's service providers are more to help merchants provide consultation and diagnosis, store construction, group purchase settings, event planning, evaluation management, user operations, Compared with Meituan's service providers, Douyin's local life service providers have to do more and more difficult, in addition to the above services, they also need to package and provide content production, live broadcast operations, distribution system construction and other services, especially when the penetration rate of merchants is far less than that of Meituan, Douyin also needs service providers to push, which requires more real resource investment.
Therefore, after Douyin tested the group purchase and delivery in March, Douyin local life welcomes third-party service providers to join. On April 25, the 2023 Douyin Life Service Ecological Partner Conference was held in Chengdu, and Li Wei, vice president of Douyin Life Service Business, said in a high-profile manner at the scene: "In the past year, more and more service providers have chosen to enter the Douyin Life Service Ecosystem. ”
According to media reports present at the time, the on-site PPT showed that "in terms of quantity, service providers are growing rapidly at a growth rate of more than 20% month-on-month, and in terms of scale, the transaction scale undertaken by service providers is growing by more than 30% every month." At the same time, the transaction size of merchants operated by service providers has increased by more than 80% compared with those operated by themselves. ”
Comparing the data of merchants' self-operation and agency operation, and encouraging local life merchants to use agency operation services, such support is still relatively rare in the entire history of third-party service development. Although in hindsight, this is just a tactical intimacy that Douyin has to do as a last resort in order to get the support of service providers to open up the market as soon as possible. (In fact, at that time, Douyin local life had already begun to work on infrastructure construction and direct connection with businesses)
For a time, more service provider companies entered the Douyin local life track. "In order to save trouble, too many service sectors have been given to service providers", which has led to the fact that compared with other platforms, Douyin local life can get a completely different voice in the process of dealing with its service providers.
Meituan's army of moat riders is in its own hands, and WeChat, which is eyeing local life, can also contain a number of small program service providers at any time with its technical interface, even JD.com, which is entering the instant retail, also has JD Logistics as a support. "New Position" said in a previous article that each platform has its own unique advantages in doing local life, and platforms without a moat are destined to not survive on the battlefield of local life.
In fact, if the business model is really suitable and the cooperation with service providers can be better run-in, then this group may also become the "moat" of Douyin's local life.
Compared with local life, Douyin has smooth cooperation with service providers at the stage of doing e-commerce business. Countless e-commerce companies, a large number of MCNs in the middle and waist of the head, and various teams that do traffic conversion and Douyin generation operations, I believe that everyone knows these roles with the "nature of middleman services" without example, which has supported the growth of Douyin e-commerce.
Judging from this successful experience, as long as it can open up the market, Douyin should not mind the profit sharing of third-party institutions and service providers. This is also the reason why at the beginning, Douyin's local life showed a little attitude, and service providers rushed to take the olive branch. It's just that from interest e-commerce to local life track, the problem between the platform and the service provider is far more than whether they are willing to make profits, and the run-in is even more difficult.
02. Poor information, right to speak, cutting leeks
In fact, in the interest e-commerce sector, the third party is mainly based on MCN institutions rather than agency operation service providers (although in actual situation the two businesses are involved in each other), and the e-commerce service providers can still be used nationwide, and the traffic pool of local life is really divided according to geographical location, in this section, MCN and base foreign service providers do not have so much operational space, but deep local operation service providers can do more things.
However, the service provider of Douyin's local life has indeed fully explained to the outside world what it means to "a strong dragon can't overpower the head snake".
The person in charge of the top 1 brand of Douyin's dessert category who has also operated it before bluntly said in a podcast in August: "Douyin's local life is not a pit, and local life service providers are the biggest pit...... That is, unless you have some good resources that you know, and then you will give some head pallets, otherwise it is difficult for you to get from the novice stage to the head, and then go to receive some good pallets. "We understand that this podcast guest intends to say that it is not recommended for new companies to continue to enter the local life service provider, which is a plate that is far greater than the ability to fight for connections.
In fact, before Douyin opened the partner ecological conference in April this year, Douyin local life carried out a large-scale cleanup of service providers, and a total of more than 100 service providers were cleaned up, and most of the reasons for the cleanup were "illegal recruitment of the second generation", and the reason for individual cleanup was "false information", at that time, some Douyin bloggers said that "the market of local life service providers is too chaotic, and they take advantage of the poor information that physical store owners don't know about Douyin group buying live broadcasts, and wantonly deceive store owners."
Presumably many Douyin users have perceived that now many local life businesses that use agency operations, their group purchase live broadcast rooms are recorded and broadcasted, and the oral videos of the influencers bringing goods are the same templates, which can be described as "vomiting and dumb ridicule", and most of the sales with goods come from the dishes and prices themselves.
For a while, more local life service providers intervened, not only did they not make Douyin's takeaway market bigger, but they may even affect the in-store integrated business that was originally performing well. At this juncture, the impact of takeaway, Meituan's moat business, on Douyin's local life is not good, only negative, which can be described as "your honey and arsenic". In the eyes of many people who are familiar with the local life of Douyin, this plate has become a proper "hard-hit area for shell cutting leeks and running away".
This also leads to the fact that those service providers who actually want to do a good job in local life are even more unsustainable, "There is a service provider next door with a monthly loss of 400,000 yuan, just to do cases, and do more data." "The original genes of service providers with the nature of agency operation are like this, and those who have done it know that they are helpless to be dominated by "having to make profits as benchmark cases".
By June 30, Douyin Life Service issued the "Douyin Life Service - Announcement on the Change of Service Provider Access Method", which changed the original independent settlement model of service providers to a targeted invitation settlement model. This is a major turning point in the relationship between Douyin's local life business and service providers, and at this time, only two months have passed since the Eco-Partner Conference in April.
That month, there was also news that "the food delivery business has given up on reaching the GMV target of 100 billion yuan this year, and GMV is no longer the most important indicator for the team in the second half of 2023". According to media reports at the time, Douyin shifted its focus to "trying to run through business processes in more ways", which means to get started with merchants in person in order to take back some of the voice that was once given to service providers.
The "honeymoon period" of Douyin's local life and service providers is so short, in fact, it has long been foreshadowed. From arrival to the store to takeaway, the expansion of Douyin's local life will inevitably introduce a group of bosses who do not understand traffic and only understand store operation, and Douyin's traffic conversion is also famous, and the bosses are willing to join the platform in the hope of getting traffic.
In September, there was news of imminent high-level personnel changes in Douyin's local life. In fact, throughout 2023, some industry insiders have been reporting that Douyin is removing some local life service providers, which shows that Douyin's rectification of service providers has never been broken, but due to the above problems, these rectifications still treat the symptoms but not the root cause. It wasn't until November, at the end of the month after the new head Pu Yanzi took office, that an announcement directly ended the service career of more local life service providers.
According to the announcement, from November 27, eligible local life service providers will automatically terminate their cooperation after the expiration of the agreement. Termination means that there is no room for negotiation to renew. This time, it is not simply about the quality of service, but on the regional nature of the service provider, which the outside world calls "one-size-fits-all".
According to the official website of the Douyin Life Service Center, in fact, Douyin announced in August that "it will bid for regional service providers from time to time", and gave the entry process of regional service providers after obtaining qualifications, which was originally intended to allow service providers to better serve customers of national chain catering types (such as KFC), and regional service providers can only serve customers in their own regions, and some customers can only choose regional service providers instead of ordinary service providers.
I don't know what happened in the middle, only three or four months later, more large service providers will be destined to end their service careers, "New Position" combined with the above-mentioned "shell cutting leeks and running away" guess, the main purpose of Douyin's move is also to directly cut off those service providers who "take the opportunity to cut leeks on a large scale without deep cultivation in specific cities".
We don't know how much this forced removal has to do with Pu Yanzi's succession, but it is worth noting that Pu Yanzi's original position was the person in charge of the commercialization of Douyin Group, which can mobilize the traffic of all the apps under Douyin, and continue to be responsible for commercialization after taking over the local life.
Therefore, the position of Douyin commercialization is considered by some people to be a position of "cultivating princes". As for Pu Yanzi's work style, as mentioned above, he was born in sales and is good at dealing with merchants. It can be seen that while Douyin has given greater traffic support to the local life sector in 2024, it has also made up its mind to directly connect to merchants and gradually "draw a clear line" with service providers, and embark on a road of "slow is fast".
03. Write at the end
Douyin itself is a field with heavy attributes, and relying on service providers is equivalent to hiring a group of mercenaries to fight a tough battle, and there will be no more results, no less burning, killing and looting. In order to grab speed, Douyin borrowed its own successful experience to try, which is no problem, and it is not too late to stop losses in time after realizing that the harm outweighs the benefits.
Meituan and JD.com both love to mention the "flywheel effect", in order to make the stationary flywheel rotate, you have to make a lot of effort at the beginning, push it repeatedly round and round, each turn is very laborious, but every turn of the effort will not be in vain, the flywheel will form its own potential energy every turn, and the flywheel will rotate faster and faster.
Byte should also be well versed in the way of the "flywheel", in the field of cloud computing, the volcano engine is still the main (domestic) supporter of the "data flywheel". On the battlefield of local life, in the face of Meituan's larger-scale counterattack, Douyin's local life will be done in 2024, and it must be done "heavy".