Douyin's local life is unstoppable
Douyin Life Service in 2023
In the battlefield of local life in 2023, Douyin and Meituan continue to make moves and attack each other's hinterland, and every move of both sides stirs up the nerves of the market and fights hotly. 2023 has passed, how is Douyin's local life performing?
Recently, Douyin Life Service released the "2023 Annual Data Report", which shows that in 2023, the total transaction volume of Douyin Life Service Platform will increase by 256%, and the stores will cover a total of 370+ cities, compared with last year, the platform's short video transaction volume will increase by 83%, and the platform's live broadcast transaction volume will increase by 5.7 times.
Douyin Life Service 2023 Annual Data Report Source: Douyin Life Service
In the past year, users watched more than 2 billion grass-planting videos, 10.61 million grass-planting live broadcast rooms, and searched for content related to life services 59.3 billion times, with the transaction volume brought by search increasing by 2.6 times, and the average daily total search volume increasing by 1.57 times.
In addition, more than 4.5 million stores have achieved business growth, the number of settled service providers has increased by 1.79 times, the number of merchants cooperated with service providers has increased by nearly 2 times, and the total transaction volume of service providers has increased by nearly 8 times. The number of group buying influencers who settled in the market increased by 2.89 times, more than 580,000 influencers obtained stable income here, the total transaction volume of influencers increased by more than 2 times, and influencers visited stores to help physical merchants increase their income by 94.6 billion.
Judging from the data, Douyin Life Service has achieved rapid growth in 2023 and handed over a brilliant report card.
Objectively speaking, it is not too early for Douyin to lay out local life, and in January 2021, Douyin life service was launched. In recent years, Douyin has relied on a large number of users and a huge traffic pool, from in-store business to takeaway business, and has made frequent moves, constantly establishing its advantages in local life, and has achieved performance beyond expectations.
At the end of 2023, Douyin life services still have big moves. In November, Douyin's senior management of life services underwent a new adjustment, Zhu Shiyu, the former head of Douyin's life service business, will be transferred to the first-level department "Growth and Business Solutions", and Pu Yanzi, the head of commercialization of Douyin Group, will also be the head of life service business.
It is understood that Pu Yanzi joined Douyin Group in 2013 and is one of the early employees of Douyin, who has been engaged in commercialization and sales-related work for a long time, and has long-term experience in dealing with merchants. Market participants pointed out that with the change of leadership of Douyin's life service, new changes may emerge in Douyin's local life in 2024.
At the same time, the Douyin group purchase channel has undergone a new round of adjustments, adding three modules: "Special Group Buy", "Hot List", and "Free Trial". And in the information flow push at the bottom of the page, the live broadcast room begins to occupy an important position.
Douyin group buying adds three new channels Source: Douyin
In December, market sources said that Douyin is vigorously building a review system, inviting Dianping V5 users to settle in, and launching a series of operational measures for high-quality review users on the site. It is understood that Douyin is inviting users with Dianping Lv5-Lv8 and Douyin evaluation level below Lv3, covering 21 cities across the country.
In addition to short videos and live streams, high-quality and authentic user reviews are an important part of influencing consumer decisions, and it is clear that Douyin is trying to fill in the puzzle of local life.
In 2024, the war of local life is on the verge of breaking out
At the beginning of 2024, Douyin Life Service can't wait to hand over the annual report, and behind a series of actions, Douyin also gave a signal that it will continue to run wild on the local life track.
According to iResearch, the size of the local living market is expected to grow to 35.3 trillion yuan in 2025. Market participants pointed out that the trillion-dollar market space coupled with the abundant local life formats and relatively high-frequency and stable consumer demand will make the industry more and more competitive in 2024.
In addition to Douyin, giants such as Alibaba, Kuaishou, Pinduoduo, Tencent, and Xiaohongshu have entered the local life one after another, with great ambitions.
Ali has long been eyeing the cake of local life. In March 2023, AutoNavi and Alibaba's in-store business "Koubei" officially merged and gradually assumed the responsibility of in-store business. In July, Alibaba announced that it would form a life service segment based on three major businesses based on geographical location, AutoNavi, Local Life and Fliggy. In November, AutoNavi launched the "AutoNavi Second Delivery" service in Beijing, Wuhan, Hangzhou and other places, and entered the errand business.
According to data, from October 2022 to September 2023, AutoNavi's average monthly active users will be about 760 million, surpassing Douyin and becoming a major traffic entrance. It is worth mentioning that AutoNavi has brought new vitality to Ali's local life. According to the interim report for fiscal year 2024 disclosed by Alibaba, in the six months ended September, local life group's revenue was 30.014 billion yuan, achieving a growth of 22%, mainly due to the strong growth of Ele.me and AutoNavi's business.
Alibaba's financial report Source: Alibaba Group announcement
At the same time, Kuaishou established a local life business department to accelerate the completion of the shortcomings of the home delivery business, Tencent launched the WeChat mini-program "Store Takeaway", Channels opened group buying, Pinduoduo App opened the "Local Life" entrance, and Xiaohongshu established a closed loop of local life consumption from planting grass to trading, and no one is willing to give up this trillion-level market.
Douyin has entered the game with a strong advantage in content traffic, with AutoNavi, Kuaishou, Xiaohongshu, etc. coming one after another, and market participants pointed out that the strongest player in the battle for local life is still Meituan.
With years of refined operation and management, Meituan has strong strength in terms of fulfillment capabilities, consumer mentality, merchant supply side, and distribution network. In the words of Wang Xing, the founder of Meituan, there is no one on the market that can fight for takeaway delivery.
On the basis of the original moat, Meituan is still upgrading. In 2023, Meituan has significantly increased its efforts in live streaming and short videos, and launched marketing campaigns such as the God Rush and God Coupon Festival. In December, the progress of Meituan's live broadcast has accelerated again, and it is reported that Meituan's other new live broadcast IP explosion group is expanding the city in a large area, in 21 cities including Guangzhou, Shenzhen, and Jinan, and vigorously recruiting trial broadcast service providers.
It is understood that the explosive group focuses on low-cost discount products, focusing on in-store consumption scenarios. This also means that Meituan's live broadcast ecosystem is maturing, and with the increase in live broadcasting, Meituan's business may be able to go further in the future.
Everyone is ready to go, and there will definitely be a lot of good things to show in the local living market in 2024.
Douyin local life next
In 2023, Douyin has launched a hot war with Meituan to storm local life with a spark of fire, but it is undeniable that Douyin life services still face many challenges.
Douyin did takeaway, but it was not as smooth as imagined. In June 2023, it was reported that Douyin's food delivery business had given up on achieving the GMV target of 100 billion yuan in 2023, and the strategic focus shifted to running through business processes in more ways.
In December, market sources said that some regional agents reported that Douyin Takeaway will no longer negotiate renewal in some regions, that is, after the contract expires on December 31, 2023, many agents will lose their qualifications. It is reported that the scope of cities that will stop the renewal of the visa is very wide, and it may only retain the five cities of Chengdu, Shanghai, Changsha, Shenzhen and Fuzhou, and other regions will stop attracting investment. Douyin takeaway seems to have encountered a bottleneck, and how to run through the business process and find a feasible path is a big challenge.
Douyin has enough traffic advantages, but it is still not enough, after all, traffic is not a master key. In the third quarter of 2023, Douyin will have more than 700 million daily active users, and it is difficult to have more room for traffic growth.
In addition, when users swipe Douyin, they will indeed be attracted by the content and go to the store to consume on a whim, but more often, Douyin is just an entertainment tool for most people, and Douyin has not yet cultivated the user's mind to eat, drink and have fun on the App. It should be noted that Douyin mostly relies on low prices to attract users to place orders, and when the price advantage disappears, how to improve the repurchase rate of users in the next step is a big problem.
In addition, in terms of merchants, Douyin's merchant resources are not as rich as Meituan, so Douyin needs to further cultivate users' minds, change users' behavioral Xi, and expand more merchants to settle on the platform. In addition, it is necessary to further strengthen the platform operation and management capabilities of local life, and continue to improve the performance capabilities and scheduling system.
Overall, in the local life market, the competition is far from final, and Douyin still has a lot to offer. Nowadays, Douyin is developing rapidly, "conquering the city", and has grown into a new force whose strength cannot be underestimated, and we may be able to expect that Douyin and Meituan will stage a "dragon fight" in the future.
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