Recently, Pinduoduo, which is accustomed to using protracted battles in Xi, has also ushered in a buffer period, and Pinduoduo's community group buying business Duoduo has suspended the business of local life and officially started in December last year.
If it goes according to the original plan, Duoduo's local lifestyle business is expected to go live nationwide after the Chinese New Year in February this year, led by Zhao Jiazhen, co-CEO of Pinduoduo. It is reported that the investment content of the business includes in-store catering coupons, in-store hotel coupons, movie tickets and scenic spot ticket coupons, etc., and at the same time, it will also focus on the third-line sinking market where Meituan and Douyin are relatively weak.
According to Pinduoduo insiders, so far, only Pinduoduo's local life business has been closed, and its Duoduo business is still operating.
In addition, a former buyer of Duoduo said that most of the regional managers have been transferred to the Temu team, leaving only a small number of streamlined organizations to continue to maintain the normal operation of the community group buying business. It is worth noting that from the search of BOSS Zhipin software, it is found that Pinduoduo is still continuing to recruit local life BD, and its main work content is to inspect, evaluate and discuss cooperation with catering, leisure and entertainment and hotel businesses.
So, why is Pinduoduo reluctant to let go of the local life business?
It is important to know that in the local life market, community group buying has just ended a three-year market scuffle, and the competition between major e-commerce platforms has also come to an end temporarily. The three former group buying giants have died down one after another, including Tongcheng Life, Shihuituan and Xingsheng Preferred. Only the two head players of Pinduoduo's Duoduo and Meituan Optimal were left.
In the past competition, it can be found that the price paid by each company is also very huge. According to relevant data, the two community group buying businesses, Duoduo and Meituan, are still not profitable so far. Among them, the loss rate of Duoduo Grocery remained in the single digits, and Meituan Optimal is also facing huge profit pressure.
According to the latest financial report, the revenue of Meituan's new business segment, including Meituan Preferred, was 18.8 billion yuan, an increase of 15.3% year-on-year. However, its operating loss exceeded 5 billion yuan.
At present, as the market competition in major community group buying has gradually entered a stable period, Meituan Optimal and Duoduo Grocery have begun to slowly adjust their future development direction. Duoduo has transferred some of its employees to Pinduoduo's new businesses, including local life, e-commerce going overseas, and so on. Meituan, on the other hand, upgraded Meituan Preferred to Little Elephant Supermarket to further increase the retail market.
It is worth mentioning that the retreat of Duoduo is not that Pinduoduo has completely abandoned the local life market, but in order to retain the fire, the early layout in the store business. Since March last year, Pinduoduo's Kuaituan has officially recruited service providers in local life, and most of the group buying merchants are concentrated in first-tier cities such as Shanghai and Beijing, including accommodation, life services, entertainment and hairdressing.
According to Li Wei, the head of the Kuaituan project, the number of follow-up groups with a single connection reached nearly 1,000 within two or three months. Although the low price can bring a huge amount of traffic, the low price means that there are relatively few corresponding packages to choose from. At present, most merchants are still in the wait-and-see stage, and there are less than 10 merchants participating in low-price packages.
Despite this, there are still many outsiders who continue to enter the local life market. According to iResearch, by 2025, China's local life service market can expand to 35.3 trillion yuan. This means that local life has become a huge bait, attracting a large number of businesses to stop.
Among them, the fierce battle between Meituan and Douyin has entered a white-hot stage. According to relevant data, the total transaction volume of Douyin life services increased by 256% last year, and its services covered as many as 370 cities, and more than 200 cooperative stores.
Not only that, Xiaohongshu has also joined this competition, and in April last year, it conducted an internal test of the group buying project, which included first-tier cities such as Beijing and Shanghai. Kuaishou Local Life has reached a cooperation with Tongcheng Travel to provide users with local life services. Even AutoNavi Map has entered the local life market, and in order to get a piece of the pie, it has launched AutoNavi second delivery business.