Douyin and Meituan are stepping into the same river.
Recently, Douyin spent 1.4 billion yuan to purchase a payment license, adding a piece of the puzzle to Douyin payment: offline acquiring. This can support offline business scenarios such as Douyin's local life, including offline QR code payment, bank card acquiring, etc.
Douyin, Meituan's new rival, has embarked on the old path of Meituan: it used to use third-party payment, and its business was inevitably constrained, and when it was full-fledged, it reserved financial licenses to avoid being controlled by others, and in addition to saving channel costs, it could also derive consumer loans, merchant loans, credit cards and other financial services based on online and offline ecosystems.
The unanimous choice of large manufacturers once again verifies that the end of the Internet is finance. Recently, the relevant person in charge of Douyin said that finance is not the focus of Douyin's ecology, but it has helped millions of small and micro businesses to turn over funds. Previously, according to Caixin, as of the end of 2023, Douyin's lending balance was less than 325 billion yuan, and industry sources were quoted as saying that the original plan was to double the lending balance to 400 billion yuan by the end of 2023, but the initial target was not completed.
In the past two years, Douyin's local life business has expanded rapidly. According to the report of "Late", in the first quarter of this year, the GMV of Douyin's local life has exceeded 100 billion yuan, doubling year-on-year. The momentum is so fierce that Meituan regards it as a henchman. The consumer loan business derived from e-commerce and local life business is violently impacting mutual finance giants such as Ant Financial.
After winning the offline payment license, how much storm can Douyin set off in the field of financial payment?
Douyin for offline payment?
Douyin doesn't want to "make wedding dresses" for others anymore.
In 2023, Douyin's local life GMV will be about 310 billion yuan. Due to the weakness of Douyin's home-to-home business, in-store and hospitality consumption account for the majority of GMV, and its standard transaction model is: online purchase of group purchase coupons - in-store verification - additional consumption - payment and checkout.
In 2021, Douyin Pay will be officially launched in the Douyin APP, and the user's "online group coupon" - "in-store verification" operation experience is smooth, but due to the lack of offline acquiring licenses, consumers can only use Alipay, WeChat and other payment methods when paying offline.
The amount of offline payment that can be driven by hundreds of billions of GMV is inevitably not a small number, even if only the channel fee is charged, the payment institution can make a big profit, but in the past, this part of the income and business data had nothing to do with Douyin. This is like Douyin is a big fish pond with a daily activity of more than 600 million, working hard to incubate talents, make store visit videos, and attract "fish" to the store to consume, but Douyin only eats the "half of the fish" online, and the offline part goes into the pockets of Alipay and WeChat.
Currently, the prevailing payment rate in the catering industry is around 0.6%. According to the "Late" report, in the first quarter of this year, the GMV of Douyin's local life exceeded 100 billion yuan, with a year-on-year growth rate of more than 100%, and the annual GMV target was nearly 600 billion yuan. Even if only 100 billion offline payment scenarios are derived, payment institutions can earn more than 600 million yuan in channel fees.
Previously, it was not that Douyin didn't want this profit, but that after the payment industry was strictly regulated, the number of licenses continued to decrease, and Douyin could only acquire it from the market if it wanted to enter the market. In the case of more monks and less porridge, the licensed institutions are reluctant to sell and wait for the price to sell, and the price of the license is rising.
Recently, Hailian Jinhui announced that it intends to transfer 100% of the equity of its UMF E-commerce Co., Ltd. to Tianjin Tongrong E-commerce Co., Ltd. (hereinafter referred to as "Tianjin Tongrong"). The transaction price is the benchmark transfer consideration of 750 million yuan + the net assets consideration on the delivery date. It is estimated that the total price of this transaction is nearly 1.4 billion yuan.
According to the enterprise investigation, Tianjin Tongrong is a wholly-owned subsidiary of Beijing Shibei Technology Co., Ltd., and Zhang Yiming, the founder of Byte, and Zhang Lidong, the chairman of Byte, hold 99% and 1% of the latter's shares respectively. This shows how close Tianjin Tongrong is to the core power of bytes. Tianjin Tongrong also wholly owns the license subject of Douyin Pay - Wuhan Hezhong Yibao Technology Co., Ltd.
With this license, the offline trading part of Douyin's local life can go through its own channel, and users can open the Douyin APP, scan the QR code in the store, and pay the final payment. In other words, Douyin has worked hard to attract users from short videos and live broadcast rooms to stores, and the offline payment link has achieved a closed loop.
In fact, "buying, buying, buying" has always been a common and efficient way for bytes to expand new business, but vigorous efforts do not necessarily work miracles. Previously, Byte had bought games, VR, mobile phones and other businesses in large quantities, but due to deviations from the company's main business, stricter industry supervision, cost reduction and efficiency increase, etc., the related businesses did not meet the company's expectations, and in the end they could only be sold or marginalized.
Although Douyin Pay has run through e-commerce, local life group buying, social red envelopes and other scenarios, it has no advantage offline.
A former employee of Douyin Local Life said that when he was expanding his business in the early stage, he tried to push and place the QR code of Douyin scanning group meals on the tables of cooperative merchants, but the open rate was not high. If there is no continuous and strong subsidy, it may be difficult for user habits to migrate from Meituan, Alipay, and WeChat to Douyin.
A choice of last resort
Behind the local life players stands a giant. Meituan is a pole of its own, with the shadow of Tencent behind it, and Ali stands behind Ele.me and AutoNavi, so they give priority to their own products in the choice of payment tools.
Previously, Meituan had opened the payment interface to Alipay and WeChat, but later, Wang Xing thought that Alipay's channel fee was too expensive, and once dropped the Alipay payment interface. Nowadays, although you can still use WeChat, Alipay, digital yuan, Apple Pay and other methods when placing orders in Meituan, the system gives priority to Meituan Pay and Meituan Monthly Pay, and the latter two can enjoy instant cash discounts and give away delivery coupons.
At present, Douyin, which has a huge amount of traffic, has become a "common opponent" in the Internet industry, and the big manufacturers will naturally not easily open the payment entrance to Douyin, and Douyin Pay has to rely on itself if it wants to take root offline.
Looking back at the history of offline payments, we can see that this is a war of attrition accompanied by subsidies. As strong as Alipay and WeChat, one of the key factors behind the booming online car-hailing and bike-sharing wars was to seize the offline payment entrance. An important reason why Hellobike was able to survive and join Ali is that it is mainly located in second- and third-tier cities, which meets the needs of Alipay to promote offline payment. Payment services can also act as traffic portals and derive new financial services.
So, what does Douyin rely on to lay an offline payment network? From the perspective of usage habits, offline scanning code payment is often used in scenarios such as shared bicycles, shared charging treasures, taxis, and in-store scanning code order payment, and in these aspects, Douyin is not deep and relatively absent, making it lack a clear starting point.
And consumers' habits of using WeChat, Alipay, and even Meituan Pay have already been formed, and they can't be changed overnight. Statistics show that Alipay and WeChat occupy nearly ninety percent of the market share of offline mobile payment. Douyin can take advantage of consumers' impulsive consumption psychology in short videos and live broadcast rooms to eat away at the online share of traditional e-commerce and local life, but once it is out of the online scene, it also lacks the connection point to stimulate users offline.
In the current Internet environment, even ByteDance, the so-called "most profitable" Internet company, will not easily start a large-scale "money-burning" subsidy war. What's more, Alipay and WeChat have already been baptized by "subsidies", and they are not short of money, nor are they short of tactics and tactics.
Although it is difficult, making up for offline shortcomings is a move that Douyin has to follow up. First of all, the side of the couch does not allow others to snore. Wang Xing once commented that the opponents that Meituan had defeated before had shortcomings, but new opponents like Douyin were all-rounders. Behind the strong smell of gunpowder, Douyin's offline payment without its own channel seems out of place, not only to pay a lot of tolls, but also to leak secrets and the hidden danger of business being controlled by others.
Secondly, after the peak of Internet traffic, the business of large factories is staggered, and friction is inevitable, and the reserve license has become a prerequisite for starting anew.
Even Alipay, which has strong tool attributes, is also laying out the content track, catching up with the late train of short videos and live broadcast traffic dividends, and opening up a "video" entrance in the menu C position at the bottom of the homepage, hoping to retain users and derive more transaction scenarios. How can Douyin be willing to make wedding dresses for others?
Is finance at the end of the internet?
With a license, local life can reap the benefits of "killing three birds with one stone": advertising fees, transaction commissions, and derived financial benefits.
At the end of the internet is finance. Compared with offline time-consuming and laborious pushing, making money with finance is obviously a "lying and earning" business.
According to the financial report, in 2023, Tencent's financial technology and enterprise service business will "make a big fortune", with revenue accounting for about one-third of the company's total revenue, reaching 203.9 billion yuan. In fiscal year 2023, Ant Group contributed 10.294 billion yuan in profits to Alibaba.
Putting aside the financial business, as far as the advertising platform is concerned, Douyin has become an important marketing scenario for many lending institutions. Many users may have swiped loan advertisements when they swiped Douyin daily.
In addition, Douyin itself is also vigorously promoting financial businesses such as consumer loans and merchant loans. In the Douyin APP "My Wallet", "Rest Assured Borrowing" is an online personal loan product, which directly transfers money to the user's account for the user's free disposal, which is equivalent to Alipay's "borrowing"; "Douyin monthly payment" belongs to the consumer financial service of first enjoy and pay later, which is equivalent to Alipay's "Huabei".
"Leopard Change" tested Tencent Micro Loan, Alipay Loan, and Douyin Assured Loan Credit Line as a user, and the basic amount of the three was about 200,000 yuan, of which the annualized interest rate of Alipay Loan was 10.95%, Micro Loan was 9%, and Assured Loan was 12.6%. In the same period, the annualized interest rate of Bank of China's "Bank of China E Loan" was only 3.4%.
Generally speaking, interest rates are positively correlated with risk levels, and the higher the interest rate, the greater the user's overdue risk. The loan interest rate of the same user in different institutions varies greatly, which is related to the risk control of the lending institution. In addition to the lower cost of bank funds, if the user's mortgage and salary card are in a certain bank, they can usually get a larger loan amount and lower interest rate. However, risk control based on online data is relatively weak, and covering high risks with high interest rates has become a means of controlling risk exposure.
For lending institutions, the behavioral data accumulated by users and merchants on the platform is an important indicator for assessing risk, which determines the amount of loans and interest rates. WeChat has social value, and Alipay has strong attributes, which is a rigid need for many people, which has also become an important risk control grasp for the two companies. In order to continue to use these two apps, many people would rather tear down the east wall and make up the west wall when the loan expires, and give priority to repaying the loans of these two apps.
In contrast, the substitutability of short videos is strong, and the credit value precipitated by pan-browsing behavior is limited, which determines that Douyin needs to work more on risk prevention, and the borrowing interest rate is higher than that of Alipay and WeChat.
Compared with Alipay and WeChat, Douyin is a rising star in finance, and its external radiation capacity is relatively limited. After entering the offline, Douyin Pay is not about how much profit it can create in the short term, but by contacting more consumers and merchants and mining more derivative needs, so as to cultivate new "cash cows" for Douyin and even Bytes.
The payment war between large manufacturers may not be over.