WeChat disrupts the situation, and local life ushers in the "Three Kingdoms Killing"

Just as Douyin and Meituan are fighting for local life, this battlefield has ushered in a new player - WeChat video account. A few days ago, the video account released the entry policy of local life businesses, including two first-level categories of catering and wine tourism, and 9 second-level categories such as dinner, fast food, baked snacks, accommodation, and scenic spots.

In terms of fees, throughout 2024, local life merchants can enjoy a 0.6% discount on technical service fees for entering the video account, and then recover to 2.5%, which is at a low level compared with the 2% to 5% rate range of e-commerce, with a category margin of 20,000 yuan, and a floating margin paid at a certain proportion of the total transaction amount within 30 days.

Shouldering the "hope of the whole goose factory"

It is understood that the WeChat payment team is the main promoter of Channels' entry into local life. WeChat Pay connects the most extensive local life merchants, accounting for more than 50% of the offline payment market, and has a large number of merchants' business flow, logistics and passenger flow and other big data information.

Regarding the above news, a person familiar with the matter said that Channels' entry into local life is to better meet the consumption and business needs of users and merchants in Channels, and to support the development of Channels' live streaming business. Channels has no intention of competing with Douyin, Meituan, etc.

"WeChat has expanded the team size of the live streaming of Channels a small amount internally, and at present, all related businesses are mainly promoted by the Channels live streaming team." The person familiar with the matter added.

At the beginning of 2023, Ma Huateng called the video account "the hope of the whole goose factory". At the beginning of 2024, he once again affirmed the video account, saying that the video account has indeed lived up to expectations after more than a year of development, "allowing us to regain a solid grasp after the failure of short videos in the past."

But at the same time, Ma Huateng is also full of crisis. He said that WeChat is currently Tencent's most active platform in the entire ecosystem, but it has also been around for 12 years. It is also 12 years for QQ to go from prosperity to decline and look forward to the next transformation. Therefore, how to sprout new shoots in the old tree of WeChat is a big problem, "In the BAT company, it seems that we only see that we still have the opportunity to sprout, and other new trees are thriving, which also brings us a lot of pressure." Undoubtedly, Ma Huateng will use the strength of the whole company to accelerate the commercialization of the video account this year.

Looking back at the entire industry, due to Douyin's radical actions in the past two years, the battlefield of local life has become a "hot war". According to media reports, in the first quarter of 2024, the sales of Douyin local life will reach 100 billion yuan, and "on Douyin, enjoy discounts" has sunk to the minds of users.

The penetration of Douyin in the local life sector has made Meituan extremely alarming. On April 18, Meituan CEO Wang Xing released an internal email announcing a new round of structural adjustments: the previously integrated Meituan platform, the store business group, the home business group and the basic R&D platform will be merged into the "core local business" sector, and Wang Puzhong will be the CEO of the "core local business".

Zhang Chuan, senior vice president of Meituan, predicted at the beginning of 2024 that the Internet has entered the stage of competition for existing users, because there is no delivery moat like takeaway, so novices enter life services from the beginning of the store. Meituan's opponents are getting stronger, and now they are all all-rounders.

Douyin and WeChat, China's two largest C-end user active platforms, plus Meituan, China's largest local life service provider, local life has officially entered the "Three Kingdoms Killing" melee.

WeChat Pay intervenes to intensify market competition

WeChat's layout of local life has always been very Buddhist, although the layout time is very early, but it basically relies on the self-drive of service providers and merchants.

In February 2023, the WeChat Mini Program will launch "Store Express" in Guangzhou and Shenzhen. In July, "Store Express" added business in 12 cities such as Beijing, Chengdu, Chongqing, Shanghai, and Hangzhou, and the merchants were basically brand chain stores such as Dingdong Medicine, KFC, and Baiguoyuan, and the delivery party was SF City or Dada.

In August 2023, the video account tried the waters of local life, but the effect was average. Xia Heng, the head service provider of the video number and the founder of Beijing First Time Network Technology Co., Ltd., pointed out that they had broadcast on the video account for the super head platform and promoted group purchase coupons, but the best one only sold more than 300,000 yuan, because the traffic distribution of the video number was inaccurate, and they tried to buy "urban fixed-point traffic", but found that the number of viewers of the video number dropped by two-thirds.

Xia Heng also mentioned that the number of merchants in the first round of the pilot of the video account is limited, mainly chain brands such as KFC and Michelle Bingcheng, and the background is connected to the merchant's own mini program in the form of API. "At that time, the verification rate of the video account was only 30% to 50%." He said. According to Douyin service provider data, Douyin's write-off rate can reach 60% to 70%.

Due to the mediocre effect, in the second half of 2023, the enthusiasm of Channels for local life will become increasingly depressed. The turning point was the intervention of the WeChat Pay team. Starting from the end of 2023, the WeChat Pay team will be involved in the commercialization process of Channels and develop transaction components.

First, local merchants can directly put products on the shelves of the Channels store without having to develop a separate Mini Program, so that the algorithm of the Channels can maximize the data precipitation; Second, there is an exclusive traffic recommendation for local life in the traffic pool; Third, one step ahead of Douyin and Meituan, to achieve a closed-loop of the whole process of online coupon purchase and offline verification.

The reason why WeChat Pay is in a hurry is because Douyin Pay has a tendency to penetrate offline merchants. In the past few years, WeChat Pay and Alipay have occupied the largest number of merchant payment entrances, and if Douyin Pay promotes its own payment sinking with a write-off scenario, then the payment market will usher in a new player.

The video number should learn Douyin

As the two major national applications with the largest number of users and user duration in China, Douyin and WeChat have always been regarded as products with two different genes - a typical efficiency machine that vigorously produces miracles, focuses on operation, the public domain is king, and the traffic is centralized; The other is product-driven, light operation, both public and private domains, decentralized traffic, and typical atomic component thinking.

Specific to local life, since entering the game in 2021, Douyin has been holding it high, using the high ecological niche of content and the operational support of real money to make it rise rapidly. For example, Douyin's penetration of local life merchants is deeper than imagined, and in some toy stores, Douyin and joint merchants have launched co-branded models, and only when you buy coupons on Douyin can you enjoy discounts.

At the 2023 Douyin Local Life Conference, Douyin announced that it plans to invest 500 million yuan in the next year to help merchants more accurately match suitable influencers through three major measures, including business order subsidies, product function optimization, and upgraded operation services, and at the same time allow influencers to obtain higher revenue from bringing goods.

Douyin's dimensionality reduction blow to Meituan illustrates the effectiveness of this set of combination punches. At present, the style of "cultivation system" has changed in the way Channels plays local life, and it integrates the resources of the whole company, which is more similar to the playing style and style of Douyin:

First, Tencent's advertising department has intervened in the commercialization of Channels, and they are working with the WeChat Pay team to vigorously promote the "nearby push" advertising business, which can now give customers up to 30% rebates, which is almost the highest rebate in Tencent's advertising business.

Second, all business teams work together to open up the closed loop of transactions. The e-commerce orders purchased by users from the video account and other entrances have been obtained a separate secondary entrance, and the TAP column at the bottom of WeChat "I" - "Card Package" entrance has been upgraded to "Orders and Card Package", where users can query e-commerce orders, and in the future, various cards and coupons will be displayed here.

Third, the traffic recommendation of Channels is more localized, and the local distribution logic is strengthened. One of the secrets of WeChat's rise is LBS (Location Social), such as Shake and People Nearby, one of which has been removed from the shelves and the other has been changed to "Nearby". But up to now, the video account has not yet launched a "group buy" entrance.

As for operations, Channels may not be as heavy as Douyin. An operation director of a major Internet company once pointed out that within Channels, the weight of operation is lower than that of products and technologies, which greatly reduces the ability of operations to mobilize resources, and Channels believes in the power of products.

However, times have changed, and the full rise of Douyin has put Tencent and WeChat under pressure like never before, with content, e-commerce, advertising, and social networks all developing rapidly. What WeChat can't do, Douyin is doing, and it's expanding without borders. It is reported that in 2023, ByteDance's revenue and profit will surpass Tencent. No wonder Ma Huateng sighed that how the old tree of WeChat sprouts is a big problem.

Yan Junwen