Local life dynamics: Meituan is on guard, multiple platforms are attacking from all sides, and e-commerce giants are entering the game

As Internet giants have turned their attention to the field of local life services, a war over food delivery, group buying, and instant delivery is intensifying. Meituan, JD.com, Taobao, Douyin, Kuaishou and other platforms are constantly launching new services and new functions to seize this market with huge potential. This article will analyze the competitive situation in the field of local life services in detail, and how each platform competes for users and market share through strategic adjustments and business innovation.

The local life battlefield is filled with gunpowder. Meituan is doing its best to defend its position, while Douyin, Kuaishou, Video Account, and Xiaohongshu are attacking from all sides to grab the local life market share. At the same time, JD.com is increasing its investment in the food delivery field, and Taobao's hourly delivery service is open to all merchants. A fierce local life war has already begun.

This article focuses on the developments in various fields of local life, and comments and additions are welcome.

1. Meituan strictly guards the local life position

Since the beginning of this year, various giant companies have increased their investment in local life services.

Price competition

Meituan has launched a series of preferential activities, emphasizing price power. For example, it launched "Daily Magic Coupons" and "Hot Deals" for food delivery; it launched the "Special Price Group Buying" section for group buying, and also provided large subsidies to attract more merchants to settle in and consumers to place orders.

Douyin continues to strengthen its low-price label. The group buying channel has added three new modules: "Special Group Buying", "Popular List", and "Free Trial". The "Special Group Buying" module brings together many group buying products. The products in the module have relatively large discounts, and the price subsidies range from 0.1 yuan to hundreds of yuan.

Kuaishou also adopted a low-price strategy and launched a service brand called "Dare to Compare Prices" to allow users to see price differences more intuitively.

Fighting for the sinking market

Meituan changed its operating model in low-tier cities and began to fine-tune management to improve its competitiveness in the sinking market. Previously, Meituan's store business in the sinking market was basically an agent model, which was conducive to rapid expansion, but difficult to manage and prone to information asymmetry. After adjusting to the direct operation model, it can more accurately understand and meet the needs of merchants and users.

Douyin promotes the "regional service provider business" model, and helps businesses operate by cooperating with high-quality regional service providers. Douyin has become one of the important positions for business promotion, but video operation is not easy, especially in low-tier cities where businesses have less experience. Service providers can provide short videos, content planning and other services to make up for the shortcomings of businesses. By cooperating with high-quality regional service providers, it can help inexperienced small and medium-sized businesses operate, thereby enhancing Douyin's influence in sinking cities.

Kuaishou continues to strengthen its existing advantages in the lower-tier cities and develops local life services by enriching content supply and providing resource support. For example, it launched the "Flying Bird Plan" to provide traffic and cash support to talent creators to encourage their growth, thereby outputting more high-quality content and promoting the growth of local life services.

AI

Improve user experience and conversion efficiency with the help of AI. Meituan Dianping has tested the "Smart Assistant" function. When users search for certain questions, a beta version of the "Assistant" will appear at the top of the search results page to intelligently answer users' questions. In addition, Meituan's food delivery app is also testing the AI ​​assistant "Ask Xiaodai" for C-end users, which can provide users with dining recommendations and other services.

Douyin and Kuaishou mainly use AI to help creators produce high-quality content efficiently and with high quality, which in turn feeds back to local life distribution.

1. Meituan Waimai adjusts its business objectives

It is rumored that Meituan Waimai will adjust its top priority in business operations from pursuing GMV to increasing order volume.

The reason is that Meituan Waimai has been experiencing a continuous downward trend in the average order value, which has caused a significant decline in GMV (gross merchandise volume) of 10%-20%. Therefore, it hopes to stabilize the basic market of its food delivery business by increasing the frequency of orders.

Since 2023, Meituan has begun to fully focus on low-price food delivery.

As of August this year, the low-price "Pinhaofan" has successfully attracted more than 120 million users, which is close to a quarter of Meituan's total takeaway users. By allowing users to place orders in a centralized manner, merchants to prepare meals efficiently, and riders to deliver meals in a centralized manner, Meituan has improved the efficiency of all three parties, thereby reducing their costs and achieving a surge in sales.

At the same time, Meituan also launched innovative businesses such as "Brand Satellite Stores" and "Super Popular" this year. These businesses are all centered on low-price strategies, effectively stimulating user demand.

Among them, Meituan has previously implemented the "Brand Satellite Store Ten Thousand Store Commission Rebate Plan" (supporting merchants through commission rebates, traffic support, free AI site selection and product selection, and precision marketing services, and providing users with more stable food quality), attracting more than 120 brands including Lao Xiang Ji and Tai Er Pickled Fish to open more than 800 brand satellite stores.

As of early July, the number of merchants participating in the "God Member" project has exceeded 5 million.

It can be seen that through innovative businesses focusing on low prices such as "Pinhaofan", "Brand Satellite Stores" and "Shenqianshou", Meituan has gained a clear advantage in the field of low-price takeout.

Adjusting its strategic goals this time will also help it maintain and expand its market share in the fierce competition in the catering market.

2. Meituan established a core local business segment

Meituan has made major adjustments to its organizational structure, merging both in-store and home delivery businesses into the core local business segment, with Wang Puchong as CEO. This move means that Meituan will gradually connect "home delivery" and "store delivery".

Starting from May this year, Meituan's core local business has gradually opened up home delivery and store delivery on a city-by-city basis. An obvious perception from the user level is that when ordering Meituan takeout in some cities, the store will begin to guide users to buy group purchase coupons and consume in the store.

In addition to the interconnection of store pages, another attempt is to launch the "instant pick-up" function, that is, after users purchase group purchase coupons, they can verify and place orders online, and then go to the store to pick up the goods.

Meituan has another trick to connect home delivery and store delivery - God Membership. After users purchase the God Coupon Package, they can use it in various scenarios such as eating, drinking, and having fun, without any category restrictions.

At the same time, Meituan has also launched two official live broadcast IPs, "Shen Qiangshou" and "Bao Tuantuan", to seek growth. The former focuses on home delivery business, while the latter focuses on store business. The homepage of the App also provides a fixed entrance for live broadcasts, aggregating a large number of official and merchant live broadcast rooms, mainly selling group purchase coupons.

3. Internal testing of the “money saving version”

Following the "Super Hot" and "Pinhao Fan", Meituan Waimai launched low-priced products again. This time, the "Saving Edition" was tested in the Meituan Waimai app with the goal of "high cost performance". After opening the app, in addition to the ordinary "filter" functions, there is also an eye-catching "Saving Edition" option at the bottom of the homepage.

After clicking on the "Savings" page, it is similar to a parallel version of the "New Meituan Takeaway", where each package is presented in the form of a commodity flow, emphasizing the price of a single package and its price advantage compared to ordinary takeaways. The "Takeaway" section of the Meituan app is also synchronized with it. The location of the "Savings" page on the Meituan Takeaway homepage and the effect after clicking it are as follows:

"Pinhaofan" is a price-for-volume exchange, and the "saving version" is also a low-price selling point, but it has gone a step further in terms of supply. The participants of the former are still mainly small businesses, and there are few chain players. The supply of the saving version will cover more large KA businesses, such as Yuanji Yunjiao, Tustin and other chain restaurant brands.

Another change reflected in the money-saving version is that Meituan Takeout is vigorously trying the "commodity model".

In the past, Meituan Waimai has always sorted and recommended by merchant name, but the new projects such as Super Popular, Pinhaofan, and Savings Edition have replaced "merchants" with "commodities" and completed all displays in the form of single products. This year's emphasis on the commodity model is, to a certain extent, inspired by Pinduoduo's explosive product model.

Therefore, this year, we can intuitively see many changes in the sense of "affordability" on the takeout page and the entire Meituan page, and the product model also contributes to this.

For example, the "savings version" of the product will be marked with "about x yuan saved" below the price, and many packages will directly mark the comparison between their prices and the "in-store average price", which are effects that are difficult to achieve with the merchant model. Not only takeout, the "special price group" display method on the Meituan main site is extremely similar to the "savings version", in addition to the exclusive recommendation position of "10 billion subsidies", and the animation effect of "you have xx yuan coupon package to use", etc.

In addition to the "sense of affordability" from the user's perspective, the product model will also reshape the traffic distribution logic on the merchant side. Under the traditional merchant model, it is difficult for small and medium-sized merchants to compete with chain merchants of the same category in terms of brand power, user evaluation, advertising investment and other dimensions, resulting in no advantage in recommendation ranking. In the product model presented in units of "products", the platform can give more traffic to low-priced products, which can help small and medium-sized merchants to acquire customers to a certain extent, and can also optimize the exposure of unpopular products of KA merchants, which will open up greater room for imagination in terms of advertising revenue in the future.

However, if Meituan Takeout is to be completely transformed into a "commodity model", the degree of consumer acceptance remains to be verified. After all, the public's threshold for safety and trust in "eating" is much higher than other commodity consumption, and familiar brands and stores are the basis of "security", and pages with pure commodity flow may also affect user experience.

4. Launch special discount group

In May this year, Meituan’s special group buying was renamed Special Price Group, providing super value special group buying services.

After the name change, Meituan adopted the strategy of "super big brands + platform subsidies" to introduce more well-known brands and high-quality products to enhance consumers' trust in special group purchases. At the same time, it quickly established the mental cognition of "special group = super low price and high-quality products" in the minds of consumers.

The special price group is comparable to Pinduoduo, with products as the smallest operating unit, rather than stores. At the same time, a 10 billion subsidy campaign was launched, involving McDonald's and other leading catering brands, with a wide range of stores, and users have a stronger perception of low prices.

The two official live broadcast IPs launched by Meituan, "Shen Qiangshou" and "Bao Tuantuan", focus on home delivery business and in-store business respectively, and sell group purchase coupons in the live broadcast room, which is a content-based marketing form that targets Douyin.

5. Launch the “Instant Withdrawal” function

Meituan Group Buying has launched the "Second Pickup" service. This service not only covers dine-in, but also suitable for take-out. On the Meituan app, if you choose to place an order for food group buying at the "Second Pickup Store", you can click "Go to Order" on the order page to complete the coupon verification, ordering and backstage self-pickup reservation at nearby stores online in one stop. You can pick up the food at the store with the pickup code, eliminating the hassle of jumping to the brand mini-program or manually verifying the coupon, which greatly facilitates consumers in fast-paced lives.

According to Meituan’s estimates, after aggregation platform subsidies, merchant group buying, and “instant delivery” services, the order volume of leading milk tea and coffee brands can increase by 20% to 40%.

At present, "second delivery" has taken the lead in covering high-frequency consumer categories such as tea and coffee. It may be replicated in more catering formats in the future, forming a complementary service with take-out and dine-in, so as to better meet various "more, faster, better, cheaper" needs online, offline, in-store and during travel.

6. Meituan launches its own map

Meituan’s self-developed map is launched, replacing third-party maps:

Provides basic map services, such as displaying location information near the current location, finding destinations, etc., and also supports viewing traffic information

It has channels for food, transportation, hotels, attractions, and rest and entertainment. It supports finding related services provided by Meituan merchants through the channels, creating a second window for Meituan merchants.

Supports navigation services for store directions. The experience is similar to third-party navigation. After the user sets the current location and destination, selects transportation methods such as taxi/driving/bus/walking, and clicks "Open Navigation" to enter the navigation mode. The navigation will display the estimated distance, duration, speed, number of traffic lights and simple traffic information.

The entrance is deep. Users will only see the "Map" entrance on the right side of the search bar after searching in the search bar of the Meituan app. After clicking to enter, they can see the map with the Meituan logo.

Compared with mature map navigation software, Meituan Map still has gaps in some route planning and traffic prompts, which damages the user experience.

Maps are particularly important to Meituan, because third-party maps cannot meet Meituan's needs in some specific scenarios. For example, unmanned delivery has to face closed areas such as office buildings and elevators, as well as complex environments such as auxiliary roads, non-motorized vehicle lanes, and internal roads of residential areas. Existing third-party high-precision maps are difficult to cover these details.

At the same time, the rich and unique data collected by Meituan is closely integrated with high-precision maps. Using third-party basic maps may face difficulties in intellectual property cooperation and protection. In this case, Meituan’s self-developed maps have become an inevitable choice.

7. Others

The scale of Meituan Pinhaofan continues to expand, and the group-buying model has basically been successful.

Meituan's "God Member" has been upgraded to connect 13 food, drink and entertainment items including takeaway services, group buying of food, hotel accommodation, leisure and entertainment, beauty and health, and family services. After the integration, the merchant side has gained a significant amount of new customers, almost all of which were driven by the catering category, and the platform's operating efficiency has been improved.

Meituan launched its rental business, breaking the conventional monthly rental model of traditional rental platforms and innovatively introducing a flexible rental period charged on a daily basis. For example, users can choose to rent for 45 days or 70 days according to actual needs, which greatly meets the rental needs in various scenarios such as short-term rentals, medium- and short-term travel, exam preparation, and business travel.

"Meituan Quanquan" and "Special Price Group Buying" are placed side by side in the "Low Price Good Goods" section to create the ultimate cost-effectiveness. The main distribution channels of Meituan Quanquan include self-operated corporate WeChat groups, expert distribution networks and Meituan Quanquan mini programs.

Meituan cooperates with Alipay, and Meituan Takeaway and Meituan Hotel, two core businesses, have been launched on Alipay mini-programs

2. Douyin local life attacks from all sides

1. Internal testing of the “Convenient Price” function

TikTok is testing a new local lifestyle service feature called “Shunshou Price”.

When users complete the payment process of a group purchase order on Douyin, the order page will push other group purchase products within 1 km of the area, and the price of the group purchase products will be lower than the regular group purchase price. At the same time, the slogan "Shop on the way and enjoy exclusive discounts" can be seen.

The products or services displayed by the "Convenient Price" function are not pushed randomly, but are recommended through the precise positioning of the user's mobile phone. The recommended products are all from merchants participating in Douyin group buying within 1 km of the current location.

Douyin’s “convenient price” is exactly the same as the “buy one at a time” in the e-commerce field (after placing an order, you can check the items and exchange them for great value), but it has been brought into the local life scene.

From the perspective of user experience, it provides users with a more convenient and affordable local consumption experience. This method of instant recommendation and discounted purchases can improve user satisfaction and loyalty.

At the same time, through precise positioning recommendations, information overload is avoided, allowing users to make consumption decisions that best suit their needs in a short period of time.

From the perspective of merchants, the new function mainly focuses on offline scenarios. The "see now, buy now" model can stimulate users' immediate desire to buy, especially after users have completed a purchase, the possibility of purchasing other products is greatly increased.

This model helps to improve the overall consumer conversion rate and provides new traffic channels and user reach channels for offline merchants participating in group buying, helping offline merchants who have difficulty in acquiring customers to attract targeted users to their stores.

2. Launch "Super Value Group"

Douyin Local Life has launched a "Super Value Group" activity for catering and comprehensive category merchants, competing with Meituan's "Special Price Group".

The gameplay of the super value group is very simple, which is to attract attention with low prices, push high-quality products with price competitiveness to users, and then promote the sales growth of merchants.

The event provides traffic incentives, channel privileges, and exclusive atmosphere. Merchants participating in the event can enjoy billions of traffic incentives across all channels of Douyin every day, as well as exclusive channel pages and super-value group tags.

In terms of price power requirements, the actual price/group purchase price of catering products after investment must meet two conditions: the actual price/group purchase price ≤ 95% off and ≤ 300 yuan (at least 1 yuan discount).

In other words, first, the discount should not exceed 9.5%, that is, the merchant should give at least 5% off the original price; second, the final price (or group purchase price) should not exceed 300 yuan, which means that even if the original price is much higher than 300 yuan, the price of participating in the super value group activity must be controlled within this range. In addition, the merchant should give at least 1 yuan off to reflect the authenticity and attractiveness of the activity.

In addition to the above-mentioned discounts and price caps, catering products must also meet the condition of being the lowest price in the past 30 days. At the same time, the price must not be higher than the price of the same product across all channels to ensure that the prices on the Douyin platform are competitive.

Douyin has stricter requirements on the price power of comprehensive products (non-catering products). The price after investment in comprehensive products/group purchase price is ≤ 10% off and ≤ 500 yuan (at least 1 yuan off), that is, the merchant must give at least 10% off the original price, and comprehensive products must also meet the condition of the lowest price in the past 30 days. In terms of special exclusive products, Douyin Super Value Group sets differentiated discounts and price ranges based on the characteristics of different secondary categories.

It is reported that the more profits merchants make, the more traffic they will be encouraged to earn.

Unlike the previous "Super Value Coupon Inflation" activity which was jointly funded and subsidized by merchants and platforms, this Super Value Group activity is fully funded by merchants, which means that merchants need to bear all preferential costs in the activity and there is no additional subsidy from the platform.

In addition, merchants can offer group purchases and vouchers in value-added group activities to attract consumers to participate in the activities. The upper limit of the number of products that a single merchant can submit is 5, and the inventory must be more than 10.

During this event, the platform also set up a more detailed and intuitive data viewing function, allowing merchants to track key transaction data in real time, such as payment GMV, payment orders, verification GMV, etc. They can also view the number of reward exposures and reward orders, as well as the number of sales and sales rate.

3. Optimize the delivery path

Douyin optimized the layout of its own mall's hourly delivery channel, removed the "food delivery" entrance, and put it back in the secondary menu of Douyin group buying, shortening the user's opening path.

In addition, Douyin Waimai has also launched a merchant registration function in Douyin Visitors. The launch of this function has significantly simplified the registration process for single stores and chain stores.

4. Launch the “TikTok Hot Restaurant Ranking”

The Douyin life service platform has launched the “Douyin Heart-beating Restaurant List”, which recommends specialty restaurants based on consumer interests, merchant content strength, etc.

Douyin's Heart-beating Restaurant List sorts and categorizes high-quality businesses under the "store-find-people" model:

• Flavor list: represents the characteristics and customs of various countries and regions, which are often visited by locals and loved by users from other places
• Atmosphere list: Unique atmosphere and environment, suitable for taking exquisite photos and videos while dining
• Trendy list: unique or innovative experience, feel different and novel when dining

In this way, short video content is the gateway for "stores to find people". Lists are the gateway for "people to find stores". The entire traffic cycle is thus opened up.

5. Douyin local life layout (including "off-peak special offer" area)

Since entering the local life market, Douyin has been adopting a low-price strategy, reducing merchant commissions and increasing consumer subsidies, in order to lower product prices and attract users to place orders.

The feature-rich "Merchant Page" was launched in 2019, allowing users to query various promotional and discount information of merchants.

In 2020, the group buying business was launched, focusing on the "content + low price" model, and hotel and ticket booking functions were successively launched.

At the same time, the zero commission model has been adopted for a long time. Even if the commission is raised several times subsequently, the commission rate is relatively low, which gives merchants room to provide competitive low-priced goods.

Last year, relying on the low price + traffic strategy, we continued to make efforts and added three new modules: "Special Group Buying", "Popular List" and "Free Trial".

Douyin constantly encourages merchants to offer some of their products for special group purchases to attract traffic, and then brings in a large number of potential customers and orders for merchants through low prices and live broadcasts/content.

In June this year, we launched the "Off-Peak Specials" zone, which can only be used during the off-season or idle time periods of merchants, but the price is lower.

The “Convenient Price” function was tested in July (see above), and Douyin may continue to fight in local life in the future.

3. JD.com increases its focus on food delivery

JD.com’s “Instant Delivery Zone” has previously taken over two key entrances on the homepage (an independent entrance at the top of the homepage parallel to the homepage label + an entrance across the entire screen in the middle of the homepage). This time, it has further expanded to include takeaway merchants Burger King and Yonghe King.

Takeout is a high-frequency and rigid consumption, which can enrich the supply of JD.com's instant retail and strengthen the public's awareness of the platform's instant delivery capabilities. Takeout for the general public, low-priced, chain brands is a good way for JD.com to expand its user base.

The launch of Burger King and Yonghe King further demonstrates JD.com's intention to further penetrate the food delivery market, and its desire to use food delivery to increase the richness of supply, improve delivery capabilities, and strengthen its instant retail mindset among more general consumers.

Currently, JD.com’s delivery business in Shanghai is concentrated in four major sectors: fresh food, supermarkets, coffee and beverages, and medicine delivery.

Coffee drinks are one of the most frequently consumed categories, so the subsidies are the largest. The slogan "9.9 free shipping" is also highlighted, and this price is indeed better than Meituan.

In Shanghai, most of the merchants settled in are brands familiar to white-collar workers, such as Luckin Coffee, Kudi, Mixue Ice City, and Nova Coffee. The common feature of these brands is that they have many stores and are widely distributed. Orders are basically delivered within 10 minutes, and the emphasis on timeliness and service is still the main theme of JD.com.

JD Seconds Delivery was launched in May, integrating the original instant retail brands JD 24-hour delivery and JD Home Delivery. Relying on the same-city delivery service provided by Dada Seconds Delivery, it provides consumers with a "good product enjoyment" and takeaway experience with the fastest delivery time of 9 minutes with a new brand image.

In July, we launched an on-time guarantee service - for orders with delivery delays of more than 10 minutes, users will be automatically compensated with coupons with no threshold required, effectively ensuring the user's shopping experience.

In August, we launched services including “refund for expensive orders”, “compensation for slow orders” and “free shipping for return orders starting from 0 yuan” in Beijing, achieving efficient delivery in “average 28 minutes, fastest 9 minutes”.

Starting in September, users will be allowed to cancel orders during delivery to improve user experience.

In terms of supermarkets, JD.com’s Express has the exclusive cooperation advantage with Walmart compared to Meituan and Ele.me, and can provide delivery services for Sam’s Club.

On JD.com’s instant delivery page, there are coupons for some products of Sam’s Club, which are cheaper than ordering on the Sam’s App.

JD.com's Express Delivery has already grabbed a group of users from various platforms through activities such as free shipping for coffee drinks at 9.9 yuan, compensation for 10-minute overdue delivery, and lucky draws for cash coupons when placing orders. In the future, it may vigorously launch food delivery services to grab key restaurant customers.

4. Taobao 1-hour delivery is open to all merchants

The homepage of Taobao app has been significantly redesigned and upgraded. A new "Hourly Delivery" tab has been added to the top as a first-level traffic entrance, opening up public domain traffic to merchants in the Hourly Delivery channel.

At the same time, we have reached in-depth cooperation with Ele.me to jointly build an ecosystem that comprehensively covers supermarket convenience, pharmacies, fresh fruits and vegetables, wine and beverages, flowers and plants, and other multi-category supplies, providing users with convenient and efficient local life service experience 24 hours a day.

In addition, Taobao Hourly Delivery is open to all brands and merchants on Taobao Tmall. As long as the brands and merchants have local warehouses and can meet users' instant delivery needs, they can apply to join.

JD.com upgraded its JD.com instant delivery, Taobao fully liberalized its one-hour delivery service, Meituan launched its instant pickup service, and instant retail has been fully upgraded. Competition has covered all aspects of local life.

V. Others

Kuaishou launched group purchase home delivery, adding a "delivery only" label to the group purchase package service guarantee, and also adding the "takeout home delivery" function service. Brand merchants with self-delivery capabilities can also obtain Kuaishou's group purchase home delivery capabilities through invitation. Users do not need to jump to a third-party platform and can order takeout within Kuaishou.

Kuaishou and Meituan have recently upgraded their cooperation based on local life. In the next three years, the scope of cooperation will be expanded to "100 cities and 10,000 stores" across the country, and more basic and systematic product construction will be promoted in production and research.

WeChat Video Account also began to accelerate its layout in the field of local life services in April this year. Merchants in the local life industry can apply to enter the video account store of the "local life" business type. Currently, the stores are divided into two types: single store and chain store. Unlike Xiaohongshu, which temporarily waives the deposit, local life merchants or influencers who enter the video account need to pay a deposit to the platform, and the merchants must also bear the corresponding platform technical service fees.

Xiaohongshu has fully opened the group purchase function for the catering category in 49 core cities across the country. At the same time, the deposit for catering merchants is temporarily waived, and the commission rate, i.e. the technical service fee, is 0.6%. Currently, this rule is not open to other local life categories.

A "Nearby" entrance has been added to Xiaohongshu's homepage, where users can browse notes, live broadcasts and group chats related to nearby food, drink and entertainment, accelerating the layout of local life.