Douyin's food delivery business shrinks and is transferred from local life to e-commerce department

Douyin and Kuaishou, two short video giants, are trying to open up a new battlefield in the food delivery field. However, facing strong competition from traditional food delivery platforms such as Meituan and Ele.me, the road to counterattack of short video food delivery is not smooth. This article will deeply explore the new trends of Douyin and Kuaishou in the food delivery field and analyze whether they can break through in this food delivery war.

Douyin's local life home delivery business "group purchase delivery" (commonly known as Douyin takeaway) has been officially assigned to Douyin's e-commerce instant retail business "Hourly Delivery". At present, the "Food Delivery" entrance has been launched in the Hourly Delivery channel, covering most cities, and users can directly order food and have it delivered to their homes through this entrance.

There were signs that Douyin Takeout would be transferred from the local life department to the e-commerce department.

In June this year, Douyin Life Service adjusted its "group purchase and delivery" business. No new merchants will be added to the business. The original group purchase and delivery products are expected to be removed from the shelves on July 15, and no new orders will be received. Officials said at the time that this business will be integrated into Douyin's e-commerce Doudian home delivery platform.

It can be seen from this that Douyin Takeout has changed from an important business with a first-level entrance to a special section of Douyin e-commerce "Hourly Delivery", with a certain contraction in both size and traffic exposure.

At the same time, another short video platform, Kuaishou, also entered the food delivery market. Tech Planet disclosed that in the second half of last year, some Kuaishou merchants with self-delivery services could build food delivery mini-programs to provide food delivery services. Starting in March this year, Kuaishou optimized the product delivery function based on the delivery needs of some local life merchants, and users can order food delivery within Kuaishou.

However, a Kuaishou local life employee revealed to Tech Planet that, in fact, the delivery function is actually a small product optimization to support the needs of local life merchants. It does not have an independent service entrance and a complete distribution system, and there is still a big gap compared with the real food delivery platform. Kuaishou's slow progress in food delivery over the past six months can be described as "Buddhist".

Judging from the continuous shrinkage of Douyin’s food delivery business in the past two years and the Buddhist Kuaishou food delivery business, the highly-watched short video food delivery business has not been making rapid progress. Do they still have a chance to counterattack food delivery platforms such as Meituan and Ele.me?

01 Douyin food delivery changes its “door”, while Kuaishou food delivery is jogging in a Buddhist way

Douyin Takeout recently moved to a new home.

Recently, Douyin Mall added a new "Food Delivery" entrance. The entrance to this service is deep inside, located in the "Hourly Delivery" within the Douyin Mall. After clicking on the Hourly Delivery, you need to swipe the service classification section to the left to see the hidden "Food Delivery" entrance.

Caption: The entrance and interface of Douyin’s food delivery app.

In the food delivery interface, users can see some nearby takeaway products, which are displayed in the form of pictures and texts, and the estimated delivery time and price are also displayed.

The food delivery products currently sold are divided into 7 categories, including cakes and desserts, freshly made dishes, fast food bento, hot pot, barbecue, grilled and fried skewers, and rice noodle soup. The average customer price of these products is more than 60 yuan. It still maintains the business strategy adjusted by Douyin Takeaway last year, focusing the takeaway business on packages above 60 yuan to avoid direct competition with Meituan and Ele.me takeaway platforms.

Clicking on one of the takeaway products will jump to the ordering interface of the takeaway merchant. Compared with the previous Douyin takeaway ordering interface in local life, there have been some changes. It can be found that the Douyin hourly takeaway ordering interface is closer to the takeaway ordering interface of Meituan and Ele.me. The product information is clear and more regular, and the delivery time is also prompted.

Caption: On the left is the Douyin takeaway ordering interface during the local life period, and on the right is the Douyin takeaway ordering interface within the hourly delivery period.

Overall, it can be seen that after switching to Douyin e-commerce, Douyin's takeaway business has been optimized to a certain extent in the consumer experience, except that the entrance is deep and difficult to find. It is more in line with the consumption habits of current takeaway users. Whether it can bring new breakthroughs remains to be seen.

Another short video platform, Kuaishou, has also entered the field of food delivery, but the steps it has taken are not big.

In November last year, some of the cooperating merchants extended their delivery services to Kuaishou, that is, some of Kuaishou’s group purchases also supported home delivery. It was not until half a year later that Kuaishou’s local life open platform provided merchants with takeaway display labels for group purchase products and the ability to build delivery order mini programs.

In addition, the takeaway function is not fully developed, there is no separate takeaway entrance, and it is still dependent on Kuaishou group buying. Users can only find takeaway products through search. Tech Planet also found that there are too few types of takeaway products, and most of the products that can be delivered are high-priced products such as crayfish and barbecue.

As the food delivery function is still in the testing phase, the merchant group has not been further expanded. A local life merchant of Kuaishou told Tech Planet that the delivery capability of Kuaishou Local Life is opened by merchants invited by the platform. He tried to apply at the beginning of this year, but was rejected by the platform. The delivery function has not been opened so far. He learned that the reason is that the platform currently invites mainly merchants from brands and chain stores, and has not yet opened it to other merchants.

02 Short video delivery is not as easy as imagined

"It's not easy to do food delivery on Douyin for half a year," said Li Heng (pseudonym), a barbecue merchant on Douyin.

Li Heng said that the situation of other companies is unclear, but he did not attract more orders. It is undeniable that for merchants, although the commission for entering platforms such as Douyin is relatively low, only 2.5%, the content operation costs (such as spending money on traffic and hiring people to create content, etc.) are relatively high.

In order to attract traffic, they spent about 50,000 yuan to package and shoot short videos of takeaway products in more than a month. The first few videos did attract some attention, with an exposure of about 50,000, but the conversion rate was extremely low, with only 1.5% of the audience placing an order, which means there were only about 750 valid orders.

As time went on, the popularity of the video dropped rapidly. In order to maintain exposure, they had to continue to invest and buy "DOU+" promotion, but the effect was becoming less and less obvious.

"We are not planning to invest too much now. The takeaway function will be put on our group buying interface. If someone is willing to buy, then they can buy. If no one wants to buy, then there is nothing we can do," said Li Heng.

Xiyao, a merchant operating takeout on Kuaishou, told Tech Planet that it is not easy to do takeout on Kuaishou. Xiyao said that although Kuaishou has enabled merchants to deliver food, since there is no exclusive exposure portal, merchants can only promote their products through short videos and live broadcasts, and the conversion rate is not high.

Most importantly, compared to other platforms, Kuaishou’s food delivery service faces fulfillment issues due to the lack of its own delivery system, and sometimes it cannot call riders. As a result, in one month, there were more than 10 negative reviews due to delivery delays, which directly affected the store’s rating and ranking, and further led to a decline in orders.

This kind of problem also exists in Douyin food delivery. Tech Planet found that many users have also reported this kind of problem. On Sina Black Cat complaint platform, in June this year, a Douyin user complained that his food delivery could not be delivered immediately. The food delivery originally ordered at 11:50 in the morning was not delivered an hour later. He called the merchant, and the merchant said that there was no one to deliver it.

A regional service provider of Douyin's life service told Tech Planet that they mainly serve merchants engaged in in-store group buying because this segment is larger. Although group buying and delivery is a new model for Douyin, judging from the company's previous revenue data, the proportion of group buying and delivery is still too small, and current service providers are not interested in it.

Short video food delivery has not brought the platform ideal data. In June last year, LatePost reported that Douyin's food delivery business had given up the goal of achieving 100 billion yuan in GMV in 2023, and GMV was no longer the most important indicator for the team in the second half of last year. The current focus of the business has shifted to: trying to run the business process in more ways.

03 Does the short video platform still have a chance to make a comeback by delivering food?

For short video platforms such as Douyin and Kuaishou, there are still opportunities in the food delivery business.

In the past year, Meituan and Ele.me have continuously optimized live broadcasts and short videos, and created models such as live broadcasts of food delivery and food delivery with products, indicating that food delivery platforms are optimistic about live broadcasts and short videos. Through these measures, they are trying to build a new link between users and products.

According to Meituan’s 2023 annual financial report, the scale of live broadcast transactions grew rapidly throughout 2023, and consumers were increasingly willing to watch live broadcasts and place orders on the platform, which indirectly reflects that the "short video/live broadcast + takeaway" model still has room for development.

In terms of market demand, the domestic takeaway market is not yet saturated. According to data released by Yanjing Bizhi Market Research Network, the market size of China's catering delivery service industry has reached 2.8 trillion yuan in 2024, with a year-on-year growth rate of about 12%. The user scale has exceeded 500 million people, and 30% of the market is still unpenetrated.

After taking over the food delivery business, Douyin E-Commerce has made some changes, including strengthening its emphasis on fulfillment time.

Tech Planet discovered that Douyin e-commerce is specifically recruiting for a position called "Home Delivery Strategic Rules Management Expert", who is required to have experience in formulating supply strategies for e-commerce or near-field fulfillment business (takeout, instant retail), and systematically sort out all the rules of Douyin e-commerce to ensure the rationality, effectiveness, timeliness, etc. of each rule, to safeguard business development.

In addition, Douyin’s food delivery service will offer more discounts than Douyin’s life service. An employee of Douyin’s e-commerce revealed to Tech Planet that they will plan and organize home delivery services, launch large-scale activities such as big promotions, winter and summer campaigns, and node marketing, to increase the popularity of Douyin’s food delivery service within an hour.

While exploring its own food delivery service, Kuaishou is also further strengthening local life cooperation with Meituan.

Public information shows that about three years ago, Meituan launched the Meituan Mini Program through the Kuaishou open platform, allowing Kuaishou users to order food while browsing. According to the International Business Daily, this three-year cooperation exceeded the expectations of both parties.

Data shows that in June this year, the GMV of Meituan merchants on the Kuaishou platform increased by more than 38 times year-on-year, and the order volume increased by more than 10 times year-on-year. In July this year, after the three-year cooperation expired, the two parties cooperated again. In the next three years, the scope of cooperation between Kuaishou and Meituan will be expanded to "100 cities and 10,000 stores" across the country, increasing the scale of in-store and home delivery services.

Neither Douyin nor Kuaishou has built its own delivery system. They still rely on self-delivery by merchants or third-party delivery, which may make delivery efficiency unstable and affect user experience, thereby affecting the merchant's reputation and revenue.

From the current perspective, short video platforms still have opportunities to do food delivery, but it will undoubtedly take some time to successfully run this business.

Text | Chen Qiaohui