Video accounts enter local life again

In the field of local life, the video account is also quietly expanding its territory. So how much of the pie can the video account get?

WeChat still seems to be obsessed with local life.

When Meituan began to integrate its two core businesses of in-store and home delivery and prepared to fight Douyin, Video Account, an underdog player, quietly expanded its territory while the top players were fighting.

Recently, Video Account released the policy for local life merchants to settle in, including two first-level categories, catering and hotel travel, and nine second-level categories, including formal meals, fast food, baked snacks, accommodation, scenic spots, etc. As the "hope of the whole village" in Ma Huateng's words, Video Account has been eager to try local life for a long time. This time, it finally has large-scale actions and standards, which also means that the company has made up its mind to join this battle that seems difficult to fight.

Unlike Meituan and Douyin, the details of this time show that Video Account’s actions are different from those of traditional local life giants. The catering category does not support single stores for the time being, and is more targeted at merchants with multiple chain stores. Hotels with single stores are allowed to enter the hotel and travel category, but the entry qualification standards require corporate entity qualifications including business licenses and legal person ID information. Scenic spots are marked as "only open to 4A and above scenic spots."

Even though the restaurant chain is developing rapidly, the overall market share is still relatively low. Under strict standards, video accounts for local life seem to want to break through from the direction with less resistance first, which also indirectly shows that video accounts are still relatively cautious in the field of local life.

In fact, there are traces of this caution. Compared with Douyin, which quickly pushed the scale of local life to 100 billion in a single quarter, WeChat’s performance in local life can be said to be not very outstanding.

WeChat's entry into local life can be traced back to February 2023, when the WeChat applet launched "Store Express Delivery" in Guangzhou and Shenzhen. By July, store express delivery added services in 12 cities including Beijing and Chengdu. The merchants are basically brand chain stores such as KFC and Pagoda, and the delivery parties are SF Express or Dada.

In August, Video Account tried to enter the local life market, but the effect was average. According to a report by China Entrepreneur, the best performance of a video account service provider only sold more than 300,000 yuan, because the traffic distribution of Video Account was inaccurate. At the same time, the actual purchases also seemed unsatisfactory. "At that time, the test showed that the write-off rate of Video Account was only 30% to 50%." He said. According to the data of Douyin service providers, the write-off rate of Douyin can reach 60% to 70%.

The first stop was almost declared a failure. In the second half of 2023, there was almost no enthusiasm for local life on Video Account. However, the corresponding turning point was the entry of the WeChat Pay team. From the end of 2023, the WeChat Pay team intervened in the commercialization process of Video Account, and the local life of Video Account was brought to the forefront again. According to people close to Tencent, the reason why WeChat Pay is anxious to participate in local life is that Douyin Pay has a tendency to penetrate offline merchants.

According to public data, Douyin's local life GTV (gross transaction volume) in 2023 is nearly 200 billion yuan, which is nearly one-third of Meituan. According to the "2023 Local Life Service Report", as of April 2023, the overlapping user scale of Meituan and Douyin exceeded 300 million, and the overlapping users accounted for as high as 81% of Meituan users. Recently, according to "LatePost", Douyin's sales of life services in the first quarter of 2024 have exceeded 100 billion yuan, an increase of more than 100% over the same period last year, and the gap in scale with Meituan is narrowing. The rapid growth of Douyin's local life has also suppressed Meituan's valuation. In 2023 alone, Meituan's stock price in the secondary market fell by 53.12%, and its market value continued to evaporate. To some extent, Douyin's local life has confirmed to the market the fact that without self-built capacity, it can grab a considerable market share by relying solely on the control of traffic and third-party outsourced capacity.

Driven by this logic, Douyin Pay's competition for WeChat Pay offline seems to be another version of its competition with Meituan.

As the defending party, WeChat Pay occupies the traffic of social and private domains. The huge first-mover advantage allows WeChat Pay to rest assured temporarily, but if it does not have more chips in hand, the final outcome of this battle may still be unknown. In fact, from another detail, it is not easy for Video Account to get a share of the local life cake. The number of Douyin local life team has exceeded 5,000, while the number of WeChat's entire team is about 4,000. Such a disparity in configuration also means that this battle can only be fought slowly and dragged on to have the possibility of victory, but will Douyin local life really give WeChat time? Everything is still unknown.

The hope of the whole village set out again. Although the defensive intention was obvious, it was still a tough battle.