Douyin food delivery "dies": group purchases are difficult to fulfill, with only 100,000 orders sold per day in three cities

Is Douyin food delivery really coming? I believe many people are curious about whether its emergence will bring about structural changes to the food delivery industry. Will the operational characteristics of "finding people for food delivery" and "high-level marketing" put pressure on leading food delivery companies such as Meituan? This article will answer your questions.

The overall launch time of Douyin’s food delivery business has become increasingly confusing.

“Douyin has always kept its food delivery business very secret. Even the teams that have had contact with the other party have signed a confidentiality agreement.” Gao Qi (pseudonym), a person close to Douyin’s food delivery business, revealed to “Interface News·Entrepreneurship Frontline” that although the overall launch time of Douyin’s food delivery business has not yet been confirmed, he is sure that Douyin will definitely open its food delivery business nationwide in the second half of this year.

Since the beginning of this year, there have been frequent reports that Douyin Takeaway will be launched nationwide. First, there were a lot of reports online that "Douyin Takeaway is really coming" and will be launched nationwide in March. Later, there was news that it will be launched in 15 cities including Nanjing, Xiamen, and Hefei. Recently, there were media reports that Douyin Takeaway is expected to be launched in June.

But as expected, these rumors were all refuted. The latest news is that 36Kr reported that the two projects, group purchase delivery and Ele.me Douyin mini program, are still in the pilot and optimization process, and there is no plan to "launch as a whole in June."

"Jiemian News·Entrepreneurship Frontline" also asked ByteDance about the situation of Douyin's food delivery business, but no response was received as of press time.

Although the news about Douyin's food delivery business has been kept secret, with Meituan starting to enter the group buying food delivery and live streaming business, a head-on war between the two companies is now on the verge of breaking out.

01 Tik Tok "attacks", Meituan "gets anxious"

Although the news of Douyin's full launch of food delivery has been pending, its ambition to expand the food delivery business is becoming increasingly clear.

“Douyin has recently opened up a large number of job openings for its food delivery business. Since April this year alone, Douyin Chengdu has recruited more than 400 marketing personnel. Their main responsibilities are to attract merchants to settle in and open Douyin food delivery services, just like Meituan’s ground promotion in the past.” Gao Qi revealed to “Interface News·Entrepreneurship Frontline”.

Interface News · Entrepreneurship Frontline found through a search on BOSS Direct that ByteDance has hundreds of positions related to its food delivery business, including city planning and operations, open platform products, and catering product operations, some of which are urgently needed.

Tik Tok Takeaway Business Related Positions and Responsibilities

Positions and responsibilities related to Douyin’s food delivery business Douyin’s attack on the food delivery business has obviously brought a sense of crisis to Meituan.

"Meituan has established an independent group-buying takeout line." Gao Qi revealed to "Interface News·Entrepreneurship Frontline" that recently, Meituan has not only begun to frequently connect with takeout delivery companies with long-distance delivery capabilities to increase Meituan's group-buying takeout delivery capabilities, but has also begun to contact some Douyin content service providers to try to fill its own shortcomings in content.

Not only that, "Jiemian News·Entrepreneurship Frontline" found that Meituan has also opened a large number of positions related to group buying business, mainly for online optimization of Meituan’s merchant pages and group buying.

Meituan Group Buying Business Positions and Responsibilities

Public reports show that Douyin's local life transaction volume in 2022 is close to 90 billion yuan, and the target for Douyin's life service in 2023 is 150 billion yuan. According to LatePost, Douyin's local life real transaction volume target this year is close to 400 billion yuan. Among them, the target for in-store and hotel and travel business is 290 billion yuan, which is close to the level of Meituan's related business in 2021; the target for takeaway business is 100 billion yuan.

Although the person in charge of Douyin's life service said that the above data was inaccurate, it was enough to make Meituan, which had previously seemed a bit "Buddhist", unable to sit still.

According to media reports, since Douyin launched the "group purchase and delivery" service, Meituan has set up an internal defense team to specifically study Douyin's actions. The defense team will launch more new businesses based on Douyin's actions.

Meituan’s actions do not stop there.

In late March, Meituan added a special group buying section above the food page of the APP, and expanded a large number of chain merchants, such as Mixue Ice City, Jumbo Pizza, KFC, etc., to compete with Douyin's special group buying.

On April 11, Meituan held an internal ecological meeting. At the meeting, Meituan announced that it would launch group purchase delivery in more than 20 cities including Beijing, Shanghai, Guangzhou and Shenzhen from April 17, benchmarking Douyin's group purchase delivery.

In addition, Meituan has re-tested the food delivery live streaming and created an entrance to the "food delivery live streaming" channel. Users can search for the keyword "food delivery live streaming" to jump to the Meituan food delivery live streaming page.

Just like Douyin group-buying coupons, users can choose to consume immediately or store the coupons for consumption at other times after placing an order in the live broadcast room through the Meituan APP. Just like in-store group buying, users can return the coupons for takeaway products at any time and when they expire.

"Although Douyin's takeaway story has always been about interest-based group buying and claims that it will not be a competition in the existing market, there are only so many consumers. Once they buy takeaway on Douyin, they will definitely not buy it on other platforms again. In the final analysis, Douyin and Meituan are both competing in the existing takeaway market." Gao Qi bluntly said that it is only a matter of time before Douyin and Meituan compete head-on, and this "tit-for-tat" situation does not surprise people in the industry.

Obviously, Douyin is like a catfish entering the food delivery market, stirring up the originally calm situation. Now, Douyin's food delivery business has reached Meituan's doorstep, and the two sides have begun to clash head-on, and the smell of gunpowder is getting stronger and stronger.

02 Much thunder but little rain: less than 100,000 orders per day

But objectively speaking, Douyin's food delivery business has not been going smoothly: the XD Food Delivery app, which was open for testing in 2021, has been silent, and as of March this year, Douyin Food Delivery has only been piloted in three cities: Beijing, Shanghai, and Chengdu. And its business volume is not as good as expected.

"The business volume of Douyin's food delivery service is indeed small," Gao Qi estimated to Jiemian News. Today, Meituan's food delivery service handles at least 50 million orders per day in cities across the country, and can reach 60 million orders during peak hours. But in the same three cities, Douyin's orders per day are less than 100,000.

“For a giant like TikTok, after testing the waters for a year and achieving the current order volume, the data is indeed not very good,” Gao Qi sighed.

Gao Qi believes that the current situation is closely related to the product logic of both parties.

Meituan’s product logic is similar to that of a shelf: consumers actively look for stores, and the platform recommends popular categories based on the user’s address and consumer identity tags to meet the user’s needs for obtaining meals in the shortest time possible.

"This typical logic of people looking for goods is more in line with consumer habits, and under this model, the average order value is generally only 20 to 30 yuan, the scenario is daily, and the consumption frequency is also higher." Gao Qi said.

The product logic of Douyin is more inclined to interest consumption: it advocates the logic of goods finding people, creating demand and then satisfying it. Consumers may not have the intention to consume, but they are "planted with grass" when watching short videos, and then they are recommended to "pull grass".

"Douyin is more like group buying takeout. Its average customer unit price is higher, reaching 150-170 yuan. This makes Douyin's group buying takeout demand more inclined to family gatherings. Not only is the order volume small, but the delivery distance of merchants is also farther." Gao Qi added, but this also puts high demands on Douyin's delivery system.

Today, although Douyin has reached cooperation with four third-party delivery platforms, it still takes time to expand on a large scale compared to Meituan, which has its own riders.

In fact, a consumer recently placed an order for a cake set meal recommended on Douyin because of interest and low price. However, after purchasing the product, he found that although the other party supported "immediate delivery", due to the long distance between him and the merchant, the goods ordered at 5:30 pm were not delivered until 10:00 pm.

"The waiting time was too long, so I canceled the order." Obviously, as ordinary consumers, especially in the field of food delivery, consumers rarely have the patience to wait for 4 or 5 hours.

Douyin takeaway delivery takes a long time

Douyin's current delivery system relies on third-party platforms such as Dada, SF Express, and UU Running Errands, or on merchants' own delivery, which increases the fulfillment costs of small merchants and discourages some merchants from leaving.

Liu Wei (pseudonym), a catering entrepreneur who started a hot pot restaurant in Beijing, said that he decided to join Douyin Local Life in May 2022. Because he also recognized Douyin's interest group buying model, "In the past, consumers looked for stores. For example, if consumers had a demand for a certain restaurant, they would go to Dianping.com or Meituan to search and place an order directly. But now the offline customer flow is limited, and it is not realistic to wait for consumers to actively find stores."

He feels that for merchants, if there are 1 million viewers, a 10% conversion rate will lead to 100,000 people receiving coupons, and another 10% conversion rate will lead to 10,000 people visiting the store, which will be a huge amount of traffic for restaurants.

But Liu Wei did not join Douyin's food delivery business.

"Takeout requires end-to-end delivery capabilities, and the last-mile delivery network is very important." Liu Wei said that consumers are too far away from offline stores, and it is not cost-effective to use a third party or deliver by himself, so he simply decided to just provide in-store services.

03 The bonus period of “big bet”

Even in the face of extremely high fulfillment costs, many businesses are willing to take a gamble. After all, commercial competition is always a battle for traffic. Today, Douyin users have already exceeded 800 million, and huge traffic often contains unlimited opportunities.

Although Douyin's food delivery pilot is still "lukewarm", entrepreneurs who are eyeing this piece of cake are still flocking in.

"In March of this year, there was news in the market that Douyin was going to open up its nationwide food delivery business, and some speculators in small cities pretended to be the official one recruiting agents. Some entrepreneurs in second- and third-tier cities thought it was an opportunity when they heard that Douyin was recruiting food delivery agents, and they were defrauded of several million yuan." Gao Qi said that although this is a chaos in the industry, it also shows everyone's expectations for Douyin's food delivery.

In fact, Liu Bin, vice president of UU Running Errands, also believes that there are still many entrepreneurial opportunities based on Douyin food delivery.

"We usually deal more with merchants. They are very interested in Douyin food delivery, but many merchants don't know how to operate it." Liu Bin said that compared with Meituan, the operating threshold of the Douyin platform is higher.

He explained that on Meituan, merchants do not need to know much about operations. When they want to market, they only need to spend money on Meituan to increase traffic, and there will be growth. But Douyin is not like that. Just going to offline stores to shoot videos on Douyin requires three labor costs: someone to appear on camera, someone to plan the script, and someone to shoot and edit the video. Therefore, there is a market opportunity to become a Douyin operation service provider.

Liu Bin admitted that although the company is currently only a delivery service provider cooperating with Douyin, when Douyin starts recruiting agents in the future, UU Running Errands may also become a regional food delivery service provider for Douyin.

"Many merchants do not have independent content marketing capabilities. UU Running Errands can provide content marketing services to more merchants in the region, not only providing transportation support but also content services." he said.

Wang Zi, a restaurant entrepreneur engaged in Shanghai's local cuisine in Pudong, also feels that in the future, Douyin food delivery will become a traffic pool for competition among restaurant brands.

Wang Zi said that Douyin's interest recommendation model is more suitable for creating explosive products. In the future, catering businesses cannot ignore Douyin takeaway - businesses that need to promote their brands in the short term, or businesses that want to create Internet celebrity stores, as well as fast food chains with relatively standardized products and long-term small profits but quick turnover are suitable for Douyin takeaway.

He believes that brands can use Douyin's traffic to establish and promote the brand's corporate culture. "After all, every Douyin video can serve as a publicity window for the company. In this way, catering brands can not only make money through Douyin takeout, but also spread brand culture and shape brand communication through short videos."

However, this still places high demands on Douyin's delivery capabilities. But Wang Zi believes that if it is a leading chain brand with enough offline stores, Douyin food delivery can also generate more energy.

Recently, a chain coffee entrepreneur told Jiemian News: Entrepreneurship Frontline that his recent transaction volume through Douyin local life live broadcasts has accounted for 10% of online transactions. However, Douyin food delivery has not yet been opened nationwide, and cannot provide delivery services to consumers, and can only be consumed in stores.

Obviously, if Douyin food delivery is released nationwide in the future, fulfillment of contracts will be easier, and catering brands may be able to take the first step towards becoming popular on the Douyin food delivery platform.

Author: Fu Yancui

Source: WeChat public account "Entrepreneurship Frontline"