Who will get the chance if Douyin starts delivering food?

This article introduces the three major groups that will benefit after Douyin launches its food delivery business: influencers, merchants, and service providers, and analyzes how they can seize this dividend.

As we enter 2023, the battle for local lifestyle business has spread from Meituan to multiple Internet platforms.

First, in mid-February, WeChat tested a new project called "Store Express Delivery" in Guangdong and Shenzhen. The entrance was set up in the mini-program on the discovery page. The first batch of open categories included food, fresh food, and daily necessities. Most of the merchants settled in were chain brands, cutting-edge Internet companies, as well as a number of local companies and innovative brands.

Then, Kuaishou, which had reached a strategic cooperation with Meituan at the end of last year, also announced the launch of the official local life mini program, which allows users to directly complete group purchase transactions and consume in stores without relying on third parties. At present, brands such as 7fentian, Bantianyao, Wallace, and Nan Hotpot have settled in and opened group purchase businesses in Beijing, Shanghai, Hangzhou, Chengdu and other places.

Time moves to March. After officially piloting the food delivery internal beta test business in Beijing, Shanghai and Chengdu, Douyin launched the food delivery business in 15 cities across the country on March 5. By grafting the Ele.me mini program, it uses "content + algorithm" to arouse users' desire to order food.

With the disruption of Douyin, the battle for local life has accelerated from "in-store" to "home delivery" , and directly attacked Meituan. Previously, Kas had discussed in detail the advantages and disadvantages of Douyin's entry into the food delivery market in "Douyin has a hard time passing Meituan". Today, we will combine the views of Kas Academy partner Daqi to discuss a more practical question: Who will have the opportunity when Douyin engages in food delivery?

1. Who can get the first batch of free traffic?

For Douyin, which is essentially a content platform, after vigorously launching a wave of new businesses, it is necessary to let all parties know widely. So who will take on this role of communication? Undoubtedly, it is the mainstay of the content platform - influencers.

In Daqi’s view, in the early stage of Douyin’s vigorous promotion of its food delivery business, the first batch of free traffic will inevitably be given priority to the reachers.

First, influencers can help the platform label takeout users accordingly. Second, only if influencers sell more can they drive takeout orders, and only with a large number of orders can the riders be supported. It is worth noting that Daqi specifically emphasized that the traffic bonus period of group buying influencers who only do short videos has ended . Now if influencers want to reap the bonus, they must transform.

In June 2021, Douyin, which has been deeply engaged in the local life business for a long time, launched the "Visit Stores to Win Traffic" campaign, and poured a large amount of traffic to amateur store exploration experts. In addition, this type of store exploration video is easy to shoot and highly practical. You don’t even need to show your face, live broadcast, or find sources of goods. You can monetize by just hanging a group purchase link below the video. Therefore, many short video store exploration experts with group purchases and discounts as their main selling points quickly seized the traffic trend at the time and easily made a lot of profits in a short period of time.

Image source: TikTok

But as time goes by, for group buying experts who only make short videos, this "wild growth" stage has obviously passed.

On the one hand, amid the craze for store exploration, many people have tried to "dine for free" in stores under the name of "store exploration experts". After such negative news has been repeatedly exposed, some users have begun to look down on "store exploration experts", which has to some extent damaged the reputation and trust of this group.

On the other hand, the traffic on the content side of Douyin has shown a significant decline in the past one or two years. Many mature influencers with high-quality content have been caught in the dilemma of gaining or even losing followers, not to mention the store exploration influencers who have no obvious advantage in content quality.

At the same time, with the influx of store explorers, they have completed the important mission of labeling user preferences. After completing the mission, Douyin has significantly reduced the traffic investment in the store exploration business . Many store explorers who have lost traffic support do not have outstanding content capabilities, and in terms of the number of video outputs, they cannot be compared with those tools that can quickly produce a large number of videos (such as the local store explosion code. As long as users use Douyin to scan the store explosion code, they can publish the merchant's promotional video to their own Douyin with one click, achieving a rapid fission effect)

At this stage, Douyin has begun to focus on the food delivery business, which is obviously a new opportunity for influencers. However, if short video store exploration influencers want to reap the first batch of free traffic dividends, Daqi believes that they can focus on two directions:

One is to transform into a takeaway review expert. By producing review content that can provide reference value to users, you can attract the attention of users in the same city, and then earn income by earning commissions through linking, accepting merchant advertisements, etc.

To create this type of account, the content of the oral broadcast should be immersive, allowing users to quickly get the information points of the video. In addition, authenticity and heartfeltness are the core points. It is necessary to cultivate a sense of trust in the hearts of users. After all, life service experts are in the business of trust. Once the reputation collapses and trust is damaged, the blow to the account will be fatal.

The second is to transform into a live broadcast expert of life services. For life service content, especially instant consumption categories such as takeout, compared with short videos, live broadcasts are more stimulating, users have a stronger experience, and the conversion path is relatively shorter. If the expert can master professional live broadcasting skills and combine them with appropriate product combination strategies, it is easy to achieve outstanding results in the live broadcast room.

2. “Time Bonus” for Merchants

In addition to the bonuses from influencers, Daqi believes that the current stage is undoubtedly a bonus period for local life businesses.

The reason is simple. Although it has been in internal testing for more than half a year, the restaurant stores available for Douyin takeaway are still very limited, and they are basically catering businesses, involving brands such as full meals, cakes and drinks, among which chain catering companies account for the majority. And takeaway is a business that must meet the diverse consumption needs of users, and only when a sufficient number of merchants enter the market and the number of orders increases, the most uncontrollable rider link can be solved, the riders can make money, and the takeaway business can be run. Therefore, if Douyin wants to make the takeaway business bigger, it will inevitably need to attract more merchants to enter the market.

In the current cognition of many businesses, doing Douyin food delivery business may not be an easy task. There are two main reasons:

First, although Douyin’s commission rate is only 2.5% (excluding delivery fees) at this stage , in fact, the comprehensive operating costs of merchants are not low . For example, if they want to seek help from service providers, they have to pay the service provider fees; if they want to cooperate with influencers, they also need to pay the influencer fees, plus the invisible filming, video production fees and rider fees. Overall, it is easy for merchants who value short-term ROI to be in a dilemma, and even choose to give up Douyin after entering the market;

Second, the operating logic of Douyin’s food delivery is different from that of traditional food delivery platforms. Some merchants are not clear about how to use short videos and live broadcasts, and need to invest extra time and energy to explore and learn.

Although facing challenges in terms of cost and basic capabilities, Daqi believes that in order to quickly run the food delivery business, Douyin will lower the standards for live broadcast review while providing merchants with traffic. In other words, the current stage is a great opportunity for merchants to enjoy the "time bonus" of Douyin food delivery. Merchants entering the market at this time can often feel the "sufficiency" of traffic . Even if they are occasionally restricted due to violations, the platform will still provide a considerable amount of traffic the next day. Merchants can also use this policy bonus period to relatively easily complete the accumulation of initial traffic and experience.

As for the duration of the time bonus window, Daqi believes it is 3-6 months or 6-12 months . Because the advancement speed of Douyin's local life business varies in different cities, the bonus window period will naturally vary. Merchants who want to enter the market can choose the time to join according to the progress of the local life business and get as much free traffic bonus as possible. After the free bonus period ends, it will enter the delivery bonus period, and the merchant's response strategy will also change accordingly.

Of course, not all businesses are suitable for food delivery business on Douyin. Daqi believes that businesses that want to do food delivery on Douyin must meet two requirements: one is to have a central kitchen, and the other is to have dense distribution outlets , so that they can undertake pulse orders under peak consumption. The reason is also mentioned in the article "Douyin is difficult to pass the Meituan test": users attach great importance to the food delivery experience. In the scene of food delivery, which is a race against time, a delay of ten minutes may affect consumer decisions and consumer experience. A difference of half an hour is enough to discourage a group of users.

3. Opportunities and Challenges for Service Providers

With the entry of a large number of food delivery merchants, Douyin life service providers will also usher in more opportunities.

On October 25 last year, Douyin Life Service held its first national service provider partner conference and officially announced a set of data: Douyin Life Service has now covered 377 cities across the country, with more than 1 million cooperative stores, involving more than 80 subcategories. The number of active sellers on the platform has increased by 22 times, and the overall transaction amount has increased by more than 30 times.

During the period of rapid growth of Douyin's life service business, service providers have played a vital role. It is understood that in May 2021, Douyin signed the first cooperative service provider. By November 2021, Douyin's life service cooperative service providers had exceeded 100, and Douyin also formally established a service provider management department.

Faced with the difficulties faced by merchants in the specific operation process, such as the lack of expert resources, the inability to achieve traffic breakthroughs, and not knowing how to operate short videos and live broadcasts, many service providers were the first to realize the opportunity and used their professional capabilities to provide merchants with expert services, video creativity, live broadcast services, store operations, traffic promotion and other special services or full-case operations, which not only helped merchants "run" out a place in the life service track, but also made a lot of money for themselves.

According to 36Kr, from the launch of the business to August 2022, Douyin Life Service Providers have opened more than 100,000 new merchants and helped merchants generate a total GMV of more than 10 billion. The number of merchants with stable sales after establishing cooperation with service providers has increased 77 times. A group of leading service providers have quickly grown in volume and have been able to generate hundreds of millions or even billions of GMV.

Now that Douyin has entered the food delivery business, both the number of merchants that can be tapped and the demand for merchants will increase significantly, which is undoubtedly a positive signal for service providers.

However, Daqi believes that for service providers, the length of the window period is determined by the maturity of local business. At the same time, the business of service providers is not a one-time thing, but faces huge challenges, especially as the market continues to expand, merchants and platforms are also raising their requirements for service providers. On the other hand, local life merchants attach great importance to the input-output ratio, and their strong awareness of payment is not that strong. When some merchants find that the cost of investment is lower than the cost of cooperation with service providers, they may choose to abandon the service provider and use delivery tools (massive local push) to enhance their business.

If local life service providers do not want to become abandoned, in addition to improving their service level and truly "understanding business, content, system, and rules", they can also develop "agent operation + X" in addition to services to enhance their own competitiveness .

For example, some service providers, in addition to operating Douyin life services, have also designed their own courses, allowing the team and instructors to provide services to merchants and teach them how to operate their own businesses; other service providers will set up their own accounts, cultivate and support their own talents, in order to enhance their business competitiveness.

Of course, no matter whether you are an influencer, a merchant or a service provider, only by striving to become the leader in the trend can you have a better chance of making "quick" money. So, how long can the trend of Douyin food delivery last? Let's wait and see.

Author: Kas Data

Source: WeChat public account "CaasData (ID: caasdata6)"