31 days after Douyin Supermarket was launched

Douyin Supermarket has been online for a month. How is it developing now? Since its layout in local life, Douyin Supermarket has made great efforts to develop supermarkets, benchmarking against traditional e-commerce platforms such as Tmall and JD.com. The author of this article introduces the recent development of Douyin Supermarket in detail, and puts forward the current pain points and difficulties based on data comparison of competing products. Recommended for those who are interested in Douyin e-commerce and Douyin Supermarket.

One month after its launch, how is Douyin Supermarket doing?

Just after the 2023 Spring Festival holiday, Douyin e-commerce quietly launched a new business - Douyin Supermarket. Although it seems that there is no publicity and promotion, Douyin Supermarket released the investment promotion details in August 2022 and carried out city pilots in October last year, which led to the official launch of the national business in January this year.

Starting from January 28, when users search for "Douyin Supermarket" on Douyin, the entrance to "Douyin E-commerce Supermarket" will appear, and they can click to enter the supermarket channel.

Screenshot of Douyin Supermarket homepage

Now that it has been a month since its launch, how is Douyin Supermarket doing?

Judging from its overall interface, the layout and design of Douyin Supermarket seem to have certain similarities with Tmall Supermarket; judging from the user volume, one month is obviously not enough for it to build its own brand advantage . At present, Douyin Supermarket is still actively using price advantages to attract new customers, such as the recent launch of the "Dining Table Superpower" campaign, featuring large discounts of "50 off for purchases over 99".

Compared with interest-based e-commerce that relies on content to retain users, Douyin Supermarket belongs to the category of "shelf e-commerce", which means directly clarifying the purpose of "buying" and solving shopping and home delivery needs in the shortest time .

Why did Douyin want to build a supermarket? Why did it choose to launch this service at the beginning of this year? From the perspective of product categories, milk beverage preparation, paper laundry, alcoholic beverage health, household cleaning, etc. are the main categories of products on the shelves of Douyin Supermarket. These low-profit and high-frequency products are rigid needs in life and are more suitable for being summarized into search scenarios. "Interest" and "content" are secondary.

This is in line with the concept of "new e-commerce field" mentioned by Wei Wenwen, president of Douyin's e-commerce. Douyin's huge traffic will overflow into active scenarios such as shopping malls and searches. Supply-side construction of these "people looking for goods" scenarios will help more users develop fixed consumption habits and bring about comprehensive and long-term growth.

As a daily necessities category with a high repurchase rate and stable customer flow, Douyin Supermarket has become the latest experimental category of Douyin e-commerce. In this article, we will try to explore a question: Can Douyin Supermarket compete with JD Supermarket and Tmall Supermarket?

01 31 days after Douyin Supermarket was launched nationwide

It has been 31 days since Douyin Supermarket was officially launched. Observing its product interface, product richness, and after-sales experience, Kas found that it has both similarities and differences with JD Supermarket and Tmall Supermarket. Similar to Tmall Supermarket and JD Supermarket, Douyin Supermarket's page design is mainly green, and the main page includes major modules such as marketing entrance, classification catalog, and product recommendations.

Image source: Douyin Supermarket

The services provided by the three are basically the same, that is, to create an online supermarket centered around family life scenarios, where users can place orders within the App to purchase household cleaning products, snacks, alcoholic beverages and other daily necessities with high repurchase rates.

Judging from the richness of goods in the channel and the logistics situation, Douyin Supermarket's graphics and page design are relatively simple, and the variety and quantity of goods are not rich enough. Douyin Supermarket sells 9 categories of goods, including milk and beverage preparation, paper and laundry, alcohol and health care, household cleaning, personal care and beauty, snacks and candies, maternal and child pets, grains, oils and fast food, and electrical appliances, while Maochao and Jingchao both have more than 15 first-level categories.

The products in Douyin Supermarket are currently positioned as uniformly packaged and shipped directly from warehouses, but it is not clear whether it is "fully self-operated", "self-operated + third-party" or "pure third-party".

On the product details page, Douyin Supermarket has a note that says "official direct delivery, authentic guaranteed." For example, on the product page for Maotai Liquor 43-degree Feitian, the merchant's qualifications are shown as Shanghai Xinpai Information Technology Co., Ltd., which, according to Tianyancha, is a wholly-owned subsidiary of Douyin Group (Hong Kong).

Some products are marked as "shipped on the same day", which means that if the order is placed before 16:00, it will be shipped on the same day, and if the order is placed before 23:59, it will be delivered on the next day.

Douyin Supermarket’s “next-day delivery” and “hourly delivery” services

Kass saw that cities such as Beijing have launched the "same-day delivery" service, but have not yet launched the "next-day delivery" service. The "hourly delivery" service is currently in trial operation in Shenzhen and has not been widely promoted . In general, compared with the fulfillment capabilities of Maochao and Jingchao's "half-day delivery" and "next-day delivery", the newly born Douyin Supermarket still has a certain gap.

The reason for the slower delivery speed is that Jingchao relies on its own JD Logistics, Maochao has Danniao Logistics, and Douyin Supermarket does not have a mature delivery system.

Currently, Douyin Supermarket and SF Express have reached a cooperation agreement, and new users can enjoy free shipping on their first order and door-to-door delivery. For old users, free shipping is available only when the order is over 88 yuan, which is the same as the free shipping threshold of Tmall Supermarket.

Under the premise of weak logistics, Douyin Supermarket chose to use a low-price strategy to attract the first batch of users . At present, the coupons issued by Douyin Supermarket are relatively restrained. New users can get an 8-yuan no-threshold coupon, a 20-yuan discount coupon for orders over 59 yuan (unlocked after placing the first order), and a 20-yuan discount coupon for orders over 99 yuan (unlocked after placing the second order).

However, the price-performance ratio of Douyin Supermarket is not very high.

For example, a 1kg×3 combination set of Super Dishwashing Liquid is 33.9 yuan after discount in Tmall Supermarket, and 33.5 yuan after subsidy from Douyin; Mentholatum Oil-Control and Anti-Acne Men's Facial Cleanser is priced at 31.9 yuan...Since fast-moving consumer goods brands have their own price control system, they will make the prices of goods the same on each platform. The price advantage of Douyin Supermarket does not exist unless the platform provides subsidies.

It can be seen that most of the products in Douyin Supermarket are subsidized by the platform or participate in limited-time flash sales and other activities , and only a small number of products have no activities and subsidies.

Image source: Douyin Supermarket

In addition, although the official slogan of "safe price" is promoted, the threshold for free shipping in Douyin Supermarket is 88 yuan. When supporting facilities such as freight coupons are not yet perfect, this threshold is obviously too high for newly registered users.

03 What are the chances of Douyin Supermarket winning against Tmall and JD.com?

Entering the e-commerce supermarket track, Douyin has a strong traffic advantage - more than 600 million daily active users and a large number of users who have developed the habit of shopping on the site, which is an important asset for it to compete with JD Supermarket and Tmall Supermarket.

Previously, Douyin e-commerce rose in this way. With the huge amount of traffic, Douyin attracted many grassroots manufacturers and brand merchants, and Douyin e-commerce gradually grew into a behemoth. According to the technology media The Information, citing two people familiar with the matter, the total e-commerce transaction volume (GMV) of the Douyin platform reached US$208 billion (about RMB 1.41 trillion) last year, an increase of 76% from 2021.

Supermarkets that mainly sell daily necessities and food are also more suitable for live streaming. Recently, Douyin e-commerce's official live streaming room has been recommending products sold in Douyin supermarkets, and the sales of these products are also impressive.

Despite its traffic advantage, Douyin’s shortcomings as a supermarket are also obvious.

As mentioned above, Douyin Supermarket is still in its infancy in terms of supply chain and logistics. Douyin Supermarket mainly cooperates with SF Express and ZTO Express. The logistics speed varies depending on the place of shipment, and is generally slower than JD.com and Tmall.

The inability to keep up with the speed is a historical problem . Douyin has always been an asset-light business and has not done logistics itself.

A year ago, Tech Planet reported that Douyin e-commerce was testing the express delivery service Yinzunda. After merchants on Douyin choose this service, express delivery companies can deliver goods to the door, provide limited delivery at the end, receive compensation for complaints at the end, and prioritize the forwarding of packages according to the merchant's choice, so as to reduce the merchant's return rate due to logistics reasons and increase user repurchase. Since then, the service has been renamed "Yinxuda", and companies such as ZTO, YTO, Yunda, SF Express, China Post, and JD.com have successively joined.

This service is not officially provided by Douyin, but needs to be activated by merchants themselves. According to Yibao.com, merchants using ZTO, YTO, and Yunda need to pay 0.8 yuan per order, while merchants using SF Express and JD.com need to pay 0.01 yuan per order; the hourly shopping service provided by Douyin Supermarket in some areas is also mainly delivered by merchants.

However, in the supermarket business which has higher requirements on timeliness, Douyin will inevitably have to invest heavily in warehousing and distribution.

According to Douyin Supermarket’s customer service, “the goods are shipped from Guangdong,” Douyin Supermarket’s warehouses are mainly in Guangdong, while Tmall and JD Supermarkets that deliver the same-day or next-day goods are generally shipped directly from city warehouses, which are generally within 20 kilometers of consumers.

An e-commerce industry research report released by Ping An Securities shows that in 2020, the unit ticket cost of community group buying, YTO, JD Logistics and Dingdong Maicai was approximately 1.1 yuan, 2.1 yuan, 16.7 yuan and 12.7 yuan respectively, which correspond to the fulfillment costs of community group buying, Tongda, JD, and instant delivery.

Image source: Ping An Securities

Instant delivery lacks the order aggregation effect (each deliveryman can only deliver a few orders at most each time), and the cost per ticket is relatively high. If Douyin Supermarket wants to provide services comparable to those of JD Supermarket and Tmall Supermarket, it will inevitably significantly increase its delivery costs.

It is worth noting that the supermarket business is still indispensable to Douyin, which is not only related to e-commerce, but also to local life services. Although Douyin Supermarket has not yet launched the "Hourly Shopping" business nationwide, it is operating in pilot cities. If "Hourly Shopping" is launched nationwide in the future, it will put more pressure on warehousing and distribution manpower. Douyin Supermarket may need to build its own distribution system, or reach in-depth cooperation with large supermarket brands and merchants, and both parties will negotiate the distribution method.

Kas believes that whether Douyin Supermarket can be successful depends on Douyin's willingness to invest, including investment in infrastructure, traffic resources and subsidies for C-end users. Judging from the resources currently invested by Douyin, Douyin Supermarket is still in the trial stage and has not yet exerted its full strength. For example, in terms of resource location, there is no entrance to Douyin Supermarket in Douyin Mall. If users want to enter Douyin Supermarket, they need to search or jump through Douyin e-commerce live broadcasts of Douyin Supermarket products multiple times before entering.

In short, although it has reached the basic threshold of online supermarkets, Douyin Supermarket lacks different "explosive points" to make up for the brand effect gap caused by too short operating time under the suppression of "predecessors" such as Tmall Supermarket and JD.com. How should Douyin Supermarket make up for these gaps? How much effort should be put into making up for them? This determines whether Douyin Supermarket can catch up with and surpass its competitors.

Author: Lou Xingchui

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