Starbucks breakfast is 19 yuan, Nayuki's tea coffee series is 9.9 yuan, two cups of Heytea classics are 28 yuan... During the New Year's Goods Festival, new tea brands that have settled in Douyin's local life have launched a price sinking war. Data shows that Starbucks breakfast set sales reached 850,000 orders, Nayuki's tea coffee sales exceeded 1 million orders, and new tea drinks with inward prices have successfully achieved traffic growth in Douyin's local life field. In comparison, Douyin's local food delivery business seems to be much inferior. Clour observed that Douyin's food delivery is mainly group buying, and barbecue, hot pot, grilled fish and other foods are all set meals for two to four people, and the group purchase price is mostly above 100. Click on a store and the sales of goods purchased in the store are basically over 10,000, while the sales of goods delivered to the home are only a few dozen. Since 2021, Douyin has been testing "Heart-beating Takeaway" internally. It was not until this year that Douyin officially launched takeaway and teamed up with Ele.me to launch the "see now, order now, deliver now" local life service. In order to solve the rider problem, Douyin Life Service also recently reached a formal cooperation with third-party instant delivery platforms Dada, Shansong, and SF Express. However, despite Douyin's continuous investment in its food delivery business and continuous improvement of the food delivery chain, Douyin's local food delivery journey has not been smooth. What is the reason behind this? 1. After joining hands with Ele.me, Douyin has not been doing well in the food delivery fieldOnce upon a time, the fancy food videos posted by store exploration bloggers made countless fans salivate. However, since Douyin does not have a food delivery service, consumers who saw these videos late at night had to suppress their hunger and scroll away the videos silently. As users' calls for Douyin food delivery grow louder and louder, it is imperative for Douyin Local Life to enter the food delivery field. Moreover, for Douyin, seizing the growth point of food delivery can also help the growth of local life GMV. As hot words such as lying flat and playing badly become more and more popular, the food delivery business also has broad development prospects. According to Zhiyan Consulting data, as of the end of 2021, the scale of Chinese food delivery users reached 540 million, 100 million higher than last year, and the number of registered merchants in the food delivery market reached more than 1.4 million, a year-on-year increase of 80%. In July 2021, Douyin began internal testing of "Heart-beating Takeaway" and arranged pilot projects in Beijing, Shanghai, Guangzhou and other places. Because the takeaway business has just emerged, the delivery chain is not perfect, and merchants are more focused on operating in-store business. If Douyin wants to fully promote the takeaway business, it will naturally have to increase investment costs. But Douyin was not fully prepared at that time. From the perspective of consumers, it was difficult for Douyin Takeaway to establish a large number of consumer reviews in the short term, and it was not attractive enough to consumers. From the perspective of merchants, Douyin lacked riders and needed to introduce them from third-party platforms, which increased the operating costs of merchants and was not cost-effective. As a result, this attempt ended in failure, and Douyin Takeaway came to a temporary end. Until May 2022, when Beijing suspended dine-in services, many businesses found a second profit growth point through Douyin, such as the crayfish business, which was particularly popular. The takeaway business that Douyin had shelved was also put back on the agenda by businesses through local life. When shopping, consumers can order coupons through the merchant's live broadcast room and send the merchant a private message with the coupon code and address information. The store then uses express delivery such as Shansong, SF Express, and Dada to deliver the goods. However, the delivery time is relatively long, ranging from about two hours to half a day, and the delivery fee is also higher. The phenomenon of merchants’ explosive sales on Douyin’s local life also accelerated Douyin’s progress in promoting takeout. On August 15, 2022, Douyin officially announced its cooperation with Ele.me, which was a win-win for both parties. Ele.me helped Douyin supplement takeout merchants, and Douyin provided Ele.me with a traffic pool of 680 million daily active users. However, Douyin’s takeout delivery link was not perfect at the time, and it could only promote group purchase takeout in pilot cities. Chinese food industry analyst Zhu Danpeng mentioned in an interview with "Ran Finance" that the most important problem with Douyin's food delivery business is not the high price and delivery costs, but how to improve the service system, ensure product quality, and thus increase fan stickiness. From the perspective of consumer usage scenarios, Douyin's group-buying takeout generally occurs when a few people in the office are having short gatherings while working. The coverage area is relatively narrow, and it is difficult to meet the takeout needs of the majority of consumers. There is great uncertainty as to whether Douyin can emulate the takeout model of Meituan and Ele.me in the future. 2. Can Douyin compete with Meituan in the food delivery business?The cooperation between Douyin and SF Express, Tongcheng, and Dada has opened up the "last mile" of the food delivery road. When searching, Claure found that the delivery fees of merchants near Douyin food delivery are mostly within 5 yuan, slightly higher than Meituan. But with the superposition of coupons in the live broadcast room, the price of Douyin group purchase food delivery may also be cheaper than Meituan group purchase packages. On the surface, the gap between Douyin food delivery and Meituan food delivery seems to be gradually narrowing. So, in the field of local life, can Douyin compete with Meituan? From the perspective of shopping logic, Douyin adopts an algorithm recommendation based on interest, attracting users to place orders through high-quality content. On the one hand, store explorers can help stores attract traffic, and on the other hand, stores can also broadcast their own stores through short video bloggers. When the food atmosphere created by bloggers online collides with the hungry fans offline, it is very likely to convert audience traffic into commercial realization. Last November, Douyin and Ele.me jointly launched a new takeaway scenario of "see now, order now, and arrive now" in Nanjing, where users can directly order the food they see on Douyin through Ele.me. Not long after, Douyin spent another 1 billion yuan to buy the broadcasting rights of the World Cup, and the World Cup also successfully attracted traffic for takeaways. McDonald's has launched the slogan "Order McDelivery when watching football matches" and launched 45,000 videos related to the McDelivery mini program, with product sales exceeding 100 million. Sales of food from other brands have also increased, and some businesses have launched special World Cup packages. According to data from Ele.me, during the World Cup, orders for alcohol and beverages increased by nearly 50%, and orders for lobster, barbecue, and coffee increased by more than 30%. Meituan’s food delivery business is relatively simple, that is, to reasonably push merchants according to user needs. Admittedly, Meituan does not have the content and traffic advantages of Douyin, but for users, ordering food delivery on Meituan is like a lifestyle habit, while ordering food delivery on Douyin is just a pastime when bored, and it doesn’t matter even if there are no food videos. As Meituan CEO Wang Xing said at the earnings conference: "Short video platforms have achieved rapid growth in local services, but their sales are not comparable to Meituan's. Our services are based on stores and search results, which can meet the most direct needs of consumers and the stable daily operation needs of stores." This can be seen from the GMV created by the local life of the two. According to the research report data released by Bocom International, Meituan's store business GMV in 2022 is about 236 billion yuan. The full-year GMV of Douyin's local life in 2022 is 50 billion yuan. In terms of delivery, which is the most important aspect of user experience, Meituan has laid a solid barrier through the accumulation of time. According to Meituan’s financial report, in 2021, Meituan had a total of 5.27 million riders, and the rider delivery cost was 68.2 billion yuan, accounting for 71% of the takeaway revenue. Douyin cooperates with external delivery service providers and is still in the pilot stage. Clour found that some Douyin stores still use the merchant self-delivery method, which has led to an increase in merchant costs and caused a certain burden on small and medium-sized merchants. In addition, the delivery time of many merchants on Douyin is until 10 pm, which also limits the user's choice. In addition, the delivery time of Douyin's takeaway is basically about 1 hour, which is not advantageous compared with Meituan. At present, Douyin's food delivery service is not a success. The reason is that Douyin can neither change consumers' shopping habits with high-quality content, nor attract high-quality top merchants to settle in, and its logistics system is not perfect. Therefore, Douyin has a long way to go in the food delivery field. 3. How is the progress of Douyin’s local life services?As the Internet dividend peaks, local life services are expected to become a new traffic growth curve. According to iResearch Consulting data, the market size of China's local life services was 19.5 trillion yuan in 2020, but the penetration rate was only 12.7%. In 2025, the market size of China's local life services will grow to 35.3 trillion yuan. In order to leverage the market size of local life, Douyin began to deploy group buying business as early as March 2021. It not only provided traffic for pilot merchants, but also promised free entry for pilot merchants without commission. By 2022, Douyin's local life has achieved the goal of 50 billion GMV. Image source: Tik Tok screenshot On Douyin, whether it is local life or takeaway, everything is driven by high-quality content. Take new tea drinks as an example. Luckin Coffee let models enter the live broadcast room to drive consumption. The steps of the male model group holding coffee on the catwalk were very eye-catching. Heytea live broadcasted the annual meeting and held an annual beverage show. Building corresponding consumption scenarios to attract users to place orders is undoubtedly the best way to convert traffic into commercial realization. Although Douyin has a unique traffic advantage, for some small and medium-sized businesses, their capital costs are difficult to support content creation, and Meituan’s threshold is relatively low, which makes it easier for some businesses to lean towards Meituan. At present, Douyin Local Life is like a developing child, still in the "forming" stage. Although Meituan's attitude towards it is "like facing a formidable enemy", the gap between the two is indeed not small - relevant data shows that Douyin Local Life has more than 1 million merchants cooperating with it, while the number of merchants in Meituan Local Life is as high as 3.78 million, and the gap is self-evident. In order to increase its attractiveness to merchants, Douyin's local life service commission is much lower than Meituan's. According to the rules, Douyin's commission is settled monthly, and merchants who meet the relevant conditions can also return 50% of the commission. In addition, Douyin will provide new merchants with 60 days of commission-free service. Although Douyin later began to charge commissions, the rate was 2%-8%, while Meituan's commission rate was 10%. Of course, Douyin's low commission has attracted many small and medium-sized businesses, but it has also caused some industry chaos. Some businesses deliberately create bluffing gimmicks such as "eat hot pot for 1 yuan" and "eat seafood for 9.9" to deceive consumers. This has overdrawn Douyin's reputation to a certain extent and caused immeasurable losses to Douyin's local life. In short, if Douyin wants to compete with Meituan in the local life field, on the one hand, it needs to introduce a large number of top merchants to restore its reputation, and on the other hand, it needs to establish a mechanism for healthy development. "Low prices" can indeed help the platform bring traffic in a short period of time, but continuously providing users with high-quality products is the fundamental reason for them to stay. Therefore, in addition to traffic, Douyin should really think about what value it can create for merchants. Author: Rain and Smoke; Editor: Ji Nan Source: TopKlout (ID: TopKlout), a self-media ecological observation account that combines good-looking and informative content |
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