Douyin group buying raid on Meituan

Welcome to the WeChat subscription number of “Sina Technology”: techsina

Text/Herry

Source/New Extract Business Review (ID: xinzhainews)

For the past four years, Douyin, which is unwilling to only do traffic business, has been frantically testing Meituan’s basic business, the local life business, but unfortunately the action is heavy and rainy. It was not until the epidemic, when a large number of local merchants poured into the Douyin live broadcast room to “survive” to bring goods, Douyin opened up the second line of Ren and Du.

On August 19, Douyin and Ele.me announced a high-profile official cooperation, and sounded the gong to enter the takeaway field in the local life sector. The official announcement is full of sincerity and paints a fresh, fun, attractive and convenient future life picture for businesses and consumers. Strangely, this “commitment” did not add a specific time and deadline.

Now, half a month has passed since the official announcement of Douyin’s Ele.me cooperation. How is Douyin’s takeaway business progressing? What counterattacks does Meituan have? What impact will Douyin’s entry have on the entire industry? Xinzhai chatted with several local businesses about their true views on Meituan and Douyin, and restored the real situation of the battle between Douyin and Meituan off the field.

Douyin VS Meituan, which one is stronger

When people are sighing that Meituan’s wool is getting more and more difficult to cut, but unexpectedly found that there are a large number of surprises waiting to be cut on Douyin.

On August 19, Li Yang (pseudonym), who lives in Beijing, was “poisoned” in the middle of the night in the Moments. In the picture, a leg of lamb that was burnt on the outside and tender on the inside was grilled on a charcoal fire, making people drool. . And attached the text, “Douyin coupons are really cattle X, directly half price.”

That evening, Li Yang ordered a special set meal for four at the original price of 579.2 yuan at the Xiaoying Store in Beijing’s Black Forest Charcoal-Roasted Leg of Lamb. As a result, he got a fresh and delicious roasted leg of lamb for only half the price. For Li Yang, who has not had such a big advantage on the platform for a long time, it is a pleasant surprise.

In fact, as early as 2021, Douyin has already started to test the waters of local life “group buying” in Beijing, Shanghai, etc., and there is already a “same city” entrance on the page, but it did not make a high-profile statement at that time.

On the same day that Li Yang used the Douyin group purchase coupons, Douyin and Ele.me jointly announced a cooperation, which will provide consumers with “see, click, and reach” local life services. Since then, Douyin has officially entered the food delivery industry, targeting Meituan’s basic business.

However, as of now, Douyin and Ele.me have not taken any substantial actions, neither have the Ele.me applet launched, nor have they added a takeaway entrance.

How should Meituan respond to the aggressive Douyin offensive? “Defensive action” is essential. It is known that Meituan Takeaway has canceled all applets on Douyin, and switched to jumping to the page to receive coupons, directing customers to spend in its own app. All Meituan official accounts on Douyin, originally bound to the entrance to the Meituan applet, have now become virtual phone or App download entrances.

At the same time, Meituan has rapidly promoted joint cooperation with leading brands. For example, it has jointly launched 19 pieces of Frappuccino for home delivery with Starbucks, with unprecedented discounts. Although Douyin has not yet included Starbucks, Häagen-Dazs and other big names, it has captured many small and medium-sized chain brands, and is not reluctant to “sprinkle coins”.

“There are also people who use Meituan coupons, but more customers use Douyin coupons.” In the past two months, many visitors to Peiping Restaurant, an old chain restaurant in Beijing, have used the group purchase coupons on Douyin to dine at the store. The staff told Xinzhai: “It’s a four-person boutique package. Group buying on Douyin is not only 60 yuan cheaper, but the dishes are also more popular with guests.”

Similarly, the clerk of the coffee chain brand Tims in Beijing said: “Meituan, Dianping, and Douyin have coupons. You can buy whichever is suitable. However, many drinks on Douyin are indeed more cost-effective than other platforms.” As for Douyin platform Tims staff said it was unclear whether there was a subsidy to support the brand’s “sprinkling coins”.

However, according to the customer service of Douyin Lai Ke, new takeaway merchants who have settled in since June will sign a commission rebate agreement with the platform, with a 60-day protection period. During the protection period, the platform only charges the payment channel service fee, which is 0.6% of the write-off amount. After the protection period, the platform will charge a 2.5% software service fee.

Compared with the “2022 Life Service Software Service Fee Standard Description” released by Douyin, the average software service rate is 4%, the minimum rate is 2.0%, and the maximum rate does not exceed 8%. Lower than average charges and lower than most categories.

“For merchants’ group purchase coupons, the platform does not give subsidies for the amount of each order.” As for other preferential support, the customer service said that there is no such thing for the time being. “If you want traffic tilt and expert recommendation, you can spend money on the app to buy it.”

Ele.me also called on merchants recently: “Do some targeted operations, such as separate meals, separate activities, separate discounts, to seize the traffic highland of the new battlefield.” The platform does not have more real money subsidies, All the wool comes from merchants, but Douyin has entered the local life business, and many merchants are still optimistic.

The data shows that from January 2021 to March 2022, just over a year after the Douyin life service was launched, more than 700,000 life service merchants settled in and cooperated, and the merchant stores covered more than 370 cities. The GMV in 2022 is compared with the same period last year. , an increase of 234 times.

Douyin is so powerful that Meituan, which has held the top spot in the food delivery industry for many years, feels a crisis.

Douyin storms, Meituan defends

Business is difficult at the moment, and merchants are trying their best to attract customers and refuse to let go of any traffic platform. Although Douyin, as a “newcomer”, naturally brings the halo of the novice welfare period, Meituan, as a veteran position, cannot be discarded.

“I have a cooperation with Douyin. About a month and a half ago, each person can only buy 5 group purchase coupons per month.” Tims Coffee Douyin page shows that the best-selling medium cup latte has sold 156,000 cups, and the dessert “Tianqu” “Ball” has sold 124,000 copies, and there are 4 other products that have sold more than 10,000 copies.

In Meituan, although Tims’ product settings are different, compared to Douyin’s sales data, it is still a lot inferior. Even in half a year’s sales, there are no products that exceed 100,000.

It is understood that in July this year, Tims and Douyin jointly launched a month-long “Heart for a “Coconut” Summer” activity. Like many merchants, Tims tried to use Douyin’s short videos of talents, live broadcasts of enterprise accounts and Daren Live, etc. are looking for new ways to stimulate revenue growth.

Douyin’s daily activity has grown rapidly in the past two years and will exceed 600 million in 2022. The live broadcast of goods has burst out with amazing energy, and it has almost become a battleground for merchants. The advantages of Douyin’s life service are not limited to the short video announcement function, but can also reach more “accurate” customer groups in combination with merchant positioning and expand the business radius of merchants. Merchants can also rely on the form of video content to pre-position the consumer experience such as food stores and store environments to shorten the consumer decision-making cycle.

But the disadvantage of Meituan is precisely this. In the past of the era of graphics and texts, video is very popular, and consumers are more inclined to short videos and live broadcasts with “color, sound and shape”. Meituan, bound by “content and traffic”, also tried to build its own traffic ecology and tried live broadcasts, but with little success.

However, when asked if Douyin can deliver, the Tims clerk replied: “There is no takeaway delivery on Douyin, you can only shop at the store. If you want to deliver, you can place an order on our own app or Meituan. “Although they issued a joint statement with Ele.me, nearly half a month has passed, and the takeaway function of Douyin has not been launched. It seems that the transportation capacity is still the “neck” problem of Douyin’s local life.

As the big brother of the food delivery industry, Meituan has the advantage in transportation capacity, and its huge group of riders can be more flexible and convenient, and improve logistics efficiency. For local life, the distribution capacity is only the basic threshold, and the local supply capacity is the determining factor. After years of accumulation, Meituan has obvious advantages in local supply. Local physical supermarkets, offline stores, front-end warehouses and other resources, Douyin is just a fledgling, although it has teamed up with Ele.me, it is still difficult to catch up in the short term.

With these advantages, Meituan began to tap new growth points. Recently, in the financial report released by Meituan, “Meituan Flash Delivery” was classified as a core local business. It can be seen that Meituan is preparing to attack “instant retail” in a big way, and take the lead in the local life business.

It will take time to test whether Douyin can be compared.

Local life, the last sanctuary

After Douyin announced its cooperation with Ele.me, some industry insiders speculated that this move would speed up JD.com’s entry into local life. Not only JD.com, but also Ali, Pinduoduo, Kuaishou, and Xiaohongshu are all eyeing local life.

Why local living? The reason is that this is a trillion-dollar market and one of the few incremental markets in the trillion-dollar market. iResearch predicts that the scale of China’s local life service market will be 19.5 trillion yuan in 2020, and this figure will increase to 35.3 trillion yuan by 2025, with a compound annual growth rate of 12.6%.

At the same time, with the expansion of more new scenarios such as online catering and online group purchases, the online penetration rate of local life services will also increase significantly, from 24.3% in 2020 to 30.8% in 2025. In such a fertile land, when will the major giants not speed up their scramble for food?

Douyin is betting on local life to solve the urgent need for traffic and realization. At present, the domestic advertising revenue of Douyin parent company ByteDance has already peaked. As ByteDance’s largest source of income, the stagnation of advertising revenue has led ByteDance to look for a way out. Local life is the latest and most important growth curve for Douyin.

As early as 2018, Douyin formed a POI team to carry grass-planting videos through POI, trying to “take food” from Meituan. In 2019, Douyin launched the “Merchant” page, which can inquire about various promotions and discounts, and supports “online booking”. In 2020, businesses such as group purchases, “Talents Visiting Stores”, online hotel reservations, and ticket reservations will be launched one after another. In 2021, a “local direct sales center” will be established to expand local life business, the “Eat, Drink and Play” channel and map will be launched at the top of the same city page, and a group purchase entry will be added to the “Wallet” function.

In just four years, Douyin’s actions were frequent but the splash was small. Until the first half of 2022, when many people were forced to stay at home due to the impact of the epidemic, Douyin unexpectedly broke the deadlock of local life and business and launched the “Douyin Laike App” to gather local businesses. , to rapidly promote the local life business.

On August 19, Douyin and Ele.me joined forces. It is foreseeable that while the two parties will complement each other in terms of traffic and capacity, they will also open up new ways to play in the food delivery industry, like a timely spoiler, injecting new vitality into the entire industry.

In the video scene, consumers can realize one-stop service from planting grass, ordering, payment to receiving goods, which is an unprecedented experience. For merchants, they can rely on two big trees to gain insight into consumer needs at any time, iterate products in a timely manner, continue to innovate, leverage high turnover at low cost, and enjoy the dividends of the video age.

Looking at other giants, Ali’s local life has been hindered, and JD.com and Pinduoduo have no intentions and have not really gathered their efforts to develop the market. Although Xiaohongshu has already launched the same-city function, it has achieved little and no further progress.

The smoke of gunpowder has been lit, and the emergence of Douyin has made the industry guess that it may be able to compete with Meituan. At that time, whether it is multi-pronged or winner-take-all, the one that can gain a firm foothold must be the one that offers real benefits to businesses and consumers.

This article is reproduced from: http://finance.sina.com.cn/tech/csj/2022-09-02/doc-imqmmtha5633110.shtml
This site is for inclusion only, and the copyright belongs to the original author.