Text | Edited by Dou Xuan and Dong Jie | Yang Xuan
The local life of Douyin, which set a target of 50 billion GMV at the beginning of the year, is surging forward.
36 Krypton exclusively learned that in the first half of the year, the GMV of Douyin’s local life was about 22 billion yuan. Among them, GMV exceeded 10 billion yuan in the first quarter, and between 11 billion and 12 billion yuan in the second quarter. It only took half a year to surpass the target that was not achieved in the whole year of last year (note: the target for the whole year last year was 20 billion).
Specific to a single month, the first half of the year showed an overall growth trend, and the monthly GMV in May was about 4.5 billion yuan. But by June, GMV had slipped. A person familiar with the matter believes that this has nothing to do with the commissions that started in June (service fees charged to merchants of life services), but more because the marketing node in June started relatively slowly from the middle of the month.
In addition, in the first half of this year, several benchmark provinces and regions in Douyin’s local life, such as Hubei, Henan, and Chengdu, are also breaking through their peaks one after another. According to 36 Krypton, excluding the live broadcast caliber, the monthly GMV of Hubei and Henan exceeded 300 million and 200 million respectively in June.
36氪 asked Douyin for verification accordingly, and the person in charge of Douyin’s life services responded that the data was inaccurate, but it was inconvenient to disclose the details.
Affected by the epidemic, the overall market of the local life business in the whole market has shown a downward trend, but Douyin is growing against the trend; this has aroused the vigilance and attention of competitors including Meituan.
Subdivide the assessment objectives and focus on the development of live broadcast group purchases
In January of this year, Douyin’s local life business set a target of 40 billion GMV, which was raised to 50 billion in February.
A person close to Bytes told “36氪Future Consumption” that from the current momentum, it is not a big problem to complete the annual goal. In the third quarter that has already started, the internal goal is to guarantee a minimum GMV of 5 billion per month.
In addition to the traditional GMV produced by the use of group purchase marketing tools, the sales of pre-made dishes and e-commerce products brought by live broadcasts (self-broadcasting + live broadcasts) have also been included in this year’s GMV assessment goals.
While improving the GMV target, Douyin’s local life has also begun to realize growth targets, including: the number of group purchasers has increased to 3.5 million by the end of the year, the average daily broadcast of merchants has reached 20,000, and the growth of merchants has reached 100,000.
According to 36 Krypton’s understanding of future consumption, as of June, the number of brands connected to Douyin’s local life in the first half of the year has reached about 150,000, and the number of group buying merchants has increased by about 40,000.
After January this year, the key assessment indicators of local direct sales centers have also changed from the development of new merchants to the activity rate of merchants. This means that after a year and a half of local customer accumulation, Douyin has begun to focus on improving existing customers and helping merchants do differentiated user operations.
After nearly two years of exploration, Douyin’s local life business has begun to develop in a refined direction this year, and the style of play has also changed.
Some service providers said that in the first half of last year, when the agency operation business started, there were mostly short videos of people visiting stores. However, this year, Douyin’s group purchase business pays more attention to the contribution rate of live broadcasts to GMV, and strongly encourages merchants to broadcast on their own.
“Short videos are difficult to incubate in the same city, and the transaction conversion rate is relatively low. Douyin hopes to increase the conversion rate and GMV through live broadcast. And encouraging merchants to broadcast themselves, on the one hand, can help them convert traffic to private domains, on the other hand, also It can stimulate the enthusiasm of merchants to advertise.” A person familiar with the matter explained to 36Kr.
In addition, the entire local life market is currently not limited to in-store services for eating, drinking and playing, but also includes the sales of pre-made dishes and e-commerce products. The GMV brought by these categories mainly relies on the live broadcast teams built in various regions and the merchants’ live broadcasts are completed. . In June this year, Douyin has landed its first local life live broadcast base in Suzhou.
According to statistics, in GMV in the first half of the year, short videos contributed nearly 70% (referring to short video group purchase links). According to people familiar with the matter, the internal goal is that the GMV contributed by live broadcasts can reach more than 35% by the end of the year, but it is also said that the GMV of short videos and live broadcasts planned to account for 50% each in Q4.
The short video content that originally accounted for the bulk, Douyin previously took into account the contribution of the same city and feed stream, but since this year, feed stream conversion has been paid more attention, and the same city segment has gradually returned to the short video community positioning, the fixed resource bit traffic has decreased, and more focus on content quality Promote and avoid over-commercialization.
Continue to expand cities, vigorously subsidize, and establish a closed-loop group buying business
The rapid growth of GMV has benefited from the rapid expansion of Douyin’s local life business.
A service provider revealed to 36氪 Future Consumption that from January to March this year, Douyin has intensively expanded its cities in Yunnan, Chongqing, Tianjin and other places. MCN agencies and agency operating companies.
As of June, Douyin’s local life has expanded to 33 cities, and the annual plan is 50-55 cities. In existing cities, such as the earliest developed cities such as Beijing, Shanghai, Guangzhou and Shenzhen, as well as Internet celebrity cities such as Chongqing and Chengdu, the Douyin team focuses on operation.
It is understood that Douyin currently divides the geographical scope of the agents. The first-tier and strong second-tier are operated and managed by the direct sales team, and the remaining cities are completed by the agents to complete the expansion and operation management of the merchants.
However, some people familiar with the matter revealed to 36氪 Future Consumption that Douyin will make efforts to sink cities in the second half of the year, and will give a 60-day support cycle. The GMV target of a single city is 5 million per month.
In the future, the Zhongtai of Douyin’s local life team may also move from Beijing to Chengdu. The above-mentioned insider said that Chengdu is a tourist city, which is highly inclusive and has done a good job in attracting investment and joining. of.
In response to this action, the relevant person in charge of Douyin Life Service responded that it is not the integration of the Beijing team into Chengdu, but the Douyin Life Service is setting up local teams in various places, and Chengdu is one of the first key cities for business expansion.
At the same time as expanding the city, Douyin is also actively expanding the categories of local life, including bathing and massage, comprehensive supermarkets, flowers, etc. The number of first-level categories has exceeded 10 at present.
Douyin local life category
A person familiar with the matter said that the categories that Douyin will focus on this year are parent-child, travel, sports and fitness, leisure and entertainment, etc. These categories have a larger GMV contribution rate and higher interaction. It is understood that in the current GMV of local life, the contribution ratio of meals, in-store integration and wine travel is about 5:2.5:2.5.
It was the first to open up the catering category with the largest proportion of GMV. Most of the leading merchants have already settled in, and this year will focus more on repurchase. From December last year to the present, the frequency of monthly repurchase of catering has doubled.
However, although the expansion is active, the focus of Douyin’s local life is still focused on the group buying business. The takeaway business, which was briefly tried last year, has no plans to restart.
Impact Meituan’s ambitions?
There are indications that local life is being seen as the third curve of Douyin’s growth.
In June of this year, the local life business began to charge merchants. The average software service rate for each commodity category was 3%, of which the rates for marriage and parent-child education reached 8% and 4.5% respectively. In the same month, a huge number of local pushes were tested – this is a product designed for local merchants to pay for placement.
Categories of Douyin’s Local Life Participating in Commissioning
Beginning in November last year, the group purchase business originally under the giant engine was merged into Douyin. Li Wei, the original local direct sales vice president of the giant engine in charge of the group purchase business, also turned to Douyin live broadcast and local life director Han Shangyou to report.
In addition to GMV, the advertising revenue brought by local life is another target that Bytes attaches great importance to.
This year’s local advertising revenue target is 30 billion yuan, double the previous year . “Instead of grabbing the market for local transactions, we also want to grab the local promotion market,” a person familiar with the matter told 36氪.
With the increasing importance of local life in the interior, the traffic distribution of Douyin’s main station has also been significantly inclined this year. In all cities with direct sales centers, Douyin has opened the first-level entrance of intra-city group purchases. At the same time, Douyin short videos can also have multiple group purchase links, and the transaction link is shortened.
In addition, this year, Douyin has also launched Douyin Laigu, which manages local businesses in a unified manner, and advertising products separated from the giant engine, Huge Local Push, and other products. Similar to the development path of the e-commerce business, the local life business is currently also We are striving to create a relatively independent closed-loop ecosystem of products.
In terms of organizational structure, Douyin’s local life almost matches the Meituan to-store business group, which is divided into: catering, comprehensive and wine travel according to business types. People familiar with the matter believe that when the closed loop from planting grass to trading is completed, Douyin’s local life will have the ability to impact Meituan.
Affected by the epidemic, Meituan’s in-store business in Q2 suffered a major blow. A number of insiders told 36Kr that the turnover of catering merchants in Shanghai decreased by 60%-70% in March on average; the GTV (total transaction volume) target of in-store-related business in April and May was only completed by less than 50%; Beijing suspends dine-in, and at least 10% of GTV is lost in in-store dining.
The management generally believes that it is very difficult for Meituan to complete the annual GTV target for the hotel and travel business. “Related target values are being adjusted internally in the near future,” a person familiar with the matter told 36氪. At the time, the person said, “(Meituan) is very vigilant and under a lot of pressure.”
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