Can Douyin takeaway change the market landscape? Meituan plans to recruit 10,000 people to "prepare for war"

Source: Visual China

Author丨Zhang Rui

Editor丨 Kang Xiao

Produced by Tencent News Xiaoman Studio

Local life services with high frequency, high repurchase and huge market space have become a must for leading Internet companies, and the same is true for Douyin, which has "no boundaries".

Since announcing its cooperation with Ele.me in August last year, Douyin has made new moves in the field of food delivery. It is reported that Douyin will launch a national takeaway service on March 1. In response, Douyin replied that it is piloting in Beijing, Shanghai and Chengdu to open up self-service entry for merchants, and there is currently no specific timetable for expanding the city, nor is there a plan to launch a nationwide takeaway service next month.

Unlike Meituan Takeaway and Ele.me, the pilot of Douyin's early takeaway project is mainly based on "group buying and delivery". On December 5 last year, the official account "Douyin Life Service Business Watch" affiliated with Douyin announced that Douyin opened a "group purchase delivery" service (that is, Douyin takeaway service) in pilot cities.

According to "Deep Net", Douyin takeaway is currently mainly carried out in three ways. First, the settled merchants use the three-party aggregation distribution resources provided by Douyin life service (including SF City, Flash Delivery, Dada Express), or self-delivery; Second, merchants can carry out takeaway operations through the "Ele.me Douyin Mini Program"; Third, merchants who have built their own "brand mini programs" can choose their own fulfillment and distribution system to carry out takeaway business.

According to the inquiry of "Deep Net", the merchants currently settled in Douyin takeaway are mainly group meal takeaway with higher unit prices, and more than 100 yuan of group meal takeaway accounts for a relatively large proportion. In this regard, an industry insider revealed: "Douyin plans to familiarize itself with the entire business process in the form of large and small orders, and then make a large-scale business at the right time."

The challenge for Douyin is that whether it is choosing third-party delivery or merchants delivering by themselves, it is difficult to form a scale effect on the delivery side, which means that the cost of Douyin takeout for merchants in the early stage will be higher than that of Meituan takeaway. In addition, takeaway is a planned consumption, which does not fully fit with Douyin's interest-based e-commerce impulse consumption. In the long run, it is still unknown how much market share Douyin takeaway can take.

It has been planned for a long time

Douyin's local life business is mainly divided into two parts, one is the in-store business such as group buying, and the other is the home business such as takeaway. Compared with 2018, when it cut into the in-store business of group buying, Douyin only began to layout the takeaway business in 2021.

In the second half of 2021, there was news that Douyin was testing "heartbeat takeaway" internally to prepare for the implementation of takeaway business. At that time, when "Deep Web" searched for "heartbeat takeaway" on Douyin, a prompt would pop up on the page that "Douyin currently has no takeaway-related business plan". Now, if you search for "heartbeat takeaway" on Douyin, you will be directly redirected to the "Douyin Life Service" page.

"This shows that after the closed-loop business is formed, Douyin's local life will focus on takeaway and other home business." Feng Nian, the founder of Dian Jinhand, told "Deep Web".

From the perspective of GMV growth, Douyin has tasted the sweetness brought by in-store business such as group buying. According to the "2022 Douyin Life Service Data Report", in the past year, Douyin life services have covered more than 370 cities and more than 1 million cooperative stores. From the GMV point of view, according to 36Kr reports, Douyin Life Service completed about 77 billion yuan of GMV in 2022.

From the perspective of commercial monetization, in-store business such as group buying not only contributed group buying commissions to Douyin, but also brought about the growth of advertising business.

Since June 2022, Douyin has ended its previous "commission-free" offer for merchants and began to increase the group buying commission according to the profit margin of different categories, including 4.5% for accommodation, 2.5%, 2.0% and 3.5% for food, play and entertainment, and 8% for wedding (all including 0.6% payment channel fee).

Group buying commissions are only part of Douyin's local living income, and in order to increase exposure, many merchants will stream on Douyin for promotion. According to data, Douyin's local group buying advertising business will complete about 8.3 billion yuan in 2022, higher than the target of 4.5 billion yuan.

Obviously, in addition to live broadcast rewards, advertising, and e-commerce business, local life services have become an important fulcrum for Douyin's business monetization. According to 36Kr news, the target GMV of Douyin life service this year is 150 billion, twice as much as the previous year.

To achieve the small goal of doubling the GMV of local life services, Douyin needs to continue to make efforts in the food delivery business.

"If the in-store business is a side dish, the takeaway business is the main meal." For the oversized takeaway business, some analysts told "Deep Net", "If Douyin wants to take away a cake in the local life field, it is inevitable to increase the takeaway and wait for the home business, because Meituan has already given samples to Douyin." ”

Meituan's revenue composition in the third quarter of 2022

According to data, last year's Meituan GTV (total transaction volume, Meituan takeaway platforms mainly look at GTV) was about 1.6 trillion, of which about 850 billion was food delivery. In terms of revenue, in the third quarter of 2022, Meituan's revenue was 62.619 billion yuan, of which distribution service revenue accounted for the lion's share, 20.107 billion yuan, accounting for 32% of revenue.

In other words, whether it is business frequency, fulfillment costs, or consumption growth space, the "money scene" of home business such as takeaway is better than that of in-store business. This means that Douyin needs to take a piece of the local life business ecology, and when the in-store business improves, it must spend a lot of money on takeaway and other home business.

Ele.me is difficult to make up for the delivery shortcoming

Unlike the in-store business, which mainly distributes information based on geographical location through traffic, the home delivery business such as takeaway emphasizes the distribution of offline service capabilities and fulfillment capabilities. Among them, delivery is the core barrier of takeaway and other home businesses, and it is also the short board of Douyin.

In order to make up for its own shortcomings in intra-city delivery, Douyin and Ele.me announced their cooperation on August 19, 2022. According to "Deep Web", Ele.me is not Douyin's exclusive partner in the takeaway business, and Ele.me only provides instant delivery business for merchants and users in the form of Douyin mini programs.

Judging from the later results, the cooperation between the two did not meet market expectations, and the food delivery industry is still a pattern of competition between Meituan and Ele.me. Among them, Meituan occupies about 70% of the market share, and Ele.me's market share is about 30%. "Douyin has lost the opportunity to reinvent its own offline delivery system, and Douyin and Ele.me's cooperation and aggregation of three-party distribution resources are doing infrastructure construction, so that small businesses can use Douyin's ability to go to stores and homes to empower themselves and do their own takeaways," Feng Nian said.

Judging from the introduction of Douyin's "group purchase and delivery" project for merchants in December last year, Douyin does have the meaning of "letting merchants do takeaway by themselves".

According to the official introduction of Douyin: the "group purchase delivery" link provides multiple choices in distribution methods, and merchants can choose to use the three-party aggregation distribution resources provided by Douyin life services (SF City, Flash Delivery, Dada) or choose self-delivery. In addition to "group purchase delivery", in order to meet the diversified takeaway delivery business needs of different merchants, the platform also provides takeaway operation methods such as "Ele.me Douyin Mini Program" and "Brand Mini Program".

Some industry insiders predict that in order to reduce delivery costs and form scale effects on the distribution side, the possibility that Douyin takeaway has not built its own delivery team cannot be ruled out. Because catering takeaway is only a part of the home business, in the future, Douyin will expand its takeaway business to fresh food, flowers, medicine, food, groceries, 3C and other categories, all of which need the blessing of a strong instant delivery system.

Takeaway is a hard bone

Compared with Meituan and Ele.me, Douyin has advantages in traffic, users, and scenes, and users come to Douyin mainly for entertainment. Douyin's product design is presented by placing the information stream in the most prominent position and recommending videos to users through algorithms. The local life content of food recommendation can meet the needs of users, but whether it can be converted into transactions and form a closed loop is unpredictable.

Some industry insiders revealed a detail to "Deep Net": In 2020, when Douyin encourages influencers to visit stores, launch gourmet dining coupons and group buying products, as long as it is a restaurant with heavy Douyin traffic, the search volume of this restaurant in Meituan will peak. "This shows that the store's Douyin traffic has spilled over to Meituan."

This also shows from the side that in the local life ecology, traffic is only the first step, and the ability to push and sell in the later stage, and deal with large and small stores in different regions offline, and use this to push service products to users to complete transactions, is a huge and complicated work. For latecomer Douyin, the local life business is a hard bone, and the takeaway business is even more so.

Some catering practitioners revealed, "Entering Douyin requires a professional video shooting team, which will increase the expenditure of labor costs." Moreover, Douyin takeaway is still in the exploration stage, and the transaction volume is far inferior to Meituan, and it cannot be expected to increase the transaction volume through Douyin takeaway. ”

Although Douyin takeaway is still in the exploratory stage, it is difficult to change the competition pattern of the takeaway market in the short term, but the vigilant Meituan has smelled the danger approaching. According to reports, Meituan plans to recruit about 10,000 people in the first quarter, and a number of local life service businesses such as takeaway, in-store, and wine hotels have also increased the number of recruitment positions.

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