Author/Yu Bo
Source/Milestone
Image source/photo.com
Compared with OTA, Douyin's "single attribution" attribute on the user side is too strong.
Douyin is not necessarily cheaper than Ctrip & Meituan
After two years, Douyin Life Service once again officially announced an increase in the software service fee of merchants. Recently, Douyin Life Service released the "Service Fee Charging Policy for Life Service Software", starting from 0:00 on July 1, 2024, the service fee of Douyin Life Service Software will be implemented according to the latest rate, of which the accommodation category will be increased from the previous 4.5% to 8%, and the game category will be raised from the previous 2.0% to 3.0%-5.0%.
This means that if after the implementation of the new rules, tourists spend 1,000 yuan per room night hotel and 300 yuan for scenic spot tickets on the Douyin platform, then Douyin will charge merchants 80 yuan and 15 yuan (calculated at 5%) for software service fees, compared to 45 yuan and 6 yuan previously, and merchants need to pay 77.78% more and up to 150% more costs.
A number of hotel practitioners told Milestone that the increase in software service fees will indeed cause certain cost pressure on them, and even some independent hotels with average comprehensive strength may choose to withdraw; But on the other hand, there are also voices that the increase in the "threshold" may play a role in gathering traffic, and the top hotel brands may benefit from this, but this needs to be verified by facts.
Previously, Douyin Life Service had raised the software service fees for accommodation and play categories from the previous 0.6% to 4.5% and 2.0% respectively on June 1, 2022. At that time, Douyin replied in an interview with a financial media that this move is mainly to build a virtuous circle of business ecology with merchants, and the revised service fee rate is lower than the industry average, and will provide various protection policies for businesses in areas seriously affected by the mask incident, as well as small and micro businesses nationwide.
It is worth noting that although the rate of Douyin life service after this price adjustment is still lower than the 10%-15% commission level of platforms such as Ctrip and Meituan, the actual cost paid by merchants is not limited to this.
Unlike e-commerce platforms such as Ctrip and Meituan, Douyin is a content platform, and merchants need to produce exquisite short video content in order to capture the hearts of Douyin users, which often requires a certain amount of additional operating expenses. According to media reports, the operating expenses mainly include 4-50,000 yuan/year basic service fee and 8%-12% commission. This means that after this rate adjustment, the comprehensive cost paid by merchants on the Douyin platform will not necessarily be lower than that of the OTA platform.
Moreover, compared with Ctrip and Meituan, the write-off rate of Douyin life services is relatively low, which also invisibly increases the marketing costs of merchants. Taking the data disclosed by Essence Securities in the research report as an example, the write-off rate of Douyin Daren's live broadcast of wine and tourism products is only 5%. According to data from Hua Chuang Securities, Ctrip's live broadcast write-off rate in 2023 will be as high as 91%.
Douyin's value consideration cannot only look at the explicit cost
Regarding the rate increase of Douyin life service, industry insiders said that this was expected, and it was just a matter of time. "OTA platforms or new media platforms in the two-sided market effect, often form a monopoly competition or even oligopoly competition pattern, these platforms in the early days often with free or low commissions to attract a large number of merchants to settle in, with the help of bilateral market effect to make the supply side and demand side on the platform more and more, when the platform market position is stable and form a certain monopoly, will raise the commission, the original Taobao growth path is a template."
However, unlike the "tool" nature of Ctrip and Meituan, Douyin is a content platform, which means that it cannot be considered only in terms of explicit costs, and the hidden income related to marketing is also one of the important factors that cannot be ignored:
First of all, Douyin's more than 800 million daily active users, as well as the precision marketing brought about by traffic distribution based on user portraits, combined with the production of exquisite short video content, can significantly enhance the brand value of merchants, which cannot be accurately measured with quantitative financial indicators.
Secondly, although the write-off rate of Douyin is not high, it has made a significant contribution to the global passenger flow, including online and offline. According to the data of the "2024 Pinxingyun Global Grass Planting White Paper", the spillover value of Douyin is as high as 20%-40%, indicating that consumers will consume in channels other than Douyin e-commerce after Douyin completes cognitive construction.
This means that for many wine and tourism companies with strong comprehensive strength, the purpose of their entry into Douyin is not only to get orders, but more importantly, it is part of their marketing strategy. According to the data, as of September 2023, 14,000 scenic spots and more than 100,000 hotels have opened official accounts on Douyin. In the first half of the first quarter of 2024, the number of registered corporate accounts in the travel industry on the Douyin platform increased by 20% year-on-year, mainly in the hotel accommodation sector. Therefore, this is the confidence of Douyin Life Service to increase the software service fee again after two years.
For Douyin's wine and tourism business, on the one hand, the increase in the rate can enhance its "hematopoietic" ability and provide more funds for the subsequent development of the business line; On the other hand, it may also mean an adjustment of market strategies, such as focusing more on leading companies with stronger liquidity and providing them with higher quality services.
Douyin may be more "scary" than OTAs in the future
From a commercial point of view, it is understandable that Douyin Life Service will raise the rate, which is in line with basic business logic. But business can't be cold, it must also have its warm side, while considering the interests of the platform, Douyin should also consider the situation of merchants, after all, Douyin is an ecosystem, users, content, merchants, and platforms are indispensable.
At the just-concluded 13th Milestone Brand Development Conference, Luo Bingqing, Founder and Managing Director of Pengrun Hotel Consulting and Asset Management, was cautiously optimistic about the current development of China's hotel industry. On the one hand, although the current tourism market continues to be hot, consumer demand tends to be more rational and cautious, and there is still a certain gap between the per capita tourism expenditure and the level of the same period in 2019. On the other hand, according to Pengrun's market research, 52% of companies said that they will continue to reduce their budgets this year, and the business travel market is still difficult to improve. She pointed out that in 2023, most hotels will have a difficult balance between occupancy rate and average room rate.
In the context of the general market prosperity, hotels will pay more attention to the competition for traffic; At the same time, under the effect of operating leverage, hotels have to pay more marketing costs to obtain orders in order to reduce the fixed cost sharing rate. To a certain extent, Douyin life service has a sense of taking advantage of the fire.
Returning to the perspective of business, compared with OTA, Douyin has a stronger single-attribution attribute on the user side, because the short video platform is almost the only one in Douyin, and there is a significant gap between Kuaishou and it; OTAs, on the other hand, have stronger multi-homing attributes on the user side, for example, consumers may switch between multiple platforms such as Ctrip, Tongcheng, Fliggy, and Meituan. This means that if the commercial closed loop of Douyin life services is completely opened up in the future, under the joint action of content + e-commerce, Douyin's voice will be significantly higher than that of OTA, and merchants may pay greater costs.
Therefore, in the face of Douyin life services, which are still in the growth stage, the hotel industry and enterprises also need to take precautions and strive to improve their bargaining power to prevent Douyin from becoming a dominant player in the future.
From the perspective of the industry, the concentration of market share and the improvement of the chain rate will be conducive to enhancing the voice of the head hotel group, but due to the characteristics of the market, it is difficult to concentrate the market share. In the case of a relatively fragmented market share, it is particularly important for the head hotel group to lead the construction of an alliance of interests, which can allow everyone to "work together" to fight for the interests of the entire industry in front of the oligarchs.
For example, for Douyin and OTAs, it is necessary to have both time diversification (consumers choose different products at different times) and space diversification (different consumers choose different products) to maximize the benefits of the platform. So, can the hotel industry formulate relevant rules through alliances, and all hotels can carry out a single product launch for different platforms, so as to weaken the user experience of the platform and enhance their own right to speak. Even, the head hotel group can jointly fund to establish a professional hotel booking platform, just like 12306 for train tickets.
From the perspective of enterprises, hotels can continue to strengthen the construction of their own membership system, and use member rights and interests and quality services to form their own private domain traffic pool. Of course, private domain traffic is more suitable for leading hotel groups, and it is relatively difficult for small and medium-sized hotel groups.
epilogue
Whether it is Douyin or OTA, in the design of platform rules, it should play more of a role in balancing the interests of all parties, and when necessary, it should also be appropriately beneficial to merchants, after all, the platform is the ecology, and without these seemingly "weak" merchants, the platform may not be able to play. Here, you can think about how Pinduoduo rose?
※This article only represents the author's personal views and is not the position of Maidian.com