ByteDance’s Douyin, the sister app of TikTok for mainland China, is launching an attack on local services giant Meituan. Chinese media outlet Tech Planet reported on October 21 that Douyin’s local life business team has set up a new branch in Chengdu, Sichuan Province and has also set up on-demand delivery and community group-buying distribution businesses, thus forming a multi-faceted ecology in the sector. The platform’s food delivery business will reportedly be piloted in Shanghai, Beijing and Chengdu.
In addition to its Beijing headquarters, Douyin’s Chengdu branch has set up R&D, innovative business, commercialization and other departments. For example, the merchant-exclusive operating platform of Douyin’s local life services business is operated by the Chengdu team, and the main operating body is Chengdu Suojiansuode Technology Co., Ltd. established by ByteDance in March this year, with a registered capital of 100 million yuan ($13.8 million).
In the report, an employee of Douyin local life business in Chengdu revealed that in July this year, the firm set up the new business team in the southwestern city, with a business model similar to that of Meituan. Chengdu, as an important stronghold of ByteDance’s local life business, is accelerating its development. Han Shangyou, the vice president of Douyin and head of its local life services business, has also started to work in Chengdu and Beijing.
In addition, food delivery business and community group-buying distribution business have been established by Douyin local life business team. The group-buying distribution business mainly explores the field of to-home delivery. At present, the delivery service is covered by merchants. Next, the platform will connect with leading delivery service suppliers to further enrich the food delivery system of Douyin.
According to sources cited by Tech Planet, in addition to testing food deliveries in Shanghai this year, the project will also be piloted in Beijing, Chengdu and other places. At present, teams in the above cities have started recruitment for related positions, such as catering product operation.
36Kr reported in July that the GMV of Douyin’s local life services business in the first half of the year was about 22 billion yuan. In the first quarter, its GMV exceeded 10 billion yuan, and in the second quarter, the performance was between 10-12 billion yuan. It took only half a year to surpass the target that was not achieved in the whole year of last year (the target for the whole year of last year was 20 billion yuan). In January this year, Douyin local life business set a target of 40 billion-yuan GMV, and in February, it raised this target to 50 billion yuan.
While raising the GMV target, the local life services business of Douyin began to chase a growth goal. The number of group buyers was set to increase to 3.5 million at the end of the year, the average daily livestreams by merchants would reach 20,000, and the growth of merchants would reach 100,000. As of June, in the first half of the year, the number of brands connected to Douyin local life services reached about 150,000, and the number of group-buying business merchants that joined Douyin increased by about 40,000.
Affected by the pandemic, the overall market of local life services has showed a downward trend, but Douyin is still growing. This has aroused the vigilance and attention of competitors, including Meituan.