Despite facing significant competition in the food delivery market, Douyin remains committed to carving out a substantial market share in this sector.
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On September 4, in response to media reports suggesting that Douyin had abandoned its food delivery aspirations, representatives from Douyin’s Life Services team clarified to Business that they are indeed progressing with their group buying and delivery services.
Following pilot runs in three cities, they expanded their services to Beijing, Shanghai, Chengdu, Guangzhou, Changsha, and Linyi in July, while also introducing a regional agency model.
The representative of douyin said : “The second batch of cities is set to launch in September. Regional agents, in collaboration with Douyin’s in-house business development team, will aid more merchants to join and ensure effective delivery of group purchases.”
China Daily highlighted that the Douyin app now features a “Local” channel on its homepage, which directs users straight to the food delivery channel. A dessert seller from Nanluoguxiang shared that their store has listed only one product on Douyin’s delivery service, which is limited to a 2km radius. Beyond this range, customers need to arrange their own courier service.
A Douyin operation insider revealed that for deliveries within 2km, the platform charges a default fee of 5-6 RMB, with an additional charge of 0.3-0.9 RMB for every extra kilometer. “While the commission rate for restaurants remains at 2.5%, the higher the order price and the longer the delivery distance, the more cost-effective Douyin’s delivery becomes.” However, the insider also acknowledged that Douyin still struggles to compete with established players like Meituan in terms of merchant volume and variety.
Douyin VS Meituan
A comparison of similar shops on both Douyin and Meituan revealed that Meituan has a more extensive product list, whereas Douyin focuses on offering meal packages, often at higher prices.
“The current strategy for Douyin’s food delivery service is to avoid saturated markets and price wars. They aim to identify and capture niches that have been overlooked by competitors,” the insider elaborated. For instance, Douyin is encouraging vendors to focus on meals for multiple people, with packages for two or more individuals making up over 80% of the offerings. The target customer demographic is those seeking impulsive and interactive purchases rather than essential needs, especially during weekends, holidays, tea breaks, or family gatherings.