Douyin, China’s TikTok is dipping its toes in the food delivery market to rival Alibaba, Meituan
- Chinese TikTok, Douyin, is onto its second foray into the food delivery business, a market almost entirely controlled by Meituan and Alibaba’s Ele.me
- The project, still under exploration, is basically for restaurants that are willing to deliver their own food to users of the short video platform.
- It could be an uphill battle for Douyin without its own delivery personnel as Meituan and Alibaba’s Ele.me are known for their armies of delivery drivers.
In China, it is commonly known that the food delivery business is a game for two — Alibaba and Tencent, who own Ele.me and Meituan. These two apps alone, whose army of delivery drivers are a ubiquitous sight on Chinese city streets, controls almost 99% of the local food delivery market. Now, ByteDance’s Douyin, the Chinese version of TikTok, wants to challenge that duopoly with a rather unconventional approach — food delivery without its own drivers.
Frankly, ByteDance, China’s largest unicorn, has made a series of moves to enter the food delivery sector prior to this. Just last year, it tested “Xindong Waimai” using Douyin’s own short video platform as a channel to develop its takeaway business. The company eventually opted not to roll out the service more broadly.
This time around, although the project is still under exploration, the short video app is “trying to open delivery options of group-purchased goods for some businesses with urgent needs”, according to South China Morning Post who quoted a representative from the company’s life services department.
Currently, a handful of restaurants in particular cities, including those whose economies were hit hard by a resurgence in Covid-19 this year such as Shanghai, now include an option on their Douyin channels for users to order food with delivery. The downside however is that restaurants must provide their own delivery staff or use delivery drivers from another service, according to state-owned media The Paper.
Should that be the reality, it might be a tough game ahead for Douyin considering both market leaders, Meituan and Alibaba’s Ele.me, are known for their armies of delivery drivers–a rather ubiquitous sight on Chinese city streets. Duoyin’s approach to crack the duopoly has not been the maiden attempt in a country where the number of people who ordered food online between 2016 and 2020 is 400 million.
In fact, even e-commerce giant JD.com in June told Bloomberg News that the company was exploring a move into the business segment because Dada Nexus, JD’s logistics affiliate, has strong capabilities in same-city delivery. According to a report by Chinese online media outlet LatePost, JD has already been in talks with some restaurants in cities like Zhengzhou, in central Henan province, and will let Dada handle the deliveries.
The upside of JD joining the food delivery market would be its strength in logistics. As it is, the company has a comprehensive delivery system with extensive experience in it. Overall,grabbing a slice of the Chinese food delivery market could reap huge rewards for companies.
To put it into context, in 2021, total users of food delivery platforms jumped nearly 30% to 544 million, according to Chinese consultancy Zhiyan. In general, the Chinese meal delivery industry is so large and profitable because of how often consumers make purchases.
According to a report by iiMedia Research in 2021, 27% of Chinese consumers order food six to ten times per month, and 14.3% of users order food 11 to 20 times per month. Notably, only 18.5% of the respondents said they never order food online.
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