By the end of 2020, the number of food delivery users in China has reached nearly 500 million, and the overall size of the market has reached RMB835.2 billion. The common food delivery websites in China mainly include Eleme, Meituan(HKG:03690), Baidu delivery, etc. It is worth mentioning here that Eleme and Meituan, with a market share of nearly 95%, are leading in the food delivery industry of China.
It was reported that Douyin (Chinese version of TikTok) has decided to enter the food delivery industry，setting up a dedicated delivery team recently and has begun to do on the app. The TikTok food delivery business is called "Xin Dong Wai Mai"(which means Heartbeat Delivery), and its slogan is "Heartbeat Takeaway. Eat What You Love".
According to sources, "Xin Dong Wai Mai" is likely to invite catering merchants in Douyin to settle in, and the merchants will provide delivery services independently. The service may become an aggregate mode of food delivery platform, cooperating with ELEME or Meituan for diversion of food delivery business.
Key differences between "Xin Dong Wai Mai", Meituan, and Eleme are the passive presentation and the active search. The traffic accuracy of the former is certainly not as good as the latter. However, Douyin Delivery could use its platform as its unique advantage, which means its advertisement could be set in short videos.
Short videos can make users' opinions on selling more authentic, and also change static delivery information into dynamic information, creating conditions for TikTok to develop takeout business through the medium of short videos." Xin Dong Wai Mai" will be first opened in first-tier cities and second-tier cities, and then gradually spread to the whole country.
The launch of Heartbeat Restaurant, let TikTok have the idea to do the next video version of "Dianping". Although the DAU reached 600 million, TikTok is essentially a platform rather than a content creator, how to help people to connect with business resources, provide operational advice, give traffic support for quality video, guide content output, and establish a review content platform. This is what TikTok needs to consider entering the food delivery market.
In the layout of Meituan, local service is more like an entrance-level product.ByteDance can provide more retail services through local services, which helps it form complete business and data structures. For TikTok, the online traffic has already reached its peak, and now TikTok's ad loading rate has almost reached the same level as Weibo's. Users can no longer stand more ads. For TikTok, the remaining potential channel turning into cash is to transfer online traffic to offline LBS services.
In fact, both Alibaba and Meituan are expanding their business based on LBS services. Alibaba has been committed to Ali's local life and online travel business. Alibaba realizes that LBS-based service capability is the core. Thanks to its ability to deliver online and offline, Meituan's annual number of trading users was 511 million in 2020 compared to the number of 450 million last year, a YoY increase of 13.3%; 6.8 million active merchants, a YoY increase of 10.1%. Behind the growth of Meituan's data, there is not only the progress in the delivery business and hotel business but also the important growth brought by the business of group buying in communities.
However, there is much content about daily sharing in Tik Tok, and therefore more people choose to go to the shops offline, which has posed certain challenges to Meituan and other local businesses.
For users, if "Xin Dong Wai Mai" can be successfully launched, maybe you can watch short videos about delicious food and order them simultaneously in the future. Food will be more intuitive through a short video. For the market, both Meituan and Eleme have their core competitiveness. The market share of Meituan and Alibaba will not be fundamentally affected. To start the Tiktok delivery is aimed at looking for potential users and expanding the market.
The competition between Meituan and Eleme has been becoming less intense in the 8 years, but it seems that there is still a large space in the delivery market. From last year's COVID-19 to now, both of them have seen a significant increase in revenue. The size of the delivery market grew to RMB664.62 billion, up 15 % year on year. But there is still a lot of room to improve in the delivery market. Can ByteDance seize the opportunity? We can see it in the future!
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