In July, Douyin conducted food delivery trials in Shanghai, and a month later teamed up with, the food ordering arm of South China Morning Post-owner Alibaba Group Holding. Douyin users could tune into a nearby diner’s live-streaming session, order food and have it delivered by Ele.me without having to leave the app.
Douyin’s doubling down on food delivery comes after the company staged its “Goodies Festival” in September, which provided a glimpse of how it would diversify revenue away from advertising by leveraging its huge reach and influence when it came to consumer tastes in food and fashion.
In 2021, ByteDance’s revenue soared 70 per cent year on year to US$58 billion, down from a year on year growth rate of 111 per cent in 2020, according to Reuters.
China’s food delivery sector is dominated by Meituan, with a market share of about 70 per cent, while Ele.me accounts for most of the remainder.
Although Douyin enjoys unrivalled online reach through its huge number of users, the platform has lacked order fulfilment capacity, said analysts at Dongxing Securities in a recent research report. They added thatwould have limited impact on Meituan, because Douyin’s food delivery service is more suited for “takeout demands that are interest-based or fleeting”.
In a third quarter earnings call, Meituan CEO Wang Xing dismissed Douyin as a serious challenger, saying that while it had “achieved a relatively faster growth in [its] local service business … its GTV [gross transaction value] was not an apples to apples comparison to our GTV”, and that Meituan could better meet the needs of users and merchants.
When searching for food deals from merchants in Beijing’s Sanlitun shopping area, the Post found that Meituan offered a better variety and quantity, and that finding deals was easier using the Meituan app than Douyin.
Douyin and Meituan did not reply to requests for comment.