Recently, ByteDance has launched (in Chinese) a group purchase function for businesses in the catering industry on the Douyin (抖音, positioned as the "Chinese version of TikTok") platform. This feature is for merchants who have completed the super app's Enterprise ID certification. The introduction of this new function means that the newly opened small shop linked to the enterprise account needs a "zero threshold to open a shopping cart + technical service fee as low as 1%."
For business owners in the restaurant industry, this is good news, since online sales are the main way they acquire customers and orders. According to data from the official websites of Meituan and ele.me (two of the largest food delivery platforms in China), the commission rates are generally between 18%-26% (Meituan) or 15%-25% (ele.me). When the coronavirus spread through China heavily, online orders became the only way for restaurants to survive, which pushed food delivery platforms' influence to the highest level.
The commission fees became a vital factor in deciding whether they would survive this winter or not. Now, Douyin platform provides even more beneficial terms on a platform, with over 400 million Daily Active Users (DAU) in China. ByteDance is trying to seize business owners from Meituan and ele.me, exploring business in this huge rigid market.
The company has already paid attention to this field and even made some moves. In January 2019, it launched a 50% off restaurant voucher on its merchant page, making the discount voucher the online and offline "circulation currency." Besides, another video sharing platform, Kuaishou, announced the upgrading of the product features of merchants' accounts, focused on the three core directions: brand, e-commerce, and local commerce. The first category of local life services is primarily for restaurants.
For Internet giants in China, penetration into daily life seems like a default option. One week ago, Alipay announced a pivot towards being a 'life services platform' and put food delivery, restaurants and hotels on the top position page. Companies are using their ways to attract customers and businesses based on their existing large user flows. TikTok will face strong competition after entering the restaurant industry and the competitors will not be easy to defeat. Compared to previous strategies provided in 2019, the group purchase model is more attractive while the user experience needs to be watched.