Douyin, China’s TikTok, tests food delivery, bringing ByteDance into a market dominated by Meituan and Alibaba

  • Douyin is supporting restaurants willing to deliver their own food to users of the short video platform as local economies recover from Covid-19 lockdowns
  • The move marks the ByteDance-owned platform’s second foray into food delivery, a market almost entirely controlled by Meituan and Alibaba’s

ByteDance’s Douyin, the Chinese version of TikTok, is once again wading into the food delivery market by testing a new feature that would bring it into direct competition with market leaders Meituan and Alibaba Group Holding.

The short video app is “trying to open delivery options of group-purchased goods for some businesses with urgent needs, and the project is still under exploration”, a representative from the company’s life services department said.

Some 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. However, restaurants must provide their own delivery staff or use delivery drivers from another service, state-owned media The Paper reported on Friday, citing a person close to Douyin.

“Douyin’s life service team is carrying out activities to help businesses recover in some cities,” the Douyin representative said.

ByteDance, China’s largest unicorn, could be in for an uphill battle. Without its own delivery personnel, the company is launching a soft exploration of the market.

By contrast, market leaders Meituan and Alibaba’s are known for their armies of delivery drivers, who are a ubiquitous sight on Chinese city streets.

Douyin’s latest move marks its second foray into food delivery. Last year, it tested “Xindong Waimai”, a food delivery service that was launched as a mini program that opens within Douyin. The company eventually opted not to roll out the service more broadly.

Some fast food restaurants, including KFC and the bubble tea chain HeyTea, have offered deliveries through Douyin since last year using their own personnel. But the companies offered the service through their own initiative, and it was not officially supported by the short video platform.

The potential to crack the duopolistic market has even enticed e-commerce giant In June, JD Retail chief executive Xin Lijun 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.

A Dada representative said that the food delivery service is “still in the planning stage”.

Any company able to grab a slice of the food delivery market could see huge rewards. In 2021, total users of food delivery platforms jumped nearly 30 per cent to 544 million, according to Chinese consultancy Zhiyan. The market had been growing quickly even before the Covid-19 pandemic, which created even more demand for such services while people were forced to stay at home during multiple periods of lockdowns across different cities.

However, securing a piece of the market means changing user preferences for apps that have become staples of many people’s digital lives in China. Meituan and Alibaba made up 69 per cent and 26 per cent of the market, respectively, in 2020, according to Zhiyan data.

Internet search company Baidu also entered the market in 2014, only to sell Baidu Waimai three years later to, which rebranded the service That service made up 4 per cent of the market in 2020, according to Zhiyan.

Author: Coco Feng, SCMP

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