Recently, Tiktok local life released the notice on the service fee policy for life service software in 2022. From June 1, Tiktok life service will adjust the software service fee policy, which means that Tiktok will bid farewell to the era of "zero service fee". But even so, many businesses said that they would not give up the traffic "fat meat" of Tiktok, and would increase investment in Tiktok.
Tech planet exclusively learned that this year, the annual target of local life business will be increased to 50 billion yuan, which is higher than the target of 30 billion yuan to 40 billion yuan set at the end of last year. However, considering the factors affected by the epidemic, this target may be dynamically adjusted. In addition, a person close to bytek disclosed that byteh beat is preparing to integrate the local life business of Tiktok, including Beijing, to Chengdu. Hanshangyou, vice president of Tiktok and head of local life service, has gone to Chengdu to communicate relevant matters.
With regard to the above news, the relevant person in charge of Tiktok life service said to tech Planet: the information is not accurate, and the Beijing team is not integrated into Chengdu. In fact, considering the business development, in order to facilitate the service of local merchants, Tiktok life service is setting up local teams in various places. Beijing, Shanghai, Chengdu, Hangzhou and other cities have developed life service industries, which are in line with the development direction of Tiktok life service business, and are among the first batch of key cities for business expansion.
Tech planet has learned that Tiktok has recently opened a number of non sales positions related to local life in Chengdu, and byte HR has also distributed relevant recruitment information on platforms such as pulse, or intends to take Chengdu as a key development city for local life.
As a new first tier city and online popular city, Chengdu has a huge local consumer market, which also makes Chengdu a key city for the layout of various platforms, such as meituan and Alibaba word-of-mouth. In addition, Chengdu also has some start-ups in the local life industry. At present, the operation mode of Tiktok's local life is a cooperation mode in which the first and second tier cities and online Red cities are directly operated, and the third and fourth tier cities and suburban counties are service providers. Naturally, cities like Chengdu are also the key cities to be laid out for the local life of Tiktok.
In addition, tech planet also learned exclusively that according to the source, the company's top management set the target dau for the weight removal of the three terminals of Tiktok (main terminal app, speed version and volcano version) in the second half of the year at 800million, including 600million for the main terminal and 200million for the speed version. It can be seen that with the crazy growth of Tiktok traffic, Tiktok's local life business will also benefit from it, and will achieve faster growth in business layout and revenue.
The expansion of Tiktok's local life
After two years of development, the local life of Tiktok has taken shape.
In 2018, Tiktok made its first attempt to lay out the local life business, for example, by building a life service scene in Tiktok with the help of a third-party platform, and then set up a group purchase function for businesses on the "enterprise account", but it was not a success.
Due to the lack of in-depth management experience, the local life business on Tiktok became a platform for "Princes" of all parties. Some large companies had capital advantages and were able to quickly expand their business. However, for small and medium-sized companies and individual businesses, it was difficult to obtain growth space at low cost by carrying out group purchase, wine travel and other businesses in Tiktok. Therefore, the local life business of Tiktok was not progressing smoothly at that time.
Zhang Yiming, who has always been optimistic about the local business, obviously will not allow the local life business to stop here. Tiktok then carried out a series of integration and changes.
It is reported that since October 2020, the group's human resources and strategic departments have investigated the local life business structure of meituan. According to media reports, the Ministry of Commerce has set up a "local direct business center" to expand local life business. After the cancellation of the original SMB (small and medium-sized customers) business line, about 10000 employees were transferred to the center in January 2021 to explore customers in life service, catering and other industries.
Subsequently, Tiktok began to push to the first and second tier and sinking markets through the local market, attracting local businesses to settle in Tiktok and gaining a certain number of business bases. However, the large number of merchants did not achieve the expected order growth.
A merchant told tech planet that the entrance to Tiktok's local life is too deep, and users still need to click the text link attached to the short video to buy group buying goods. As a result, the goods have not been effectively exposed, resulting in flat sales. This pain point will not be solved until 2021.
In 2021, the same city page of Tiktok app has changed. It can be found in some cities, such as Hangzhou, Beijing, Shanghai and other first - and second tier cities. The area of "city name + eating, drinking and playing" is added to its home page, which is the initial group purchase entrance. The establishment of an important entrance has enabled the local living business to obtain greater traffic. Tiktok has also continuously optimized the entrance in the later stage, and added a group purchase entrance in Tiktok's "wallet".
Then, Tiktok's local life business began to use live broadcasting to pry open a new local life sales entrance, allowing the anchor to sell tickets in the live broadcasting room and buy tickets in the store. A merchant told tech planet that after the launch of this function, its order volume has been further improved.
In addition, local businesses have also opened up new modes of operation, such as intra city distribution and flash delivery, so that goods can be delivered to customers in a short time like takeout. Through diversified marketing means and operation methods, it opens a new situation for the local life service of Tiktok.
Not only that, tech planet has learned that the local life of Tiktok has also strengthened its investment in the functions of businesses, service providers and content. For local merchants, Tiktok local life launched the "Tiktok visitor" app, which is similar to the "Douyin store" of Tiktok e-commerce, and can manage the background data of merchants. For local service providers, Tiktok local life recently launched the "Tiktok life service provider background", which allows service providers to view relevant data and cooperation opportunities in the background. The platform is still under test and requires an invitation code to enter.
In terms of content, Tiktok local life has recently launched a "life service organization platform", which is similar to Tiktok's short video MCN organization management platform, and can provide relevant background management for creators and organizations of local life. This means that Tiktok will strengthen the content output in local life and provide more efficient content realization for businesses and institutions.
It can be seen that Tiktok local life is making every effort to build a service ecosystem for local life.
The competition between Tiktok local life and meituan group purchase
Tiktok can't get around meituan when she is doing local life.
Although Tiktok's local life is dominated by group buying and meituan's life is dominated by takeout, both sides have business intersections.
At present, the local life of Tiktok mainly focuses on the business layout of the first and second tier cities and online popular cities. In the first and second tier cities, Beijing, Shanghai, Chengdu, Hangzhou and other cities are preferred. They are all cities with high consumption capacity and food characteristics. Local life business is easier to start from these cities.
Tech planet has learned that Tiktok is focusing on promoting local life in these first and second tier cities. The preferred target customer group is meituan merchants. Because meituan merchants prefer to broaden sales channels and try new service scenarios, Tiktok will be a new choice. Tiktok mainly cooperates with local local Dianyin companies to arrange local Dianyin specialists to contact merchants who have made public comments and meituan in the business district or mall to help merchants understand Tiktok's local life services and arrange to settle in Tiktok.
In order to get customers faster, Tiktok also gives traffic and subsidies to businesses. Take the group purchase price of a barbecue shop in Beijing as an example. For the same package a, the group purchase price of Tiktok is 150 yuan, while that of other platforms is 160 yuan. This is not uncommon in Tiktok. Users can be obtained at a lower price.
In order to prevent the attack of Tiktok, meituan also gave a "response". Under the basic plate of takeout, meituan began to increase the group purchase business in the store. On the one hand, it launched the "meituan circle" focusing on the local food special offer platform, and on the other hand, it launched the live delivery function in meituan app to create a new sales scene.
For example, the recently launched "meituan live assistant" app is to provide professional delivery tools for meituan merchants. In addition, it also launched the "video grass planting" function on the merchant page to improve the service experience of users and improve the repurchase rate through video grass planting. In addition, meituan has also launched the short video function "video earn". Users can brush relevant short videos such as food and medical beauty. It is not ruled out that this function will open the function of hanging group purchase links in the later stage to improve the order transaction rate.
Of course, at this time, Tiktok's pace is also more open, not limited to the group purchase of food and catering. Since last year, Tiktok has made attempts in medical beauty, tourism and other aspects. For example, it has launched the "mangosteen travel" platform, gathered local accommodation businesses and ticket businesses in Tiktok, created a unit subdivision platform, and completed the re division of the group buying track.
In addition, in order to further enrich the service market of e-commerce and local life business, Tiktok actively cooperates with third-party service providers, and specially creates a platform called "Tiktok service market" for third-party service providers in Tiktok app. The platform has services that most local businesses need to use, such as ordering meals, local experts' shop cashing tools, etc. through these services, it not only improves the relevant needs of businesses, but also reduces the operating costs of Tiktok.
The rapid expansion of Tiktok's local life has also attracted businesses on the sidelines of meituan. Manager Chen of the investment promotion department, located in Wuhan kilometer Express repair, told tech planet that they are a national chain enterprise engaged in door-to-door maintenance, sales and recycling services such as mobile phones and computers. At present, they have opened more than 200 direct online stores in meituan, but with the continuous expansion of business, there is an urgent need for new sales scenarios.
Manager Chen said: "Tiktok is a new battlefield for local life. The kilometer Express repair club will settle in Tiktok local life group purchase business. Short videos are more conducive to show our maintenance business. After settling in Tiktok, they will use short videos to promote group purchase in stores."
There are more than one Wuhan merchants with similar ideas. According to a manager of a local push company in Wuhan, local life merchants who want to settle in Tiktok are increasing their willingness to settle in meituan month by month compared with "not only in Wuhan, but also in other places."
It is not difficult to see that although there is an essential difference between Tiktok and meituan's group purchase, the competition between them will be inevitable in order to obtain traffic and Gmv.
Can Tiktok leverage the trillion yuan local living market?
With the establishment of "Tiktok group" and the appointment of a new CFO by bytek not long ago, the outside world regards this move as a prelude to bytek's listing.
Several private equity investors quoted by Zaobao said that the valuation of private equity was close to $400 billion this year. In order to impact the overestimation, bytes need a new engine.
In November last year, byte beat completed the new organizational structure adjustment, and established six business segments, including tiktok and Tiktok, Feishu, vigorously education, volcanic engine, and Chaoxi Lightyear. Among these six businesses, Tiktok and tiktok are the main forces for byte's revenue growth, especially Tiktok e-commerce.
According to latepost, the Gmv of Tiktok e-commerce will exceed 500billion yuan in 2020, and the Gmv target for 2021 will double to reach 100billion yuan. A set of data disclosed by Mu Qing, vice president of Tiktok, shows that from January to August 2021, the Gmv of Tiktok e-commerce increased by 7.9 times compared with that from January to August 2020. It can be seen that the Gmv of Tiktok e-commerce has become a new "sharp weapon" for attracting money. But this is far from enough. In 2020, Tiktok will focus on the "local life service" of the trillion market.
Since 2018, the company has adopted the "enterprise number" and now has chosen a subdivision track "shop group purchase" in the local life business, mainly to form a differentiated development with meituan.
According to the report of iResearch consulting, the domestic local life service market penetration is only 12.7%, and consumers are mainly concentrated in the field of catering takeout. There is still a lot of room for growth in subdivided areas such as wine travel to stores and home services. In the later stage, Tiktok began to lay out the business of wine tourism and cultural tourism in addition to the group purchase in the store.
So far, the local life of Tiktok has formed a group purchase business for food, wine tourism, medical beauty, cultural tourism and other purposes, and has also created a relatively perfect background service system. Tech planet has learned that next, Tiktok will try out the "cultural tourism" business in tourism hot cities such as Kunming, and promote the advertising investment of local life merchants in Tiktok, so as to improve the growth of advertising revenue.
In the face of a series of actions of Tiktok in local life, other Internet giants are also preparing for war.
Meituan announced this year that it would cooperate with Kwai and launch meituan applet on the Kwai open platform to provide meituan merchants with complete service capabilities such as package, voucher, reservation and other commodity display, online transaction and after-sales service. Kwai users will be able to go directly through meituan applet; Ali launched the "pop group", focusing on the preferential group purchase of local food; Tencent launched the group purchase tool "geese enjoy group" for the first time to test the local group purchase based on wechat.
It is obvious that all parties will not give up the big cake of the trillion level local living market. Whether it is Tiktok or other platforms, they all hope that the local living business will become a new growth curve. Therefore, the market competition between platforms will be more intense.