Douyin considers expanding pilot cities for group buying deliveries

ByteDance's Douyin, the Chinese version of TikTok, said that it is considering expanding the pilot cities for group buying deliveries, a move to further tap online business.

Group buying deliveries are being tested in Beijing, Shanghai and Chengdu in Southwest China's Sichuan Province, and self-registration services for merchants have been launched in the three cities, Douyin said in a reply to the Global Times on Tuesday.

The firm said it would also consider expanding the pilot cities gradually, depending on the present pilot cities' performance. There is currently no specific timetable, the company said.

The reply came after news circulated online that Douyin will launch a takeout business on March 1, according to news outlet tmtpost.com on Tuesday afternoon.

Douyin said the move to offer group buying can meet the multi-scenario consumption needs of users and the diversified business needs of catering businesses.

On December 5, 2022, Douyin reached cooperation with China's three major express courier platforms - JD backed-Dada, SF Express' same-city delivery services, and Shansong - to provide same-city logistics services.

Previously in August 2022, Douyin also teamed up with Alibaba's food delivery arm Ele.me, which went live on its app via a mini program. Currently, the service is only available from merchants in Nanjing, East China's Jiangsu Province.

Local tech media outlet 36Kr previously reported that the gross merchandises value (GMV) of Douyin's local life services unit in the first half of 2022 surpassed 22 billion yuan ($3.24 billion), higher than the target of 20 billion yuan of 2021.

The goal of Douyin's local life services in 2023 is 150 billion yuan, which is about twice the GMV of the previous year.

Data from the National Bureau of Statistics showed that online catering sales in the first three quarters of 2022 increased by 4 percent year-on-year, reaching 9.59 trillion yuan.

Douyin has advantages in technology, channels and funding, as well as algorithms, Liu Dingding, a veteran industry analyst, told the Global Times on Tuesday.

But he warned that group buying delivery has not been a big part of its business map, which limits its competitive edge against other giants such as Meituan.

The quarterly revenue of Meituan's core local business segment increased to 46.3 billion yuan, a year-on-year increase of 24.6 percent, according to the firm's financial report for the third quarter in 2022.