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China’s Tiktok Enters Local Business Market

Before February this year , Bytedance’s local life business’s annual goal is: 20 billion RMB (in store) by the end of 2021 . This number is slightly lower than one-tenth of Meituan ‘s GMV in store, hotel and travel business in 2019.

People familiar with the matter said that the number of 20 billion has been adjusted subsequently. The person in charge of Ocean Engine (a mobile marketing platform that helps you advertise your products on Bytedance’s apps like Toutiao (one of China’s largest mobile platforms of content creation, aggregation and distribution), Douyin (known as TikTok outside of China, one of the largest short-form video platform in the world), and more.

Compared with the actual situation, 20 billion goal seems to be a too high target. We learned that as of March 2021 , the GMV of Douyin’s local life business that month was less than 40 million RMB.

“ Bytence tends to set high, sometimes unrealistic goals. “ said a Bytedance person. Its education business unit, for example, Guagua dragon gained 200 thousands paid customer last year. This year, the sales target doubled. Actually, even achieving 50% growth is a stretch.

In December 2020 , Bytence commercialization department set up a “ local direct business center “. The core team consisted of about 20 or 30 people, and it is Led by Pu Yanzi, vice president of commercial sales. The sales head is Li Wei. Previously, he was in charge of the game business of Douyin .

The local direct business center is divided into three teams: vertical business, advertising business and innovative business team. The vertical business and advertising business teams sell ads or ads-related products to local business, such as clinics, the dentists and supermarkets.

The innovative business team relies on BD team to acquire new customers . On the one hand, participating merchants can cooperate with local KOL on Douyin and shoot store-exploring videos to gain customers; on the other hand, they can also launch discounted group purchase coupons on Douyin and enter the ranking list.

Throughout the country, Douyin’s local life business has opened up 21 direct-operated cities, including Beijing, Shanghai, Guangzhou, Hangzhou, Nanjing, Wuhan ,as well as popular cities such as Shenzhen, Xiamen, Ningbo, and Wuxi.

Meituan’s in-store business wanted to expand for content marketing for a long time. In 2017, Dianping (merged with Meituan in 2015) launched the vlog. Business can be presented through video, and users can also use 30- second short videos to comment. In April 2018 , the Dianping app was updated again, imitating Xiaohongshu, not only adding short video functions, but also inviting celebrities as KOLs.

However, the underlying logic of Meituan and Douyin’s in-store business is not the same. For users, Meituan + Dianping is still a tool after the consumers have confirmed intention, such as making reservations or purchasing in-store coupons on Meituan, and then review it on Dianping (similar to Yelp) ; while Douyin hopes to pique the consumers’ interest by short videos and close the purchase loop later.

Internet Veteran in US and China