Douyin completes its target on local life services ahead of schedule

ByteDance-owned Douyin has achieved its yearly target set for local life service ahead of schedule, reaching RMB 50 billion ($69.8 billion) GMV in October, Chinese media outlet 36Kr reported, citing several unnamed sources.

Why it matters: The short video app, which has more than 600 million daily active users, introduced functions like ordering food and tickets, and booking travels directly into it. These moves put the content giant in direct competition with Meituan and Ele.me — two established local service players.

Details: Douyin’s local life unit has now provided a variety of daily services, including buying food ordering recommendations and sightseeing tickets, and booking hotels, parent-child activities, and sports and fitness events. Users can complete those purchases in the video app. 

• The 36Kr report said short videos contributed nearly 50% to the platform’s fast-growing life services sales, while live-streaming and search contributed 35% and 18% to the total GMV growth, respectively.
• A direct link to purchases can appear in the bottom left corner of a related short video. For example, a user watching a video of a plate of steamed fish might see a link to a nearby restaurant serving the same or a similar dish. Those links can nudge users to place orders without leaving the current app.
• Douyin is also reportedly piloting food delivery and group buying delivery services in the southwestern Chinese city of Chengdu soon. But merchants still need to contact couriers themselves for delivery if they currently get takeout orders in the city.

Context: The popular short video platform is being used by merchants as a new way to get a broader range of consumers, while Douyin is also expecting to accelerate the monetization process from the local lifestyle unit, which has huge development potential.

• The overall market size of China’s internet local life service industry has reached RMB 2.6 trillion, growing 15.1% from a year earlier, according to a report conducted by consulting firm Qianzhan, with the figure expected to reach RMB 4 trillion by 2025. 
• The line between content platforms and retail platforms is increasingly blurring, for example, Meituan also tested a short video function this May. 
• Moreover, established players are seeking partnerships in the hope of defending their advantages. Meituan and Kuaishou reached “strategic cooperation” last December after rival Douyin set up the life service as the company’s core business. In August this year, Douyin and Ele.me also announced cooperation, though it has not yet been implemented.