TikTok Sister Site Douyin Expands China Food Delivery

TikTok’s Chinese sister site, Douyin, has expanded its group-buying and food delivery services to 24 new cities, in a sign of how video services are increasingly becoming a significant driver of e-commerce in the region.

The company previously offered such services in major cities such as Beijing, Shanghai and Chengdu, but will now bring the total number of cities serviced to 30, including major markets such as tech manufacturing hub Shenzhen, Beijing suburb Tianjin and Chongqing in southwestern China.

Once the new cities are rolled out the services will cover 70 percent of Chinese provincial capitals, including Shenyang, Shijiazhuang, Jinan and Hefei.

Group buying services have become popular in China and involve handing out discounts to users if a certain number of people agree to buy the item.

Food delivery

Douyin said it would contract with third-party regional vendors to meet delivery demands from merchants.

The company last year began using delivery services including SF Express’ SFTC, JD.com’s Dada and Alibaba Group’s Ele.me to deliver restaurant meals sold through the platform.

Douyin said in February it was planning to expand food delivery services.

The company’s main competitor in China is Meituan, which had 6.24 million food delivery riders and 9.3 million merchants on its platform last year, compared to 2 million merchants for Douyin as of April.

Growing industry

In the first half of this year Douyin’s food delivery sales topped 100 billion yuan ($13.8bn, £11bn), according to local media reports, which while substantial was less than half of Meituan’s sales.

Meituan has made efforts of its own to expand into livestream e-commerce, in order to face off competition from Douyin, saying in July it planned to expand such services.

China’s on-demand local retail market is expected to reach 1.2 trillion yuan ( $170bn, £130bn) by 2025, following a compound annual growth rate of 64 percent from 2016 to 2021, according to a July study from JD Consumer and Industry Development Research Institute, Dada Group and the China Chain Store and Franchise Association (CCFA).