Douyin sees steady growth in on-demand services but is some way off from mounting a serious challenge to Meituan
- Local services at ByteDance-owned Douyin reached a gross merchandise volume (GMV) of over 100 billion yuan in the first half
- Douyin, which started its local services foray in 2018, currently provides services covering local eateries, drinking, fun and entertainment
Douyin, the domestic sister app of short video hit TikTok, has achieved steady growth in its local services business although it is still some way off from challenging Meituan’s dominant market position, according to a local media report by LatePost.
Local services at ByteDance-owned Douyin reached a gross merchandise volume (GMV) of over 100 billion yuan (US$13.9 billion) in the first half, less than half of the same business at Meituan. Douyin had previously set a GMV target of 290 billion yuan for the operation in 2023, according to a previous report by LatePost.
ByteDance did not immediately respond to a request for comment on Tuesday.
China’s on-demand local services market is expected to reach 2.5 trillion yuan in 2025, according to a report by research firm iiMedia. Development of the local services sector in new tier-one and tier-two cities is expanding at pace as growth exceeds cities such as Shanghai and Beijing, according to the report.
Meituan takes a leaf out of new rival Douyin’s book by adding more video
Meituan and competitor Ele.me, owned by Alibaba Group Holding which also owns the Post, have established a complete local life services ecosystem and lead the market currently. But “as Douyin accelerates its entry into the market, the local life services industry will become a multi-platform competition in future,” the report adds.
Douyin, which started its local services foray in 2018, currently provides services covering local eateries, drinking, fun and entertainment. The move is part of an ongoing effort by the short video app to tap its vast user base to diversify and find fresh sources of revenue.
The LatePost report noted that Douyin’s local services business did not meet internal expectations in the first quarter but did see a spurt in orders in April as people prepared for the May holiday. Orders fell again in May before returning to growth in July, according to the report.
Tong Wenhao, an analyst at research firm LeadLeo, also noted that the two platforms may fit different situations. “Compared with Meituan, Douyin has more [user] interaction, where [restaurants] can use video and live-streaming to introduce products and services … The disadvantage is that it started the business later,” Tong said.
