China Food

Zhang Yiming’s retail ambition can’t be hidden

if you want to grab a bigger cake in the local life field of a scuffle, you need to do some “real kung fu”.
Left hand investment and right hand self operation, from new consumption to retail, the end of the Internet factory is FMCG?

Lay out online supermarkets and expand the new “boundary”

In the Internet age, bosses probably don’t realize who their next opponents are. For example, in the retail sector, in the near future, consumers may choose Tiktok in addition to Carrefour, Wal Mart, tmall and when shopping in supermarkets.
ByteDance, which claims to have no boundaries, has a new business layout recently. This time, it has extended its tentacles to the retail industry. Recently, it was reported that Tiktok was testing the self-supporting real-time retail business similar to supermarket – “Dichao door-to-door delivery”, which was developed by ByteDance e-commerce department and belonged to two teams with Tiktok’s local life business.
It is reported that douchao will test the two main categories of drinks and fresh food in advance. The main purpose is to penetrate the young high-income groups in the first and second tier cities, so as to improve the frequency of users using Tiktok e-commerce. It is currently being piloted in Guangzhou, Shenzhen, Hangzhou and other cities.
Entering the online supermarket is actually adding weight to the local life business, which means that ByteDance has penetrated deeper and deeper into the consumption field. Its tentacles have been extended from FMCG business to retail, and it is the real-time retail that giants are scrambling to layout at present, and the means have also shifted from investment to self-management.
In fact, compared with the strategy of attacking everywhere in the consumption field through investment last year, due to national regulatory policies, bytek had to disband its investment team in 2022 and began to open up its layout in tea, wine and other consumption fields in the form of self built teams.
In May this year, it was reported that ByteDance had set up a food and beverage team in Beijing, and the first project that the team would start was new tea. Although byte responded afterwards that the food and beverage team focused on serving internal needs, its publicly released recruitment information clearly mentioned “sorting out core selling points and product launch plans, and being responsible for implementation”, which also confirmed byte’s plan to launch tea externally. Earlier, bytek also launched its own tea brand “Taoyuan jade leaf”, liquor brand “suime Xiaojiu” and perfume brand “emotif”.
It can be seen that in the field of consumption, the logic of byte’s self operated business is similar to that of investment, which basically means that young people can do whatever they like, and the expanded new business has a high degree of consistency with the main user groups of the main business.
Take investment as an example. When new consumption was in full swing in the first two years, bytek quickly adjusted its investment ideas and increased its investment in new consumption. One side indirectly holds shares in many new consumer companies as a well-known investment institution LP, while the other side ends up in person.
According to the incomplete statistics of the data checked by the enterprise, in the 68 investment activities launched by ByteDance in 2021, the investment in the new consumption field reached 9 times, and 7 times in 2020. Among them, food and beverage related brands include weinian, manner coffee, shark fit, which focuses on light food and health, bubble wine brand Houxue wine, hotpot ingredients chain brand lazy bear hotpot, new tea, yinwei tea and Ningji. Other consumer brands include oral care brand nysc, Yunjing, a sweeping robot, and Feiliu technology, a clothing supply chain platform, are basically online popular brands that were very popular in the consumer field in the past two years, including a large number of sub categories, which can be described as attacking in all directions.
However, with the collective flameout of new consumption this year, the money thrown out by byte in this field may be difficult to recover in a short time. The wide spread investment strategy will inevitably suffer from the uncertain economic environment.
In fact, in addition to the new consumption field, ByteDance’s investment in education, games, entertainment, science and technology and other fields is affected by the market environment, which is either hard hit or mediocre performance, so it is obviously unable to bear the banner of growth. At present, the economic situation is still unclear, and the vision of ByteDance relying on investment to build a new growth track may be defeated.

Overweight local life, traffic alone can’t support

Almost at the same time, the growth rate of byte’s main business has slowed significantly.
Public information shows that in 2021, the revenue of ByteDance was about $58billion, an increase of 70% year-on-year, significantly lower than the 111% growth rate in 2020. Although it did not disclose the specific revenue composition, it is generally believed in the industry that the most direct reason for the slowdown in the growth of byte revenue is that the growth of advertising business is blocked. According to 36 krypton, byte’s advertising revenue achieved double-digit growth of 115billion yuan in the first half of 2021, and the growth rate fell significantly in the third quarter.
At a time when there is not much room for growth in the main business and capital and flow have become more expensive, it has become a common choice for major platform companies to expand consumption scenarios at a lower cost based on their existing advantages. In terms of byte, the daily life of holding Tiktok exceeds 700million, which urgently needs new channels of flow realization outside the advertising sector.
Obviously, e-commerce and local life have become new driving forces. In the e-commerce sector, the unique interest e-commerce model created by Tiktok has achieved good results. In the past year, the platform Gmv increased by 3.2 times and sold more than 10billion products. According to people familiar with the matter, the growth of ByteDance’s annual revenue in 2021 was mainly due to the rapid development of Tiktok e-commerce business and overseas tiktok.
The local living sector with greater scale and potential has a late entry time for bytes. Among the existing local life businesses of Tiktok, only the group purchase business performs well, which can realize the closed-loop transaction. Other businesses such as hotels and tourism also need to rely on third-party platforms, which is far from the platform companies that have been deeply involved in local life for many years, such as meituan, Alibaba, Ctrip, etc.
In 2022, byte increased its investment in local life. An intuitive performance is that at the beginning of this year, bytek raised the annual goal of Tiktok’s local life business to 50billion yuan from the “30 billion yuan for 40 billion yuan” set at the end of last year, which is about one sixth of the business of meituan to stores, wine tourism and tourism.
Under the high target instruction, byte has acted frequently this year. In addition to the “door-to-door delivery” business mentioned above, Tiktok has also charged commissions to local life merchants since June 1. As long as merchants publish goods or service information on the Tiktok platform and make transactions with users, they must pay software service fees to Tiktok. The charging standard is divided into 8 categories, and the rates range from 2% to 8%, which is generally lower than the industry average level.
However, in the view of insiders, although the traffic data of Tiktok is considerable, there are several major challenges that must be overcome in order to share more cake in the local life field in the future, and the first one is the problem of closed-loop consumption. In meituan’s local life mode, consumers can choose to spend in the store or deliver goods home. However, due to the lack of real-time delivery system, Tiktok can only choose to spend in the store.
The lack of logistics and distribution has undoubtedly become an important bottleneck restricting the development of Tiktok’s local life. The Tiktok takeout business, which was popular last year, did not land in the end, mainly because of the lack of riders. Now, byte wants to benchmark supermarket and develop real-time retail business, and the same problem will appear again.
However, recently, it has been revealed that bytek is vigorously adding logistics services. Tiktok e-commerce has recently tested the “jisuda” service, which can achieve the same day delivery of goods in the same city and the next day delivery in surrounding cities. In addition, Tiktok has completed docking with mainstream express companies such as SF,, Tongda rabbit, and “jisuda” has been tested in Jilin and other places. It is unknown when it will be fully launched in the whole Tiktok e-commerce. But in any case, the construction of the logistics system is not overnight. has lost more than ten years in building its own logistics system. Meituan and hungry have been laying outlets across the country for more than ten years before they have a complete distribution system.
Unfortunately, while accelerating the layout of local life business, ByteDance is trapped by the peak traffic. Other Internet giants are also competing to develop new businesses, and have extended their tentacles to the hinterland of each other. Recently, in an interview with the media, Xin Lijun, CEO of JD retail, said that JD was studying the possibility of entering takeout, pointing to the local life business. While hungry launched the “explosive group” group purchase business last year, becoming another giant player who entered the store after meituan, Tiktok and Kwai.
It’s not difficult to imagine that ByteDance needs some “real kung fu” to win a bigger cake in the local life field of a scuffle.
Author: lihuanhuan; Source: FMCG (id:fbc180), reprint has been authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246);
food people are “watching”

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