Switching to a service provider, the unit price per customer increased by 40%, and the messy fees were gone.
▶Offline light food brand Douyin operation HE Tuber manager, over 50 offline stores in Beijing + Chengdu
We have also encountered pitfalls when looking for Douyin operators.
In April this year, the agent operator gave us our first live broadcast. The GMV of the five-hour live broadcast reached more than 200,000 yuan, ranking third on Douyin’s local group buying life list in Beijing. Sounds great, but there's no money to be made.
Because points are raised based on sales, the agent
operation keeps the package price very low. For example, a burrito priced at 32 yuan is priced at 27.9 yuan in the store, and the discounted price is 27 yuan on Meituan Takeout and our mini program. During the live broadcast, they directly marked the price to 19 yuan, which is almost 40% off; there is also a 35 yuan burrito. The chicken breast meal is priced at 28 yuan, and they sell 50 yuan vouchers in the live broadcast room for 35 yuan, which is equivalent to a 30% discount, which is 24.5 yuan.
In Douyin Live, the sales price has been discounted by 40%. In addition, the platform deducts 2.5% and the operator deducts 10%. The total deduction is 12.5%. We will definitely make no money.
In mid-May, we switched to another agent and by the beginning of June we had done a total of 4 or 5 live broadcasts. Although the cumulative GMV was just over 400,000 yuan, the unit price per customer increased by 40%. We have also reached an agreement with the agent operator. We will not pay the pit fee for the experts to visit the store. We will adopt a pure commission model, and the commission will be included in the 10% commission we give to the agent operator. In other words, we do not pay any additional fees except the commission to the agent operator.
We have more than 50 light food restaurants in Beijing and
Chengdu, with annual sales of nearly 100 million yuan. Takeaways contribute 60% of our revenue, currently Meituan is the main one. We do Douyin mainly for exposure and to increase the awareness of young people. At present, the proportion of sales is not large and the write-off rate is not high. In May, the GMV of our Douyin live broadcast was only 400,000 yuan, and 210,000 yuan was written off, with a write-off rate of just over 50%.
But Douyin is also solving the problem of in-store verification.
Previously, we used an in-store verification system called HuaLaLa, but it did not support Douyin, so we had to prepare a separate mobile phone for verification of Douyin group buying coupons. At the end of February, Douyin was connected to Hualala, and store cashier computers can directly scan Douyin’s QR code.
In terms of time period, Douyin is also stimulating demand in "off-season" periods such as Mondays and Wednesdays. In May, our live broadcasts will also be held on Mondays and Wednesdays. They will also focus on node marketing. For example, in May, we did "Xindong 51". We labeled the products with event labels. If consumers place an order of more than 50 yuan, the platform will subsidize users 2 yuan.
At present, our main transactions are still with Meituan. Meituan has not taken any action yet, and the platform deduction points have not been reduced.
3. The write-off rate of Douyin Catering reaches 50%, and the write-off rate in one day accounts for 50%
▶The leading service provider of Douyin life services, operating GMV of hundreds of millions in 2016
This year, the GMV target of Douyin Local Life has tripled, and service providers with average strength also want to get a share of the pie. As a result, many catering businesses complained that the current agent operators of Douyin Life Service have chaotic management and chaotic charging.
Last year, at the Douyin Service Provider Conference, there were only 8 catering service providers around our city. This year, the number has increased to more than 200. In the past, most of those who transformed themselves into Douyin service providers were e-commerce service providers. But this year, all kinds of people want to get a piece of the pie, such as BDs from Meituan and Koubei, and catering businesses. Now, Douyin’s local life service providers have a low threshold and only need to pay a deposit of 100,000 yuan.
However, we feel that the chaos is only temporary. Douyin will gradually tighten its policies and eliminate a group of service providers with insufficient capabilities. Therefore, the confusion in management and fee exchange is only temporary.
At present, Douyin is doing whatever it takes to provide good services to KA and SKA merchants, trying to create a number of benchmark cases. We mainly serve KA customers. We hold a meeting with Douyin once a month to connect with the person in charge of operations of Douyin’s life service provider.
We charge commissions to catering merchants, usually 3%-8%. The larger the merchant, the lower the commission point. For example, if a customer like Cha Momo has sales of over 100 million in a single day, we would be happy to do it if the commission is 1%.
Compared with Meituan, Douyin provides merchants with resources, including traffic and low deduction points. Douyin’s deductions for catering merchants are 2.5%, beauties (including haircuts and medical beauty) are 3%-10%, entertainment is 3%-9%, travel agencies are 6%, cars are 5%, and shopping is 5%.
Now, Meituan has been reducing the deduction points, from the original 8% (catering package) to 4%. Some companies even waive the fee, while Meituan only charges a basic service fee. Correspondingly, they signed an exclusive agreement with Meituan. Either the price of other channels must be consistent with Meituan, or they must offline Douyin group purchase, but the agreement was only signed for three months. Meituan is not a charity, and it is also looking at the effects of these countermeasures.
In our view, Meituan’s measures have little impact on Douyin. Merchants should conduct live broadcasts and conduct promotions on special holidays. Because Douyin has made inroads outside of Meituan, through live broadcasts and short videos, consumers’ orders are entirely driven by content.
The write-off rate of Douyin’s catering sector has reached 50%, and this number will only be 30% in 2021. For Douyin catering packages (or vouchers), 50% are written off in one day, 15%
