A source close to Douyin’s e-commerce unit has exclusively revealed to 36Kr that, in 2023, the ByteDance-owned company achieved a gross merchandise volume (GMV) of approximately RMB 2.7 trillion (USD 375 billion). The GMV target for its e-commerce business in 2024 is set at RMB 4 trillion (USD 556 billion), indicating a nearly 50% increase.
36Kr sought confirmation from Douyin, but the company declined to respond.
In 2023, Alibaba’s annual GMV was RMB 7.2 trillion (USD 1 trillion), while Pinduoduo’s GMV was RMB 4.05 trillion (USD 560.9 billion). This means Douyin E-commerce’s target for this year is very close to Pinduoduo’s performance last year.
In February this year, LatePost reported that Douyin E-commerce’s GMV in 2023 was around RMB 2.2 trillion (USD 306 billion), with a target of RMB 3 trillion (USD 415.5 billion) for this year. However, Douyin E-commerce officials denied the authenticity of these figures.
According to 36Kr’s source, the RMB 2.2 trillion figure did not account for the contribution of product cards, with the actual final performance being RMB 2.7 trillion (USD 373.9 billion). Additionally, the RMB 3 trillion target was Douyin E-commerce’s publicly declared goal, while the internal target was actually RMB 4 trillion (USD 554 billion).
In Douyin’s local lifestyle services business, there have also been similar “true and false targets.” At the beginning of 2023, several media outlets reported that Douyin’s lifestyle services had a GMV target of RMB 150 billion (USD 20.7 billion) for the year. However, in late February, LatePost reported that the RMB 150 billion figure was the impression Douyin wanted to give its competitors, with the real GMV target being close to RMB 400 billion (USD 55.4 billion). This claim was also denied by Douyin representatives.
Compared to Pinduoduo, Douyin E-commerce has focused more on enhancing its low-price competitive capability, which is more evident in 2024. This is understandable, as Douyin E-commerce’s competitors—Pinduoduo, Alibaba, and JD.com—have all implemented low-price strategies.
On May 22, Ebrun reported that Douyin E-commerce is currently testing an automatic price adjustment feature on a small scale. This feature allows merchants to delegate price adjustments to the platform based on market conditions and the platform’s suggested prices within the conditions set by the merchants, offering consumers more competitively priced products. Since the beginning of 2024, all products on Douyin E-commerce will be labeled with price tags such as “lowest price for the same model,” “highest price for the same model,” and “lowest price on the entire network.”
In addition to engaging in a price war, Douyin E-commerce is also seeking growth in the shelf-based e-commerce market as the content space reaches its limits.
In March this year, Douyin launched the Douyin Mall app, marking the first time Douyin E-commerce has introduced an independent e-commerce shopping platform outside of the main Douyin app. In the Douyin Mall app, users can experience and complete the entire e-commerce process, including searching for products, comparing prices, placing orders, viewing logistics, and after-sales services.
A Douyin E-commerce official said, “[Douyin] has observed strong demand for proactive shopping among some users. To better serve these users, Douyin E-commerce launched the Douyin Mall to help them discover great deals and manage orders conveniently.”
Meanwhile, competitor Pinduoduo continues to grow at a pace that exceeds market expectations. In the first quarter of 2024, Pinduoduo’s revenue increased by 131% to RMB 86.81 billion (USD 12 billion), net profit increased by 246% year-on-year to RMB 28.00 billion (USD 3.8 billion), and transaction service income increased by 327% to RMB 44.36 billion (USD 6.1 billion). This marks the fifth consecutive quarter that Pinduoduo’s performance has exceeded market expectations.
Currently, Douyin has about 800 million daily active users (DAU). During last year’s Singles’ Day, Pinduoduo’s DAU peaked at 398 million under the special circumstances of the shopping festival. Generally, Douyin’s DAU can consistently hover around twice the level of Pinduoduo’s.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Wang Yuchan for 36Kr.