In a recent internal announcement, Douyin Waimai, previously part of Douyin E-commerce’s quick commerce division, has been reassigned to the local lifestyle services division. This marks the second restructuring of Douyin’s food delivery service within just half a year.
The initial shakeup came in April, when Douyin Waimai was shifted from the local lifestyle services division to quick commerce. This move led to a cascade of changes, most notably on the consumer-facing side. By mid-June, Douyin’s group buying delivery service had stopped onboarding new merchants, and by late June, Douyin Waimai’s to-home platform officially launched. Shortly thereafter, reports surfaced that a food delivery option had been integrated into the hourly delivery section of Douyin Mall, expanding its reach to most major cities.
However, the integration was short-lived. Four months later, the team found itself reassigned back to local lifestyle services, barely six weeks after the new platform’s official rollout. According to 36Kr, the food delivery option has since disappeared from the hourly delivery section in Douyin Mall.
A provider for Douyin’s group buying service noted that policies surrounding Douyin Waimai have been highly erratic this year, leading to an unclear business direction. The repeated policy shifts have resulted in financial losses for many service providers involved.
Douyin’s foray into food delivery began amidst fierce competition with Meituan in the lifestyle services arena. The journey started in 2022 when Douyin partnered with Ele.me to pilot food delivery services in Nanjing. Early in 2023, Douyin Waimai was launched, with third-party logistics support from SF Intra-city, FlashEx, and Dada Nexus. Initial pilots were conducted in major cities like Beijing and Shanghai. By July, Douyin Waimai began recruiting regional agents, rapidly expanding its reach nationwide through service providers.
Sources close to Douyin Waimai revealed that Meituan initially regarded Douyin’s entry into food delivery as a significant threat, prompting it to deploy billions in subsidies to counter the challenge. However, Douyin Waimai struggled to gain a foothold, with unpredictable order volumes and inconsistent fulfillment capabilities undermining its success.
By the end of 2023, Meituan no longer considered Douyin Waimai a serious competitor. Douyin, in turn, scaled back its ambitions, abandoning its goal of reaching RMB 1 trillion (USD 140 billion) in GMV and seeking other ways to streamline operations.
At first, the integration of food delivery with Douyin’s quick commerce service appeared promising, suggesting a strategic shift towards a leaner, more agile approach. This move was seen as a sign that Douyin was dialing down its food delivery ambitions, pivoting from a resource-intensive model to a more flexible one that could better leverage its vast user base. If Douyin had stuck with traditional delivery methods, it would have faced steep fulfillment and operational costs, particularly in regions where competitors like Meituan dominate. However, merging food delivery with quick commerce could have allowed Douyin to capitalize on its extensive user network more effectively.
Yet, the abrupt restructuring has once again thrown the future of Douyin Waimai into question.
Conceptually, food delivery—which focuses on to-home services—aligns more naturally with the local lifestyle group buying logic. Earlier this year, Meituan merged its to-store and to-home segments to maximize synergies. With Douyin’s in-store group buying entering a critical phase of competition against Meituan, the return of the food delivery team could potentially inject new energy into Douyin’s local lifestyle services division as it gears up for its next set of challenges.
As of this writing, ByteDance has not responded to requests for comment regarding the specifics of this report.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Zhang Rao for 36Kr.