Under its strategy of “rapidly expanding business, quickly investing resources to explore the market, and promptly adjusting,” Chinese tech giant ByteDance has extended its business operations into fields such as healthcare, education, social interaction, and more. Now, the Beijing-based firm is turning to the local life services field. Merchants who joined Douyin, the Chinese version of TikTok, have been greatly influenced by the platform. The following is compiled from a report by Chinese media outlet Huxiu on December 27.

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“Even if the overall view rate and five-second view rate of short videos without selling goods or promoting group buying items are good, the natural distribution traffic from Douyin has been declining recently,” said one person in charge of a restaurant chain. The source also said that Douyin is increasing its resource support for local life services providers, and that “this trend guides merchants to follow the platform and try out livestreaming business.”

A local life services provider on Douyin pointed out that most merchants that have started to try livestreaming are well-known or powerful brands. “Each livestreaming event requires at least one host and one assistant, plus photographers, equipment costs, promoting costs and others. It has set a high threshold that makes some small and medium-sized merchants discouraged. This furthermore requires the service provider teams to understand goods, delivery and business models, and have the ability to optimize sales.”

Most merchants are not familiar with Douyin’s traffic methods, and need to constantly adjust their strategies according to the complex data indicators on Douyin. “It looks like merchants only need to shoot short videos and open livestreaming channels. Behind the scenes, however, they have to be familiar with Douyin’s content and traffic algorithm, and have the mindset and ability to create popular products,” concluded a partner of Kasi Academy, a digital promotion educational institution.

In addition, an insider close to Douyin disclosed that from 2022, the local life services team of Douyin will “label” users in three stages: A) The number of users who actually bought a certain kind of product; B) The number of users who have searched, subscribed to and liked a certain kind of product; C) The data system draws directional user portraits based on age, work and living habits. Douyin’s database is highly intelligent in its calculations, and now it can even identify potential customers in the near future according to the repurchase cycle of goods.

“There are not enough labels for local life service users. The greatest value of group buying item short videos, vlogging videos and livestreaming by merchants is to help Douyin clarify those labels. From the moment a new user enters Douyin, a process of constantly enriching labels has been started. That is, users are constantly divided into different traffic pools according to their behavior,” said the aforementioned insider, adding that Douyin is invincible with its traffic, from low-cost group buying, vlogging to food delivery and livestreaming, and users are caught in this wave actively or passively.

According to media reports, the gross merchandise volume (GMV) of Douyin’s life services business maintained rapid growth in the second half of 2022. The figure exceeded 8 billion yuan ($1.15 million) in September and 10 billion in October. According to a person familiar with the matter, the cumulative GMV of Douyin’s life services business in the first 10 months of 2022 has approached 60 billion. A report by LatePost showed that the company plans to complete a transaction volume of over 250 billion yuan in 2024 in the life services business.