It came after a February directive from the central government that urged internet platforms to lower the fees they charged restaurants, which also dealt a potentially heavy blow to the revenue of Meituan, ByteDance's biggest competitor in the sector. Photo: AP alt=A woman speaks on her phone near the logo for Douyin in Beijing March 31, 2021. In the spring of 2021, Douyin began showing video clips of popular destinations in each city, and offered discounted pricing under its "group chasing" strategy.īyteDance raised this year's gross merchandise volume (GMV) target for Douyin's local life business to 50 billion yuan (US$7.5 billion) from 40 billion yuan, according to a report last week by tech media 36Kr.Ī woman speaks on her phone near the logo for Douyin in Beijing March 31, 2021. In order to build a sustainable commercial ecosystem, the service rate adjusted this time is still lower than the industry average standard," Douyin said in a statement.ĭouyin started its local services foray in 2018 but did not ramp up expansion efforts until late 2020 when it formed a dedicated "local life business centre".
"Douyin's local life services platform has long benefited the merchants by charging zero service rate. However, merchants still need to pay a 0.6 per cent payment service fee, some of which goes to third-party payment tools including WeChat Pay and Alipay.Īs well, "small and micro merchants" and stores "severely impacted" by China's zero-Covid policy can also enjoy the zero rate while only having to pay the payment service charge, Douyin said, without elaborating. In Shanghai, noodle chain Chenxianggui had only 35 of its 120 branches in the city operating in mid-May, according to business magazine China Entrepreneur. Alibaba owns the South China Morning Post.Īmid the Covid-19 lockdowns in Shanghai and Beijing over the past two months, governments ordered restaurants to suspend their dine-in services, and many were even banned from accepting takeaway orders. In addition, traditional e-commerce platforms, including Alibaba Group Holding's Taobao, are enhancing video content to woo consumers. With daily active users of 600 million, Douyin - which is not available outside the mainland - is approaching its saturation point in China and is up against fierce competition from Tencent Holding's short video services as well as Kuaishou, the No 2 short video platform in the country. The charges reflect efforts by Douyin's owner to generate more revenues from the popular short-video service that is increasingly being used by merchants as a marketing and sales platform. The highest rate, 8 per cent, applies to wedding services.
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The commission rate varies from 2 to 8 per cent for different product categories, according to a statement on ByteDance's OceanEngine site, which offers tips to merchants and short video creators on how to expand their influence on Douyin.ĭo you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.įor example, restaurants will pay 2.5 per cent of the order's transaction amount, while hotels will be charged 4.5 per cent. The new rule, effective Wednesday, applies to all merchants that offer so-called group buying deals, or discounts that apply to bulk purchases of one item by multiple customers.
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All in all, Alipay and WeChat Pay handle about 90% of China’s electronic payments.Douyin, the Chinese version of TikTok operated by Beijing-based tech giant ByteDance, will start collecting software service fees from offline merchants, including restaurants and hotels, that use the popular short video app to promote their business. Other internet giants, such as e-commerce giant JD.com and food delivery service Meituan, have also tried luring people to use their own payment methods, though the market duopoly is hard to break.
Instead of the ubiquitous WeChat Pay and Alipay, they may opt for Douyin Pay one day, if the incentives are great enough. Users can be directed to a product link while watching a video of an influencer reviewing, say, a lipstick. Payment is a natural step for Douyin, which has a growing e-commerce business. “The set-up of Douyin Pay (Douyin Zhifu) is to supplement the existing major payment options, and to ultimately enhance user experience on Douyin,” a Douyin spokesperson said. The short video app recently added “Douyin Pay” to its list of existing payment options, which have included Alipay and WeChat Pay. The latest entrant in online payments is Douyin, TikTok’s Chinese version. Tencent’s WeChat Pay and Alibaba’s affiliate Alipay have long dominated digital payments in China, but they have always faced new challengers.
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