The local life business of Duoduo Maicai under Pinduoduo has been closed. On January 4th, Southern Metropolis Daily learned from insiders at Pinduoduo that only the local living business under Duoduo Maicai has been closed, and the Duoduo Maicai project is operating normally.
It is understood that there have been reports recently that the local living business of Duoduo Maicai, a subsidiary of Pinduoduo, has been completely suspended. Previously, the local lifestyle business of Duoduo Maicai was expected to be launched nationwide after the Spring Festival in February 2024.
It is understood that Duoduo Maicai, a community group buying business under Pinduoduo, launched a local life to store investment campaign in mid December 2023. Investment projects include restaurant tickets, hotel tickets, scenic spot tickets, movie tickets, etc., which will focus on the third tier cities with weak Meituan and Tiktok.
According to the original plan, the local living project of Duoduo Maicai is expected to be launched nationwide after the Spring Festival in February 2024. However, in the last week of 2023, some investment personnel in certain regions received instructions to suspend the project and wait for notification when it will resume.
According to iResearch, the scale of China's local life service market is expected to grow to 35.3 trillion yuan by 2025. The market size is large, coupled with stable and high-frequency consumption scenarios in the local area, the track has always been lively and there is no shortage of new players. In addition to Meituan in the head, Tiktok, Kwai, Xiaohongshu and others entered the game successively.
Short video platforms that hold traffic are gaining momentum. Recently, the 2023 Annual Data Report released by Tiktok Life Service shows that in 2023, the total transaction volume of Tiktok Life Service Platform will increase by 256%, with stores covering more than 370 cities. Compared with 2022, the short video transaction volume of the platform will increase by 83%, and the live broadcast transaction volume of the platform will increase by 5.7 times. It is understood that Tiktok will launch life services in January 2021. In terms of layout, from in store to takeout business, there are frequent actions.
As new players increase, the challenging Meituan increases its investment. Meituan's financial report for the third quarter of 2023 showed a revenue of 76.5 billion yuan, a year-on-year increase of 22.1% compared to 2022. In the third quarter, the comprehensive revenue from home and in store businesses reached 57.7 billion yuan, a year-on-year increase of 24.5%. Meituan is accelerating its live streaming layout, and the official live streaming coverage of Meituan has expanded to over 200 cities in the third quarter. In addition, Chen Shaohui, the CFO of Meituan, mentioned at the financial report that Meituan's marketing expenses will further increase in the fourth quarter and will strive to capture lower tier markets.
Pinduoduo will enter the local life in July 2023 and launch the "local life" entrance, mainly selling food related special food coupons, etc., to seize the market with Meituan and Tiktok. Compared with Tiktok and Meituan, Pinduoduo's growth rate is amazing. The third quarter report shows that Pinduoduo's revenue in the third quarter was 68.84 billion yuan, a year-on-year increase of 93.9%. As of the close on January 3rd, Pinduoduo's market value was $19.9 billion.
For Pinduoduo, local living is a brand new business. At present, domestic e-commerce has entered an era of low price competition, with top platforms such as "Coping Duoduo" launching services such as billions of subsidies and refunds, resulting in fierce competition. On the other hand, as one of the Four Little Dragons in China's overseas expansion, Temu, which is experiencing rapid growth, also faces fierce competition. However, if Pinduoduo, which is highly efficient in human resources, increases its local life business and makes it a new growth point beyond e-commerce business in the future, Meituan and Tiktok will surely meet a strong competitor.