More details have emerged about “Xindong Waimai,” an on-demand food delivery service currently being developed by Douyin, which is the Chinese mainland version of video sharing platform TikTok, owned and operated by Beijing-based tech firm Bytedance.
Rather than setting up a new comprehensive delivery service network from scratch, Douyin has reportedly opted to pursue an aggregator model, offering a single channel through which consumers can purchase items delivered by a range of existing delivery providers.
Under this arrangement, China’s leading delivery platforms such as Ele.me and Meituan could see their services embedded directly into the wildly popular Douyin app, which boasts over 600 million daily active users.
Pandaily previously reported when news broke last month that Douyin had set up a team to prepare for an entry into the competitive field of on-demand local delivery. As of now, the service is still in a closed stage of beta testing.
The new details come to light just days after Chinese regulators summoned top delivery service providers to a formal meeting to discuss the protection of workers’ rights and interests.
Delivery drivers working for these platforms are often hired on a non-contract basis as part of the “gig economy,” allowing the firms to cut costs by not providing social security or insurance benefits. Additionally, complex algorithmic incentive structures often cause drivers to engage in risky traffic behavior in their attempt to complete orders in rapid time.
Tighter regulation of the once wide-open sector may cause newcomers to think twice before setting up shop. Given the vast existing network of merchants and drivers already on platforms such as Ele.me and Meituan, it likely makes more sense for Douyin to pursue the aggregator model, capitalizing on its own web traffic without needing to build up its own delivery apparatus.
In the case that “Xindong Waimai” adopts this approach, Douyin would enter a type of partnership with existing delivery firms, which would stand to benefit from an additional channel through which consumers can place orders.
Founded in 2012 by entrepreneur Zhang Yiming, Bytedance has become one of the world’s leading internet technology firms. Although it has yet to list publicly – a topic that has garnered much buzz lately – the company was recently valued on the gray market at $425 billion.