If traffic and algorithms make more and HE Tuber more users pay attention to the local life of Douyin and transform it into effective "grass planting", then "low price" is the "lubricant" in this business chain.

Since the second half of last year, Douyin has launched a price war with other platforms, and has begun to issue "9.9 yuan coupons" for group purchases indiscriminately, using low-price strategies to snatch users, and even exaggerated to the point of "the cheaper you get, the cheaper I will be." Two pieces" momentum, not giving up a penny on this matter.

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In order to compete for B-side merchants, Douyin has attracted a group of catering merchants with a service rate of 2.5%. The average service rate for various product categories is 3%, and the highest does not exceed 8%. For this reason, other platforms have also begun to lower service rates for catering merchants, and even actively help merchants obtain resources.

 to maintain high operating and promotion costs.

Therefore, Douyin’s local life service has a huge revenue, but it is not a very profitable business. For local merchants, although Douyin’s commission is not high, lowering the group purchase price to 50% off or even lower does not create a large profit margin in itself. It is more for the purpose of attracting traffic to the store and can only be regarded as It's advertising at a loss.

 buying coupons. Once the group buying discount ends and the original price is restored, they will not make repurchases. In other words, although Douyin’s traffic is very strong and merchants have spent a lot of time and energy on it, they may not really be able to make money from it.

This also exposed the most critical problem of Douyin in the local life business, which is that Douyin, which has always been focusing on "group purchase packages" as its core operation, has a single way of attracting traffic, has a limited number of stores displayed, and has never been able to establish users' active participation in the platform. The mentality of looking for a store.

After all, the core of visiting a store is the "store" rather than the "voucher". If the platform's local life business wants to last for a long time, the platform needs to be able to provide enough store details and establish a relatively reasonable reputation system, so that users will have a clear mind when looking for stores. That is to say, users are accustomed to opening the platform with purpose, looking for suitable stores, and leaving reviews after consumption. Group purchases and discounts are secondary parts.

Only in this way can more high-quality merchants be seen, a positive business cycle can be formed, and business assets can be accumulated.

As long as Douyin cannot solve the mental problems of users, it will not be able to become a leader in the local life track.

After Douyin entered the market and caused a stir, the competition in the local lifestyle market has become increasingly fierce.

In addition to Douyin, Xiaohongshu recruits merchants and launches online group buying, and the official local life account "Marmot" has also started operations;

Kuaishou integrates local life business, launches local life mini-programs, and explores differentiated paths;

Even video accounts have begun to layout local life and are testing related services on a small scale.

Compared with the cruel "Thousand Regiments War" around 2015,

 this time the competitors are no longer inexperienced novices, but domestic Internet giants with strong backgrounds and outstanding advantages in their respective fields.

They have been developing for many years and have mature business models and user accumulation. They all want to take a share of the local life market and look for the second growth curve.

 after decades of development, have carried out in-depth market education, established a stable life service empire, and have a complete distribution system, supply resources, after-sales chain, etc.

In addition, in the face of changes in the industry situation, old players have also shifted from passive defense to active offense and taken a series of measures to target new entrants represented by Douyin. Douyin will also face greater pressure.

With players from all parties working together, local life is destined to not be peaceful, and the landscape is also being reshaped. There are well-deserved giant players in front of it, and new forces are also gearing up, and Douyin sandwiched in the middle is really, with sea water on one side and flames on the other.

Douyin naturally wants to win the battle of local life, but the minds of users who come to the store have not yet been cultivated, and merchant resources do not have an advantage. It is not easy for Douyin to break through with its traffic alone.