Douyin Said to Mull Takeover of Major Courier following Reported Entertainment Division

BEIJING, August 18 (TiPost)— News about TikTok’s Chinese version Douyin swirled recently, highlighting the popular short-video platform’s development of new revenue streams.

Credit：Visual China

Douyin was said to mull investments in, or even takeover of a major courier company providing express delivery and logistic services. “Some managers of Douyin have already entered the headquarters of Yunda Holding Co, Ltd.,” the magazine Chinese Entrepreneur cited a people familiar with the matter, declining to reveal any more details.

News about possible acquisition of a express delivery service provider is false, the person in charge of Douyin e-commerce told state-run newspaper Shanghai Securities News. Yunda responded to Chinese Entrepreneur that it didn’t have any relevant information. STO Express told investors it was not aware of related news.

Yunda became the first certified express delivery provider at Douyin platform in March. The courier provides Douyin’s e-commerce unit with specific-layer of guaranteed delivery, customer service and other services, and provides a green channel, or fast-track for collection, transfer and delivery on a priority basis, so as to offer merchants at Douyin a solid logistics guarantee. However, Yunda has not made a deep impression on shoppers at Douyin yet, since merchants mainly choose another two logistics companies – ZTO Express and STO Express. In addition, S.F. Holding Co., Ltd. undertakes most of the express delivery for purchase return at the platform.

Express delivery has become a standard feature of e-commerce platforms. It’s hard to imagine Douyin has no powerful express delivery partner as e-commerce was developed into a revenue pillar of its parent ByteDance. Douyin platform had a growth of 80% in gross merchandise volume (GMV) last year, and out of the annual volumes, the mall GMV increased 277% and GMV from the e-commerce search up 159%, Wei Wenwen, president of Douyin’s e-commerce unit, said at Douyin’s Ecosystem Conference held in May. Wei said more than 30 per cent of the total GMV came from the “marketplace” channel. She added that the company will invest RMB10 billion yuan this year to help merchants grow their business on the platform. 

Another report earlier this week indicated Douyin’s further monetization push into entertainment sector. Chinese digital news media outlet 36Kr learned Douyin created a division for culture and entertainment business. The new division was said to be led by Chen Duye, former vice president of marketing at Chinese digital marketing platform Ocean Engine. Chen reportedly reports to Han Shangyou, head of the whole Douyin platform, and Jiao Yingying, another former executive at Ocean Engine, takes over Chen’s previous position of marketing manager at ByteDance.

Chen was first said in June to transfer to Douyin to take charge of entertainment business. Douyin didn’t have a unified division for the business previously, and now it merges a variety of businesses such as live-streaming programs, music, variety shows, film and television dramas into one division, 36Kr cited people with knowledge of the matter, adding that structure adjustment of the new division is still underway. The people said live program, like live sports streaming of the 2022 FIFA World Cup last year, is the top priority of Chen’s Objectives and Key Results (OKR).

Monthly GMV of food delivery at Douyin reached RMB80 million to RMB90 million in last November and December, driven by the pilot service that allows users to place takeout order at the third party platform in nine Chinese cities in FIFA World Cup, along with a limited-time event free of delivery fees, 36Kr learned. Sources of the media said Douyin wants to make use of its short-video mode to address monetization difficulties at long-video platforms, such as to gather fans through variety shows and create an IP account, then trying to monetize based on the account by means including live selling.

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