Kuaishou & Meituan team up as Douyin enters China’s takeaway market

Meituan Dianping, or Meituan (one of China’s largest Internet companies that offer food delivery services) and Kuaishou (the Chinese video-sharing platform) have announced interoperability on 27 December.

Business users on Meituan could provide meal discounts and pre-order services for their consumers on Kuaishou through Meituan’s mini-program which will soon be installed on the short-video platform. In return, Kuaishou’s users can order food without leaving the platform. On top of bringing convenience for users on both platforms, the tie-up is believed to benefit both of the tech giants, pooling their user bases allowing for further outreach and a smoother system to purchase food online.

Kuaishou owns a large user base of the population in China’s tier 3 and tier 4 cities, a lucrative demographic of consumers that Meituan intends to penetrate as takeaway consumption in tier 1 and tier 2 regions seem to have reached its ceiling. In the meantime, the e-commerce platform that connects consumers with local businesses including food takeout, hotel bookings, and movie tickets among other services would provide rich offline resources that Kuaishou can leverage to improve its user loyalty, a coupon for an offline event, for example.

These benefits are clearly behind the brands’ willingness to work together, with it making financial sense for both companies, however, this is not the only reason a collaboration has appeared.

Some have speculated that the real intention of this collaboration is to defend their shares of China’s takeaway market against the challenge from Douyin (the Chinese Tik Tok) which is also the biggest rival of Kuaishou in the short-video industry.

Recently Douyin has expanded into the takeaway business and the food delivery giant Meituan has certainly seen threats from another competitor. The speculation follows that by uniting they can both be stronger in their respective markets when tackling Douyin, who has one of the largest user bases worldwide and ultimately help shore up their respective control of their markets.

After rumours circulated online last July, Douyin’s takeaway feature had officially launched on the app in August 2021. The American fast-food brand KFC and China’s beloved tea drink brank Hey Tea were the first two opted in, being two immensely popular brands within the market.

The swift actions by these brands indicate takeaway might be a long-awaited feature by business users on Douyin. With 670 million monthly active users as of the end of last September, compared to 410 million at Kuaishou, Douyin has also been home to food influencers, who scout around local restaurants for live streaming eating shows as well a go-to’s for food lovers.

With these existing online resources and an already mature ecosystem for takeaway, it can be expected that the dominant position of Meituan in the takeaway market could soon be shaken by Douyin. As a result, joining forces with Kuaishou could be a solution for both to respond to Douyin’s threat, leveraging one another’s user bases and also online platforms to make their services more convenient for a larger population of consumers

Regardless of the intention, the tie-up would be another step forward in achieving interoperability among tech giants, as required by the Chinese government. The synergy would also allow Meituan and Kuaishou to complement each other in the race with Douyin. With the market seeing diverse players, healthy competition will ultimately benefit consumers as brands seek to provide the best experience to consumers in order to win the lion’s share of their respective markets.

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