As 2024 begins, the “local life” services app sector has seen some major changes. Pinduoduo, the e-commerce platform under PDD Holdings, the parent company of Temu has paused its local life services. At the same time, Alibaba’s takeaway platform Ele.me has launched a new company in the city of Shenzhen with a registered capital of 10 billion RMB (1.41 billion USD), in affiliation with Alibaba’s local life services.
Local life services is an umbrella term involving services such as takeaway, event ticketing, ride-hailing and so on. Pinduoduo started its local life services under the Duoduo Maicai grocery delivery platform. It had a soft launch last year and a nationwide launch was planned for February. However, there were rumours of Pinduoduo pausing the service at the end of last year with official confirmation coming in just after the New Year.
On the other hand, Ele.me has always been a major player in the sector. Along with rival takeaway and grocery delivery platform Meituan, Ele.me is the main competitor for Duoduo Maicai. In August 2022, Ele.me teamed up with Douyin, TikTok’s Chinese sister app, to provide a service where Ele.me would fulfil orders placed on Douyin. This service caused some speculation about the possibility of Douyin acquiring Ele.me to enter the market. However, the new company involving Alibaba’s own local life branch proved that Ele.me would enter the fray with help from its parent company.
With the local life market expected to grow to 2.5 trillion RMB (352.21 billion USD) by 2025, other e-commerce companies including Kuaishou and JD are also trying to join in before market saturation as they face fierce competition. That is why pundits believe that Pinduoduo is not leaving the market but biding its time before trying new approaches. It remains to be seen who will come out on top but the sector is an important market to watch for in 2024.