TikTok Local Life's 'Convenient Price' Feature A New Move in the Local Life Market
TechCrunch China has learned that TikTok Local Life is currently internally testing the Convenient Price feature. After users complete the payment process for a group-buying order on TikTok, they can see other group-buying products within 1 mile of the nearby area on the order page, and the price of this product is lower than the regular group-buying price, which is officially called Convenient consumption, exclusive discount. In response, TechCrunch China asked an internal source of TikTok, and the other party confirmed that TikTok is testing this function.
It is known that in the e-commerce field, the function of Buying One Thing Alongside has long emerged. Taobao internally tested the Buying One Thing Alongside function as early as July 2021. When the buyer's order amount reaches the threshold, a包邮 (free shipping) product can be checked and purchased along with the order on the order page for a super-value exchange purchase. Nowadays, when users place an order on Taobao, the relevant product page will show the Buying One Thing Alongside function.
But in the local life field, the Buying Alongside in the local life field has greater differences from the e-commerce logic. On the one hand, as far as is known currently, the Buying Alongside function internally tested by TikTok appears on the page after the user has completed the group-buying order, and the relevant product is not from the store where the user placed the order, but other products within 1km, which increases the precise exposure range for other stores, but also increases the involution among offline merchants, because only merchants participating in the TikTok group-buying are likely to appear in the Buying Alongside recommendation. On the other hand, TikTok precisely matches the nearby traffic of the store to the participating merchants through the Convenient Price, allowing merchants to have a precise traffic source that does not require heavy investment in key operations beyond live streaming and talent distribution. Compared to the past when merchants need to invest time, manpower, and financial resources in content operations to obtain user traffic and convert it into group-buying orders, TikTok's Buying Alongside function can attract those offline merchants who have reasonable prices and high user satisfaction but are not good at operations.
TechCrunch China has found that TikTok has been frequently taking actions in the local life field this year, not only making large-scale organizational adjustments but also attempting to consolidate and expand its influence in the local life service market through a series of measures.
In early March, the TikTok Life Service department made an important organizational adjustment. The original on-site dining, on-site comprehensive, and wine-travel departments divided by industry were reorganized into the northern, central, and southern regions according to the geographical region, as well as the NKA department serving national chain large merchants. It is reported that this measure aims to optimize the on-site experience of consumers, improve sales efficiency, and increase the supply of merchants.
While adjusting the organization, the TikTok local life has also strengthened the management of service providers, removed non-compliant service providers, and rapidly expanded the number of local life merchants. According to the 2023 annual announcement of service provider management released by TikTok, the platform has removed a total of 211 non-compliant service providers.
In the payment field, on June 18, the officia l website of the People's Bank of China disclosed the information on the change of major matters of non-bank payment institutions, indicating that it agreed to change the company name of Wuhan Zhonghe Yibao Technology Co., Ltd. to TikTok Payment Technology Co., Ltd., marking that TikTok's payment solution in the local life market has been further improved.
At the macro level, in terms of specific implementation, the TikTok local life has also launched many projects. For example, the Heart-Pounding Time-Honored Brand · Renewal Plan to promote the digital transformation of time-honored brands is to strengthen the expansion of old brands in the TikTok local life through traffic and operation support. Another example is that for vacation tourism and accommodation products on the platform, TikTok has launched No Hidden Costs and Check-in Guarantee. Similar projects are all further strengthening the service in the TikTok local life field.
According to the official data of TikTok, by the end of 2023, the number of operating stores in the TikTok Life Service has increased to 4.5 million, the scale of talents has increased by 33%, and the number of new categories has increased by 71%.
Industry insiders believe that: The Convenient Price is a competition for the minds of users and merchants, giving TikTok another bargaining chip for offline merchants. Through the Convenient Price, more merchants will be attracted to join the TikTok local life, and further, users will also complete more consumption on TikTok because of these subsidies, making the store-finding-person model of TikTok more precise.