Douyin's food delivery service has abandoned its goal to reach a Gross Merchandise Volume (GMV) of 100 billion yuan this year, according to a report by LatePost.

The GMV metric will also cease to be the primary focus for the team during the second half of the year. A key aspect of the shift involves collaborating more with local service providers for delivery, beyond third-party delivery platforms like SF Express and Dada, according to the LatePost report.

Advertising, which is the primary source of revenue for ByteDance (the parent company of Douyin), accounted for 77% of the company's actual revenue in 2020, according to Shanghai Securities News. "This suggests a lackluster overall revenue growth for the company," the report notes. At a conference in November last year, ByteDance confirmed that domestic advertising revenue had ceased to grow in the past six months.

This stagnant growth implies a crucial requirement for ByteDance to alter its revenue structure, which is currently overly reliant on advertising revenue. The company is now compelled to explore new monetization opportunities from Douyin's active user base of over 600 million daily users.

On May 31st at the Douyin Ecosystem Conference, Wei Wenwen, President of Douyin eCommerce, revealed that over the past year, Douyin eCommerce's GMV was 3.2 times that of the same period in the previous year. Additionally, searches by users with purchase intent surged by 217% year-on-year, while orders from livestreaming rooms increased by 112% compared to April of the previous year.

These statistics highlight the crucial role that eCommerce is playing in Douyin's business, both in diversifying its revenue streams and ensuring growth. With a growing number of users turning to the platform for their shopping needs, this trend is expected to continue. Douyin's efforts to streamline its food delivery service and incorporate local service providers further emphasize this shift from advertising towards other revenue-generating models.

Beginning in 2022, Douyin Food Delivery initiated a pilot project in Beijing, Shanghai, and Chengdu, allowing self-registration by merchants. The objective was to promote the sale of perishable items such as group meals (with an average price between 110-130 yuan), partnering with third-party platforms like SF Express, Dada, and Flash Delivery for logistics.

By January 2023, Douyin Food Delivery's Gross Transaction Volume (GTV) was under 1 billion yuan, declining further in February to around 50 million yuan. It began to recover in March, but remained around 1 billion yuan. In terms of order volume, the daily average from January to March ranged between 10,000 and 20,000 orders.

Competitors such as Meituan have also become more proactive in the past year. In March this year, Meituan launched the "Godly Snatchers" project, a food delivery livestreaming room. This project, piloted across Shenzhen and Beijing, was allocated significant resources by Meituan. Merchants participating in the "Godly Snatchers" project were predominantly those with strong sales on Douyin.