Douyin's Offline Groupon: New Opportunities and Challenges

Riding the Douyin Wave: Offline Businesses Explore New Frontiers

China's short-video platform Douyin (TikTok) has become a powerful tool for driving offline business growth, particularly through its "group buying" model. However, navigating this new landscape comes with unique challenges and opportunities.

The Double-Edged Sword of Low Prices:

Many businesses find that offering lower prices on Douyin attracts price-sensitive customers but struggles to retain them in the long term. As one massage parlor owner explained, "customers who prioritize price are always looking for a better deal." This leads to high churn rates and difficulty building customer loyalty. Conversely, higher-priced packages seem to perform better, suggesting that customers willing to pay more may be more committed.

Beyond Promotion: Building a Lasting Connection:

While Douyin is effective for driving initial traffic, sustaining customer engagement requires more than just promotions. One homestay owner attempts to bridge this gap by adding guests on WeChat after their stay, allowing for personalized communication and fostering a sense of community. He believes that true customer retention comes from offering unique experiences and differentiation.

The Multi-Platform Reality:

Most businesses are operating across multiple platforms, including Douyin, Meituan, and Dianping. While these platforms have overlapping functionalities, each caters to different user segments and behaviors. For example, Wang Cheng's billiards hall offers significantly lower prices on Douyin compared to Meituan, capitalizing on the platform's potential for impulsive purchases driven by short-form videos and live streams.

The Rise of Influencer Marketing:

Douyin has opened up new avenues for influencer marketing through "short video reviews" and live stream promotions. However, identifying reliable influencers and measuring their effectiveness remains a challenge. Many businesses adopt a broad approach, partnering with various creators to cast a wide net.

The Cost of Success:

While Douyin offers immense potential, it also comes with costs. Influencer marketing campaigns can be expensive, ranging from thousands to tens of thousands of yuan depending on the creator's reach and engagement. Wang Cheng considered building an in-house Douyin team but ultimately opted against it due to the high cost of hiring skilled personnel.

Competition Heats Up:

As Douyin gains traction, competitors like Meituan are entering the fray with similar services. This increased competition could lead to further price wars and pressure on businesses to innovate and differentiate themselves.

The future of offline businesses in China is undeniably intertwined with Douyin's evolution. Adapting to this dynamic landscape requires a strategic blend of low prices, creative marketing tactics, and building genuine customer relationships.