Under the pandemic, local life services have been the hardest-hit sector. However, as lockdowns end, the more necessity-driven and convenient commercial district economy, especially community-based economy, is visibly recovering faster. According to Huike Cloud, among the top 100 commercial districts in 36 key cities by passenger flow growth compared to 2019, community-based winners accounted for over 40%, followed by office-based (30%). According to Winshang, in 2019, vacancy rates for city-level and district-level commercial districts were similar at 7.2% and 7.1%, but by 2021, district-level vacancy was 10.7%, much lower than city-level (13.5%), with second-tier cities performing prominently. Compared to shopping malls, community commerce has more flexible site selection, lower rental costs, and longer lease terms. In the post-pandemic era, the necessity-driven food economy will also favor community locations. According to Community Marketing Institute statistics, investment and financing cases targeting community-based business models have become more frequent: community fresh卤 beef hotpot restaurant Niu Shuangshuang received a 10 million yuan angel round; community milk direct supply service provider Xin'an Youxuan secured 20 million yuan in Series A financing; chain bakery community store Kesibeili obtained tens of millions of yuan in Series B financing...

As local life services gain prominence, major internet platforms are intensifying their efforts in this sector, hoping to capture a share. According to iResearch, the market size of local life services in China reached 19.5 trillion yuan in 2020, but the online service rate was only 24.3%, indicating huge room for digital transformation of small and medium merchants. Recently, Douyin announced a partnership with Ele.me, setting an example for the industry on "where does traffic for local life come from and how to achieve a closed-loop business." Earlier, QuestMobile released the "2022 Local Consumption Market Insight Report" (hereinafter referred to as the Report). Community Marketing Institute aims to answer two questions based on this report: First, in the post-pandemic era, how do brand merchants, by focusing on delivery, group buying, and even full-journey digital transformation, obtain excess traffic beyond their service radius? Second, as more internet platforms enhance their local life capabilities, how have consumer decision-making paths changed, and how can brand merchants better execute omnichannel strategies?

01

Local Life Services: Where Does Traffic Come From?

Birds in the river know the warmth of spring first. As the pandemic improves, local life services are the fastest to benefit and recover. The Report points out that in July this year, among the top 10 primary industries by net increase in monthly active users (MAU), life services and mobile shopping added 136.13 million and 52.72 million users respectively, with growth rates of 16.4% and 5%. In secondary industries, local life, delivery services, and fresh e-commerce saw MAU growth of 21%, 3.2%, and 11.5% year-on-year respectively. What is local life? The Report defines it as basic consumption by urban populations in daily life such as dining, shopping, and entertainment based on local merchants. The Report also notes that social consumption has gradually formed a new normal of urban life consumption with community consumption as the core, urban consumption as the main body, and suburban entertainment as an extension. In the early development stage, local life experienced the "thousand-group war" focusing on merchant information display and group-buying discounts to drive store visits. In the middle stage, the battle focused on food delivery: Baidu acquired Nuomi and launched Baidu Delivery; Tencent strategically invested in Dianping, which later merged with Meituan; Alibaba relaunched Koubei and invested in Ele.me. To date, Meituan has become the undisputed king of local life, but new changes have emerged: Douyin partnered with Ele.me to penetrate Meituan's "to-home" business; JD.com continues to integrate Dada, viewing instant retail as a key growth point... As local life becomes more online, the boundary between online and offline blurs, and "online search and booking + store visit" and "online ordering, instant delivery" have become main consumption methods. Taking fresh e-commerce as an example, July data shows that the sector is forming a duopoly of Hema and Dingdong Maicai: although Hema, Dingdong, and Duodian each have over 20 million MAU, only Hema (22.7%), Dingdong (9.4%), Pagoda (88%), and Meituan Maicai (27.4%) maintain high growth rates. In terms of user ratio between APP and WeChat mini-program, the order is Dingdong > Meituan Maicai > Hema > Pagoda. After industry reshuffling, why are Pagoda's WeChat mini-program and Meituan Maicai's APP users still growing rapidly? Pagoda began selling fresh categories like eggs and vegetables as early as 2019; from 2019 to 2021, Pagoda's large fresh revenue reached 32.89 million, 76.724 million, and 203 million yuan respectively, with fresh categories now accounting for 3-4% of revenue. Pagoda's fresh business is based on the logic of using fruit to drive fresh sales, enhancing online private domain member payment stickiness. Media reports also indicate that in terms of market share for front-warehouse delivery or 1-hour fresh delivery, Dingdong, Meituan Maicai, and Pupu are core players. Meituan Maicai holds about 80%, 30%, and 25% market share in Beijing, Shanghai, and Guangzhou-Shenzhen respectively, leveraging its instant retail capabilities for better fulfillment.

02

Internet Platforms Intensify Local Life Efforts: How Are Consumption Habits Reshaped?

The most obvious sign that local life is targeted by giants is that various apps now include local life, interest-based planting, and discount sections on their homepages or secondary pages. All players want to capture consumers' "browsing" needs, shorten decision paths, and complete business loops within private domains. A typical industry is credit cards. Due to the nature of advance consumption, major banks are laying out relevant sections to promote merchants, with good results. In July this year, MAU of major bank apps generally grew at double-digit rates, with China Construction Bank growing 1214.2% year-on-year. Additionally, map navigation platforms, travel service platforms, comprehensive e-commerce platforms, and short-video platforms are accelerating into this track. Technology for displaying merchant information based on geolocation is mature: Amap and other map apps use navigation location; Ctrip and other travel apps use hotels and attractions; comprehensive e-commerce and short-video platforms can not only display but also directly fulfill delivery. However, in different consumption scenarios, consumers have different platform usage habits.

1. In grocery shopping scenarios, since online payment habits are just forming, apps as traffic entrances have initial advantages, but future changes remain. For example, Dingdong, Meituan Maicai, Duodian, Yonghui Life, and Miss Fresh have over 60% of users from their own apps. A typical example: in consumer surveys, among the most-mentioned fresh brands, Siyuan Food, Hema, Loushang, and Tianhaizang performed well, indicating Hema's own fresh categories have penetrated user minds.

2. In movie/performance scenarios, due to high learning costs such as market heat, price comparison, seat selection, and additional services, apps have an advantage as traffic entrances. Among the top five players, although Maoyan's WeChat mini-program users reach 83.7%, only about 40% of users purchase tickets via WeChat mini-programs, while 50-60% use apps like Taopiaopiao, Damai, and Motianlun. Specifically, young female users in first-tier and new first-tier cities prefer Motianlun and Damai for performance tickets; Taopiaopiao has a more balanced age distribution; Maoyan and Wanda Film users are evenly distributed across city tiers, with the former being younger and more gender-neutral, and the latter leaning towards middle-aged men.

3. In travel booking and outings, due to higher learning costs, the traffic logic of the movie industry is almost more deeply validated. First, look at traffic sources. Tongcheng Travel, also the largest by user scale, relies on WeChat mini-programs for traffic, with a ratio as high as 96.4%. However, the 2nd to 5th competitors use apps as the main traffic entrance, with Qunar and Ctrip having 84.2% and 76.9% of users from apps. Then look at the distribution of niche outdoor sports across city tiers. Frisbee, due to social attributes like "frisbee yuan," has a significantly higher proportion of first-tier city users, especially young women; road surfing is like a lower-threshold skateboard, spreading almost uniformly across city tiers with a balanced age distribution; trunk markets are particularly popular in third-tier cities because compared to first- and second-tier cities, a larger proportion of local users own homes, cars, and have leisure time, and this is the only outdoor activity with a higher male ratio; paddleboarding requires higher venue standards, with a higher user ratio in third-tier cities; camping emphasizes "photo-worthy" natural scenery, with a higher overall user ratio in third-tier and below cities, especially among young users, particularly young women.

4. In food delivery scenarios, due to the maturity of the industry and payment, WeChat mini-programs and Alipay mini-programs are core traffic entrances for brand merchants. First, look at the two major players, Meituan and Ele.me. Meituan, with 60-70% market share, benefits from WeChat's traffic entrance, as its WeChat mini-program user ratio remains above 60%, and July data shows that 20.8% of Meituan App traffic comes from WeChat mini-programs like Meituan Group Buying and Meituan Ordering; Ele.me, with 20-30% share, relies mainly on its App and Alipay mini-program. Overall, when ordering food delivery, users first think of mini-programs embedded in WeChat and Alipay to see available brand merchants, and only then use apps, whether it's Meituan, Ele.me, or brand-owned apps. In terms of own app development, users are more motivated to migrate decision paths for Luckin Coffee (52.4%) and Starbucks (37.7%); Western fast food users prefer WeChat mini-programs, with ratios generally above 70%; brands that cultivate Alipay mini-program ordering habits, such as Starbucks (37.9%), Ele.me (37.4%), and Mixue Bingcheng (25.5%), have strong business synergy with Alipay, such as "1 yuan drink" and discount coupons.

Conclusion: Local life is still taking off, and consumption habits are still shifting. In the post-pandemic era, brand merchants are undergoing digital transformation, partly out of necessity and partly due to the gradual formation of online ordering and offline store/home consumption habits. Against the backdrop of online-offline integration and omnichannel operations, several important trends emerge: 1. WeChat and brand merchants have cultivated users' habit of pre-ordering via mini-programs; Douyin's recent cooperation with Ele.me is also based on its internal mini-program, and becoming a leader in a specific segment within local life, mini-programs are key to volume, retention, and repurchase; 2. In industries with higher learning costs, such as movies and travel, vertical apps have scenario advantages; 3. Although local life is a hot commodity, there are still gaps in business models. The pandemic is accelerating industry reshuffling. Not only are fresh e-commerce players like Meituan and Pagoda emerging, but in the store-visit consumption segment, brand merchants will have cross-industry opportunities with bank apps, map apps, short-video apps, and more. Take brand merchants cooperating with Douyin as an example. The current industry situation still includes issues like using group-buying prices lower than Meituan to attract traffic, influencer store visits for planting and recommendation, forming high-mid-low gross margin combo packages, mostly losing money for traffic, and store redemption rates still lower than Meituan. The root cause may be that Douyin's traffic distribution logic is more likely to create hits; or that brand merchants on Douyin have not yet accumulated high-quality and extensive user reputation assets, failing to provide comprehensive and transparent reference information...

How to capture user preferences more proactively still has great potential.