September, originally an ordinary month of late summer and early autumn, is an unusual turning point for China’s local life service industry. The previously heated “food delivery war” suddenly cooled down, and the focus of competition shifted to “in store consumption”. At this critical period, Alibaba’s Amap launched the “Street Sweeping List” and announced the exemption of annual fees for catering businesses, like a stone thrown into a calm lake, stirring up waves. This change is not only related to large companies like Meituan and Tiktok, but also closely related to the future of thousands of catering entrepreneurs and small store owners.
The food delivery war is cooling down, and regulation calls for ‘rational competition’
Entering September, many businesses and riders have clearly felt a significant decrease in takeaway orders and revenue. Mr. Zhang, who runs a Chinese style hamburger restaurant in Hubei, said that his daily turnover has decreased by more than one-third compared to July and August. Rider Xiao Zuo also found that now he runs for the same amount of time every day, but his income has dropped from over 300 yuan to over 200 yuan.
There are several main reasons for this situation. Firstly, market regulatory authorities have repeatedly demanded that platforms engage in “rational competition” and not burn money endlessly. Secondly, the platform itself has also found that relying solely on subsidies to seize the market is not a long-term solution. More importantly, for the platform, although the takeaway business has a large turnover, the profit is very thin. In contrast, the profit margin of guiding customers to consume in the store is much higher. So, major platforms coincidentally shifted their focus from “takeaway” to “in store”, and a new competition began.
Gaode’s’ breakthrough ‘move: free annual fee and’ sweeping the street list ‘
In this’ Battle of the Store ‘, Gaode Map quickly launched an attack and announced two major events as soon as possible.
The first thing is to announce that “from now on, all catering businesses across the country will be exempt from one year’s annual registration fee”.
This sentence is of great significance to merchants, especially small and medium-sized merchants.
In the past, opening a store on many platforms required an annual entry fee of several thousand yuan, which was a burden for small-scale businesses. Gaode directly waived this fee this time and provided traffic subsidies and exclusive customer service, greatly reducing the threshold for merchants to try new platforms. The effect of this measure was also immediate, with the number of new merchants joining increasing by over 600% on the day of the policy announcement.
The second thing is the launch of the “Gaode Street Sweeping List”.
This ranking is very different from the ones we have seen before. It doesn’t mainly look at what reviews the user has written, but at what the user has done.
The data for this ranking comes from the real navigation behavior of billions of users on Amap, such as how many people actually navigated to this store, how many times they went, whether they specifically went there, and so on. It combines the 1.3 billion navigation data of 51.32 million people in the past year and the 22.8 billion kilometer journey track, combined with Alipay’s sesame credit score, and screened 1.18 million stores worth recommending from a large number of stores. The CEO of Amap guarantees that this list will never be commercialized, and the core is authenticity. As a result, the average traffic of the listed small shops increased by 187% in the first week and quickly gained over 80 million users.
Gaode Street Sweeping List Page
This combination of “free annual fee+street sweeping list” not only helps businesses save money, but also helps their stores be discovered by more users. The promotion method directly targets the pain points of users and businesses.
Alibaba ecosystem takes shape: Multi terminal collaborative combat
Gaode is not fighting alone, behind this combination of punches is the support of the entire Alibaba ecosystem. In just half a month, Alibaba has completed a series of consecutive attacks: first, Gaode released the “Street Sweeping List” and invested over 1 billion yuan in subsidies for the “Support Plan”; Then, Taobao flash purchase was piloted in Shanghai, Shenzhen and other cities to shop for group purchase business, with the entrance covering Taobao, Alipay and Gaode at the same time; Then Gaode announced the waiver of annual fees.
This set of tactics has clear division of labor and forms a synergy. Gaode utilizes its over 800 million monthly active users to recommend nearby discounted group purchases when planning travel routes, achieving “navigation as consumption”. Taobao Flash Shopping is supported by its 150 million daily active users and strong e-commerce traffic. Alipay provides reliable payment guarantee. In this way, users can complete the entire process from finding a store, viewing rankings, buying group purchases to navigating to the store on Gaode, which is very smooth. This means that competition in the industry is no longer a competition among individual platforms, but has escalated into a competition among the entire ecosystem.
How will the market landscape change?
Faced with Gaode’s attack, other platforms also took action one after another. Industry leader Meituan has chosen to consolidate its advantages by restarting its “quality food delivery” service, partnering with thousands of high-end restaurants and high star hotels to strengthen Dianping’s mindset of “finding good stores” in the minds of users. Its advantage lies in the massive collection of authentic reviews accumulated over the years and a mature delivery network, but Gaode’s “free” policy poses a direct challenge to its existing charging model.
Tiktok continued to play its content expertise, launched the “fireworks store support plan”, and helped merchants attract customers through traffic incentives and videos of talented people exploring stores. Its advantage is that it can stimulate users’ consumption desire through short videos, but the conversion path from watching videos to actually placing orders and going to the store is relatively long.
Kwai and Little Red Book are also actively deploying. Kwai launched the take out entrance on the group purchase page, but most of them cooperated with third parties. Xiaohongshu focuses on bridging the gap between “grass planting” and “trading”, opening up restaurants and other businesses to join, and launching the “Xiaohongka” membership business, hoping to turn platform users’ real sharing into commercial value.
Experts generally believe that this’ in store battle ‘will be a protracted battle. In the future, it is likely that there will not be a one size fits all platform, but several platforms coexisting, each serving different users and merchants with their respective advantages. The core of competition will ultimately shift from competing for subsidies and traffic to competing for service quality and user experience.
How should entrepreneurs seize these opportunities?
For the majority of catering entrepreneurs and individual businesses, the competition from giants brings them opportunities for development. To seize this opportunity, the Investment and Finance Research Institute believes that efforts can be made in the following aspects:
Actively embracing multiple platforms, but more importantly, being meticulous in cultivation. At the moment when the pattern is uncertain, it is suggested to settle in multiple mainstream platforms such as Gaode, Meituan and Tiktok at the same time. Especially for new players like Gaode, there are free annual fees and traffic dividends, which are worth trying as soon as possible. But after joining, you can’t just wait for customers to come. You need to carefully manage the store pages on each platform, update information, and reply to comments.
Deeply understand platform rules and learn to leverage them. For example, to understand that Gaode’s “Street Sweeping List” values authentic navigation behavior, customers can be encouraged to use Gaode Maps to navigate to the store. Be good at using free or low-cost tools such as Tiktok’s talent shop, Xiaohongshu’s notes and grass planting to enhance exposure.
Build your own private domain traffic. No matter how the platform changes, establishing one’s own WeChat community and membership system, guiding customers to become members, is the foundation for resisting risks and sustainable operation.
Return to the essence and do a good job in products and services. No matter how the rules change, delicious dishes, clean environment, and enthusiastic service will always be fundamental. The new ranking system places more emphasis on authentic experiences, which provides more opportunities for conscientious small shops that are carefully managed and serve well to be seen by more people.
The release of Gaode’s “Street Sweeping List” marks a new stage for the local lifestyle industry. Competition has become more complex, but it has also brought new opportunities and a fairer environment for small and medium-sized businesses. In this changing situation, entrepreneurs need to not only keenly grasp the platform dividends, but also conscientiously do a good job in products and services, and strive to build their own customer base. Only in this way can we stand firm in the waves of sand.
Reference materials
⑴ “Local Life Competition Shifts to the ‘Battle in Store’: Top Players Move Frequently”
⑵ “Gaode Waives Annual Fees for Catering Merchants and Promotes Local Life Strategy Upgrade”
⑶ “Free” Thunder Explodes Local Life: Gaode Chain Fist Rewrites Industry Rules “
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