(Yicai Global) July 17 -- Chinese food delivery giant Meituan is lowering the commission its group-buying business charges and is promoting more livestreaming events to stem a loss of vendors and keep its competitive edge as rivals such as ByteDance's Douyin, the Chinese version of TikTok, elbow in on the local services market, according to merchants.

A veteran caterer received a call from a Meituan salesperson in May offering him rebates on commissions that would lower the service charge on group-buying orders to 1 percent from 5 percent, he told Yicai Global. But to get it, he had to stop cooperating with Douyin, he pointed out.

Beijing-based Meituan did not announce this policy change through an official notice, but informed the caterer in a private phone call, the person said.

Only merchants that have set up shop on Douyin can take advantage of Meituan's new offer. The person in charge of a restaurant chain told Yicai Global that the commission on its group-buying orders on Meituan is unchanged at 5 percent, and it has no plans to open a store on Douyin.

Meituan had to lower the commission for some merchants who opened shops on Douyin, as the latter's group-buying commission is 2.5 percent, the person said.

In the food delivery business, where Douyin's has not yet penetrated, Meituan's commission has remained unchanged at a relatively high percentage, the veteran caterer pointed out.

Besides catering, scenic spot operators also benefit from the rivalry between Meituan and Douyin. One such operator made a special deal with Meituan this summer and did not offer any tickets on Douyin, he told Yicai Global. 

Meituan gave more incentives, including funds, app traffic, and other resources, the operator added. This is the first packaging cooperation between the scenic site operator and Meituan, he noted, adding that previous tie-ups were small and short-term.

But Meituan's commission concessions may not persuade every merchant. Another scenic spot operator told Yicai Global that they sell about half of their tickets through Douyin, which “has a much lower commission than Meituan, and we work smoothly with the platform.”

Besides offering lower commissions to merchants, Meituan is also expanding its livestreaming business. Coupons have been offered to consumers taking part in its monthly livestreaming events on the 18th of each month since April.

Livestreaming sales can help merchants increase their engagement on Meituan and boost the time and money consumers spend, said Zhuang Shuai, a retail e-commerce industry expert and founder of Beijing Bailian Consulting. This can help Meituan resist the competitive pressure from Douyin to some extent, Zhuang added.

Douyin's local life services business, especially in food delivery, cannot yet fully compete with Meituan, Zhuang pointed out, noting that livestreaming events can partly help it blunt Douyin's competitive edge.

Editors: Tang Shihua, Martin Kadiev