(Yicai Global) Dec. 28 — Food delivery giant Meituan and short video platform Kuaishou are tying up to meet the growing challenge from shared competitor Douyin, after TikTok’s sister app in China started offering group buying and takeout delivery services.

Meituan will launch a mini program on Kuaishou, as it has completed tests under the food and beverage category and will add other categories such as hotels, scenic spots, entertainment, and recreation in the future, the Beijing-based local services provider said via its WeChat account yesterday. The pair got together in part because of Douyin, Yicai Global learned.

In the past year, ByteDance’s Douyin has been rapidly developing services that include, for example, food recommendations by internet celebrities through a group-buying link on the video page or in the comments section, a service very similar to that offered by Meituan’s Dazhong Dianping.

Douyin also provides meal delivery services, competing with another key business of Meituan. F&B chains such as KFC and Heytea have opened accounts on Douyin to sell their products through the platform. There are also rumors that Douyin is testing its own takeout platform.

Kuaishou’s strengths lie in its data traffic and a huge number of users in third- and fourth-tier cities, while Meituan has advantages in covering offline business scenarios, according to Wang Pengbo, senior analyst at Xi’an But’one Information. Beijing-based Kuaishou can rely on the partnership to convert data traffic to profit and meet users’ demand to improve their loyalty, he said.

Growth in Meituan’s operating revenue has slowed in recent years as competition intensified. In the third quarter, revenue rose 38 percent to CNY48.8 billion (USD7.7 billion), according to the firm’s latest financial report. Its net loss soared to a quarterly record of CNY10 billion, mainly due to rising sales and marketing costs.

Editors: Dou Shicong, Futura Costaglione