In a move to strengthen its quick commerce capabilities, Douyin has announced that its supermarket business will be merged into Xiaoshida, its one-hour delivery service.
Douyin Supermarket launched shortly after Lunar New Year in 2023 as a self-operated e-commerce channel modeled on JD Supermarket. At the time, it was led by Mu Qing, then vice president of e-commerce.
Mu presented the initiative as an early-stage experiment designed to enhance the user experience for groceries and daily essentials. The aim was to address service gaps in Douyin’s broader e-commerce system, particularly for users who valued speed and reliability.
The project had been in development for nearly a year before its official launch. Pilot programs began in mid-2022 in cities including Guangzhou, Shenzhen, and Hangzhou. That year marked a period of rapid expansion for Douyin E-commerce as it increased investment in shelf-based retail. Internally, Douyin Supermarket was positioned as a vehicle to attract young, high-income consumers in China’s upper-tier cities and drive daily app engagement.
To support the rollout, ByteDance established a limited network of self-operated warehouses. Still, Douyin Supermarket never fully adopted JD’s vertically integrated model. Instead, it operated a hybrid structure more akin to Tmall Supermarket, combining direct sales with third-party consignment.
Timeliness is typically where online supermarkets excel. JD Supermarket and Tmall Supermarket offer next-day delivery by default, with some items eligible for same-day service. Douyin Supermarket struggled to match these benchmarks. Many of its products required several days for delivery, and only a small share qualified for next-day arrival.
While Douyin Supermarket emphasized centralized fulfillment, Xiaoshida focused on local, on-demand logistics. Piloted in Shenzhen in August 2022, the one-hour delivery feature was later added to Douyin Supermarket’s interface when it went live in early 2023.
By late 2023, quick commerce had become a central battleground among China’s major tech firms. Douyin Xiaoshida gained traction and was elevated to a top-level access point, on par with Douyin Supermarket.
As its name suggests, Douyin Xiaoshida promises delivery within one hour. It spans categories including fresh food, daily necessities, and electronics.
In recent years, one-hour delivery has become a key strategy in the quick commerce race. Taobao began offering one-hour delivery through Tmall Supermarket in Beijing as early as 2017. By 2020, the service was fully integrated into the Taobao app, sourcing inventory from Tmall Supermarket, Taoxianda partners, and neighborhood stores listed on Ele.me.
JD.com joined in 2021 with its own one-hour offering. In May 2023, it consolidated JD Xiaoshida and JD Daojia into a single quick commerce platform called JD Miaosong. This April, Taobao and Tmall rebranded their hourly delivery services as Taobao Shangou, now inclusive of food delivery.
Kelly Zhang, former CEO of the Douyin business unit, once envisioned the app as a comprehensive portal for mobile users. In line with that vision, Douyin has prioritized products with strong engagement, high transaction frequency, and scalable monetization.
Quick commerce aligns with those goals.
Douyin’s first major initiative in the space was food delivery. Launched in 2022 across Beijing, Shanghai, and Chengdu, Douyin Waimai focused on premium group meals with lower time sensitivity, relying on logistics partners such as SF Express and Dada Group.
However, delivery capacity remained a constraint. At one point, speculation arose that Douyin was in talks to acquire Ele.me from Alibaba to ease its logistics bottlenecks—rumors the company later denied. In 2023, the food delivery unit was temporarily merged into the e-commerce division and grouped with Xiaoshida under a new “home delivery” department, before eventually returning to the local services team.
As Douyin Waimai scaled down, the Xiaoshida business moved to the forefront. Following a pause in merchant onboarding and city expansion, the service resumed its rollout, growing from fewer than ten cities to over 40.
Compared with food delivery, Douyin Xiaoshida’s product mix is more standardized and its demand patterns more stable, avoiding the mealtime peaks typical of restaurant orders. This reduces delivery volatility and improves logistical efficiency. While food delivery requires a proprietary courier fleet, Xiaoshida can rely on merchant-led fulfillment. For many vendors, Douyin’s massive traffic is a bigger draw than its delivery infrastructure.
Still, Xiaoshida faces the same fulfillment challenges that hindered Douyin Supermarket. Competitors like Taobao Shangou and Meituan Shangou now promise delivery in under 30 minutes, while Douyin’s average times range from 30–50 minutes.
To close the gap, Douyin recently added a next-day delivery option for merchants using centralized warehouses. But industry insiders point out that true quick commerce is defined by immediate fulfillment, and next-day service falls short of that standard.
In the end, Douyin Supermarket and Xiaoshida were always pursuing the same objective. Though they developed independently, their offerings overlapped. The merger is less about consolidation than it is about sharpening focus.
Now, the spotlight turns to Douyin Xiaoshida. In a market where speed outweighs scale, and delivery expectations continue to tighten, Douyin appears to be betting that quick commerce, not traditional online retail, is the more sustainable path forward.
After years of three-way competition among Meituan, Taobao, and JD.com, both consumers and merchants seem increasingly receptive to the idea of instant retail. For Douyin, the timing may finally be right to go all in.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Li Xiaoxia for 36Kr.