Young start-ups remodel China's food delivery market
- By Verena Menzel
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E-mail China Today, March 22, 2016
New Food Gathering Mode
One industry in this field that has particularly thrived in China for several years is the online delivery-service portals and delivery-apps sector. In 2015 the Chinese market for online delivery-service providers reached a business volume of RMB 45.8 billion, around US $7 billion – a 200 percent growth in comparison to 2014, according to statistics released by leading mobile app analytical data product Analysys Qianfan. Analysts predict that in the coming five years this market is likely to continue to grow, and that by the year 2018 it will probably reach a total volume of RMB 245,5 billion (US $375 billion).
Many successful Chinese online food delivery platforms in addition to the delivery-apps operated by big chains like McDonalds have appeared on the market in the last few years. Among the big players in this regard are such apps as Meituan Waimai, ele.me, Taobao delivery-app Tao Diandian, Baidu Waimai, and the Chinese online-mall delivery-app Jingdong. All appear in the 2015 top 10 Chinese delivery-app download-charts, according to China's market research provider ASKCI Consulting.
The reason why these new delivery-apps are so popular, especially among Chinese urbanites, is clear. With just a couple of clicks these applications enable anyone in any location to find with ease the most popular local restaurants. They then simply scroll through the menu pictures and order the meal that most appeals.
Moreover, as with sending an express parcel, customers can keep track of their order via their mobile phones – from preparation and collection from the restaurant to delivery via express carrier directly to the doorstep. To pay, customers can chose between cash or several online payment services like that on WeChat or Alibaba's Alipay. Many websites also give a fair discount on some of the dishes their member restaurants offer. Most providers even waive the delivery fee, which at a few yuan is little more than a formality anyway.
Students and office workers still constitute the biggest customer base, according to Analysys Qianfan. However, the sight of delivery carriers speeding on their electric bikes to hungry diners is also becoming more commonplace in residential areas. Insiders see this field as that with the biggest growth potential for the future.
But not only classic delivery services profit from cyber hype. As Chinese people are noted for their creativity – not only in culinary matters but also in tracking down new business opportunities – many new start-up companies have ventured into this young and promising industry. Today, they are confidently competing with traditional food delivery models. Thanks to smart business outlooks some have not only tickled the fancy of young Chinese smart phone users, but also succeeded in attracting millions of yuan in investment.
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