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Top1. Introduction
The food delivery market, with the advent and fast user adoption of Mobile Food Delivery Aggregators (MFDAs, hereafter), has grown exponentially and is now estimated to be worth over 37 billion USD (Forbes, 2019). Of all products sold online, food tops the chart. Online food sales rose by 36.8% year-over-year in the first two months of 2018 (Bloomberg, 2019). The popular MFDAs in China have an estimated 355 million users (FT, 2019), which rising every day, this means that a quarter of all Chinese people are ordering food from their phones or other smart devices. There are more than 1.8 million food delivery orders placed every day in Beijing alone (Liu, 2018). Besides the top two companies that dominate the market, ele.me (translates to ‘Are you Hungry?’) and meituan waitan (Mei means ‘beautiful’, and Tuan means ‘together’), other companies that have also managed to carve their niche are, a) ENJOY, whose slogan reads ‘Life’s too short to be bored’; b) Home-Cook that allows customers to share home-cooked meals with other users/customers, and with several different regional Chinese cuisines, this is unlike other platforms that typically deliver restaurant food; c) Similar to Home-Cook, by not offering restaurant food, Daojia’s platform prefers to form cooperative relationships with large restaurants with established brands. Between 2015-2016, 63% of online food delivery app users were white-collar workers and 30.5% were students. Today, 83% are white-collar workers, and only 10% are students (Shi, 2019). The provinces that top online food ordering demand are Shanghai, Zhejiang, Guangdong, Jiangsu and Beijing respectively (Figure 1).
Figure 1. Size of the online food delivery market in China (Daxue Consulting, 2019)
The functionality and features of these Chinese MFDAs are similar to food delivery apps available in other parts of the world, e.g., Uber eats, Deliveroo, Swiggy, Zomato etc. in terms of food selection, daily offers, coupons and vouchers, order and rider tracking, feedback and subscription options. The apps in China take about 20% of the order revenues. In Q2 of 2019, Gross Transaction Value (GTV) of China’s food delivery service grew 36.5% to RMB 93.1 billion, while the number of MFDA-based orders increased by 34.6 percent to 2.1 billion orders. Recently, the Chinese online MFDA giant Ele.me acquired one of its rivals, Baidu Waimai, and its related services for USD 800 million (DeGennaro, 2019). So far, the three largest MFDAs, Ele.me, Meituan Waimai and Baidu Waimai, have dominated over 80% of the food delivery market in China (DeGennaro, 2019). Meituan Waimai, or simply Meituan, controls about 40% of China’s food delivery market. Similar to Ele.me, Meituan is also an online-to-offline (O2O) food delivery app that provides users with online ordering, food delivery, and also other diversified services for users. Significantly, Meituan also offers more non-food delivery services than Ele.me, such as flowers, office supplies, to name a few. The two companies that dominates the online food delivery services in mainland China are Meituan and Ele.me, and both of them will be introduced further in later sections of this paper (Figure 2).
Figure 2. Food delivery orders - frequency of use (Daxue Consulting, 2019)