Delivery apps gulp down food business

Updated 2017-11-06 09:01:58 China Daily

Emerging segment feeds off high tech, big investors and busy consumers

This winter, amid sub-zero temperatures, China's food delivery market will turn red hot.

It would pull out all the stops, and open up a whole new bag of marketing tricks, to serve millions of convenience-craving, cold-averse, indoor-loving consumers such as Xiong Ling, 34, who runs her own healthcare business from her home at Wangjing area in northeast Beijing.

These days, nothing pleases Xiong as much as the ring of her door-bell. It rings three times a day. As if magically, every time she answers the bell, a fresh, hot, tasty meal materializes in a bag that is hung on her flat's front door.

Consumers such as Xiong are dependent on app-based food delivery firms that now account for 10 percent of the catering industry's annual sales, up from 7.4 percent last year.

By June-end,, the market leader, had 34.02 million active users, followed by (29.89 million) and Baidu Waimai (17.48 million).

Food delivery firms' rapid growth can be discerned from latest data, including estimates.

According to the China Internet Network Information Center's China Internet Development Report, 295 million people used online food delivery services in the first half of this year.

By the time 2018 rings in, around 350 million consumers will have likely used such services, spending more than 200 billion yuan (.2 billion), higher than 160 billion yuan spent last year, which itself was up 33 percent from the 2015 level.

In terms of absolute numbers, food and beverages will have been delivered more than 350 million times this year, up from 256 million times last year, according to the China Cuisine Association or CCA.

Jiang Junxian, director of the CCA, attributed the rapid growth of the food delivery market to the advent of technology: reliable telecom infrastructure, nifty smartphones, imaginative apps, mobile payment tools and enhanced logistics capacity of delivery firms.

Chinese consumers' growing impatience with time-consuming restaurant visits, and their reluctance to cook at home due to work pressures, are also key factors.

For instance, Xiong's saviors are "riders", or deliverymen, the backbone of food delivery services. "Takeout food services have set me free from housework, which means I can focus on work," she said. "You can even have a cup of coffee and ice cream delivered by the riders to your home."

Li, a deliveryman for Dada-JD Daojia, a food delivery unit of online marketplace, said the business is all about speed. "You've to make sure the food is warm (or does not melt) when it reaches the customer."

He receives 5 yuan per delivery in addition to a basic monthly salary. He races against time on his electric two-wheeler through the day, more so during the peak hours around mid-day.

The Dada app enables him to compete with his peers for orders. He works 7 am to 9 pm, and delivers meals, snacks or beverages 40 to 50 times in between.

An organized rider could take home 10,000 yuan a month while the average is about 6,000 yuan, he said.

He also said the food delivery segment's two giants, and, are hiring heavily this winter. For, consumers are reluctant to step out to dine at restaurants or shop for groceries to cook at home.

As demand for food delivery services soars, riders receive winter incentives from their employers.

According to market information firm Analysys' China Internet Catering Market Report 2017, the April-June quarter has seen the food delivery segment notch up sales of almost 46 billion yuan, up 28 percent sequentially and up 82 percent year-on-year.

The July-September quarter, data for which is yet to be announced, is also considered part of the peak period for takeouts. This summer, growth has been the highest in three quarters on the back of a spurt in night orders.

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