In recent years, food and beverage delivery services, which is called waimai in Chinese, have become an essential part of the urban lifestyle.
From quick lunch, midnight booze to phone chargers, you can have almost anything delivered 24/7 after a few taps on a smartphone app. And people living in large cities like Shanghai are very dependent on the courier on a daily basis.
“I work 9-to-5 and often overtime, so it’s difficult for me to find time to go to the supermarket, buy ingredients and cook meals at home. I always have food delivered to the office at noon and I also use delivery apps because it’s fast, prompt and affordable,” said Elise Wang, who uses delivery services frequently.
The growing number of delivery platforms and couriers have changed the way people live. And the huge market potential has drawn more players to join and competition is inevitable.
Last week, the city of Wuxi became a battlefield of food delivery apps after China’s top car app Didi introduced a delivery service in the city on April 9. It ignited a war between competitors Ele.me and Meituan.
App users benefited from the war of waimai, as the three companies offered jaw-dropping discounts — 2 yuan (US$0.3) for two cups of milk tea, 1 cent for fried chicken and so on. And in order to use up the coupons, a lot of people stayed up late to order food on the apps, and it took much longer to receive the packages.
The platforms were short-handed due to the increased number of orders, so delivery men from neighboring cities traveled to Wuxi to help. Some delivery men could finish 100 orders a day and earn 2,000 yuan.
But the battle disrupted the market order. On April 11, the local business administration met and spoke with the three delivery platforms, ordering them to cease the unfair competition.
On April 2, Alibaba announced that it would buy Ele.me to push into China’s fast-growing local services market, also known as online-to-offline market.
Besides regular food and beverage delivery services, new business models have also emerged to cater to the users’ growing needs for delivery.
In China, millions of consumers use smartphone apps in all aspects of lifestyle, like purchasing products and services, ordering take-out food and paying for transportation.
Delivery services like Ele.me, Sherpa’s and Meituan are the dominant powers in the market, while big restaurant chains, such as McDonald’s and KFC, have their own mobile apps in addition to the presence on popular platforms.
Ele.me is a popular food delivery app.
Take-out no longer means fast food. Now, one can order almost anything as take-out, including hotpot, which is delivered in a huge package that includes pots, fuel and dishes, and the cost is not much higher than dinning-in.
More comprehensive services are also offered in the new era food delivery. The famous hotpot chain Haidilao’s Hi Delivery not only sends the pots and food, but also cleans up everything on scheduled time.
The grocery delivery landscape has changed drastically in the past few years. In the beginning, it was dominated by websites that specialized in fresh food delivery. But they’ve faded due to the high cost of warehousing and transporting the easily perishable goods. Raising prices to cover the extra costs was not a good solution either. Because if a kilo of apples costs twice as much online as in the regular market, it’s very difficult to convince the users to pay for the convenience.
The once popular online grocery stores like Yummy 77, KerryGo and Tablelife have closed their operations. Yummy77 received US$20 million in investment from Amazon in 2014, and two years later it was suddenly closed.
E-commerce giants like Taobao and JD operate large-scale fresh food deliveries. The company’s strengths allow the price to be more reasonable and deliveries in Shanghai are quite timely.
In 2015, Alibaba launched Hema, a new concept that combines online and offline retail.
Customers can visit the stores, which are supermarkets with various cook-to-order dining options, or place orders on the app. The delivery for the first order of the day is free regardless of the order amount, and it only delivers to customers located within a 3-kilometer radius to ensure shorter delivery time.
As of April 13, Hema have 38 stores across nine cities. There are 15 stores in Shanghai and 10 stores in Beijing, and the brand covers cities like Suzhou, Shenzhen, Ningbo, Hangzhou, Chengdu, Fuzhou and Guiyang. They will soon open in Guangzhou, Nanjing, Wuhan and Xi’an.
A particular advantage Hema has over other fresh deliveries is that customers can visit the store and see products, the price and quality is unified online and offline. That way they can establish trust more easily.
Because of the short delivery radius, Hema is able to cut the cost of cold chain transportation down to one-third that of the traditional B2C fresh e-commerce platforms. It offers free pick-up when the products are returned.
According to Hema, 75 percent of the customers are the 1980s generation. And when a new store is opened, the ratio of online and offline ordering is about half and half after six months of operation. A year later, 70 percent of the orders are placed online.
“When choosing the location of a store, Hema creates a buyer persona based on the data of Taobao mobile app and Alipay to analyze the online shopping activity, and as a community shopping mall, the consumption population within the 3-kilometer radius should exceed 300,000, and sufficient parking space is also important,” said Marvin Ma, public relations manager of Hema.
Hema not only sells fresh fruit, vegetables and meat, but also hot meals and semi-cooked meals.
They’ve revealed that the best-selling bakery good is the Beibei cakes (sponge cakes with mayo filling that are coated with meat floss), and popular deli items include grilled Argentinian squid, seafood stir-fry with scallion and ginger as well as seafood steamed with garlic and vermicelli.
Recently, Hema started to offer 24-hour delivery in Beijing and Shanghai for additional fee, and it’s very popular, especially for emergency products and late-night snacks like crayfish, the demand of which is eight times more than the day time.
In 2015, Alibaba launched Hema, a new concept that combines online and offline retail.
In Shanghai, alcohol delivery services have emerged to answer the consumers’ needs for wine and beers delivered to the doorstep.
Launched at the end of 2016, DrinKuaidi is a drink delivery service in Shanghai that sends wine, cold beer, spirits and cocktail kits within one hour during the period of noon to 2am daily.
Ambroise Proffit, founding partner of DrinKuaidi, explained that the idea of opening the alcohol delivery service is to present a real drinking experience.
“I worked in restaurants and bars before and now I want to bring the same experience to your home, to pair the highly used on-demand food delivery, we send drinks,” said Proffit.
DrinKuaidi has its own app and sells on WeChat as well as other delivery platforms. Although platforms like Ele.me and Meituan charges the vendors, they’ve helped the service to reach more locals.
In the shop, a cocktail kit that makes 13 glasses of Mojito is 260 yuan and a bottle of Grey Goose French Vodka is 295 yuan.
Wine and beer are the most popular products, and the peak hour is Friday and Saturday from 7 to 11pm. They have their own drivers but are also using courier services.
They’ve drawn a radius of delivery with different order minimum, in downtown it’s 78 yuan for delivery under one hour, and in districts including Minhang, Pudong, Yangpu, Baoshan and Jiading, it’s 175 yuan minimum for delivery under two hours. Similar alcohol delivery services include BottlesXO (app) and AskJerry (WeChat).
In addition to food and beverage, a new kind of delivery service is taking care of your needs for almost anything, anytime, anywhere — like buying medicines or anything the food delivery platforms don’t offer.
Linqu is a personalized errand running app that has a buy-at-will service, you can type in any purchase demand and where to buy, from food, medicines to even quilts and pillows.
The delivery fee is much higher than the food and beverage services, but it solves immediate problems promptly.
Linqu also has sections for wanghong (online celebrity) foods and drinks, for extra costs, the delivery men would stand in line to buy the products that often take more than an hour in store.
The all-purpose errand service is even more versatile, one can order services like dog walking, file printing and temporary driver.
DrinKuaidi is a drink delivery service in Shanghai that sends wine, cold beer, spirits and cocktail kits within one hour.