Chinese campus-oriented delivery app, Zhai.me, has raised financing totalling USD 35 million led by Meituan, China’s leading group-buying and food delivery service.
Screenshot of Zhai.me’s mobile app
Other prominent investors include Banyan Capital, Bertelsmann Asia Investments and Vertex Venture Holdings, according to Tencent Tech.
Meituan’s app will be integrated into Zhai.me‘s user interface, and Zhai,me will help Meituan overcome its ‘last mile problem’ and reach into student dorm rooms, Sun Gaofeng, college drop-out and Zhai.me co-founder, told tech blog 36kr.
In China, student residence halls are off-limits to delivery people. Dormitory managers neither sign for packages nor allow deliveries be left unattended. Students are left with no option but to meet delivery people at the entrance to residence halls, and this poses a problem for delivery services.
“The takeout you order from Meituan can only go so far and many people hate the idea of having to walk downstairs to go get it. Our goal is for you to be able to get everything you need online without you ever stepping out of your room,” said Dai Wenbo, co-founder of Zhai.me, who also quit college to work on the startup.
Zhai.me was launched in Shanghai in December 2014. The name, which in Chinese literally means ‘Indoorsy Me,’ or ‘Otaku-lifestyle’ in English, embraces the sedentary Chinese student lifestyle and its obsession with the Internet and desire to retreat from reality.
To meet the needs of the masses of dorm room dwellers, Zhai.me hires one student from each residence hall as a part-time manager, or ‘building director’, to complete the last leg of the delivery process.
Zhai.me first called the student-operated distribution hub “a convenience store within a dorm”, and later came up with the cute moniker: “the Night Owl Store.”
Screenshot of Zhai.me’s web page. On the right is the logo for “Night Owl Store”, under which it reads, “A convenience store within a dorm.”
“Can you imagine how lazy students these days are? Now they can live comfortably without even getting out of bed,” Zhao Qifan, a junior-year part-time “building director” at Shanghai Jian Qiao University told The Economic Observer.
Zhai.me also partners with retail businesses within a half-hours walk from major campuses and employs ‘spidermen,’ their term for errand boys, to travel between businesses and residence halls to ensure faster delivery.
Zhai.me revealed that it covers nearly 800 universities in 70 Chinese cities and currently employs more than 20,000 students as part-time ‘building directors.’ Zhai.me claims, every day, an average of 200,000 people use its app with customer retention at 65%. Zhai.me’s goal is to handle one million orders a day by the end of 2015.
According to statistics released by the Chinese Ministry of Education, China has altogether 2,845 accredited universities with more than 24 million students. The student population, previously underrepresented on Meituan because of resistance from university authorities, is simply too large to ignore.
Zhai.me is not without formidable competitors however. Two other major campus-oriented delivery platforms, namely Anlaiye (literally “I’m Coming”) and 59store, each command comparable market share.
“Until now, none of them have been anywhere close to making a profit,” Tian Jiangchuan, a venture capitalist, told the Economic Observer. “Rapid expansion remains investors’ very first requirement for them – in order to achieve scale.”
Meituan itself is dogged by rumors of overstated performance and an imminent cash crunch. In a lasting battle with Ele.me for the lead in food delivery service, Meituan is allegedly losing million dollars on monthly basis, China Business Media said.