Food delivery is a trending business in China. This week Chinese online food-delivery giant Ele.me acquired one of its rivals, Baidu Waimai, and its related services for USD 800 million. So far, the three largest food delivery apps, Ele.me, Meituan Waimai and Baidu Waimai, have dominated over 80% of the food-delivery market in China. Meanwhile, there are other smaller food-delivery service providers who are seeking opportunities and joining this fierce battlefield by providing an unique business model.
Ele.me, the Chinese food delivery giant, is backed by China’s largest e-commerce operator Alibaba Group Holding. Other existing investors include GSR Ventures, Sequoia Capital, and MatrixPartners China. After its acquisition of Baidu Waimai, Ele.me claims to have an estimated 53.4 percent of China’s food delivery market share, with the number of delivery orders reaching 295 million.
Ele.me offers customer-to-customer meal ordering and food delivery services. It started by helping restaurant owners install computers, thereby, connecting them to Ele.me’s meal ordering platform. On top of that, it also created a system for restaurant management. Additionally, Ele.me hires its own food delivery employees and coordinates them based on food-delivery locations. This way it can control the entire process from online meal ordering to food delivery.
Once online orders are placed, the platform sets a delivery deadline based on the distance between the restaurant and the user. Users can receive compensation if the deliveries are delayed. Data analysis shows the average delivery time is 31 minutes, and the company is trying to reduce the time further by improving on its management efficiency.
Additionally, with the help of artificial intelligence technology developed by Baidu Waimai, Ele.me is seeking opportunities in the high-end market of food delivery industry.
Meituan Waimai is an online-to-offline (O2O) food delivery app that provides users with online ordering, food delivery and some other related services in China. Its service is well developed in all of China’s first and second-tier cities such as Beijing, Shanghai, Hangzhou, Guangzhou, and 300 other cities. Besides food, users can also purchase medications, fruits and other daily essentials that can be bought in a supermarket. Meituan Waimai will arrange them to be delivered to its users. Similarly to Ele.me, it recruits its own food delivery employees to deliver orders to users.
Meituan Waimai is backed by Tencent. Last year Meituan merged with Dianping and secured a USD 3.3 billion financing round. Currently, it has more than 40% of China’s food delivery market. After Ele.me’s acquisition of Baidu Waimai, it is obvious that Meituan Waimai will face challenges as it is directly competing with Ele.me in this industry.
ENJOY’s slogan is perhaps the best description of the app: “Life’s too short to be bored.” The app is a combination of a restaurant guide, table reservation service and also online retailer of stylish food and beverages.
The dining experience with ENJOY isn’t only about food. While ENJOY’s well-selected food and beverage offerings deliver distinctive experiences for Chinese foodies, they also appeal to your intellect.
Through ENJOY, users can reserve a dinner with Taiwanese folk master Ara Kimbo to discuss the relationship between music and society; or perhaps enjoy a feast in the showroom of an emerging designer and chat about the latest fashion trends; or even appreciate an artistic afternoon tea at a cafe designed in the style of legendary choreographer Pina Bausch.
Regarding its financing, Enjoy secured its latest financing round of USD 30 million last year. That round was led by China Culture Industrial Investment Fund, with Stone Venture Capital also participating as an investor.
Unlike other food delivery apps that mainly deliver restaurant food, Home-Cook allows customers to share home-cooked meals with others. There are many different cuisines available on its platform, such as Beijing cuisine, Sichuan cuisine and so on. Customers can choose their native cuisine on Home-Cook’s online platform. The platform enables them to enjoy their native cuisines while they are working in other cities.
Cooks can apply to sell home-cooked meals on the platform. The company checks each work space, including food materials, taste and so on, to make sure each of its customer can enjoy authentic home-cooked meals.
Founded in 2014 in Beijing, later than some well-established food delivery giants, it has been able to gain more than one million users in China. Its service is available in five cities, including Beijing, Shanghai, Guangzhou, Shenzhen and Hangzhou.
Home-Cook previously received financing funding from angel investor Wang Gang, who also invested in Didi’s angel financing round. Home-Cook, so far, has secured four financing rounds; its latest Series C financing round was from an undisclosed group of investors.
Similar to Home-Cook, in that it does not offer fastfood, Daojia’s platform also provides customers with a richer cuisine. However, differently from Home-Cook, Daojia prefers to form cooperative relationships with large restaurants with established brands.
It has a logistics team with over 3,000 employees to help provide its one million users with high efficiency food delivery services. Customers can also place orders via phone calls and websites.
Though some giants dominate majority of the food delivery market share, food is an eternal topic for customers. In the past few years, many food delivery services providers have tried to improve their delivery efficiency and reduce delivery times. As customers become tired of fast food, they begin to pay attention to the quality and taste of food. That is why Ele.me is targeting the high-end market within the food delivery industry by working with Baidu Waimai’s AI technologies. Will these giants still own majority share of the food market space? Or can these small companies conquer customer’s stomachs? Let’s wait and see.
(Top photo from 58pic.com)