China Internet Daily:Online food delivery
Market overview。
Analysys International recently published a report profiling growth in the Chinaonline food delivery market in 1H15. In 1H15, the total transaction volume offood delivery via online channels reached RMB12.5b, up 135% YoY. Totalorders were over 370m. Meituan (Alibaba is a 13% shareholder) currentlymaintains the greatest market share at 34.5%, followed by Ele.me (invested inby Tencent and Dianping) at 33.5%, Baidu Waimai at 12.7%, and Koubei(backed by Alibaba/ANT Financial) at 4.1%. Meituan and Ele.me’s majorcustomers tend to be college students while Baidu Waimai focuses more onoffice workers who can afford higher-priced orders. According to iResearch,the current penetration rate of online food delivery only accounts 5.9% of totalfood delivery, indicating great potential for growth. iResearch expectspenetration to reach 12.4% by 2017. In addition to the market growthpotential, food delivery transactions are high frequency and generatesignificant traffic, which can benefit other O2O services and online paymentfor internet enterprises.
Recent developments。
Ele.me raised $350m from investors including Tencent, JD.com, and Dianpingearlier this year. By leveraging its own offline resources and the onlinestrengths of its partners, Ele.me continues to play a leading role in the market.
The success of ele.me should also help to drive transactions for Tencent’sWeChat payment tool. Baidu Waimai launched in May last year, and is alreadypresent in 70 Chinese cities. Baidu recently announced that the company plansto invest RMB20b in its O2O service over the next three years, which includesinvestment in food delivery services. Baidu has recently offered heavysubsidies to promote its business. It has also developed its own delivery team,seeking to provide better user experience. Alibaba and affiliate Ant FinancialServices Group recently invested RMB6b in Koubei and intend to join thecompetition more vigorously. Although Koubei currently has small marketshare, Alibaba should be able to leverage its considerable user base acrossTaobao and Alipay to expand Koubei’s market share. We expect the Chineseinternet giants to leverage their respective advantages to expand their marketdominance in online food delivery and attract more users to their ownplatforms.