Dishing Out A New Business

With online food services added to the menu, the sector’s main players are looking at acquisitions and diversification to beef up their share By Deng Yaqing

Lou Mei, a 30-year-old employee with a foreign Internet company in Beijing, has seen her eating habits change recently. “I used to stroll out with my colleagues to have lunch in the shopping malls near my office but as my work schedule has become increasingly tight and almost all the restaurants to my taste have online order and delivery services, I now tend to have my lunch delivered to my office, even supper at times,” Lou said. “Many of my colleagues also do the same.”

Two takeout apps that Lou has installed on her mobile phone and uses often are Baidu Takeaway, the online food delivery platform started by Baidu, China’s leading search engine, and Meituan Takeaway owned by group deal giant MeituanDianping. “Since the restaurants listed on these two apps offer discounts or distribute coupons every now and then, sometimes it’s cheaper ordering takeout than eating out,” she added.

Along with the transformation of the traditional catering industry, a cutthroat battle has been unleashed in China’s online food delivery sector. Ele.me, one of the frontrunners in the trade, announced on August 24 that it was acquiring Baidu Takeaway. The deal is valued at $800 million.

According to statistics from iiMedia Research Group, a global mobile Internet market consultancy, Ele.me held 41.7 percent of China’s online food delivery market in the first half of this year. Meituan Takeaway ran close behind with 41 percent, while Baidu Takeaway lagged far behind as the third runner with a mere 13.2 percent.

Co- founded by two students and