Un­wel­come spot­light falls on food order­ing and de­liv­ery app Ele.me

China Daily (Canada) - - LIFE - By MENGJING mengjing@chi­nadaily.com.cn

The rapid de­vel­op­ment of China’s on­line food order­ing mar­ket has hit a bump, af­ter the coun­try’s State broad­caster named and shamed the sec­tor’s big­gest player on a widely watched TV pro­gram.

Ele.me, the on­line food order­ing and de­liv­ery ap­pli­ca­tion backed by Alibaba Group Hold­ing Ltd, has fallen un­der the spot­light af­ter the pro­gram broad­cast that it al­lowed un­qual­i­fied ven­dors to sell food through its on­line plat­form.

The food and drug ad­min­is­tra­tions in Shang­hai and Chengdu, Sichuan prov­ince, both said on Wed­nes­day they have launched in­ves­ti­ga­tions into Ele.me.

The Shang­hai-based site, which han­dles food order­ing and de­liv­ery to more than 300 cities in China, apol­o­gized to the pub­lic and vowed to take mea­sures to rec­tify the sit­u­a­tion.

“It is with a heavy heart, that I find that the com­pa­nywe are so proud of, has trig­gered such food safety con­cerns,” said Zhang Xuhao, its chief ex­ec­u­tive of­fi­cer in a state­ment on Wed­nes­day.

He said the com­pany will in­tro­duce stricter checks to safe­guard food safety and carry out an in­ves­ti­ga­tion to make sure all the restau­rants on its plat­form have qual­i­fied li­censes to sell food.

An­a­lysts sug­gested Ele.me’s trou­bles, how­ever, may lead to a re­think by many firms in the hy­per-com­pet­i­tive Chi­nese on­line food order­ing and de­liv­ery mar­ket on how they op­er­ate.

Lu Zhen­wang, an in­de­pen­dent In­ter­net ex­pert and the chief ex­ec­u­tive of­fi­cer of the Shang­hai-based Wan­qing Con­sul­tancy, said the food­safety con­cerns will cer­tainly cost Ele.me.

“The mar­ket as whole is still ex­pe­ri­enc­ing rapid de­vel­op­ment due to strong de­mand from China’s es­ti­mated 200300 mil­lion white-col­lar work­ers.

“So Ele.me’s loss is go­ing to be its com­peti­tors’ gain,” he said.

Sta­tis­tics from the Bei­jing­based In­ter­net con­sul­tancy Analysys In­ter­na­tional show that China’s on­line food order­ing and de­liv­ery trans­ac­tions were worth 45.78 bil­lion yuan ($7.03 bil­lion) last year, three times higher than in 2014.

Its fig­ures show that Ele.me just leads the mar­ket with a 33.7 per­cent share, fol­lowed by Meituan Take­out with 33.1 per­cent, and Baidu Take­out 19 per­cent.

“Th­ese three on­line food order­ing and de­liv­ery apps are backed by China’s largest In­ter­net play­ers Alibaba, Ten­cent Hold­ings Ltd and Baidu Inc. I’d say this cash-burn­ing com­pe­ti­tion to win cus­tomers will last an­other two years,” said Lu.

Zhang Jing, an an­a­lyst with China E-Com­merce Re­search Cen­ter, said that the busi­ness of mak­ing, then de­liv­er­ing, food off­line is a tricky model to get right.

“To en­sure food safety re­quires co­op­er­a­tion be­tween govern­ment au­thor­i­ties and the on­line order­ing plat­forms,” she said.

A sur­vey re­leased on Wed­nes­day by Pen­guin In­tel­li­gence, an In­ter­net-fo­cused think tank af­fil­i­ated to Ten­cent, showed that about 80 per­cent of 20,136 In­ter­net users polled claimed they had suf­fered from falsead­ver­tis­ing­whenorder­ing food on­line, with the even­tual food look­ing noth­ing like what was shown on­line.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.