On­line ca­ter­ing proves recipe for in­vestor suc­cess

China Daily (Hong Kong) - - BUSINESS -

BEI­JING — China’s on­line ca­ter­ing sec­tor is con­tin­u­ing to ex­pand quickly, as more than 300 mil­lion meals are ex­pected to be or­dered on­line this year, ac­cord­ing a re­cent in­dus­try forecast.

The coun­try’s take­out busi­ness will ac­count for more than 10 per­cent of the ca­ter­ing in­dus­try’s to­tal re­tail rev­enue by 2020, said Jiang Junx­ian, head of the China Cui­sine As­so­ci­a­tion.

In 2016, a to­tal of 256 mil­lion meals were or­dered on­line, up 22.5 per­cent from 2015, he re­vealed at an in­dus­try con­fer­ence on on­line ca­ter­ing.

The mar­ket size of China’s take-out busi­ness ex­ceeded 160 bil­lion yuan ($23.49 bil­lion ) in 2016, up 33 per­cent year-on-year, Jiang said.

The craze sweep­ing across the coun­try has pro­vided new busi­ness op­por­tu­ni­ties for young en­trepreneurs.

“Open­ing a restau­rant would be very costly while start­ing on­line ca­ter­ing seemed to be a bet­ter idea for me, es­pe­cially as it ben­e­fits a lot from the boom­ing in­ter­net sec­tor,” said 24-year-old Ha Nan, CEO of the Bei­jing Liushan­men Tech­nol­ogy, an in­ter­net ca­ter­ing com­pany.

See­ing the po­ten­tial of the emerg­ing take­out sec­tor, Ha founded Bei­jing Liushan­men Tech­nol­ogy in 2014 af­ter grad­u­at­ing from the Uni­ver­sity of In­ter­na­tional Busi­ness and Eco­nomics.

As well as of­fer­ing meals for in­di­vid­ual and group clients, his com­pany also of­fers com­plete ca­ter­ing sup­ply chain so­lu­tions and in­tel­li­gent host­ing ser­vices for restau­rant chains and cafes.

“As the en­vi­ron­ment changes and com­pe­ti­tion gets fiercer today, we can­not only rely on the in­ter­net ca­ter­ing sys­tem it­self, but also have to seek new growth points, such as the sup­ply chain busi­ness which can fuel the de­vel­op­ment of tra­di­tional restau­rants.” Ha added.

So far the com­pany has raised 10 mil­lion yuan in in­vest­ment and has notched up monthly rev­enue of around one mil­lion yuan.

Be­sides reg­u­lar meals, Chi­nese din­ers are be­com­ing in­creas­ingly in­ter­ested in other types of on­line ca­ter­ing ser­vices such as late-night snacks and af­ter­noon tea.

Last year, the trans­ac­tion vol­umes for these two types of ser­vices jumped more than three-fold on Ele.me, one of the coun­try’s largest on­line ca­ter­ing plat­forms, much higher than the growth in lunch and din­ner or­ders.

The thriv­ing on­line busi­ness has also brought vi­tal­ity to the coun­try’s tra­di­tional ca­ter­ing sec­tor. For Jin­bai­wan, a chain restau­rant fa­mous for Pek­ing duck and tra­di­tional Chi­nese cui­sine in Bei­jing, the take­out busi­ness now ac­counts for nearly 800,000 yuan of its daily rev­enue, or 40 per­cent of its to­tal turnover.

Fac­ing the brisk growth of the on­line ca­ter­ing sec­tor, Jiang said food safety was al­ways a top pri­or­ity, which re­quired close co­op­er­a­tion be­tween cater­ers and de­liv­ery providers.

A re­port from mar­ket con­sul­tancy iiMe­dia Re­search re­vealed that 256 mil­lion peo­ple or­dered on­line take­outs in China last year, an in­crease of 22.5 per­cent yearon-year. And it is ex­pected that the num­ber will grew to 301 mil­lion by the end of this year.

The re­port said that the mar­ket will con­tinue to grow, but at a slower rate, and on­line ca­ter­ing com­pa­nies will need to fo­cus on of­fer­ing bet­ter ser­vices to re­tain their cur­rent cus­tomers.

Ac­cord­ing to the re­port, food safety and de­liv­ery speed are the two main fac­tors cus­tomers con­sider when choos­ing an on­line ca­ter­ing plat­form.

It said that in or­der to im­prove ser­vice qual­ity, com­pa­nies need to fo­cus on food safety, which will help them of­fer a bet­ter user ex­pe­ri­ence and im­prove their com­pet­i­tive­ness in the boom­ing mar­ket.

The in­dus­try has im­proved greatly in sav­ing en­ergy, re­duc­ing pol­lu­tion and wa­ter waste.” Li Xinchuang, pres­i­dent of the China Met­al­lur­gi­cal In­dus­try Plan­ning & Re­search In­sti­tute

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