App deliveries changing China’s eating habits

GUO Bonan has opened several branches of “8Peppers” spicy Sichuan-style restaurants across Shanghai since last year, but not one has a dining room.

He doesn’t need them — stationed outside each outlet are packs of food deliverymen on motorbikes waiting to whisk dishes from Guo’s steaming kitchens to homes, office buildings and factories across the city of 24 million.

China’s app-based meal-delivery boom of the past two years has introduced several nowfamiliar phenomena: families and office workers huddling around mobile phones to place orders, delivery scooters scattering pedestrians on crowded sidewalks, and mountains of empty plastic meal containers.

But it’s also fuelling wider change by shrinking restaurants and reducing how often families cook at home while allowing millions to fry up meals in their own home kitchens and ship them to hungry buyers.

“In a rapidly developing city like Shanghai, time is money. So people don’t want to spend it cooking for themselves anymore,” said Guo, 29, adding that younger people like him are no longer learning how to cook.

“8Peppers” focuses purely on delivery through leading platforms like Ele.me and Meituan, avoiding the expense of paying waiters and maintaining a dining space.

Passionate about food, Chinese are also eager adopters of e-commerce, a potent combination for delivery start-ups.

More than 200 billion yuan (US$32 billion) worth of meals were delivered in 2017, equalling Bolivia’s gross domestic product, a figure expected to grow another 20 percent this year, consultancy iiMedia Research said. Users of meal-ordering platforms tripled in two years to 343 million in 2017, the China Internet Network Information Center said, the vast majority using mobile apps.

The delivery cost of a few yuan is no deterrent as Chinese incomes rise, said Zhang Xuhao, Ele.me’s founder and CEO. “Price is not so important anymore. Convenience and efficiency get the most attention, especially among Chinese born in the 90s or 2000s,” Zhang said.

Ele.me is now working on user-data systems that can help restaurateurs determine where to open for maximum sales, and testing delivery drones.

With its massive and growing cities, “China’s potential is extremely large,” Zhang said.

The industry is another proxy battle between e-commerce heavyweight Alibaba and gaming and social media rival Tencent in their struggle for tech dominance in everything from online games to content and mobile payments.

Alibaba is an Ele.me backer while Tencent is heavily invested in Meituan. Delivery platforms have raised billions in venture capital and are said to be burning cash via discounts to grab market share, with growth rates expected to slow.

“It will change restaurant design. Kitchen space only used to be one-fourth of a restaurant. But restaurants are now becoming something like processing centers for delivery,” said Wang Yuke of consultancy firm RET.

Su Xiaosu joined fast-growing platform Hui Jia Chi Fan (“Go home to eat”), which plugs home kitchens into delivery networks and is now in six cities.

Su, 34, grosses up to 3,000 yuan (US$475) per day, an eyepopping take for most Chinese, by frying up her native Jiangsu Province specialties in her tiny home kitchen in Shanghai and handing them to deliverymen in her apartment stairwell.

“My biggest concern is upsetting my neighbors,” Su said.