Food de­liv­ery is China’s hottest In­ter­net sec­tor

New Straits Times - - Business -

BEI­JING: China’s fastest-grow­ing on­line in­dus­try seg­ment in the first half was food de­liv­ery, as star­tups backed by Ten­cent Hold­ings Ltd and Alibaba Group Hold­ing Ltd touted dis­counts and mar­shalled ar­mies of peo­ple to get restau­rant meals to the homes of al­most 300 mil­lion.

The pop­u­la­tion of peo­ple who rang up meals from phones and com­put­ers surged 41.6 per cent to 295 mil­lion over the first six months of this year, said the gov­ern­ment’s on­line in­dus­try over­seers in a bi­en­nial In­ter­net snap­shot yes­ter­day.

That’s well in ex­cess of other mar­kets, in­clud­ing the 7.7 per cent user growth in dig­i­tal pay­ments and 23.7 per cent rise in ride-hail­ing, both more ma­ture sec­tors.

Food de­liv­ery, which has ex­isted for decades, has been tur­bocharged in the smart­phone era to be­come one of the coun­try’s fiercest on­line bat­tle­fronts.

The largest plat­forms, backed by Ten­cent, Baidu Inc and Alibaba, have plied din­ers with coupons and built out ex­ten­sive net­works.

That in turn has en­cour­aged patronage from ur­ban­ites who de­mand fast ser­vice at the press of a smart­phone screen.

The in­dus­try has at­tracted bil­lions of dol­lars worth of in­vest­ments and spurred a flurry of deal-mak­ing.

This week, Bloomberg re­ported that sec­tor-leader Meituan Dian­ping, which is backed by Ten­cent, is in talks to snag as much as US$5 bil­lion (RM21.39 bil­lion) in fund­ing that could make it the world’s fourth largest startup.

Baidu, the Chi­nese on­line search gi­ant, is said to be ne­go­ti­at­ing the sale of its loss-mak­ing Waimai unit to Alibababacked Ele.me.

Ele.me had 28 mil­lion monthly ac­tive users as of May and com­ple­ments the e-com­merce op­er­a­tor’s own on-de­mand ser­vices af­fil­i­ate Koubei. To­gether, they are vy­ing for supremacy with Meituan.

Over 92 per cent of the cus­tomers used smart­phones to place an or­der, said the China In­ter­net Net­work In­for­ma­tion Cen­tre in its re­port.

“As the in­dus­try ma­tured while prof­itabil­ity re­mains low, it be­came an ob­vi­ous choice for the plat­forms to ex­plore other re­lated busi­nesses,” it said.

There were 751 mil­lion In­ter­net users in main­land China as of June, al­most 20 mil­lion more than at the end of last year, said the re­port. Bloomberg

BLOOMBERG PIC

The pop­u­la­tion of peo­ple who rang up meals from phones and com­put­ers in China surged 41.6 per cent to 295 mil­lion over the first six months of this year.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.