Food delivery is China’s hottest Internet sector
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