A Hungry Industry: Internet+ Food
Text by Wang Jiayin
Xiao Shu, a 33-year-old Beijing office worker, has become inseparable from her cellphone, and food apps such as Dianping, Meituan and Baidu Takeout as well as shopping apps such as Bee Quick, Tmall, and COFCO’s Womai only make the problem worse.
“An ancient Chinese goes, ‘Firewood, rice, cooking oil, salt, soy sauce, vinegar and tea are the seven necessities of life,’” declares Xiao. “Today, all these things can be purchased together online on some websites. Once in a while, I just fill up on what I need without going anywhere.”
Shopping From Home
The dramatic development of the internet, O2O in particular, has brought dramatic changes to consumption methods as well as eating habits in China.
Never has hunting for food been so easy. Delicacies can be delivered to one’s doorsteps after only a few taps on a smartphone. Delivery of semi-prepared meals is helpful for those looking to entertain friends at home without enduring all of the headaches associated with cooking. It takes less than half an hour to have salt delivered through some websites.
“The accelerated rhythm of many people’s lives has hastened ‘lazy economics,’ resulting in increasing need for food delivery,” asserts Jiang Junxian, president of China Cuisine Association. “Online food delivery has matured gradually, now drawing internet giants such as Baidu, Ali-baba, and Tencent. The breakneck progress of the internet has revolutionized life and work, transforming all trades and giving rise to a new industry – internet+ catering.
The O2O cooperative pattern between e-commerce and community convenience stores has made food delivery quicker and more efficient. After someone orders with a phone, the goods, as small as a pack of cookies or as big as a case of soda, are delivered directly from the nearest convenience store. Fresh fruit or snacks can be delivered for an office break for only 30 yuan.
This kind of convenience has led China’s food and dining O2O into a “golden era” in terms of market access. Statistics show that in 2015, the country’s O2O food delivery brought in US$21.4 billion, an increase of 46.8 percent over 2014, and market expansion multiplied by 10 within five years.
Embracing Internet+
Today, internet technology has gradually infiltrated and upgraded the catering industry via positioning, payment, ordering, drainage, and big data, leading to an era of increasing efficiency. The disruption of the mobile internet in particular has not only restructured the pattern of benefit distribution in traditional catering but also accelerated transformation of the industry.
“Given its organizational features, the catering industry has entered a ‘micro era’ wherein enterprises have become more professional, specified, and popularized,” illustrates Han Ming, president of China Hotel Association. “Integration with the internet creates massive potential, beefing up every segment for transformation, from group purchasing and ordering to takeout and ratings.”
In 2015, greater numbers of traditional catering companies began to embrace O2O. In Beijing, many time-honored restaurants under the umbrella of Ju De Hua Tian (a well-known Beijing-based food franchise), including Hongbinlou, which specializes in Muslim cuisine, Emei Restaurant, which serves Sichuan dishes, and Huguosi Snacks, which provides various Beijing-flavor delicacies, began to join e-commerce, offering easy methods for diners to order their signature dishes such as ‘rolling donkey’ (a snack made from bean flour), pea cakes, and fermented drink made from ground beans.
“Today, such venerable restaurants are tasting the fruits of offering such takeout,” remarks Liu Jian, head of the Marketing Department of Ju De Hua Tian. “We have seen a bump of 700,000 yuan a month thanks to the takeout business,” he adds.
That case is not isolated. According to a survey by Analysys International, in December 2015, online takeout totaled 7.09 billion yuan, 10 percent growth over the previous month.
Aside from O2O takeout, internet+ catering has placed more attention on clients’ individual demands. People have become more “picky” as their living standards improve: They want to eat fresh, safe, good-tasting food, giving rise to “private kitchens.”
Xiao Shu uses quite a few of apps for “private kitchens” such as Huijiachifan (Go Home to Eat) and Chijidun (Having Several Meals, or HSM), which are O2O catering platforms based on geographical location.
When a user loads HSM, photos are displayed of specialty dishes from online “private kitchens” within 3.5 kilometers, and each photo includes a portrait of the chef, which links to relevant information about him or her. One can enjoy doorstep delivery after placing an order.
“Over the five years since operations began, the average daily rate has been 70 to 80 percent, drawing mostly white collar workers, pregnant women, and shut-ins,” explains Hu Zhong, founder of HSM.
Contrasting HSM, which places emphasis on formal meals, Mishi (Finding Food) specializes in desserts, bakeries, home-brews, and dried food. Today, Mishi covers more than 300 cities across the country, with 15,000 registered private kitchens and over 400,000 daily users.
“The sharing economy is the best way to join the market,” asserts Feng Xiao, founder of Mishi. “There might be 20 restaurants around where you live, but there are over 1,000 kitchens.”
Nevertheless, issues have risen during the integration of internet+ and the cater-ing industry, most problematic of which is food safety.
On March 15, the World Consumer Rights Day, China’s Central Television Station exposed the bad working conditions and environment of some kitchens registered on ele.me, an online food delivery service. The internet’s most powerful feature, the removal of geographic restrictions, makes sensual perception more difficult. To address the issue, such platforms must exercise better discipline via stricter supervision and administration, with stiff regulations for access and stronger user verification.
Credibility is key for both businesses and customers regardless of the services.
“We cannot tolerate underweight products ordered online,” claims Xiao Shu. “Nor can we tolerate unsafe takeout. Such worries will certainly fade with the maturation of the internet+.”
