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Food Delivery War : Ele.me Vs Meituan



INTRODUCTION


The food delivery market is a duopoly dominated by Chinese tech giants Alibaba and Tencent, who own Ele.me and Meituan, respectively. These two delivery apps together control 98% of China's meal delivery business. Alibaba and Tencent, longtime adversaries, have been battling it out across sectors for years, and China's food delivery is simply another battleground for them. The two behemoths are vying for the O2O food delivery industry in China and racing to gain new users who can be guided to other Alibaba or Tencent services.


Based on the decade-long rivalry between Meituan and Ele.me, two Chinese enterprises which focus mostly on food delivery services, we can observe that this was a war over entrepreneurship, customer awareness and the integration of digital transformation trends.


Owning Ele.me gives Alibaba a treasure trove of consumer data, and the same goes for Tencent’s ownership of Meituan. Consumer purchasing power, eating habits, and payment profiles may all be gleaned from data obtained from Chinese food delivery applications.


Also Read: What Online Food Aggregators in India are learning from China.


Due to the intense competition amongst delivery apps in China, while placing an order, customers often receive considerable discounts and coupons. This price war can reduce the cost of ordering food compared to eating at home. Price disputes have led to considerable couponing between the two biggest competitors in the market, Ele.me and Meituan.

No.

Table of Content

1

COMPETITOR ANALYSIS

2

​APP TESTING AND FIRST HAND COMPARISON

3

​STRATEGIES AND INNOVATION INVOLVED BY BIG PLAYERS

COMPETITOR ANALYSIS

CRITERIA

MEITUAN WAIMAI

Life Cycle

Register, Search, add to cart, Pay, Track

Register, Search, add to cart, Pay, Track

Features

Food, Vegetable, Medicine, Errands Shopping

​Food, Groceries, Errand Shopping

Delivery Fees

​Depends on Restaurant (average 5CNY)

​Depends on Restaurant (average 5CNY)

Payment Options

​WeChat, Alipay, Bank card

​WeChat, Alipay

Filter Features

Distance, Sales, Delivery Speed, Rating, Lowest min order value, Lowest Delivery Fee

​Distance, Sales, Discount, Quality, Pharmacy

Discounts

New user discounts, Restaurant Specific, Festival offers, Payment offers

New user discounts

Premium Subscription

Yes. Exclusive discounts to members

​Yes, 20-yuan red envelope every month, Charges: 12 Yuan per month

Market Growth Strategies

1. Late delivery discounts (The user needs to pay a minimum for this). 10% off for 10 mins delay, 70% off for 40 mins delay.

2. Paid Additional cutlery request.

3. Red envelope gifts which can be sent to friends.

4. Corporate Meal Order

5. Order Donation

6. Takeaway 7. Pre-purchase plus self-pickup model

8. Face feature to recognize the person who will deliver

9. Option to chat and message with restaurant and delivery person separately

  1. You can actually access it through the Alipay app.

  2. Fixed amount red envelope for late delivery. 2.4 Y for 10 min, 6.0 Yuan for 15 min, and 8 yuan for 30 min

  3. Takeaway

  4. live streaming

  5. Short Video Channel, video recommendation page, users can be directly led to restaurants’ pages Chatbot assistance during order

UX Design

​• The app is simple with 3 options at the bottom i.e., Home Order and Profile

• The entire searching is done through the orders page.

• The home page is filled with categories and nearby restaurants just like Zomato

• Unlike Zomato each restaurant is shown in a smaller area with additional information like minimum order, delivery fees.

• There is a floating cart button which often covers some space sometime make clicking difficult

• The app is simple with 4 options at the bottom i.e., Home, Life, Order and Profile

• The entire searching is done through the orders page.

• A large part of the screen is covered with running offers and search bar

• There are a lot of categories and a separate all categories button

• Better placement of images of restaurants and information.

• Additional information like minimum order, delivery fees and promotional message

Main Target Segments

Main Target Segments White-collar business segment

Students and campus segment

Positioning Strategies

Excitement, Sincerity, Friendly, Trendy, Sentimental, Unique

Sophisticated, Glamorous, Western, Masculine, Rugged

Commission Rate

18%

15%


APP TESTING AND FIRST HAND COMPARISON


I have downloaded the Meituan Waimai Android application and the Ele.me Android application in my smartphone and carried out exclusive testing of these apps. The first-hand insights into the UX, Quality of service of both these mobile applications are as follows.


1.Meituan Waimai

The app is quite large with a size of 63 MB. The loading time is about 3 seconds. The app supports Android dark mode. The previous search results get saved in the search bar which can be deleted. The notification icon is too small and often causes problems while clicking on it. There are many filters like putting a bar on minimum order value, delivery fees, rating, etc. The size of the icons is small. The transition between pages is fast and pages load very quickly. In case of a slow internet connection, the restaurant listing loads immediately which images and offers load slowly.

The merchant on-boarding process is also shown in the same app and the analysis of recently on-boarded restaurants like brand growth, the number of orders are also shown to attract new sellers.




2.Ele.me

App size of Ele.me is about 80 MB which is larger than Meituan. The loading time is about 2-3 seconds. The app is easier to use than Meituan. The homepage is almost similar but the placement of icons and space for each restaurant is adequate. There is no lag in the app and the functioning is quite smooth. However, while changing the city the app goes black for a second to refresh the city and show the available areas in the city. The higher app and the minor lag in moving between pages could be one of the reason behind the lower usage rate of the Ele.me app. The merchant on-boarding process is also shown in the same app and the analysis of recently on-boarded restaurant like brand growth, number of orders are also shown to attract new sellers.





STRATEGIES AND INNOVATION ADOPTED BY BIG PLAYERS

Online purchases of semi-prepared food has become a new option for young clients. As a result of this new trend, semi-prepared food has increased considerably. Eight hundred thousand semi-finished meals were sold in 2019. At the same time, many older people have abandoned their Spring Festival practice of stocking vegetables. They began ordering fresh veggies to be delivered to their homes. In comparison to 2018, sales on the Taoxianda platform, a one-hour delivery project launched in March 2018 between Taobao and e-commerce platform Sun Art Retail, climbed by 172%.


1. Strategies and Innovations by Ele.me

Tmall Supermarket, Taoxianda, and Ele.me announced on August 14, 2020, that they had improved their strategic partnership with Yili, one of China's major dairy producers. As a result of this strategic move, Ele.me entered the Chinese milk and daily needs delivery sector.


In 2020, Ele.me further partnered with more than 500 college canteens in 100 cities across the country to provide food delivery service. In addition to school cafeterias, several restaurants near colleges and universities had joined Ele.me's "Ten Billion Subsidies" programme that offered coupons to students when they order takeaway through the site. Ele.me has also launched a promotion to commemorate the school opening day. When ordering on the platform, college students could save up to 15 yuan and received special fruit discounts of at least 1 yuan.


2. Strategies and Innovations by Meituan Waimai

Unlike Ele.me, Meituan Waimai offers more non-food delivery services such as flowers, medicines and pharmaceuticals, office supplies, and more. Meituan also works in the Chinese hospitality and tourism sector with services such as on-demand delivery, car-hailing, bike-sharing, hotel and travel booking, movie ticketing, etc. Today, Meituan’s business comprises over 200 service categories covering over 2,800 cities and counties across China. It is the largest e-commerce platform in China today.

Leveraging its advancements in innovative technology, Meituan collaborates with many merchants and different partners to provide the consumers with a better quality of life. Meituan is speeding up the digitization of the lifestyle services business in both demand and supply.


To commemorate World Environment Day in 2021, Meituan announced the opening of the Meituan Green Tech Fund and several green projects. Meituan has set aside RMB 500 million for the Meituan Green Tech Fund, which will work with industry groups, academics, and scientists to support low-carbon green development. In response to China's overall carbon-neutral goals, this project intends to encourage green technology research and application through philanthropic causes. The fund will focus on two initiatives, the Meituan Green Tech Award, and a demonstration project. The Meituan Green Tech Award will encourage studies on essential technologies that serve China's low-carbon and circular development plan by young academics and scientists. The demonstration project will encourage innovative applications in Eco-friendly packaging, recycling, and smart supply chain operations.


In April 2021, the food delivery giant raised $10 billion in a stock and convertible bonds sale to build a war chest for drones and self-driving cars to facilitate their supply chain operations. Meituan also underscored strong investor faith in the growth prospects of some Chinese tech firms despite a regulatory clampdown on the sector. This investment will also help them to develop expertise in autonomous delivery, drone delivery and build other cutting-edge technology solutions.


The above data is based on market research on the Chinese O2O food delivery market for an Indian food delivery company seeking opportunities in the highly profitable market of China by Trouver Trade.





NOTE: The above report has been published with due consent from the client. The name of the client has been concealed due to confidentiality agreement.


About Trouver Trade

Trouver Trade Research and Technology Private Limited is a business development firm based in India that provides services such as market research, growth hacking, business intelligence, promotional strategies, and the development of innovative technology platforms that help businesses grow exponentially with a digital persona.

Trouver Trade empowers business Ideas with the most relevant Market Information and sustainable Growth Strategies. With our profound expertise and corporate experience, you will receive real solutions to understand your customers, expand your business, and beat the competition. Get in touch for a Free Consultation.


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