As the COVID-19 pandemic has escalated recently in various parts of China, the practice of “group buying” various essential food products is surging. In Shanghai and other cities, many local e-commerce platforms have launched such services one after another. Under the arrangements, residents place orders, merchants produce meals and platform drivers deliver food all in bulk. The overall operation efficiency has been improved, playing a huge role in helping people in locked-down areas solve their food problems.
Domestic media outlet Lanjinger reported that this “group buying food” mode is not only applicable to pandemic-affected areas. The leading two companies in the domestic food delivery industry – Meituan and Ele.me – are now promoting such services, while keeping a low profile.
Industry insiders revealed that Alibaba-backed food delivery platform Ele.me has set up a “group buying business” team last year to develop a product, and launched “Ele.me Pintuan (饿了么拼团 Èleme pīntuán)” in the cities of Wuxi, Shaoxing and Jinan. Meituan also has already set up an innovative business department to test “Pinhaofan (拼好饭 Pīnhǎofàn)” in crowded office buildings and business districts in Wuhu, Xiamen and other Chinese cities.
The two products are similar in page design, ordering process and meal type. Both adopt the mode of “popular meal recommendation + bulk orders + unified distribution,” in which users place orders in bulk, merchants make meals in batches and delivery drivers send them in groups.
From the perspective of the product model, it seems that the two firms want to copy the previous successful mode of “group buying” of catering to the food delivery business, which focuses on “one-to-one.” They want to use the scale effect to realize “one-to-many” service, so as to improve the overall sales volume and benefit merchants, users and riders.
Investigations show that the competition among small and medium-sized catering businesses is fierce. In addition, there are some common problems, including fewer new customers, slow orders, and lack of food development ability. If users with similar geographical locations, working time and dining time can be gathered together to make group buying food delivery orders, the merchants and riders can also benefit from centralized meal production and distribution. Users can get more discounts, while small and medium-sized catering merchants can see new opportunities to increase their order volume.