Modern China is practically a lazy foodie’s paradise. Cities like Shanghai and Beijing now boast some of the world’s most advanced delivery ecosystems, through which a meal can be at your doorstep within less than an hour.
In addition to restaurants, grocery stores and convenience stores have also increased their online offerings over the past decade — a tremendous boon during the Covid-19 outbreak, which saw many confined to their homes for months on end.
In terms of scale, accessibility, and innovation, China’s food delivery is just plain better than yours — here’s why.
Then and Now
As of 2020, China’s online food delivery market generates the equivalent of 45 billion USD yearly — nearly double that of the US. Trace that trend back, however, and you’ll find American fast food chains were among the first to push app-based ordering in China.
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In the early 2010s, chain restaurants such as KFC, McDonald’s, and Pizza Hut would provide their own drivers for door-to-door delivery; some even offered their own online ordering platforms well before today’s apps were being developed. Smaller restaurants would often have their own in-house drivers, which could be called by ordering from the restaurants directly — years before they would become consolidated on a single app.
Today, delivery in China is dominated by two players that run the largest ordering apps in the country. These are Meituan and Eleme — backed by tech giants Tencent and Alibaba, respectively — with the former taking 66% of the market, and the latter taking 32%.
Unlike the platforms of yore which accepted only cash, these apps integrated new digital payment systems like WeChat Wallet and Alipay — also owned by the aforementioned tech giants — that would make online ordering that much more convenient.
Eating on 996
China’s demanding work culture can also provide further context for the explosion in food delivery.
The “996” work schedule (9:00 AM to 9:00 PM, six days a week) has in reent years become so pervasive in the country’s tech sector that protests over it went viral last year, even prompting former Alibaba chairman Jack Ma to chime in on the subject.
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In a work culture in which people are clocking in more than ever before, food delivery takes on a unique urgency. Five years ago, about 63% of online food delivery app users were white-collar workers, and 30.5% were students. Fast forward to 2020, and white-collar workers take up a much larger piece of the pie at 83%, while only 11% are students.
User demographics of food delivery apps (image: Daxue Consulting)
What’s more, people are relying on delivered meals more often throughout the week. 35% of delivery app users order food one to three times a week, while an additional 35% of users order four to six times a week, according to Daxue Consulting.
Flora Ye, a Shanghai-based employee in the beauty industry, has always preferred using Eleme to deliver her meals. Though she works overtime almost every day, she says that the Covid-19 pandemic and a new diet both reduced her ordering frequency to “only once a week.”
“I like Eleme because I can use it directly from the Alipay app,” she remarks. “It also seems to cover a wider range of restaurants, because I live quite far from the city center.”
Extreme Incentivizing
Intense competition in the delivery landscape has, for one, yielded some interesting gamification of delivery apps’ user experience.
After ordering delivery, customers are given the option to send out coupons to their friends via social media app WeChat that function somewhat like call-in radio prizes. After a coupon is sent out, the nth person to open the coupon receives a big reward to use on their next order. This system had seen people setting up dedicated WeChat groups filled with hundreds of strangers for the sole purpose of sending and receiving these coupons.
A WeChat group titled “No talking, just coupons”
Other coupons appear automatically when you hit a certain total in your order. “Spend 30RMB, save 10,” they might say, or “spend 50, save 30.” Some of these deals are so lucrative that they seemingly defy basic mathematics, charging you more total money if you decide to order less food.
Both Eleme and Meituan also give customers the option to become members for a mere 20RMB (around 3USD) per month, with benefits like free delivery and extra coupons.
Lewis Zhu, a white-collar worker in the fashion industry, says that a free membership was what prompted him to switch from using Eleme to Meituan. “I order at least 40 vouchers on Meituan every month,” he says, adding:
“The food delivery is Shanghai is so convenient and affordable compared to Australia — where I used to live. There it usually costs more than 12AUD [around 7USD] for the delivery fee.”
A byproduct of the takeout explosion across China is an explosion of packaging waste — it increased ninefold in just two years to a staggering 1.6 million tons in 2017.
After China moved to ban single-use plastics by the end of 2020, delivery apps responded by taking disposable cutlery off by default, as well as offering additional points for opting out of takeout cutlery that would in turn feed into discounts and discounted memberships.
Though as plastic waste continues to choke China’s landfills and oceans, many have called for delivery start-ups to offer more incentives for businesses to use sustainable packaging.
The Delivery Workforce
Ordering delivery in China is bizarrely affordable — sometimes it costs more to sit down and eat the same dish in the restaurant it comes from. On average, delivery fees cost the equivalent of one dollar, or disappear entirely when you reach a minimum spend. Part of that is thanks to the delivery industry’s massive workforce.
About 40% of Shanghai’s population of 24 million is made up of migrant workers, who come from China’s rural provinces to work and send money back home. For migrant workers, driving taxis and delivering food are two of the most common jobs available. And as the country embraced social distancing after the Covid-19 outbreak, delivery people were often working overtime on the frontlines, delivering food and supplies to people in quarantine.
Not coincidentally, the number of drivers increased as well since the outbreak, as people facing job loss turned to the steady paycheck that delivering waimai (外卖), or takeout, could provide. Meituan reportedly added 336,000 new drivers in the first two months of 2020, over a quarter of whom previously worked in service jobs that were forced to remain closed.
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China’s delivery industry isn’t necessarily the horrible boss you might expect. In big cities like Shanghai and Shenzhen, an order delivered on time normally earns the driver 7RMB (1USD) in commission. A driver completing 1,000 orders or more in a month could earn up to 10,000RMB (about 1,414USD) after accounting for baseline salary. That number clocks in well above the average monthly salary in Shanghai of 6,504RMB (916USD), according to 2016 figures (link in Chinese) from the city’s Human Resources and Social Security Bureau.
One delivery driver we spoke to from Jiangsu province has been working with Pizza Hut’s delivery service for nearly eight years in Shanghai. He works around 10 hours a day delivering food, in addition to a second, unspecified part-time job in order to make ends meet. When asked why he chose to do delivery, he says with a shrug, “What else can I do?”
There are downsides to this commission-driven model, and in the race from restaurant to doorstep, these workers are often the first hit when such orders go awry. Given that these drivers are often speeding across China’s urban environments to deliver food on time — they risk being docked in pay when delivering a late order — there has been debate over the role the delivery explosion plays in road safety and traffic accidents. The biggest platforms have reportedly tweaked their ordering algorithms in response to allow for more forgiving delivery timelines.
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Yet in terms of convenience, China’s delivery industry can be a beautiful thing — and for those of us who pay 9USD delivery fees plus tip for a two-hour wait from UberEats, it’s something to envy.
What’s more, the landscape is changing fast — in the past few years, we’ve watched the industry embrace timely trends from sexy, environmentally-friendly outfits to drone delivery. Demand for it has also proven to be resilient, as delivery became one of the few industries showing little sign of slowing during, or after, the Covid-19 pandemic.
Only time will tell whether the delivery bubble will one day burst. But for the time being, the rest of the world can probably learn a little something from China.
Additional reporting by Siyuan Meng
Header image: Lucien Alexe via Unsplash
