‘Let’s hail a meal’: China’s Home Cook offers a sharing economy solution for the kitchen
With well-equipped technology and a positive attitude towards the sharing economy, anyone can hail a car or rent a house. But have you ever thought about ordering a home-style meal served up by a stranger?
Chinese start-up Home Cook is seeking to put a new twist on the sharing economy by providing a community marketplace for home-made meals.
The Beijing-based company helps “hosts” or cooks, share their culinary creations with buyers using the Home Cook (回家吃飯) app.
Founded in October 2014 by former Alibaba area manager Tang Wanli, Home Cook operates in six Chinese cities including Beijing, Shanghai and Shenzhen. Currently 23,000 hosts have registered. Those who sign up must use their real names and provide proof that they have completed training and certification to prepare home-cooked meals.
“Home Cook receives fewer than 50,000 orders per day and the unit price is above 50 yuan [US$7.26],” Shao Kai, chief operating officer of Home Cook said in an interview with the South China Morning Post. “We can earn one yuan from every order but have not achieved profitability due to operation costs.”
Home Cook has around two million registered users, made up primarily of white-collar workers, and other members of the community who are unable to cook at home. About 100,000 users are active on any single day.
Hosts on average earn about 4,000 yuan per month, while the most popular ones could earn as much as 100,000 yuan monthly, Shao said.
However, the operation of online food services is complicated by a lack of clear regulations governing the sector.
“Chinese law on this new business model is very much a grey area, and our top priority is to legalise our business operation in compliance with the government’s instruction” said Shao.
He added that the Chinese government had a positive attitude towards businesses geared to the new economy.
“Entrepreneurs will improve their survival rates in China if they seek out active interaction and cooperation with authorities,” he said.
Home Cook is not aggressively seeking to expand its business until the legal uncertainties are overcome.
“We will not ramp up our business until the business model is legalised,” said Shao.
However, he added that the company is planning to expand its services to a seventh city, Changsha, the capital of Hunan province.
Underscoring the challenging environment, rival operator imamadecai (媽媽的菜) closed down in 2016 after operating for two years.
Another barrier has been establishing trust between diners and hosts. Developing that trust can be time consuming, especially in China where consumers are wary after being confronted by numerous food scandals.
Home Cook has tried to reduce the use of subsidies in attracting users to its platform, according to Shao. Meanwhile, rival operators such as Meituan Waimai, Ele.me and Baidu Waimai have ramped up the incentives to win market share.
“I do not see any sign of stopping the ‘subsidies war’ among the major players. The subsidies suppress our rapid development to some extent,” said Shao, adding that his focus was on building up profit.
In a sign of the growth potential, the sharing economy is estimated to account for 10 per cent of China’s national gross domestic product by 2020, according to forecasts by China’s National Information Centre.