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Chinese food delivery apps face a backlash from restaurants – tired of the high commission they charge, some build their own digital platforms for takeaway orders
- An open letter by a restaurant association revealed Meituan levies commission of up to 23 per cent, while Ele.me takes up to 20 per cent of each order
- More restaurants in China are creating their own online platforms and using all-goods delivery companies to get takeaway orders to customers instead
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For Mike Wong, the owner of a restaurant called Hong Kong Grassroots Canteen with two branches in Beijing, takeaway service has long been something of a headache.
In China, the delivery app Meituan Dianping and its rival Ele.me (owned by Alibaba Group, the parent company of the South China Morning Post) dominate meal delivery services. Users log on to the apps and order from the restaurants listed. Wong says Meituan charges a minimum of 20 per cent commission on each order – a significant amount for a small business.
“My profit margin is only 10 to 15 per cent. So for a takeaway order, all my profits have to be given to Meituan.
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“In Beijing, many people order takeaways [even if it’s just] a cup of milk tea or a bowl of wonton noodles. The commission amount is across the board and doesn’t differentiate according to meal size or the distance covered by the delivery rider. The app takes the order and the money, and they keep the money for up to a month, which affects my cash flow. It’s a very unfair deal which is enforced upon us.”
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Wong has started using FlashEx, an intracity delivery service provider which delivers all kinds of goods, to get his takeaway orders to his customers instead.
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