Page 268 - 2023 White Paper on the Business Environment in China
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3 White Paper on the Business Environment in China
late May to August to encourage local spending. of the food delivery industry continues to increase.
Meanwhile, south China's economic powerhouse In 2020, the penetration rate among Chinese
of Shenzhen began distributing the third batch netizens was 42.3% and the COVID-19 pandemic
of its 400-million-RMB shopping vouchers, which has accelerated the penetration of online delivery
could be spent on deals for the June 18 shopping apps – which increased to 52.7% by December 2021.
festival held by the Chinese e-commerce giant Therefore, it is important to understand the current
JD.com. The massive voucher giveaway came at a landscape of the O2O food delivery market in China
time when the Omicron outbreak weighed heavily and identify the impacts of the lockdown restrictions
on China's domestic consumption, particularly on the market to stay informed of the market trends
the sales of non-daily necessities and the catering in face of the uncertainties of COVID-19. The food
sector, in the first four months of 2022. Retail delivery market is a duopoly dominated by Chinese
sales of consumer goods, a significant indicator tech giants Alibaba and Tencent, who own Ele.
of China's consumption strength, went down me and Meituan respectively. These delivery apps
0.2% year on year in the January-April period, control 95% share of China’s food delivery market.
official data showed. Shopping vouchers proved The two giants are not just competing for the O2O
to be a powerful leverage to boost spending when food delivery market in China but are racing to gain
the COVID-19 epidemic hit the country in 2020. new users who can be guided to other Alibaba or
The 500 million RMB worth of vouchers issued Tencent services. Data derived from Chinese meal
by the local government in Wuhan, the hardest- delivery apps provides insights into consumer
hit Chinese city by the epidemic, stimulated spending power, eating preferences, and payment
consumption of more than 5 billion RMB. Voucher profiles. There is a high barrier to entry in Chinese
distribution mainly targets large purchases like food delivery market due to the duopoly in the
automobiles, home appliances and furniture, industry. Meituan Waimai controls 69% of the local
as well as epidemic-hit sectors such as catering, food delivery market and is an O2O food delivery
hospitality and cultural activities. In Shanghai, app that provides users with online ordering, meal
the local government has offered a 10,000-RMB delivery, and some other related services in China.
subsidy to consumers who replace old cars Significantly, Meituan offers more non-food delivery
with electric ones. China's commerce ministry services than Ele.me, such as flowers, office supplies,
pledged in May to promote consumption by and more. Secondary to Meituan, Ele.me is another
upgrading traditional consumption, speeding up meal delivery giant in China with 26% market share
the development of new consumption patterns of the local food delivery market. Chinese meal
and improving consumption platforms, so as delivery industry is so large and profitable because
to enhance the catalytic role of consumption in of how often consumers make purchases. 27% of
economic circulation. The government maintains Chinese consumers order food six to ten times per
that the impact of the virus on consumption month, and 14.3% of users order food 11 to 20 times
is "temporary" as the strong resilience, great per month. Only 18.5% of the respondents said they
potential and sound long-term development never order food online. Online food delivery service
fundamentals of China's consumption remain users are primarily white-collar workers. Lower-tier
unchanged (Xinhua, “China Looks to Prop Up cities are showing strong growth. Consumers are
Retail Spending with Consumption Vouchers”). clustered in top-tier cities, with Shanghai boasting
the highest number of users per capita. Women
Food Delivery make up 51% of food delivery app users. Users are
overwhelmingly young, with 85% between 18 and 40.
China’s food delivery market is forecasted to In 2021, fast food accounted for 60.5% of O2O food
exceed 941.74 billion RMB in 2022, making China consumption, followed by western food which made
the world’s biggest O2O (online to offline) food up 47.1% of the market. Online shopping for semi-
delivery market. Despite the enormous market size prepared dishes has become a new choice for young
and growth it has displayed, the O2O food delivery consumers, particularly in the singles economy and
market is still far from fully saturated. As the market lazy economy in China. This new trend has led to a
scale continues to grow rapidly, the penetration rate rapid increase in sales of semi-prepared food. The
market size of the semi-prepared food market was
268
late May to August to encourage local spending. of the food delivery industry continues to increase.
Meanwhile, south China's economic powerhouse In 2020, the penetration rate among Chinese
of Shenzhen began distributing the third batch netizens was 42.3% and the COVID-19 pandemic
of its 400-million-RMB shopping vouchers, which has accelerated the penetration of online delivery
could be spent on deals for the June 18 shopping apps – which increased to 52.7% by December 2021.
festival held by the Chinese e-commerce giant Therefore, it is important to understand the current
JD.com. The massive voucher giveaway came at a landscape of the O2O food delivery market in China
time when the Omicron outbreak weighed heavily and identify the impacts of the lockdown restrictions
on China's domestic consumption, particularly on the market to stay informed of the market trends
the sales of non-daily necessities and the catering in face of the uncertainties of COVID-19. The food
sector, in the first four months of 2022. Retail delivery market is a duopoly dominated by Chinese
sales of consumer goods, a significant indicator tech giants Alibaba and Tencent, who own Ele.
of China's consumption strength, went down me and Meituan respectively. These delivery apps
0.2% year on year in the January-April period, control 95% share of China’s food delivery market.
official data showed. Shopping vouchers proved The two giants are not just competing for the O2O
to be a powerful leverage to boost spending when food delivery market in China but are racing to gain
the COVID-19 epidemic hit the country in 2020. new users who can be guided to other Alibaba or
The 500 million RMB worth of vouchers issued Tencent services. Data derived from Chinese meal
by the local government in Wuhan, the hardest- delivery apps provides insights into consumer
hit Chinese city by the epidemic, stimulated spending power, eating preferences, and payment
consumption of more than 5 billion RMB. Voucher profiles. There is a high barrier to entry in Chinese
distribution mainly targets large purchases like food delivery market due to the duopoly in the
automobiles, home appliances and furniture, industry. Meituan Waimai controls 69% of the local
as well as epidemic-hit sectors such as catering, food delivery market and is an O2O food delivery
hospitality and cultural activities. In Shanghai, app that provides users with online ordering, meal
the local government has offered a 10,000-RMB delivery, and some other related services in China.
subsidy to consumers who replace old cars Significantly, Meituan offers more non-food delivery
with electric ones. China's commerce ministry services than Ele.me, such as flowers, office supplies,
pledged in May to promote consumption by and more. Secondary to Meituan, Ele.me is another
upgrading traditional consumption, speeding up meal delivery giant in China with 26% market share
the development of new consumption patterns of the local food delivery market. Chinese meal
and improving consumption platforms, so as delivery industry is so large and profitable because
to enhance the catalytic role of consumption in of how often consumers make purchases. 27% of
economic circulation. The government maintains Chinese consumers order food six to ten times per
that the impact of the virus on consumption month, and 14.3% of users order food 11 to 20 times
is "temporary" as the strong resilience, great per month. Only 18.5% of the respondents said they
potential and sound long-term development never order food online. Online food delivery service
fundamentals of China's consumption remain users are primarily white-collar workers. Lower-tier
unchanged (Xinhua, “China Looks to Prop Up cities are showing strong growth. Consumers are
Retail Spending with Consumption Vouchers”). clustered in top-tier cities, with Shanghai boasting
the highest number of users per capita. Women
Food Delivery make up 51% of food delivery app users. Users are
overwhelmingly young, with 85% between 18 and 40.
China’s food delivery market is forecasted to In 2021, fast food accounted for 60.5% of O2O food
exceed 941.74 billion RMB in 2022, making China consumption, followed by western food which made
the world’s biggest O2O (online to offline) food up 47.1% of the market. Online shopping for semi-
delivery market. Despite the enormous market size prepared dishes has become a new choice for young
and growth it has displayed, the O2O food delivery consumers, particularly in the singles economy and
market is still far from fully saturated. As the market lazy economy in China. This new trend has led to a
scale continues to grow rapidly, the penetration rate rapid increase in sales of semi-prepared food. The
market size of the semi-prepared food market was
268
