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Meituan-Dianping report: Only 4% of dining revenues come from delivery

By Frank Hersey

Dianping Group-buying in WeChat

China’s largest restaurant food delivery platform has released a report on the country’s dining delivery trends, providing not only information on the technology and stats behind the platform but crucial data-led insight into changing Chinese dining habits and the catering industry as a whole.

Meituan-Dianping has revealed that it now processes 13 million orders a day, but despite the ubiquitous delivery bikes plying the streets of China’s cities large and small, only 4% of restaurant food is delivered.

Meituan-Dianping offers apps that let users order food to their homes or desk with a few simple taps and pay through their phones. The company has 6.5 million restaurants in its database and 260 million active users; it has recently broken the 13 million orders a day mark, coming to RMB 555 million daily in gross merchandise value.

Dianping Group-buying in WeChat

Their data shows that the dining market grew 11.3% in 2016 against the overall economic growth backdrop of 6.7%, and they predict double-digit growth for a few more years to come.

Although food delivery revenues tripled in 2016 to RMB 130 billion, delivery orders only made up 4% of total dining revenue. Growth is expected to grow to reach RMB 300 billion per year in 2018 when on-demand deliveries are expected to make up 10% of dining expenditure.

Data decisions

The report found that 100 restaurants a day are opened in China’s first-tier cities alone—and that 70% will shut up shop within a year. However, analytics from the platform can help prospective restaurateurs and investors devise what type of cuisine to offer in what location.

At present, the top five categories for new openings are fast food, bakeries, hot pot, Sichuanese, and barbecue.

For diners, the apps are allowing them to dine from a wider range of establishments. The data shows that on-demand delivery allows restaurants to cover customers within 3-5km while typically people only travel up to 1km to eat in.

Tech for better safety and changing habits

China has long been plagued by both safety and environmental scandals, many of which have involved the food industry from tainted baby formula to restaurants buying gutter oil. The food ordering platforms’ rating systems allow customers to police restaurants, driving up standards for food safety and environmental awareness.

The software is allowing restaurants to offer more services to customers such as reservations, digital menus, and in-restaurant queuing systems, but beyond that, it is also changing diners’ habits.

Lunchtime in China is sacrosanct. From around 11.55am to 1.05pm, the whole country is on its way to, eating or on its way back from lunch. Or so it seemed. Data from Meituan-Dianping now shows that ordering online is bringing lunchtime forwards and the peak is 10 am to 12 pm.

People are spending more and more frequently: the average order size is now over RMB 40 and 79% of users order more than once a week and 47% order more than three times a week.

The data collected also shows that it is millennials who are driving the growth and development of the dining industry. The relatively wealthy younger generations born in the 1980s and 1990s contributed to more than 70% of dining consumption. According to the report, this socioeconomic group will pay more for food perceived to be better quality, healthier and safer. They will also respond well to good design and new social experiences when dining.

Source:: Meituan-Dianping report: Only 4% of dining revenues come from delivery

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