While super-fast food delivery system has been life-changing for many in China, it remains a fact that many in this vast country still prefer home cooked food and companies in China are trying their best to deliver fresh vegetables and meats to the doors of these connoisseurs. One such name to enter the market is Meituan.
If we take a closer look at the figures, we will get the complete picture. China’s fresh grocery sector recorded a sale of 4.93 trillion yuan ($730 billion) in total sales last year, which is a marked growth from 3.37 trillion yuan in 2012. It is worthwhile to note here that online sales accounted for only 3 percent of the total grocery sales in 2016 which means that this sector has a great potential to grow and offers a wonderful opportunity for companies.
E-commerce leaders Alibaba and JD.com have already made grocery a part of their online shopping malls and there are also other players in the market like Tencent-backed Miss Fresh which has raised $1.4 billion till now. Making its foray in this arena is Tencent-backed food delivery and hotel booking giant, Meituan which raised nearly $4.2 billion through Hong Kong listing last year.
Meituan’s modus operandi is very much similar to that of its peers where the users get a chance to select from 1,500 stock keeping units ranging from yoghurt to pork loin and they can pay using their phones and you can get it delivered to your doorsteps in less than 30 minutes.
The company uses a number of ‘service stations’ spread across the neighbourhood that serve warehousing, packaging and delivery purposes.
This latest decision by Meituan to enter the grocery market intensifies its ongoing battle with Alibaba to shape the way how the Chinese people eat. Alibaba’s Hema Supermarket is one such example that is running on a similar platform. For years, Meituan’s food delivery arm has been involved in a fierce battle with Ele.me which was acquired by Alibaba last year.