KITA News and Reports
  • China Consume Food Online, Faster Eating Habit
    2018-01-15

    China Consume Food Online, Faster Eating Habit

     

     

     

    -     Need to Pay Attention to China’s Distribution Ecosystem Changes Centering Online Platforms -

     

    As China's smartphone-based e-commerce boom is rapidly spreading to the food sector, the food consumption culture of Chinese people is gradually changing.

     

    According to a report titled “The Food Delivery Service Market Trends in China” issued by the Beijing Branch of the Korea International Trade Association (Chairman, Kim Young-joo), the Chinese food delivery market has grown by 50.3 percent annually in recent years, reaching 166.2 billion yuan in 2016. In particular, it is only 4.6 percent of China's total catering market of 3.58 trillion yuan in 2016, and its future growth potential is expected to be even higher. The number of Chinese food delivery service users is expected to exceed 300 million this year from 206 million in 2016.

     

    Chinese food delivery service is mainly focusing on inexpensive food for busy workers. According to a survey conducted by Chinas iiMedia Data, in terms of the monthly salary of food service users, 65 percent makes 3,000 ~ 8,000 yuan, while only 7 percent earns over 10,000 yuan. Regarding food prices, 16 to 35 yuan was the most popular (63%) price range, while only 4 percent was over 56 yuan. In addition, it appears that the reason for using the delivery service is to shorten the meal time and the speed of delivery is the most important factor in choosing the food delivery platform. It shows that as the pace of Chinese office workers’ daily lives is becoming faster, they are more concerned about speed when it comes to eating habits rather than the amount or flexibility of food in the past.

     

    China's food delivery service is the oligopoly that three major online platforms, including Ele.me, Bidu Waimai and Waimai Meituan, account for 95.9 percent of the entire market. In particular, it appears that Alibaba, China's largest e-commerce company, is also dominating the food delivery service market. Since Bidu Waimai run by Bidu, China’s largest portal website, was acquired by Ele.me in August, 2017, Alibaba, the largest shareholder of Ele.me, took up 55 percent of China’s good delivery service market. 

     

     

    Food delivery online platform companies are working with various stores, such as marts and convenience stores and they are expanding its business scope to provide purchase agency services and errand services for various items, including daily necessities and fruits. As the delivery infrastructure associated with the online platform is linked to the offline stores, consumers are changing their consumption patterns by purchasing everything at home through online payments and shipping services at home or in the office.

     

    Shim Yoon-seup at the Beijing Branch of the Korea International Trade Association said "As the Chinese people's life pace is getting faster and e-commerce using smartphones is expanding. Thus, the food distribution in China is shifting from visiting restaurants (stores) in the past to online-oriented consumption. He also added "China's distribution ecosystem is changing around the online platform and its supporting shipping infrastructure."

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