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Catering to the Online Food Market

The proliferation of food apps across the Chinese mainland has made ordering food deliveries via a smartphone incredibly easy. So successful has the sector become, however, that competition is now rife between the  ever-expanding number of platforms looking to link caterers and hungry consumers.

According to the National Bureau of Statistics, the total value of the mainland catering sector grew 10.9 per cent year-on-year in the first 10 months of 2016. In the case of the online food ordering market, figures from Analysys – a Beijing-based research consultancy – valued the sector at Rmb45.78 billion (US$6.5 billion) for the year ending December 2015.

Wide Takeout Options

Key to success: offline promotions
Key to success: offline promotions

The wide range of food available has been a key factor in the growth of online catering. Indeed, there is virtually no kind of food that cannot be delivered to your doorstep as long as you have a food ordering app installed on your phone.

Some special takeout options have proved particularly popular, with even hot-pot now available. Typically, an online caterer offers small hot-pot meals for one to two people for only Rmb99, with each order coming with a pot, stove and fuel at no extra cost. Some caterers even provide induction cookers and hot-pot cooking tools, although a refundable deposit is required on such equipment.

Some specialist caterers offer postpartum confinement meals in a choice of DIY or ready-to-eat packages. Others provide special fitness meals, typically delivered by muscular men. There are also specialist menus for older diners, while it is possible to order dishes prepared by a noted chef. In certain circumstances, the chef may also be available to cook in your home.

Catering Convenience

Offline and online in alliance
Offline and online in alliance
A delivery driver's assignment log
A delivery driver's assignment log

Another reason behind the popularity of online catering is the freedom diners have to eat when and where they choose. To this end, the hot-pot takeouts come with specially-prepared heating fuel, with no gas or electricity required, allowing for preparation both indoors and outdoors.

Delivery services usually run between 10am and 3am. Given the inherent level of flexibility in the service, if you fancy dim sum from a famous restaurant for breakfast, the customer need not get up early and queue for a table. Using the appropriate phone app, the food can be delivered to your door. Similarly, if you leave it too late to book a table for a New Year's Eve dinner at your favourite restaurant, you can order pan cai or "basin dishes" to eat at home.

In some instances, online catering has replaced the practice of hiring part-time helpers to prepare dinner for hard-pressed commuters and their families. It is easy to place food orders on the trip back from the office, with freshly prepared dishes delivered just as workers reach home.

Online catering platforms can also deliver other items, including fruit, fresh produce, cosmetics, maternity and infant products, fresh flowers and cakes. There are also a number of dedicated luxury platforms targeted at the higher-end consumers. Even several pharmacy stores, including Watson's and Mannings, now have online delivery platforms.

Food Hygiene Concerns

Reassuring: tamper-proof containers
Reassuring: tamper-proof containers

Amid the convenience and business opportunities brought on by the sector, online food catering has also raised some concerns. Most notably, there have been food hygiene problems, which pose a challenge given the number of unlicensed operators in the sector.

This problem was highlighted following reports that some 90 per cent of the 100-plus catering facilities operating in a tuyuan (a "takeout village") in Beijing's Tongzhou district were unlicensed. A number of these operations didn't require health certification from their employees as long as they were willing to work well into the night.

In other areas of concern, some online food ordering platforms try to increase their market share by paying to have more prominent listings. A number of reports have indicated that unlicensed restaurants can get a top-five ranking if they are willing to pay as little as Rmb226, regardless of the quality of their service.

In response to these problems, the government last July introduced policies aimed at regulating the online food ordering sector, including new directives issued by the China Food and Drug Administration to clamp down on food safety violators.

In terms of self-regulation, some of the more reputable takeout operators have introduced a facility for reporting food-safety violations and other causes for concern via their phone apps. Customers, meanwhile, have turned to the assurances offered by well-known restaurants and catering chains when placing orders. Others check out online reviews before trying a new delivery service.

Overall, many caterers go out of their way to demonstrate their commitment to food safety including by offering the facility for consumers to remotely monitor their entire food preparation process. Others have introduced special seal-proof boxes as a form of customer assurance that delivery staff have not tampered with their order.

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Content provided by Hong Kong Trade Development Council
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