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Mainland Online Catering Market Delivers Both Rewards and Challenges

While giving consumers unprecedented choice in terms of home-delivered food and creating new job opportunities, the unlicensed status of many operators has seen the online-catering sector become a headache for mainland regulators.

Photo: Home food delivery drivers: Reaping the employment dividend from this burgeoning sector.
Home food delivery drivers: Reaping the employment dividend from this burgeoning sector.
Photo: Home food delivery drivers: Reaping the employment dividend from this burgeoning sector.
Home food delivery drivers: Reaping the employment dividend from this burgeoning sector.

The proliferation of food apps across the mainland has made it incredibly easy to order doorstep food deliveries via a smartphone. 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% 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

The wide range of food available has been a key factor in the growth of online catering. In fact, 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.

Photo: Key to success: Offline promotions.
Key to success: Offline promotions.
Photo: Key to success: Offline promotions.
Key to success: Offline promotions.

Some special takeout options have proved particularly popular, with even hot-pot now available. Typically, an online caterer offers small hot-pot meals for 1-2 people for only RMB99, with each order coming with a pot, stove and fuel at no extra cost. Some caterers even offer to provide induction cookers and hot-pot cooking tools, although a refundable deposit is required on such equipment.

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

Highly Convenient Catering

Another reason behind the popularity of online catering is that it gives diners the freedom 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. This means they can be prepared 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, there is no need to get up early and line up 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. Now it is easy to place food orders on the journey back from the office, with freshly prepared dishes delivered just as workers reach home.

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

Job Opportunities

The growth of online catering has also delivered a number of job opportunities. Working in the food-delivery sector requires a willingness to work hard and a good sense of direction, making it accessible to a fairly high number of would-be employees. It is also relatively well-rewarded, with the most reliable and efficient delivery drivers able to earn more than RMB10,000 a month.

Li Ping and Ren Qiming are two of Beijing's most reliable drivers. They both make more than 1,000 deliveries a month and earned more than RMB10,000 in their first month on the job. Over in Guangzhou, delivery driver Gao Zhenyuan earns a little less than his counterparts in the capital, taking home about RMB7,000 a month after making some 81 deliveries a day.

Photo: Offline and online in alliance.
Offline and online in alliance.
Photo: Offline and online in alliance.
Offline and online in alliance.
Photo: A delivery driver’s assignment log.
A delivery driver's assignment log.
Photo: A delivery driver’s assignment log.
A delivery driver's assignment log.

A number of women have also signed up as delivery drivers, including Guangzhou-based Huang Huajian. Assessing her typical workload, she says: "On average, I handle more than 20 orders a day. In June, I made a total of 600 deliveries."

According to Huang, all her company's delivery drivers share a WeChat group, allowing them to compete as to who has made the most deliveries on any given day. Although hot days see them delivering cold drinks and ice cream, she says they are at their busiest when the weather is bad, particularly when there is heavy rain. They are also frequently asked to deliver food as late as 2am, typically to people watching overseas sporting events.

Food Hygiene Concerns

As well as the clear upside of this new sector, it has also been the source of a number of concerns. Most notably, there has been the problem of maintaining appropriate food hygiene regimes, something of a challenge given the number of unlicensed operators in the sector.

This problem was highlighted following reports that some 90% 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 a sure sign that this problem is growing, a number of customers have taken to social media to air their concerns. In Hunan, a Ms Li blogged that she had found a water beetle in a stir-fried freshwater shrimp takeaway she had ordered. In Chengdu, meanwhile, one online commentator posted a video of a delivery man picking up food after dropping it, removing the dirt, repackaging it, and then delivering it.

Photo: Reassuring: Tamper-proof containers.
Reassuring: Tamper-proof containers.
Photo: Reassuring: Tamper-proof containers.
Reassuring: Tamper-proof containers.

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 even 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 has introduced a number of policies aimed at regulating the online food ordering sector. To this end, the China Food and Drug Administration issued Measures for the Investigation and Punishment of Illegal Conduct With Regard to Online Food Safety (for details in Chinese, please see: http://www.sda.gov.cn/WS01/CL0053/159060.html) on 14 July this year.

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

Overall, many caterers are going out of their way to demonstrate their commitment to food safety to their prospective customers. This has seen some of them offering the facility for consumers to remotely monitor their entire food preparation process. Others have introduced special tamper-proof boxes as a reassurance to customers that delivery staff have not interfered with their order.

Xing Bin, Special Correspondent, Guangzhou

Content provided by Picture: HKTDC Research
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