Youth buoy on-demand food sector

Source: Release Date: 2020-07-08
Keywords:on-demand food sector

On-demand food delivery platforms are gaining traction with young consumers, especially the post-1995 generation, who are pursuing healthy, diversified and exquisite lifestyles along with rising disposable income and consumption upgrade.

Apart from ordering takeouts, Chinese consumers are tending to buy fruit, vegetables, rice, cooking oil, salt, flower, medicines and other necessities from online food delivery platforms since the COVID-19 outbreak, according to a report released by Ele.me and Koubei, the China Hotel Association and research company CBNData.

Residents from third- and fourth-tier cities have been attaching more importance to healthy diets, with salad orders from female consumers rising by more than 200 percent in 2019 on a yearly basis.

The report said the post-1995 generation, who grew up in a comparatively wealthy era, have become the main customers of on-demand food delivery platforms. They prefer to order warm porridge at night, go to beauty salons to look after their skin, sing with their friends at KTVs, and play games at amusement arcades in spare time.

Moreover, tech-savvy young people from Shenyang in Liaoning province, Qingdao in Shandong province and Wuhan in Hubei province are in pursuit of convenient lifestyles, enjoying the takeout services provided by the third-party platforms.

The report also found that more than 80 percent of parents that work in first-and second-tier cities begin ordering takeout food on their way home because of the pressure from fast-paced life and work.

The market size of China's online food delivery market reached 653.6 billion yuan ($93.2 billion) last year, up 39.3 percent year-on-year, according to market consultancy iResearch.

In addition, these online food delivery platforms are playing a vital role in helping the catering industry resume normal operations, as brick-and-mortar businesses have been hit hard by the novel coronavirus outbreak.

Wang Lei, president of Ele.me and Koubei, a unit of e-commerce giant Alibaba Group Holding Ltd, said the epidemic has greatly accelerated the digitalization push of the services sector, and they will provide online merchants with more traffic, lower commissions and better services.

The traditional catering industry faced great challenges as a large part of the population has been confined indoors due to restrictions meant to contain the spread of the virus.

The company has rolled out a string of measures to help online merchants alleviate pressure caused by the tough situation resulting from the pandemic. It will empower 1 million merchants on the platforms to upgrade their digital solutions, with commission fees to remain 3 percent to 5 percent lower than the industry average.

Chen Liteng, an analyst at the Internet Economy Institute, a domestic consultancy, said the on-demand delivery services guarantee the daily needs of consumers, and the emergence of noncontact delivery and intelligent drop-off shelves efficiently addressed concerns about human-to-human contact amid the COVID-19 outbreak.

According to a report from market consultancy iiMedia Research, about 95 percent of caterers surveyed showed a significant decline in revenue during the outbreak. More than 90 percent of catering merchants showed their willingness to cooperate with the third-party food delivery platforms, and about 70 percent of the interviewees plan to increase purchases from the platforms.

Yang Xu, a life and services analyst at consultancy Analysys, said that these third-party takeout platforms are hastening the return to normal of the catering sector and helping mitigate the adverse effects of the outbreak.

Except from the catering industry, more consumption scenarios will be further expanded. Meituan Dianping, another food delivery and lifestyle services platform, has teamed up with 72 brick-and-mortar bookstores in Beijing to launch "takeout" services to attract more customers. Local residents will receive books from deliverymen within 30 minutes of placing the order on the Meituan app.