Only off-line catering businesses with bricks-and-mortar restaurants and proper business licenses are allowed to offer on-line catering and ordering services, a new regulation said Friday [10 November 2017]. Online catering and ordering services should be subject to the same rules as off-line restaurants, said the regulation issued by the China Food and Drug Administration (CFDA)…Full Article: ECNS.cn Nov 2017

Key Point

  • On 1 January 2018, the regulation requiring online catering services to have brick-and-mortar restaurants will go into effect.

ChinaAg Comments

  • As of August 2017, Eleme had a 41.7% market share, followed by Meituan Waimai at 41%, and Baidu Waimai at 13.2%. During August, Alibaba’s Eleme announced it would acquire Baidu Waimai.
  • In June 2017, Eleme had 34 million active users, Meituan Waimai had roughly 30 million active users, and Baidu Waimai had 17 million users.
  • In February 2017, the China Food and Drug Administration mandated that online restaurants have brick-and-mortar stores. The requirement to force online restaurants to have brick-and-mortar stores is designed to ensure that the major online delivery businesses of Meituan, Eleme and Baidu work with registered/licensed eateries.
  • In January 2017, Shanghai Railway Bureau worked with Eleme (online restaurant delivery) to launch a food delivery service to service 25 high-speed routes. After a month the service was indefinitely suspended owing to logistical challenges.
  • From December 2016 to early January 2017, the Beijing Food and Drug Administration (BFDA) ordered 225 online meal ordering/delivery businesses to close, as well as 4,409 registered restaurants to “overhaul their practices”. The majority of the offending businesses were registered with Baidu Waimai, Meituan Waimai, and Eleme.
  • In August 2016, Beijing Food and Drug Administration (BFDA) announced they began investigating Baidu Waimai, Meituan Waimai, and Eleme. According to the BFDA, they will investigate restaurants or food providers from all three e-commerce websites. Violations typically entail fines of up to CNY 200,000 (US$30,145) for the hosting e-commerce platforms.
  • In early 2016, Meituan Waimai operated in approximately 250 Chinese cities.
  • In November 2015, according to Data Center of China Internet (DCCI), Baidu Waimai had a 32% market share, followed by Meituan Waimai at 31.2% and Eleme at 29.8%.
  • In June 2015, Alibaba and Ant Financial acquired Koubei [50/50 joint venture, US$483.3 million each] to counter the Tencent-backed [see also JD.com] Meituan-Dianping online platform.

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